EPA Chemical Safety Rule Raises Questions About Authority
For what appears to be the first time in its history, the U.S. Environmental Protection Agency has recently finalized a rule that requires board-level involvement in an EPA-administered program. Specifically, the EPA’s recent amendments to the Risk Management Program (RMP) require certain chemical plants and refineries to submit third-party audit reports on process safety directly to the audit committee of the company’s board of directors. In short, the EPA is seeking to get involved in corporate governance by dictating what information management must provide to the audit committee and when — regardless of management input. In this article, first published in Law360 on April 25, 2024, Sidley lawyers Justin Savage, Ike Adams, and Aaron Flyer dissect the recent RMP amendments, which are a follow up to the EPA’s Safer Communities by Chemical Accident Prevention rule, finalized March 11, 2024. The authors explore the EPA’s authority to regulate corporate governance requirements, the practical value in doing so, and the potential fallout for companies in terms of corporate governance. If the new RMP rule survives judicial review, it may embolden the EPA to issue other board reporting obligations in any number of its regulatory programs governing corporate operations.
U.S. Nuclear Regulatory Commission Progresses Efforts to License Advanced Reactors
The U.S. Nuclear Regulatory Commission (NRC or Agency) continues to progress the Agency’s efforts to license commercial advanced reactors under two parallel paths. The Agency is reviewing applications for licensing of advanced reactors under the existing regulatory framework (10 CFR Part 50 and 10 CFR Part 52) while developing a “risk-informed” and “technology-inclusive” regulatory framework for advanced reactor technologies and designs — 10 CFR Part 53.
U.S. Fish and Wildlife Service Finalizes Changes to Voluntary Endangered Species Act Programs and Related Permitting Process
On Friday, April 12, 2024, the U.S. Fish and Wildlife Service (the Service) issued a Final Rule making changes to 50 CFR part 13 to clarify and expedite the process for issuing enhancement of survival permits and incidental take permits pursuant to Section 10(a)(1)(A) and (B), respectively, of the Endangered Species Act. The regulatory changes are intended to provide the Service greater flexibility in implementing the permitting process and generate greater conservation results by encouraging additional engagement in voluntary programs associated with these permits, including safe harbor agreements (SHAs), candidate conservation agreements with assurances (CCAAs), and habitat conservation plans (HCPs).
U.S. Federal Courts Vacate Federal Highway Administration Greenhouse Gas Rule
On Tuesday, April 2, 2024, in Commonwealth of Kentucky v. Federal Highway Administration¸ No. 23-162 (W.D. Ky.), the U.S. District Court for the Western District of Kentucky vacated the Federal Highway Administration December 2023 Greenhouse Gas Rule (see our prior blog post here for a more detailed summary of the Rule). That rule, proposed in July 2022 and modeled off of a rule proposed by the Obama administration in 2017 but repealed by the Trump administration before it could take effect, sought to require each state to set declining targets for tailpipe carbon dioxide emissions from vehicles on the National Highway System. Tuesday’s ruling follows a similar one from the U.S. District Court for the Northern District of Texas on March 28, 2024, in State of Texas v. U.S. Dep’t of Trans. No. 23-304 (N.D. Tex.) that purported to vacate the rule nationwide.
The Newest Phase of EPA’s Greenhouse Gas Emissions Standards: Phase 3
On March 29, 2024, the U.S. Environmental Protection Agency (EPA) announced its most recent national greenhouse gas (GHG) pollution standards for heavy-duty (HD) vehicles, including HD vocational vehicles and tractors. The rule establishes new CO2 emission standards for model year (MY) 2032 and later HD vehicles, with more stringent CO2 standards phasing in as early as MY 2027 for certain vehicle categories.
