On May 6, 2014, in what is largely seen as a win for the U.S. Environmental Protection Agency (EPA) and the biofuels industry, the U.S. Court of Appeals for the District of Columbia Circuit rejected the challenge to EPA's final 2013 Renewable Fuel Standard (RFS) rule by Monroe Energy, LLC (Monroe Energy), a refinery and subsidiary of Delta Airlines. In Monroe Energy, LLC v. EPA, the court held that EPA properly utilized its authority under the federal RFS to set the 2013 RFS volume requirements. The court disagreed with Monroe Energy that EPA did not sufficiently consider factors in setting the final 2013 RFS rule, including the means of compliance for obligated parties. Further, the court held that the RFS provides EPA wide discretion under its cellulosic waiver provision. As such, it was within EPA's discretion to decide against lowering the overall or advanced 2013 RFS requirements when it lowered the 2013 cellulosic requirements using that authority.
The May 6 decision did not include challenges to EPA's final 2013 RFS rule related to overall, advanced, and cellulosic biofuel requirements of the American Petroleum Institute (API) and American Fuel & Petrochemical Manufacturers (AFPM). The court severed the API and AFPM challenges to the 2013 rule from Monroe Energy's challenge to the same rule. The court had earlier agreed to sever and hold in abeyance challenges to the cellulosic biofuel requirement under the 2013 rule while EPA reconsidered it.
On May 2, 2013, EPA published a proposed rule and a direct final rule that would amend its 2013 cellulosic requirement published on August 15, 2013. The rules are available here and here.
Through these actions, EPA is proposing a revised and reduced cellulosic standard for 2013 of 810,185 gallons. As EPA explains, the direct final rule will be "effective on July 1, 2014 without further notice, unless EPA receives relevant adverse comment by June 2, 2014. If EPA receives relevant adverse comment, [it] will publish a timely withdrawal of this direct final rule in the Federal Register informing the public that this rule will not take effect."
EPA also explains that the proposed rule and direct final rule follow from EPA having granted petitions for reconsideration of the 2013 cellulosic biofuel standard by API and AFPM. Further, EPA explains that it granted the petitions because KiOR, which was "one of the two companies that EPA expected to produce cellulosic biofuel in 2013 announced soon after EPA signed its final rule that it intended to produce substantially lower volumes of cellulosic biofuel in 2013 than it had earlier reported to EPA. Since the cellulosic biofuel standard was based on EPA's projection of cellulosic biofuel production in 2013, EPA deemed this new information to be of central relevance to the rule, warranting reconsideration. On reconsideration, EPA is directed to base the standard on the lower of 'projected' production of cellulosic fuel in 2013 or the cellulosic biofuel applicable volume set forth in the statute. Since data are available to show actual production volumes for 2013, EPA's 'projection' and final rule are based on actual cellulosic biofuel production in 2013."
On May 6, 2014, the National Research Council (NRC) released a Congressionally mandated, EPA-sponsored report finding that EPA has made "substantial improvements" to its Integrated Risk Information System (IRIS) since 2011. While the report acknowledges these improvements, it provides recommendations for further IRIS enhancements. For instance, according to the National Academies' press release on the report, "to ensure that the IRIS program provides the best assessments possible, the committee recommended that EPA develop a plan for strategically updating its methodology, systematically addressing any identified inefficiencies, and continually evaluating whether the IRIS teams have the appropriate expertise and training."
The National Academies' press release is available online. The EPA press release on the report is available online. The report is available for purchase or can be read online.
Bergeson & Campbell, P.C. (B&C®) has created an online hub for news, information, and commentary on Toxic Substances Control Act (TSCA) reform that is available at http://www.TSCAreform.org. B&C's lawyers, scientists, regulatory specialists, and business consultants relentlessly participate in and track developments regarding ongoing TSCA reform efforts and related state regulatory initiatives such as California's Safer Consumer Products Regulations and related developments under the Green Chemistry Initiative.
www.TSCAreform.org contains constantly updated links to commentary, analysis, articles, and regulatory documents to help those in the chemical producer and downstream chemical products industries understand what they need to know about TSCA reform, and what it means to their business.
The U.S. Senate is expected to consider its version of tax extender legislation, S. 2260, the "Expiring Provisions Improvement Reform and Efficiency (EXPIRE) Act," as early as next week. On April 3, 2014, the Senate Finance Committee approved its version of the EXPIRE Act. The EXPIRE Act includes extensions through December 31, 2015 (and retroactive to January 1, 2014), of the following key biofuels incentives that have expired: the Alternative Fuel Refueling Property Credit; the Second Generation Biofuel Producer Tax Credit; the Special Depreciation Allowance for Second Generation Biofuel Plant Property; the Biodiesel and Renewable Diesel Fuels Credit; and the Alternative Fuel and Alternative Fuel Mixture Excise Tax Credit. A copy of the EXPIRE Act is available online. A summary of the bill is also available online.
This week, the U.S. Global Change Research Program (GCRP), a collaboration of 13 federal agencies and myriad academia, issued its third National Climate Assessment. The 841 page report and a summary of its highlights are available online.
This report is significant because compared to previous reports it more definitively attributes human activity as the cause of increased climate change, which is causing more severe weather. The report asserts that climate change is here now and will have more and more devastating impacts throughout the country. It is not a future event. Additionally, it more strongly links climate change to severe weather.
The Administration reportedly is hopeful that the report will help motivate action on climate change. It may be working to some extent as two prominent Republicans -- former Utah Governor and Presidential Candidate John Huntsman, and Lee Thomas, an EPA Administrator under the Regan Administration -- authored op-eds published on May 7, 2014, urging Republicans to accept climate change and offer leadership on the issue.
The California Department of Toxic Substances Control (DTSC) announced that Director Debbie Raphael will be leaving her position on May 30, 2014, to lead San Francisco's Department of the Environment. Raphael's replacement has not yet been announced.
In Raphael's place, Dr. Meredith Williams, DTSC Deputy Director, gave the keynote address at the 4th Safer Consumer Products Summit in Santa Clara, California, sponsored by B&C. Dr. Williams discussed DTSC's decision-making process with regard to its three selections in its draft initial Priority Product list (Paint and Varnish Strippers, and Surface Cleaners containing Methylene Chloride; Spray Polyurethane Foam Systems containing Unreacted Diisocyanates; and Children's Foam-padded Sleeping Products containing tris or tris(1,3-dichloro-2-propyl) (TDCPP)) and other DTSC efforts, including its development of a work plan identifying potential future Priority Products and guidance for companies to prepare alternative analysis assessments. DTSC also held on May 7, 2014, the first of three workshops related to its draft initial Priority Product list. The other two workshops are scheduled for May 28, 2014, and June 4, 2014.
Dr. Williams was introduced by Summit Chair Lynn L. Bergeson, whose comments are excerpted below.
"We have witnessed over the past years a dramatic shift in environmental law and policy from the regulation of end-of-pipe discharges of chemical substances into the environment (and their subsequent cleanup) to a more proactive focus on the presence of chemicals in products -- especially consumer products, and disciplined efforts to make better choices about ingredient selection and smarter production decisions to prevent pollution at the source. This shift is to ensure that product design and manufacture utilize greener materials and engage in smarter manufacturing processes to lessen the environmental footprint of product manufacture and use, and ensure the sustainability of product development and use.
"The Safer Consumer Products Regulation that went into effect last October is a bold, game-changing, historic development. The regulations reflect the newest chapter in California's implementation of its 2007 Green Chemistry Initiative. Whether the program in practice will be a faithful fulfillment of the goals underlying the Green Chemistry Initiative or evolves into something else remains to be seen. We are, after all, at the very early stages of the implementation phase of the SCP program. What is indisputable, however, is that the Safer Consumer Products Regulations are here to stay. They will have a considerable impact here in California and far beyond the state's borders."
Next week's Biobased and Renewable Products Advocacy Group (BRAG™) Report will include a full recap of the Summit, which will include contact information to receive copies of select presentations, including Dr. Williams' detailed PowerPoint.
On May 6, 2014, INVISTA, a large U.S. headquartered integrated producer of chemical intermediaries, polymers, and fibers, and owner of the LYCRA Brand, announced the introduction of the "only commercial offering of a bio-derived spandex available globally and for use in a wide variety of apparel fabrics and garments." The company explains that "[a]pproximately 70 percent by weight of the new LYCRA® bio-derived spandex fiber comes from a renewable source made from dextrose derived from corn." A copy of the Company's press release is available online.
On April 29, 2014, the U.S. House Committee on Energy and Commerce's Subcommittee on Environment and the Economy held a hearing on the revised version of the Chemicals in Commerce Act (CICA2). Details of the hearing provided by the Subcommittee, including its background memorandum, are available online.
Subcommittee Chair John Shimkus (R-IL) issued the original version of CICA in March 2014. CICA2 was released on April 22, 2014. Bergeson & Campbell, P.C.'s (B&C®) detailed summary and analysis of CICA2 is available online. B&C also issued a detailed summary and analysis of the April 29, 2014, Subcommittee hearing, which is available online.
The following witnesses testified at this week's hearing: The Honorable Jim Jones, Assistant Administrator, Office of Chemical Safety and Pollution Prevention, U.S. Environmental Protection Agency (EPA); The Honorable Calvin Dooley, President and Chief Executive Officer, American Chemistry Council; Dr. Beth Bosley, President, Boron Specialties, LLC, on behalf of the Society of Chemical Manufacturers and Affiliates; Mr. Mark Greenwood, Principal, Greenwood Environmental Counsel, PLLC; Dr. Len Sauers, Vice President, Global Sustainability, Proctor & Gamble Company; Mr. Steven Goldberg, Vice President and Associate General Counsel, Regulatory & Government Affairs, BASF; Mr. Andy Igrejas, National Campaign Director, Safer Chemicals, Healthy Families; and The Honorable Michael Moore, on behalf of the National Conference of State Legislatures.
As discussed in more detail in the B&C summary, the hearing was very partisan. Shimkus defended his revised draft of CICA2 and argued that it attempts to address concerns raised by the Democrats on the Subcommittee. Subcommittee Democrats, including Ranking Member Paul Tonko (D-NY), argued that the revised bill fails to address their concerns. Jones asserted that CICA2 would need to be strengthened in certain areas to ensure necessary protection against harmful chemicals. For instance, he stressed the need for Toxic Substances Control Act (TSCA) reform legislation to include Administration principles on TSCA reform established in 2009. As explained in B&C's analysis, Jones also "claimed in his written testimony that CICA2 'does not include a mechanism that would provide for the timely review of existing chemicals that may pose a concern.' He also stated that 'y including a standard very similar to the current TSCA Section 6 authorities, the draft bill fails to address another key element of meaningful chemical safety reform' and also criticized CICA2 for including a consideration of costs or the availability of substitutes in risk management."
Given the continued partisan nature of the TSCA reform debate, particularly within the House of Representatives, prospects for enactment of reform in this shortened election year appear to be slim.
The White House Office of Management and Budget (OMB) has reportedly received the final rule on "RFS Pathways II and Technical Amendments to the RFS2 Standards" (RFS Pathways II rule) from EPA. This is the last step in the process before EPA publishes the final rule. EPA's summary of its proposed RFS Pathways II rule is available online. A copy of the 38-page proposed rule, which was published in the Federal Register on June 14, 2013, is also available online.
The Biobased and Renewable Products Advocacy Group (BRAG™) reported on and summarized the proposed RFS Pathways II rule when it was published last year. A copy of that report is available online.
EPA has stated publically that it expects to issue its final rule setting the 2014 RFS in June 2014. As that date nears, lobbying activity on both sides has intensified. For instance, on April 30, 2014, the American Petroleum Institute released a letter claiming that "ask[ing] EPA to build in an adequate margin of safety when setting the final ethanol mandates for 2014 because projections of gasoline demand often miss the mark." A copy of the letter is available online. On April 29, 2014, Representatives Tim Walz (D-MN), Rick Nolan (D-MN), and Cheri Bustos (D-IL) -- three Democratic Members of the House of Representatives from corn-producing Midwestern states -- met with senior White House officials to argue that the final 2014 RFS rule should not include the deep cuts proposed to the corn ethanol and advanced biofuel volumetric targets. A copy of Representative Walz's press release on the meeting is available online.
On April 29, 2014, in a 6-2 ruling, the U.S. Supreme Court upheld EPA's view in EPA v. EME Homer City Generation L.P., U.S. Nos. 12-1182 and 12-1183. The opinion is available online.
The decision reverses a 2012 ruling by the U.S. Court of Appeals for the District of Columbia Circuit, holding that EPA's Cross-State Air Pollution Rule (CSAPR) exceeded EPA's authority to regulate greenhouse gas emissions under the Clean Air Act (CAA). The CSAPR -- issued under the Obama Administration and which strengthened a similar rule issued in 2005 by the Bush Administration -- requires 28 upwind states to reduce power plant emissions to help downwind states achieve national ambient air quality standards (NAAQS).
The Supreme Court held that the EPA permissibly created the CSAPR, in part considering cost effectiveness. As such, it is within EPA's authority under the CAA to include within CSAPR its "Good Neighbor" provision requiring upwind states to help downwind states meet NAAQS and imposition of federal implementation plans (FIP) "after EPA has quantified the state's interstate pollution obligation." More information on the case and the Supreme Court's holding is available online.
The BIO World Congress on Industrial Biotechnology, being held May 12-15, 2014, in Philadelphia, Pennsylvania, is the world's largest industrial biotechnology event for business leaders, investors, and policy makers in biofuels, biobased products, and renewable chemicals. BRAG and B&C will present a practical workshop to fully inform, equip, and assist renewable chemical producers in finding the path of least resistance on the road to commercialization.
"Commercializing Renewable Chemicals and Biobased Products: The Importance of Successfully and Efficiently Navigating the Regulatory Process"
Tuesday, May 13, 2014, 2:30 p.m. - 4:00 p.m.
Moderator: Lynn Bergeson, B&C
David Widawsky, Director - Economics, Exposure, and Technology Division, Office of Pollution Prevention and Toxics (OPPT), EPA, Manager of the Presidential Green Chemistry Challenge Awards
Tracy Williamson, Chief, Industrial Chemistry Branch, OPPT, EPA
Frank Pacholec, VP R&D/Corporate Sustainability Officer, Stepan Company
Nancy Clark, DuPont Industrial Biosciences
* Overview of the 90-day EPA new chemical notification review process
* Filling out the premanufacture notification (PMN) form -- Top Ten Mistakes and How to Avoid Them
* Challenges posed by chemical identity/nomenclature under U.S. and European Union (EU) law
* Leveraging successfully pollution prevention benefits
For information and to register click here.
BRAG will present "Regulatory Landscape & Implications for Innovation," Thursday, June 19, 2014, at the 18th Annual Green Chemistry & Engineering Conference hosted by the American Chemical Society's Green Chemistry Institute.
Speakers and topics include:
Lynn L. Bergeson
American Chemistry Council
"State chemical management initiatives: Green chemistry? Or, something else?"
3E Company Department of Regulatory Research
"REACHing Asia in a green chemistry environment: Initiative, implementation and impact"
Elevance Renewable Sciences
Center for Environmental Health
"Moving California towards flame retardant-free furniture and baby products"
For information and to register click here.
On April 22, 2014, the U.S. Environmental Protection Agency (EPA) signed off on a Direct Final Rule requiring petroleum refiners and importers to blend 810,185 gallons of cellulosic fuels into the fuel supply in 2013 in response to petitions for reconsideration of the Final Rule from the American Petroleum Institute (API) and the American Fuel & Petrochemical Manufacturers (AFPM). The pre-publication version of the Direct Final Rule is available online. Petitioners successfully argued that cellulosic fuel production was well below EPA's projections. Previously, EPA had mandated that the petroleum industry blend six million gallons of cellulosic fuels into the fuel supply under the Renewable Fuel Standard (RFS) for 2013. EPA granted the motion for reconsideration because one of the two companies that EPA expected to produce cellulosic biofuel in 2013 announced shortly after EPA signed the final rule that it intended to produce significantly lower volumes of cellulosic biofuel in 2013 that it had reported to EPA. The rule will be effective 60 days after it is published in the Federal Register.
Oral argument was heard on April 7, 2014, on a joint motion filed in the U.S. Court of Appeals for the D.C. Circuit by EPA, API, and AFPM to sever certain issues and hold them in abeyance pending administrative reconsideration. Monroe Energy LLC et al. v. EPA, D.C. Cir., No. 13-1265. According to the Respondent-Intervenors Biotechnology Industry Organization (BIO), Growth Energy, and Renewable Fuels Association (RFA) in their April 16, 2014, response opposing EPA's motion, severing the case serves no purpose. EPA requested that the API and AFPM petitions be pulled out of the case and held in abeyance arguing that these petitions challenged EPA's decision to use revised fuel production and consumption estimates in the 2013 final RFS and to add a small refinery exemption. They argued that these matters should be held in abeyance while EPA addresses other aspects of the 2013 RFS. The renewable fuel groups countered that no purpose would be served as the case has already been argued and it is too late to sever these issues.