By Lynn L. Bergeson
On September 27, 2018, the California Air Resources Board (CARB) announced its approval of amendments to the Low Carbon Fuel Standard (LCFS). The LCFS has been in place since 2011, in an effort to reduce greenhouse gas (GHG) emissions. Under the original program, the standard required a ten percent reduction in the carbon intensity of transportation fuels in California by 2020. In 2017 only, the LCFS has successfully led to the replacement of billions of gallons of petroleum and natural gas with renewable and sustainable transportation fuels. Despite its success, however, the approved amendments to the LCFS aim to make the program more flexible and comprehensive. Under the new amendments, the LCFS sets new requirements to the reduction in carbon intensity and added credits for alternative aviation fuels. The LCFS now requires a 20 percent reduction in carbon intensity by 2030, parallel to California’s overall 2030 target in climate change reduction. Additional changes also include the restructuration of rebate programs for utility vehicles into one single pool and a new protocol for carbon capture and storage. For further details on the new LCFS, click here.
By Lynn L. Bergeson
On July 30, 2018, Senators Susan Collins (R-ME) and Chris Coons (D-DE) reintroduced their sustainable chemistry bill, the Sustainable Chemistry Research and Development Act of 2018 (S. 3296). This bill encourages the development of new and innovative chemicals, products and processes with an improved “environmental footprint” through efficient use of resources, reducing or eliminating exposure to hazardous substances, or otherwise minimizing harm to human health and the environment. The legislation is intended to support new innovations in chemistry that benefit the economy, the environment, and human health. The bill supports coordinated efforts in sustainable chemistry across federal agencies through research and development, technology transfer, commercialization, education, and training programs -- including partnerships with the private sector. The bill does not include any regulatory components, nor does it authorize new spending. Its goal, rather, is to coordinate better federal activities in sustainable chemistry and encourage industry, academia, nonprofits, and the general public to innovate, develop, and bring to market new sustainable chemicals, materials, products, and processes.
By Lynn L. Bergeson
On June 21, 2018, the U.S. Food and Drug Administration (FDA) announced it was withdrawing the draft guidance, “Statistical Approaches to Evaluate Analytical Similarity,” issued in September 2017. The announcement states that the draft guidance, if issued in final as written, “was intended to provide advice for sponsors developing biosimilar products regarding the evaluation of analytical similarity between a proposed biosimilar product and the reference product.” Further, comments submitted to the docket “addressed a range of issues that could impact the cost and efficiency of biosimilar development, including the number of reference product lots the draft guidance would recommend biosimilar developers sample in their evaluation of high similarity and the statistical methods for this evaluation.” FDA states that after considering the public comments that were received on the draft guidance, it determined it would withdraw the draft guidance as it gives further consideration to the scientific and regulatory issues involved, and that it intends to “issue future draft guidance that will reflect state-of-the-art techniques in the evaluation of analytical data to support a demonstration that a proposed biosimilar product is highly similar to a reference product.” FDA will communicate publicly when new draft guidance is issued.
By Lynn L. Bergeson
On May 1, 2018, a new biodiesel requirement went into effect in Minnesota, requiring all diesel fuel sold in the state to contain five percent biodiesel from October to March and 20 percent biodiesel from April to September. This is the last stage of the Biodiesel Content Mandate that has been steadily increasing the minimum content requirement of biodiesel in diesel sold in Minnesota since September 29, 2005, when a two percent blend requirement was introduced. Since then the requirement has increased to five percent on May 1, 2009, and stayed at five percent for the winter months while the summer requirement increased to ten percent on July 1, 2014, and reached the final 20 percent requirement for the summer months this May. Minnesota originally planned to transition to a ten percent biodiesel blend on May 1, 2012, but concerns about inadequate blending infrastructure delayed implementation. Minnesota’s government is confident that the state is prepared to switch to a 20 percent biodiesel blend, with sufficient fuel and feedstock supply and adequate blending infrastructure. Tom Slunecka, CEO of the Minnesota Soybean Growers, states consumers benefit the most from the B20 mandate, “They’re getting better, cleaner air because biodiesel is in our fuel tanks. They’re getting the benefit of an industry that was born here in Minnesota. It’s produced here, it’s consumed here. So all the taxes stay right here.”
By Lauren M. Graham, Ph.D.
On December 28, 2017, New York City Council Member Costa Constantinides announced that the New York City Council unanimously passed a bill on the use of alternative fuels and alternative fuel technologies in the city ferry fleet (INT. 54). The legislation would require a two-year study on the feasibility of using alternative fuel, including biodiesel, and fuel technologies, including hybrid electric or fuel-cell electric, in city ferries. The study would include consideration of availability, storage, ferry compatibility, possible barriers, regulatory requirements, and other issues related to renewable fuels. Based on the findings, the city would determine whether it is feasible and practical to implement the use of renewable fuels. The bill, which Council Member Constantinides introduced to the Council in 2014, is awaiting Mayor Bill de Blasio's signature.
By Lauren M. Graham, Ph.D.
On December 8, 2017, the U.S. Department of Commerce (DOC) issued in the Federal Register a notice on the postponement of final determinations of sales in less than fair value (LTFV) investigations into biodiesel from Argentina and Indonesia and the extension of provisional measures. As reported in the Biobased and Renewable Products Advocacy Group (BRAG®) blog post “DOC Initiates Biodiesel Antidumping, Countervailing Investigation,” DOC initiated LTFV investigations of imports of biodiesel from Argentina and Indonesia on April 12, 2017. DOC is postponing the deadline for issuing the final determinations until February 15, 2018, and extending the provisional measures from a four-month period to a period of no more than six months. According to the notice, a postponement is permitted given that each preliminary determination was affirmative; the requests in each investigation were made by the exporters and producers who account for a significant proportion of exports of the subject merchandise from the country at issue; and no compelling reasons for denials exist.
By Kathleen M. Roberts
On October 10, 2017, the U.S. Environmental Protection Agency (EPA) published in the Federal Register its final rule establishing exemptions for a tolerance limit to use tall oil fatty acids (TOFA) as an inert ingredient “[i]n pesticide formulations applied to growing crops and raw agricultural commodities after harvest; in pesticides applied in/on animals, and in antimicrobial formulations for food contact surfaces.” Pursuant to Section 408(c)(2)(A)(i) of the Federal Food, Drug, and Cosmetic Act (FFDCA), EPA has the authority to establish exemptions from the requirement of a tolerance only when it can be demonstrated clearly that the risks from aggregate exposure to the pesticide residue, including all anticipated dietary exposures and all other exposures, particularly to infants and children, for which there is reliable information, will pose no appreciable risks to human health. In analyzing the risk, EPA considers both the toxicity of the inert ingredient and the reasonably foreseeable circumstances for exposure to the substance. Following its evaluation and consideration of the validity, completeness, and reliability of available toxicity data, EPA determined that sufficient data were available to conclude that TOFA do not have a toxic mechanism and will not pose a risk to the U.S. population.
EPA established the final rulemaking following a petition by Spring Trading Company on behalf of Ingevity Corporation requesting that 40 C.F.R. Sections 180.910, 180.930, and 180.940(a) be amended to establish the exemptions. The regulation is effective immediately and eliminates the need to establish maximum permissible levels for residues of TOFA that are consistent with the conditions of these exemptions. Objections and requests for hearings regarding the regulation are due by December 11, 2017.
By Lynn L. Bergeson and Margaret R. Graham
On October 15, 2017, California Governor Jerry Brown signed California Senate Bill (S.B.) 258, the Cleaning Product Right to Know Act of 2017, which would require manufacturers of cleaning products to disclose certain chemical ingredients on the product label and on the manufacturer’s website. The final version of S.B. 258 was passed by the California Senate on September 13, 2017, by a vote of 27 to 13. The California Assembly passed the bill by a vote of 55 to 15, with nine votes not recorded, on September 12, 2017. The online disclosure requirements would apply to a designated product sold in California on or after January 1, 2020, and the product label disclosure requirements would apply to a designated product sold in California on or after January 1, 2021. The bill was co-sponsored by several non-governmental organizations as well as a few manufacturers of cleaning products including Honest Company, Seventh Generation, Procter & Gamble, SC Johnson, RB - Reckitt Benckiser, Unilever, Eco Lab WD-40, fragrance maker Givaudan, and the Consumer Specialty Products Association. More information on S.B. 258 is available in our memorandum “California Bill Would Require Disclosure of Cleaning Product Ingredients.”
The State of New York’s Department of Environmental Conservation’s (DEC) Division of Materials Management will soon release formally a similar initiative, the Household Cleaning Product Information Disclosure Program. This program will require manufacturers of domestic and commercial cleaning products distributed, sold, or offered for sale in New York State to furnish information regarding such products in a certification form prescribed by the Commissioner, and is expected to require disclosure of many more chemicals than S.B. 258. The period for comments on the draft certification form and guidance document related to the program ended on July 14, 2017.
Bergeson & Campbell, P.C. (B&C®) will soon be releasing a detailed memorandum on both developments to be available on our regulatory developments webpage.
By Kathleen M. Roberts
The National Biodiesel Board (NBB) announced that on September 13, 2017, New York Governor Andrew Cuomo signed legislation that introduces bioheating fuel tax credits and bioheating fuel tax requirements to three New York counties. The bill (S5422A) requires all home heating oil sold for use in Nassau, Suffolk, and Westchester counties on or after July 1, 2018, to contain at least five percent biodiesel (B5). Assemblyman Steve Englebright and Senator Phil Boyle sponsored the bill, which received broad support from a range of industry and environmental advocates. New York City, the largest municipal consumer of heating oil in the country, instituted a citywide two percent biodiesel requirement in 2012, which increases to five percent on October 1, 2017. With the new legislation, the entire New York City Metropolitan Area, representing approximately 70 percent of the state’s heating oil market, will have a five percent biodiesel blending requirement. NBB commended Governor Cuomo for signing the bill, stating that it will provide cleaner air for more New Yorkers and support local jobs in the clean energy sector.
By Lauren M. Graham, Ph.D.
On August 28, 2017, the U.S. Department of Commerce (DOC) announced in the Federal Register that a preliminary determination had been issued in the antidumping (AD) and countervailing duty (CVD) investigations on biodiesel from Argentina and Indonesia. DOC preliminarily determined that countervailable subsidies are being provided to producers and exporters of biodiesel from Argentina and Indonesia. The period of investigation for both countries is January 1, 2016, through December 31, 2016.
Pursuant to Section 703(e)(1) of the Tariff Act of 1930, DOC preliminarily determined that critical circumstances exist with respect to imports of biodiesel from Indonesia for Musim Mas and Wilmar Trading. Similarly, DOC preliminary determined that critical circumstances exist with respect to imports of biodiesel from Argentina for LDC Argentina and Vicentin, but do not exist with respect to all other exporters or producers not individually examined. DOC will direct U.S. Customs and Border Protection (CBP) to suspend liquidation of entries of biodiesel from Argentina and Indonesia entered, or withdrawn from warehouse, for consumption, and to require a cash deposit equal to the subsidy rates indicated in the respective Federal Register notice. For Indonesian companies not individually examined, DOC applied an “all-others” subsidy rate, which was calculated by weight averaging the calculated subsidy rates of the two individually examined company respondents.
More information on the methodology and results of DOC’s analysis is available in the Preliminary Decision Memorandum, which is a public document on file in the Antidumping and Countervailing Duty Centralized Electronic Service System (ACCESS). DOC invites comments on the preliminary determinations from interested stakeholders. Following DOC’s final determination, the International Trade Commission (ITC) will make its final determination within 45 days.