As part of “A Green Deal Industrial Plan for the Net Zero Age” to respond to the US Inflation Reduction Act (IRA) (see our alert), the European Commission (the “Commission”) adopted on 9 March 2023 its Temporary Crisis and Transition Framework for State Aid measures to support the economy following the aggression against Ukraine by Russia (the “TCTF”). The text amends the Temporary Crisis Framework last amended on 28 October 2022 (see our blog). 

These are the three most important things you need to know about the TCTF:

  • To avoid that an investment would be located outside the European Economic Area (EEA), EU countries may support investments in the manufacturing of relevant equipment for the transition towards a net-zero economy, such as batteries, solar panels, wind turbines, heat pumps, carbon capture usage and storage (CCUS), as well as their key components and critical raw materials necessary for their production. They may even grant aid matching foreign subsidies to support those investments, provided that they are located in the poorer areas of the EU.
  • EU countries’ possibilities to grant aid for accelerating the rollout of renewable energy are extended to any renewable technologies, including hydropower, and no longer require a bidding process to select the aided projects that are considered as less mature.
  • The TCTF is not a subsidy program, and it is up to EU Member States to provide public funding.
Continue Reading The Commission adopts its Temporary Crisis and Transition Framework relaxing State aid rules as a response to the US Inflation Reduction Act

On March 3, 2023, the United States Environmental Protection Agency (“EPA”) published a memorandum requiring states to evaluate the cybersecurity of operational technology used by public water systems (“PWSs”) “when conducting PWS sanitary surveys or through other state programs.”  EPA’s memorandum “interprets the regulatory requirements relating to the conduct of sanitary surveys to require that when a PWS uses operational technology (“OT”), such as an industrial control system (“ICS”), as part of the equipment or operation of any required component of a sanitary survey, then the sanitary survey of that PWS must include an evaluation of the adequacy of the cybersecurity of that operational technology for producing and distributing safe drinking water.”  Specifically, “EPA’s interpretation clarifies that the regulatory requirement to review the ‘equipment’ and ‘operation’ of a PWS necessarily encompasses a review of the cybersecurity practices and controls needed to maintain the integrity and continued functioning of operational technology of the PWS that could impact the supply or safety of the water provided to customers.” 

Continue Reading EPA Requires States to Address the Cybersecurity of Public Water Systems

On February 21, 2023, the Federal Highway Administration (“FHWA”) published a Notice of Waiver for Buy America requirements related to Electric Vehicle (“EV”) Chargers, 88 Fed. Reg. 10619.  This waiver notice follows the Notice of Proposed Waiver published by FHWA on August 31, 2022.  See 87 Fed. Reg. 53539.  In response to a robust response from industry, the final waiver is narrower and more streamlined than the proposed waiver, bringing the number of phases from four to two, and simplifying the definition of an EV charger.  The waiver applies starting March 23, 2023.

Continue Reading FHWA Buy America Waiver for Electric Vehicle Chargers

The European Union (“EU”) is coming closer to adopting mandatory rules for companies that use carbon credits.

  • First, the European Parliament and Council are considering for adoption a Commission for a Regulation on a Carbon Removal Certification Framework (“CRCF Regulation Proposal”).

These two regulatory initiatives are closely tied to each other.  In effect, the draft ESRS that the Commission is considering for adoption require subject entities to disclose GHG removals and GHG mitigation projects financed through carbon credits.

The EU’s aim of regulating carbon credits coincides with its push for carbon neutrality by 2050, and a related significant proliferation of companies publicly committing to achieve “net-zero” emissions by mid-century, which has triggered an uptick in strategic purchases of carbon credits in the voluntary carbon market (“VCM”). The CRCF Regulation Proposal and the upcoming ESRS will help to expand sustainable and verified carbon removals and encourage investment in technological innovation.   

Companies turning to the VCM to reach their net zero goals, and others active in the generation, trading, and use of carbon credits, will want to follow these initiatives closely.  Opportunities remain for companies to express views that may shape the final contours of these regulations.

Continue Reading The EU’s Emerging Mandatory Disclosure and Certification Rules for Carbon Credits

On February 14, 2023, EPA released a compliance advisory regarding pesticide devices regulated under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”).  EPA released the advisory in response to “substantial non-compliance with FIFRA in the device and pesticide marketplace. Examples of non-compliance include unregistered pesticides claiming to be devices, devices bearing false and misleading statements, and devices being sold and distributed that were not produced in an EPA registered establishment.”  While the compliance advisory provides a helpful overview of requirements applicable to pesticide devices, it does not provide new substantive guidance, including on key questions facing many device manufacturers and distributors.  The advisory also suggests that EPA may increase its enforcement efforts in this area, so companies producing devices (or products that may arguably be devices) should consider taking proactive steps to ensure their product lines comply with FIFRA’s requirements.

Continue Reading EPA Releases New Guidance on Pesticide Devices

The EU’s Green Deal Industrial Plan for the Net-Zero Age

The US Inflation Reduction Act (the IRA) has raised concerns in the EU about the potential impact on international investment – particularly the possibility that such investment will be pulled into the US, rather than directed to the EU and may encourage ‘green industries’ to relocate production to the US. The EU has been working on an appropriate response that would increase the attractiveness of the EU as a green investment destination without breaching either WTO rules or its own State Aid rules.

Continue Reading The EU’s Green Deal Industrial Plan for the Net-Zero Age

The European Parliament and Council are about to adopt an agreed text on a Regulation on Batteries and Waste Batteries (“Sustainable Batteries Regulation” or “SBR”) that will impose a broad range of requirements on the safety, sustainability and circularity of batteries, including batteries that are part of devices (e.g., laptop batteries), industrial batteries (e.g., large stationary storage applications) and means of transport batteries (e.g., car batteries), as well as extended producer responsibility obligations (including waste take back) on producers marketing them.  The SBR is likely to be published in the official journal of the EU within the next couple of months and will repeal and replace the existing EU Directive on Batteries and Waste Batteries.

This post outlines the specific removability and replaceability requirements that the SBR will impose on portable batteries and light means of transport (“LMT”) batteries (e.g., batteries for electric bicycles) marketed in the EU/EEA as of around September/October 2026.  The new requirements will oblige producers of appliances to introduce design changes to their appliances and the batteries they incorporate.  Moreover, clarifying the details of such requirements is likely to create much controversy and debate among the European Commission, Member States and other stakeholders within the next two years.  In effect, the SBR leaves it to the Commission to adopt guidelines interpreting the different removability and replaceability requirements. 

The post also briefly mentions the political compromise that the European Parliament and Council reached on the removability and replaceability of electrical vehicle batteries and “starting, lighting and ignition” (“SLI”) batteries, and its emphasis on ensuring that such batteries be removable and replaceable by “independent professionals” (and not just authorized dealers).

Continue Reading New Removability and Replaceability Requirements for Batteries Marketed in the European Union

Four federal agencies—the Environmental Protection Agency, the Department of Transportation, the Department of Energy, and the Department of Housing and Urban Development—have released a Blueprint for Transportation Decarbonization, an ambitious plan that outlines the principles the federal government will continue to use to pursue its stated goal of economy-wide net zero emissions by 2050. This “whole of government” mobilization will profoundly affect many investment decisions, collaborations, regulatory actions and policy disputes with material impacts across many business sectors.

Continue Reading Biden Administration Releases Comprehensive Transportation Decarbonization Plan

Sustainability governs all policies and sectors of social and economic life. The goal of sustainable development is to meet the needs of today’s generations without compromising the self-sufficiency of future generations. Companies are called upon to innovate as economic conditions indicate a change in the direction of sustainability. Sustainability considerations and green developments have increasingly caught the attention of competition law’s enforcers. Competition authorities such as the European Commission (“Commission”), the Hellenic Competition Commission (“HCC”), the Dutch Competition Authority (“ACM”) and the German Competition Authority (“Bka”) have taken a positive stance towards accepting sustainability initiatives proposed by the private sector. How can companies balance both sustainability and competition law? In this blog post, we analyze recent developments that further explain the sustainability framework that companies have to navigate.

Continue Reading Building a sustainability strategy – what companies can (not) do from a competition law perspective

On January 6th, the White House Council of Environmental Quality (“CEQ”) released a new Guidance on Consideration of Greenhouse Gas Emissions and Climate Change (“the Guidance”) in permitting decisions, with significant implications for energy and infrastructure projects.  Though this Guidance is effective as of the date of publication, it was issued on an interim basis and CEQ will consider comments until March 10th, after which it could be revised further. 

CEQ’s recommendations will influence the Biden Administration’s analysis of greenhouse gas (“GHG”) emissions in environmental reviews under the National Environmental Policy Act (“NEPA”), applying immediately to all newly proposed actions as well as some on-going NEPA reviews.  While the Guidance is largely framed as a series of recommendations rather than requirements, it highlights best practices for environmental reviews that could help expedite project completions, improve agency decision making, and minimize litigation risks for developers.  Ultimately, CEQ is trying to ensure that agencies and project developers pay sufficient attention to climate impacts, without causing unwarranted delays to agency decision-making, particularly considering that accelerating clean energy infrastructure is a key component of the Biden Admiration’s climate agenda. 

The Guidance seeks to foster a greater understanding of GHG impacts and the tradeoffs among alternatives, thus raising expectations around the quality of federal GHG analyses.  Project developers will want to work closely with federal regulators to ensure the sufficiency of agency NEPA reviews. Failures to do so may provide project opponents a pathway to litigation. 

Continue Reading White House issues guidance on greenhouse gas analysis in permitting decisions