Legislative Update: Biden Administration’s Shift on Plastics Treaty Sparks Industry Pushback

Biden Administration’s Shift on Plastics Treaty Sparks Industry Pushback

The Biden administration has signaled a significant reversal in its stance on plastic production, now supporting targets to reduce plastic production in upcoming negotiations for an international plastics treaty. This change marks a major departure from its previous, more balanced position in earlier rounds of talks, where it had opposed reducing plastic production, focusing instead on more effective strategies, like mitigating pollution and improving recycling systems. The administration is also now open to negotiating a potential list of chemicals to phase out and developing criteria for identifying “so-called” problematic plastic products. The administration has not cited any legal authority which would allow them to limit plastic resin production.

This shift comes just before the fifth round of treaty negotiations in Busan, South Korea, scheduled for November, and follows the July release of a Biden administration report recommending efforts to reduce single-use plastic in federal operations by 2035. Furthermore, that report states that the administration’s goal is to “reduce the global production and consumption of virgin plastics” as part of its agenda.  The Vinyl Institute cautioned the administration against banning materials critical to food safety and shelf life and urged collaboration with recyclers and innovators to foster a more sustainable and circular economy.

Industry groups, including the VI, American Chemistry Council (ACC), and the Plastics Industry Association, are criticizing the administration’s abrupt policy change regarding the plastics treaty talks. They argue that the administration’s new stance could result in job losses, increased costs, and weakened U.S. influence in the global treaty negotiations. They emphasize the importance of plastics in various sectors and question the feasibility of Senate approval for such a treaty.

“As the White House caves to the wishes of extreme NGO groups, it does a disservice towards our mutual ambition for a cleaner, lower carbon future where used plastic doesn’t become pollution in the first place,” ACC President and CEO Chris Jahn said in a statement. If the Biden-Harris Administration wants to meet its sustainable development and climate change goals, the world will need to rely on plastic more, not less. Plastics enable solar and wind energy, are critical to modern healthcare, deliver clean drinking water, reduce home, building, and transportation energy needs, and help prevent food wastage.”

This week, experts are gathering in Bangkok to discuss the treaty. However, the talks have been marred by controversy.   Key stakeholders, including many from the plastic industry, have been excluded from the discussions. Hundreds of organizations have expressed concern over the lack of transparency and public participation in the Bangkok meeting, arguing that it deviates from standard practices in international environmental treaty negotiations and could set a dangerous precedent for future negotiations. Unlike previous meetings of the UN Intergovernmental Negotiating Committee on Plastic Pollution, which primarily focused on procedural matters, the Bangkok meeting is expected to address substantive elements that could be included in the treaty. The discussions will continue through next week.

States Challenge EPA’s WOTUS Rule After the Demise of the Chevron Doctrine

The Biden WOTUS rule is already facing numerous legal challenges nationwide, but the Supreme Court’s recent ruling in Loper Bright v. Raimondo, which stuck down the Chevron Doctrine and cut back federal agencies’ authority to interpret laws, has sparked a new round of lawsuits led by GOP states.

In a motion filed on August 16, West Virginia, along with 23 other states, petitioned the U.S. District Court for the District of North Dakota to reconsider the Environmental Protection Agency (EPA) and the Army Corps of Engineers’ interpretation of the “waters of the U.S.” (WOTUS) rule.  As per Loper Bright, the states argue that agency interpretations that are not contemporaneous with the original statute and lack consistency over time warrant less deference. They claim that the Biden administration’s current WOTUS rule is a significant departure from the original intent of the 1972 Clean Water Act and has fluctuated across different administrations.

This argument aligns with a recent successful motion by Texas and Idaho in another federal case. The Loper Bright decision effectively ended the Chevron doctrine—a principle that had given agencies considerable interpretive leeway—impacting the current WOTUS rule. Despite this, the EPA and Army Corps have maintained that their 2023 revision of the rule still represents the best interpretation of the Clean Water Act, even post-Loper Bright. The states contend that the agencies are dismissive of the implications of Chevron’s end and point to a recent case where a North Carolina court rejected a challenge to the WOTUS rule, which is now under appeal.

Canada Railway Shutdown is Halting Billions in Trade and Disrupting Global Supply Chains

Canada’s major railways, CN Rail and Canadian Pacific Kansas City, have locked out workers simultaneously, halting most freight transport across the country. This has caused significant disruptions in global supply chains, holding up approximately C$1 billion in daily trade. The lockout occurred after months of failed negotiations regarding rest periods, safety, and scheduling between the rail companies and Teamsters Canada, representing around 10,000 workers.

This unprecedented shutdown has halted all rail traffic in Canada and cross-border shipments with the U.S., potentially causing significant economic harm to businesses and consumers in both countries.   If not resolved, the shutdown could disrupt billions of dollars in trade each month, with major impacts on industries reliant on rail transport, including agriculture, manufacturing, and chemical processing.

Business groups are increasingly calling for Prime Minister Justin Trudeau to intervene, but he has so far declined to force arbitration, instead urging both sides to reach an agreement to avoid further economic damage.  The situation has raised concerns about Canada’s trade reliability, with international partners closely monitoring the developments.

Federal Judge Upholds Public’s Right to Know in TSCA New-Chemicals Review Case

A federal district judge has supported environmentalists’ claims that the Toxic Substances Control Act (TSCA) provisions establish a public “right to know” regarding the EPA’s reviews of new chemicals. This is a significant development in ongoing litigation aimed at increasing transparency in the new chemicals program. While Judge Loren AliKhan did not fully agree that the EPA has unlawfully withheld key documents, her ruling affirms that TSCA’s transparency requirements are enforceable in court, allowing for future legal challenges on the merits.

The case, filed by the Environmental Defense Fund (EDF) and other environmental groups, argues that the EPA has been violating the public’s right to access information about new chemical reviews by failing to promptly release pre-manufacture notices (PMNs) and certain health and safety studies, despite TSCA’s provisions that exempt such data from confidentiality protections. Industry groups have expressed concern that this ruling could lead to broader disclosure of information they consider confidential and increase pressure on the EPA to impose stricter controls on new chemicals.

Judge AliKhan’s decision is particularly noteworthy because it rejects the EPA’s argument that the plaintiffs were prematurely challenging non-final actions and grants the environmentalists’ motion to compel the production of an administrative record, marking a significant win for the plaintiffs. The judge has given both parties until September 17 to agree on the scope of this record, acknowledging that it will be a complex process.

Chemical Industry Criticizes EPA’s Formaldehyde Review, Citing Flawed Science

The EPA released its long-anticipated Integrated Risk Information System (IRIS) assessment on formaldehyde, a key document that will influence the pending Toxic Substances Control Act (TSCA) evaluation of the chemical. The assessment maintains conservative risk values that have long been opposed by the chemical industry, sparking immediate backlash from the ACC. The ACC criticized the final assessment as flawed and unfit for regulatory use, arguing that it does not meet the TSCA’s requirement to use “the best available science.”

The release of the assessment was initially delayed by an internal process issue, where the EPA briefly posted and then removed the documents before reposting them. Despite the controversy, the final assessment echoes conclusions from a 2022 draft, including a cancer risk value similar to one established in 1991. The ACC warns that if the EPA bases its TSCA evaluation on this assessment, it could lead to regulatory actions that do not adhere to scientific and legal standards. The industry group urges significant changes to avoid unscientific and legally unsound regulations later this year.

STB Hearing Scheduled for September

The Surface Transportation Board (STB) will conduct a two-day hearing on September 16 and 17 to discuss recent trends and strategies for growth in freight railroad traffic. Over three dozen participants are expected to testify, including executives from the six Class I railroads, industry analysts, shippers, suppliers, and rail labor representatives. The hearing will be live-streamed on the STB’s YouTube channel.