Legislative Update: Stricter Emissions Rules for Chemical Plants and a Busy Two Week Session for Congress

Biden Administration Enforces Stricter Emission Rules for Chemical Plants  

The Biden administration finalized a rule on April 8 requiring over 200 chemical, polymer, and resin production plants to reduce their emissions of toxic chemicals as part of a broader effort to mitigate air pollution’s health impacts.  The rule revises new source performance standards (NSPS) for the Synthetic Organic Chemical Manufacturing Industry (SOCMI) and national emission standards for hazardous air pollutants (NESHAP), targeting air toxics from SOCMI, Group I, and Group II polymers and resins facilities.

It introduces more stringent emissions limits and mandates “fenceline” air quality monitoring for chemicals, including ethylene oxide(EtO), chloroprene, benzene, 1,3-butadiene, ethylene dichloride, and vinyl chloride.  EPA is setting a 90-day deadline for beginning fenceline monitoring of chloroprene emissions. Each chemical has an “action level,” triggering plant actions to reduce emissions if exceeded. However, the EPA is extending the deadline for mandating fenceline air monitors at SOCMI facilities from one year to two years.

The federal organization states in its rule that facilities must submit quarterly data to EPA starting one year after monitoring, which is due within 45 days of the end of each quarter. EPA then would make the monitoring data publicly available.

The rule is facing significant opposition from industry, with groups already pledging to challenge the rule in court legally.  Much of the industry’s critique stems from the EPA’s use of conservative risk assessments derived from the Integrated Risk Information System (IRIS). These assessments suggest that chloroprene and EtO present substantially higher risks than previously calculated. The American Chemistry Council (ACC) and U.S. Chamber of Commerce also oppose the rule, emphasizing the significant amount of scientific uncertainty and EPA’s rush to create a rule-making package that could set important precedents.

EPA touts that its proposal will cut 58 tons a year of EtO from the environment — a 63-percent reduction compared with total nationwide estimated emissions in 2020 will cut chloroprene emissions by 74 percent nationwide, compared to estimated emissions for 2020. During the Society of Environmental Journalists annual conference on April 5, EPA Administrator Michael Regan emphasized the agency’s commitment to urgently updating regulations to address climate change.  While acknowledging legal headwinds and the need for caution in rulemaking, particularly in light of recent court rulings such as Sackett v. EPA, Regan stressed the importance of crafting regulations grounded in science and legally sound principles.

Lawsuit Settlement Aims to Enforce EPA Incinerator Standards

The Environmental Protection Agency (EPA) reached an agreement with environmentalists to address the delays in states’ implementation of key EPA incinerator emission limits.  The rule may reignite debates over regulating pyrolysis units used in “chemical recycling.”

The agreement, outlined in a proposed consent decree in Sierra Club v. Michael S. Regan, mandates that the EPA finalize federal implementation plans (FIPs) by September 16 for existing commercial and industrial solid waste incinerators (CISWI) in states without approved state plans. Additionally, by June 30, 2026, the EPA must propose an implementation plan for smaller “other” solid waste incinerators (OSWI) in such states, with finalization by June 30, 2027. These plans would be imposed on states that still need to submit their own approved pollution-cutting blueprints.

The proposed consent decree has yet to be presented to the court; its terms are summarized in a Federal Register notice, which will undergo a 30-day public comment period.   EPA proposes to retract a decision made during the Trump administration. This determination would have subjected pyrolysis units to less stringent air toxics standards under the category of “manufacturing” rather than applying the more rigorous standards of the OSWI rule. The Trump administration and the chemical industry argue that pyrolysis units do not involve solid waste combustion, thus exempting them from OSWI regulations. Currently, at least 14 states, including West Virginia, South Carolina, and Mississippi, have adopted this perspective in their regulatory frameworks.

The proposed consent decree coincides with the EPA’s introduction of a significant rule to strengthen New Source Performance Standards (NSPS) and emissions guidelines for large municipal waste combustors (LMWCs). Environmental organizations are advocating for more stringent measures beyond the EPA’s proposal, including tighter restrictions and the inclusion of limits on emerging substances like PFAS. Additionally, they are pressing the EPA to eliminate a waiver for pyrolysis within the existing LMWC regulations.

Congress in Session for Two Weeks With a Hefty Legislative Agenda

Congress returns this week from its Easter break with only two weeks to make a dent into its packed agenda before the week-long Passover Recess begins the week of April 22.  The House will work on the FISA reauthorization, followed by a long list of economic policy bills.  The other top-of-the-list items include the stalled national security package providing foreign aid for Ukraine, Israel, and Taiwan.  Rep. Marjorie Taylor Greene (R-GA) continues to pressure House Speaker Mike Johnson (R-LA) over spending bills and Ukraine funding, suggesting she is willing to move forward on her filed motion to vacate the speakership. It remains to be seen if her tactics will work.

In the Senate, the House-passed corporate tax bill remains in limbo, and little progress was made over the Easter break.  Senate Majority Leader Charles Schumer (D-NY) said he would bring the House-passed tax bill to the floor if the sponsors can get enough votes to clear it.  The bill, which would make temporary changes in rules regarding R&D expensing, bonus depreciation, and the business interest deduction, has been on life support for weeks.  Most Senate Republicans appear to oppose the bill, and there seems to be insufficient support for it to be passed.

Other Senate items for April include a bill seeking to force TikTok to divest from its Chinese parent company, ByteDance, and the impeachment trial of Department of Homeland Security Secretary Alejandro Mayorkas. Other pending items include the Federal Aviation Administration (FAA) reauthorization, which expires on May 10, and the Biden administration’s request for funds to rebuild the Francis Scott Key Bridge in Baltimore.

Cole Takes the Helm of the House Appropriations Committee as Senate Democrats Shuffle Appropriations Subcommittee Chairs

Rep. Tom Cole (R-OK) secured the support of the House Republican Conference to become the next Appropriations Committee chairman, a significant and challenging position on Capitol Hill. Running unopposed, Cole received unanimous backing from the House GOP Steering Committee, paving the way for his formal election by the conference.   Rep. Robert Aderholt (R-AL) opted out of the race, leading to a quick and smooth process.

Cole is replacing Kay Granger, who is stepping down from the top Appropriator position. He will have to give up his chairmanship of the Transportation and HUD Subcommittee, which also creates an opening on the subcommittee. Rep. Kevin Kiley (R-CA) will reportedly be assigned that open seat. Cole will also have to give up chairing the House Rules Committee. Speaker Mike Johnson is recommending Rep. Michael Burgess to chair the Rules Committee.

Following the delayed finalization of this year’s spending bills, Cole is committed to promptly addressing the FY2025 funding, which will need to pass by Sept. 30. He intends to tackle committee staffing and subcommittee chair adjustments and collaborate with leadership to establish a budgetary framework, potentially revisiting discussions on nondefense fund allocations. Cole emphasizes the importance of efficiently producing appropriations bills once the topline is set.

In the Senate, Democrats made some changes to the chairs of the Appropriations subcommittees. Senate Appropriations Chair Patty Murray (D-WA) announced that she will remain chair of the Energy & Water Subcommittee. She assumed the position last year on an interim basis following the death of Sen. Dianne Feinstein (D-CA).  Rep. Martin Heinrich (D-NM), the current chair of the Agriculture Appropriations Subcommittee, had been considered the top candidate due to his state’s deep ties to the Energy Department. Murray had to give up chairing the MilCon subcommittee. Kyrsten Sinema (I-AZ) will now take on that post.

EPA Deadline for Briefing on Wastewater and Drinking Water Infrastructure Projects Set for Later this Month

The 118th Consolidated Appropriation Act of 2024 (P.L. 118-42) directs EPA to reserve 48% ($787.7 million) of the Clean Water State Revolving Fund (CWSRF) appropriation and 56% ($631.7 million) of the Drinking Water State Revolving Fund (DWSRF) appropriation to administer grants for specific community project funding/congressionally directed spending (CPF/CDS) for wastewater and drinking infrastructure projects. These funds are paid directly to recipients instead of through the state’s SRF programs.

Some Members have raised concerns that EPA still needs to provide FY2022 and FY2023 CPF/CDS to grant recipients in a timely manner.  EPA is authorized to reserve $13.3 million from the available funding for FY2024 SRF capitalization grants to be administered to these (CPF/CDS) programs but must first gain written confirmation from the House and Senate Appropriations Committees. This requires EPA to brief the appropriation committees on ways to improve the timeliness of CPF/CDS administration by April 23, 2024.   EPA must also provide the committees with a report on the subject matter by June 7, 2024.

House Republicans Launch Effort to Overturn EPA’s RMP Rule 

House Republicans introduced a Congressional Review Act (CRA) resolution aiming to overturn the EPA’s recent rule, tightening its risk management program (RMP) for chemical facilities. Rep. Dan Crenshaw (R-TX) filed H.J. Res. 123, which, if passed by both chambers and signed by the President, would nullify the EPA’s RMP rule. Crenshaw criticized the rule, suggesting it paves the way for restricting the use of hydrofluoric acid.

The RMP rule, implemented on March 1, expands program requirements, including considerations of climate impacts and mandates for accident-prone facilities to adopt safer technologies. While pro-regulatory groups argue for the benefits of these requirements, industry and Republicans cite concerns over cost and practicality.  The CRA allows Congress to repeal recent rules with a simple majority vote but faces a potential presidential veto. Lawmakers must file a resolution within 60 legislative days of a rule’s publication in the Federal Register, with a cutoff estimated for May 22, 2025.

EPA Weights Budget Cuts Impact on Chemical Review Process Enhancements

Planned enhancements to expedite and improve EPA’s review process for new chemicals may face a pause as the agency grapples with allocating recent budget cuts from Congress for fiscal year 2024. Shari Barash, director of the EPA’s new chemicals division, highlighted potential immediate impacts of the budget cuts, including a halt in new staff hiring, delays in process improvements, and continued use of outdated electronic software. While recent hires have contributed to faster decision-making regarding critical chemicals for various industries, the Global Chemical Regulations Conference participants stressed the need for further enhancements. The EPA’s fiscal 2024 budget reduction of $1 billion compared to the previous year and $2.9 billion less than requested has raised concerns about the agency’s ability to address industry demands for standard operating procedures and the revival of programs like the Sustainable Futures initiative, aimed at facilitating safety assessments for new chemicals.