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Clark Hill 2023 Automotive & Manufacturing Industry Outlook: Energy & Environment Update

September 13, 2023

EPA Proposing Stricter Regulation of Chlorinated Solvent Use

Manufacturers should be aware of the recent proposal by the U.S. Environmental Protection Agency (“EPA”) to prohibit most industrial and commercial uses of perchloroethylene (“PCE”) as well as prohibit manufacturing, processing, and distribution of PCE for all consumer uses. Most of these uses would be phased out in two years, but the proposal calls for a 10-year phaseout for the use of PCE in dry cleaning, with compliance dates depending on the type of machine in which PCE is used.

The proposed regulation would allow the continued use of PCE for important national security applications or for other critical needs, such as applications in military and commercial aircraft, in petrochemical manufacturing, and for continued processing of PCE to manufacture hydrofluorocarbons (HFC)-125 and HFC-134a because these two chemicals can be mixed with other substances to make more climate-friendly refrigerants. However, any continued manufacturing and use of PCE would become subject to a workplace chemical protection program (“WCCP”) with a strict inhalation exposure limit, requirements to prevent skin exposure to ensure protection for workers, as well as monitoring and reporting requirements.

EPA will be accepting public comments on the proposed rule through August 15, 2023. The proposal is intended to address the unreasonable risk of injury to human health presented by PCE under its conditions of use as documented in EPA’s December 2022 final revised risk determination for PCE prepared under the Toxic Substances Control Act (“TSCA”).

EPA’s proposal regarding PCE comes on the heels of a similar proposal in May 2023 to ban most uses and strictly regulate the continued use of the solvent methylene chloride. The public comment period for the methylene chloride proposed rule ended on July 3, 2023.

Sackett v. EPA and WOTUS Update

On May 23, 2023, the United States Supreme Court issued its decision in Sackett v. EPA, limiting the reach of the Clean Water Act over adjacent wetlands. The Court held that a wetland must have a “continuous surface connection” with “Waters of the United States” making it difficult to determine where the water ends, and the wetland begins.  The Supreme Court’s decision effectively put an end to the “significant nexus standard” choosing, instead to adopt the “relatively permanent standard.”  While the Sackett decision focused on wetlands, it is likely that there will be support for using the same “relatively permanent standard” for other Waters of the United States. For further discussion of this opinion, see this article prepared by Clark Hill attorneys Zach Larsen and Steve Hoch.

With respect to EPA’s December 2022 WOTUS Rule, prior to the Supreme Court’s decision, a federal district court in North Dakota blocked the application of EPA’s WOTUS rule in about half of the United States. EPA recently filed an appeal of the Court’s injunction that many suspect is EPA’s effort to preserve WOTUS while EPA decides.  EPA, in its Regulatory Agenda, indicated that the December 2022 WOTUS rule was intended to be an interim rule with EPA issuing a second WOTUS rule later in 2023.  This effort has been put on hold.

PFAS Regulatory Updates

On March 29, 2023, EPA published a proposed National Primary Drinking Water Regulation (“NPDWR”) to establish Maximum Contaminant Levels (“MCLs”) for six different per- and polyfluoroalkyl substances (“PFAS”), including PFOA, PFOS, PFNA, PFHxS, PFBS, and GenX, in drinking water. Unlike EPA’s previously promulgated health advisories, these proposed MCLs are legally enforceable limits and were essentially set to the lowest levels at which laboratories could detect PFOA and PFOS – 4 parts per trillion. These limits are lower than any that have yet been proposed by any states attempting to set such limits. The limits for the other four PFAS were set as a combined hazard index limit. Such an approach is not novel in the regulatory risk management context but is novel with respect to drinking water standards.

Because drinking water standards are typically default groundwater and surface water remediation standards, these proposed MCLs may significantly impact the cleanups of sites impacted by PFAS. These levels may also lead to the establishment of similar significantly lower standards for PFAS discharges from permitted facilities, particularly where any such discharge may eventually migrate to any water bodies designated as public drinking water supplies. The comment period for the proposed NPDWR ended on May 30, 2023.

As referenced in our 2023 outlook, EPA previously announced a long-anticipated proposed rule which would designate PFOA and PFOS as “hazardous substances” under the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”). EPA previously indicated it planned to issue a final rule by the summer of 2023. However, on June 13, 2023, EPA published its Spring 2023 Unified Agenda and pushed back that anticipated date to February 2024.

This delay may be related to EPA’s April 13, 2023 advance notice of proposed rulemaking (“ANPR”), in which EPA asked the public for input regarding the proposed designation of seven additional PFAS compounds, precursors to those compounds and PFOA and PFOS, and most notably groups of PFAS that share similar characteristics. There are thousands of PFAS, and EPA appears to be eyeing a shift in its regulatory approach from utilizing rulemaking for specific individual PFAS to a broader group-based approach. The public comment period for the ANPR is August 11, 2023.

The views and opinions expressed in the article represent the view of the author(s) and not necessarily the official view of Clark Hill PLC. Nothing in this article constitutes professional legal advice nor is intended to be a substitute for professional legal advice.

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