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Clark Hill 2024 Automotive & Manufacturing Industry Outlook: Environment, Energy & Natural Resources

March 11, 2024

Manufacturers will continue to remain focused on regulatory activity, legislation and litigation concerning per- and polyfluoroalkyl substances (“PFAS”) in 2024 as multiple developments will present manufacturers with new PFAS-related challenges.

TSCA PFAS Reporting Rule

On October 11, 2023, the U.S. Environmental Protection Agency (“EPA”) published a final rule under  the Toxic Substances Control Act (“TSCA”) requiring  manufacturers (including importers) to submit a one-time report of their use of PFAS  from 2011 through 2022. PFAS manufacturers (as defined under the rule) have 12 months from the effective date of the rule (November 13, 2023) to collect the necessary information (i.e., November 13, 2024). This is then followed by a six-month reporting period (i.e., reports must be submitted to EPA by May 13, 2025). Additionally, “small manufacturers” that are solely reporting data on imported PFAS contained in manufactured articles have six months beyond that to report. Simply receiving PFAS from domestic suppliers or other domestic sources is not, in itself, considered “manufacturing PFAS for commercial purposes” for the purposes of the rule.

Additional information regarding the reporting rule can be found in our recent PFAS February 2024 Update and Preview.  In addition, EPA has published lengthy reporting instructions as well as a Small Entity Compliance Guidance.  However, compliance with the TSCA PFAS reporting rule will be a challenge for many manufacturers, particularly those who already experience difficulties obtaining chemical-specific information from their suppliers.

Toxic Chemical Release Reporting for PFAS

On October 31, 2023, EPA published a final rule under Section 313 of the Emergency Planning and Community Right to Know Act (“EPCRA”) that adds all PFAS included on the Toxic Chemical Release Inventory (“TRI”) to the list of Chemicals of Special Concern as part of the Toxic Chemical release reporting requirements under EPCRA. Under the Toxic Chemical release reporting regulations, 40 CFR Part 372, Chemicals of Special Concern are excluded from certain reporting exemptions, including a de minimis exemption, and cannot be reported using the alternative threshold certification reporting form or reported either as an estimate of by a range.  The rule is effective as of November 30, 2023, and applies as of January 1, 2024, for reporting year 2024 (reports due July 1, 2025).

In addition to this rule, on January 9, 2024, EPA added seven additional PFAS in accordance with the National Defense Authorization Act (NDAA). The seven PFAS added in addition to those PFAS already on the list bring the total number of PFAS subject to TRI reporting to 196.  The list of PFAS subject to TRI reporting will continue to be revised as new PFAS are added as a result of meeting the requirements of the NDAA.

Designation of PFAS as Hazardous Constituents, Hazardous Waste or Hazardous Substances 

On February 1, 2024, EPA proposed two more PFAS-related rules under the Resource Conservation and Recovery Act (“RCRA”): one rule which would designate certain PFAS (perfluorooctanoic acid (“PFOA”), perfluorooctanesulofonic acid (“PFOS”), hexafluoropropylene oxide (“HFPO”) dimer acid and its ammonium salt (more commonly known as “GenX”), perfluorononanoic acid (“PFNA”), perflurorohexanesulfonic acid (“PFHxS”), perflourodecanoic acid (“PFDA”), perfluorohexanoic acid (“PFHxA”), perfluorobutanoic acid (“PFBA”), and perfluorobutane sulfonic acid or “PFBS”) as “hazardous constituents” under RCRA, and another rule which would clarify that emerging contaminants like the nine PFAS that are the subject of the first rule can be addressed and remediated through RCRA’s corrective action process.

EPA’s first proposed rulemaking proposes to designate these chemicals as hazardous constituents under Appendix VIII to the hazardous waste regulations at 40 CFR Part 261. This designation would, according to EPA, ensure that these PFAS are subject to corrective action requirements and would be a necessary building block for future work to regulate these PFAS chemicals as a listed hazardous waste. EPA’s other rulemaking proposes regulatory language intended to clarify that the RCRA Corrective Action Program has the authority to require investigation and cleanup for wastes that meet the statutory definition of hazardous waste. According to EPA, this modification would clarify that emerging contaminants, such as PFAS, can be cleaned up through the RCRA corrective action process. Comments on the hazardous constituent rule will be due (at least initially) 60 days after it is published in the Federal Register, and comments on the corrective action rule will be due (at least initially) 30 days after they are published in the Federal Register. 

In addition to EPA’s proposed RCRA rules, as discussed in our prior update, on August 26, 2022, EPA announced a long-anticipated proposed rule which would designate PFOA and PFOS, including their structural isomers, as “hazardous substances” under the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”). EPA’s second annual progress report indicates  that it plans to issue a final rule  “in early 2024.”  This delay in finalizing may be related to EPA’s April 13, 2023 advance notice of proposed rulemaking (“ANPR”), which was also discussed in a prior update, in which EPA asked 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.

Effluent Guidelines Program Plan 15 and Regulation of Wastewater Discharges

On January 31, 2023, EPA published notice of the availability of its Effluent Guidelines Program Plan 15. Effluent limitations guidelines and pretreatment standards (“ELGs”) are technology-based standards to address industrial wastewater discharges, and EPA has promulgated numerous ELGs for specific industrial categories. Plan 15 discusses a range of topics, including EPA’s review of various ELGs as well as EPA’s update on various rulemaking actions. Specifically with respect to PFAS, Plan 15 includes an announcement that EPA completed a detailed study of the ELGs for landfills, and that EPA proposes to revise these ELGs to address PFAS discharges from landfills.

Additionally, Plan 15 announces that EPA intends to initiate or further expand PFAS-related studies concerning other industrial categories, including textile mills, publicly owned treatment works (POTW) influent, concentrated animal feeding operations (CAFO), pulp, paper, and paperboard, and airports. EPA also announced that it was not pursuing further regulatory action for the electrical and electronic components category based on the PFAS-related review it had conducted thus far. Finally, Plan 15 includes updates related to PFAS-related proposed rulemakings that EPA intends to publish in spring of 2024 related to the metals finishing, electroplating, organic chemicals, plastics, and synthetic fibers categories.

As discussed in a prior update, EPA has issued guidance to states detailing how states can utilize their authorized National Pollutant Discharge Elimination System (“NPDES”) programs to monitor for discharges of PFAS and restrict the discharge of PFAS at their source. Certain states like Michigan, North Carolina, and California have already begun to include certain PFAS-related requirements into their NPDES permitting programs. Other states will likely follow suit.

State PFAS Product Bans

States are continuing to pass legislation to ban and/or require consumer notices for PFAS-containing products. Those laws to date have targeted carpets, rugs, fabric treatments, cookware, cosmetics, food packaging, children’s products, furniture, textiles, and apparel. A detailed breakdown of the various state laws is beyond the scope of this article. However, these state laws can vary in several important respects such as which PFAS chemicals are covered, whether the law is limited to “intentionally introduced” PFAS, and, in the case of food packaging, whether the packaging is designed for direct contact with food.

For example, Connecticut’s new food packaging law defines PFAS very broadly (“all members of the class of fluorinated organic chemicals containing at least one fully fluorinated carbon atom”) and bans the use of any food package to which any amount of PFAS has been intentionally introduced during manufacturing or distribution, but the ban only applies to packaging that “is applied to or in direct with any food or beverages.” Minnesota’s statute similarly employs a broad definition of PFAS that are “intentionally added,” but the prohibition is not limited to packaging in direct contact with food but instead applies to a broad category of food packaging materials, including outside packaging. Companies must continue to monitor these developments on a state-by-state level.

Aqueous Film-Forming Foam (AFFF) MDL and Other State PFAS Litigation

Currently, there are several thousand cases pending in the multidistrict class action litigation (MDL) in the South Carolina Federal District Court related to aqueous film forming foam (“AFFF”), a now infamous source of PFAS contamination. Two settlements garnered much of the attention in 2023. Defendants 3M and Dupont reached tentative settlements, pending court approval, under which 3M would pay $10.3 billion and Dupont (and its spin offs-Chemours Company and Corteva, Inc.) would pay $1.185 billion. On February 8, 2024, the Court granted class counsel’s motion to approve the DuPont class settlement and class certification.  The settlement monies would be available to cover the costs of testing and remediation associated with the presence of PFAS in drinking water sources but would not resolve any personal injury claims and state claims for natural resource damages (and the judge overseeing the MDL is currently considering the selection of bellwether cases for certain personal injury claims to go forward with discovery). To be eligible to recover under these settlement agreements, the public water supply system (PWS) must have a PFAS detection in its water system resulting from past or future PFAS testing.

While the MDL in South Carolina is limited to claims for PFAS contamination caused by the manufacture of AFFF, some state Attorneys General have also filed separate lawsuits against manufacturers of other PFAS chemicals, including those used in consumer products. It has been reported that the Attorneys General filing these separate actions are likely trying to avoid being lumped into the MDL. An organization called Safer States maintains a website that tracks the filing of these actions. One such action by Ohio against DuPont and its spin-off companies, Chemours Co. and Corteva Inc., already has resulted in a $110 million settlement.

Michigan Lawsuits

A pair of Michigan lawsuit concerning PFAS issues are also garnering national attention. First, 3M Company filed suit against Michigan’s Department of Environment, Great Lakes, and Energy (“EGLE”) challenging EGLE’s designation of seven different types of PFAS (PFOA, PFOS, PFNA, PFHxS, HFPO, PFBS, and PFHxA) as “hazardous substances” under Michigan’s environmental statutes. And on November 15, 2022, the Michigan Court of Claims found that EGLE had violated the Michigan Administrative Procedures Act (“APA”) in promulgating drinking water standards (which serve as groundwater cleanup standards) for PFOA and PFOS because EGLE failed to adequately address cleanup and compliance costs on businesses. EGLE subsequently filed an appeal with the Michigan Court of Appeals, but on August 22, 2023, the Court of Appeals upheld the Court of Claims’ ruling. EGLE has now appealed to the Michigan Supreme Court, its final chance to preserve the standards before they are invalidated, which would force EGLE to re-promulgate those standards and adequately address cleanup and compliance costs on businesses when doing so.

Drinking Water Standards for PFAS

As discussed in a prior update, on March 29, 2023, EPA published a proposed rule that would establish enforceable drinking water standards for six PFAS (PFOA, PFOS, PFNA, PFHxS, PFBS and GENx). The comment period closed in May of 2023, and EPA’s Regulatory Agenda from the Fall of 2023 indicates that a final rule is due out later in 2024.

Revised Particulate Matter NAAQS

In a non-PFAS development, on February 7, 2024, USEPA finalized the National Ambient Air Quality Standard for fine particulate (PM 2.5).  USEPA lowered only the primary (health-based) annual PM 2.5 standard from 12 micrograms per cubic meter to 9 micrograms per cubic meter, leaving the other PM NAAQSs unchanged.  Assuming the new standard is not challenged, several implementation steps will begin after the effective date of the revised standard, including EPA’s designation of attainment/nonattainment areas for each State and each State’s development of a State Implementation Plan setting forth the State’s plan for how it will meet the new standard.

The revised standard could have significant implications for air permitting for manufacturing facilities.  For example, covered sources of PM 2.5 emissions may see their existing permit requirements modified as necessary to achieve the new standard (e.g., potentially upgraded control equipment).  Air permits for new major sources or major modifications of existing sources of PM 2.5 will now need to consider the revised PM 2.5 standard in their construction permit applications.  These implementation steps are designed to ensure that an area currently in compliance with the existing PM 2.5 standard achieves compliance with the revised standard by 2032.

This publication is intended for general informational purposes only and does not constitute legal advice or a solicitation to provide legal services. The information in this publication is not intended to create, and receipt of it does not constitute, a lawyer-client relationship. Readers should not act upon this information without seeking professional legal counsel. The views and opinions expressed herein represent those of the individual author only and are not necessarily the views of Clark Hill PLC. Although we attempt to ensure that postings on our website are complete, accurate, and up to date, we assume no responsibility for their completeness, accuracy, or timeliness.

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