US EPA Adoption of New Phase I ASTM Standard E1527 Delayed by Adverse Comments

Back in November of 2021, ASTM International issued its revised Standard Practice E1527-21 to replace its 2013 version setting forth the specific procedures and requirements for environmental professionals preparing Phase I environmental site assessments.  Preparation of a Phase I report under this Standard satisfies one of the obligations under the All Appropriate Inquires (AAI) Rule for asserting the Bona Fide Prospective Purchaser (BFPP) protection to liability for property owners under CERCLA.  The new standard contains a number of substantive changes from the 2013 version, including the following:

  • 6-Month Shelf-Life: Current guidance allows for the use of the date of the report (i.e. date of completion) to establish the 6-month shelf-life of the report.  The new standard expressly calls for use of the “earliest” of the individual components investigated by the consultant (e.g. interviews, search for recorded environmental cleanup liens, review of government records, site reconnaissance, and the professional’s “Declaration”).  Accordingly, consultants will be required to identify each individual components’ associated dates in the report for purposes of assessing validity.
  • Historical Sources: The Standard has been revised to identify four specific historical resources that must be reviewed in assessing past uses of the Site:  (1) aerial photographs, (2) fire insurance maps, (3) local street directories, and (4) historical topographic maps.  These sources must be reviewed also for adjacent properties.
  • Title Searches: The Standard requires that the User obtain and search title records to identify any land use or activity restrictions or environmental liens on the subject property.  Previously this has been fairly piecemeal or may have only considered the last change in title.  The new standard clarifies the obligation to conduct such reviews and requires research back to 1980.
  • Emerging Contaminants:  The new Standard now references “emerging contaminants,” which targets substances such as per- and polyfluoroalkyl substances (PFAS).  PFAS are a class of approximately 4,700 synthetic chemicals used in a variety of industrial and commercial processes.   Some states have begun to regulate these compounds, but they are not yet federally regulated “hazardous substances” under CERCLA (although EPA’s “strategic roadmap” sets forth a number of actions to address PFAS during the next couple of years, including regulations under CERCLA).  The new ASTM standard treats consideration of these compounds as “non-scope considerations” and states that “emerging contaminants may want to be assessed in connection with commercial real estate, because once these contaminants are defined as a hazardous substance under CERCLA, then these substances must be evaluated within the scope of E1527-21.”

On March 14, 2022, EPA issued proposed and direct-final rules to formally adopt the new standard and incorporate it into the AAI Rule and solicited public comment through April 13, 2022.  The new standard was to become effective on May 13, 2022, after which purchasers of commercial property could rely on the new standard as part of their pre-acquisition due diligence activities.

However, a number of stakeholders, including various environmental professionals and financial services industry representatives, submitted adverse public comments to the rulemaking.  The comments largely challenged EPA’s continued allowance of the 2013 standard.  More specifically, EPA’s rule allows for the option to continue using the prior version with EPA noting that “this action does not require any party to use the ASTM E1527-21 standard” and “EPA’s only action … is recognition of the ASTM E1527-21 standard as compliant with the all appropriate inquiries requirements.”  Accordingly, commenters variably citing purported “chaos” and “confusion in the marketplace” as to how to comply with the AAI Rule, and that allowance of the two standards creates a “two-tier” system of compliance.

As a result of these adverse public comments, EPA withdrew its direct final rule on May 2 and is now preparing to address the comments in a subsequent final action based upon the proposed rule.  Notwithstanding the large number of adverse comments, it seems doubtful that EPA will simply cease authorization of the 2013 version altogether, and more likely that EPA will instead specify a timeframe for sunsetting the older version.

Nonetheless, there remains a degree of risk for interested parties with commercial property acquisitions occurring in the near future.  They must now decide whether to conduct environmental assessments under the 2013 version which remains effective for now, or begin utilizing the 2021 version of the ASTM standard with the view that it will soon become effective with little substantive change aside from addressing the dual compliance track.  These parties no doubt want to avoid finding out a month prior to Closing that they must have their environmental professional go back and do additional investigations to satisfy the 2021 version.  As such, these parties must closely monitor this issue to assess how EPA addresses the adverse public comments, as well as the timing for effectiveness of the new standard in relation to their property Closings.

Are You Ready for the UK Plastic Packaging Tax?

The plastic packaging tax (the ‘Tax’) came into force on 1 April 2022, with UK businesses which produce or import plastic packaging components in quantities of 10 or more tonnes per year affected. However, despite already being in force, research conducted by YouGov, on behalf of Veolia, has found that a high proportion of retail and manufacturing businesses (77% of those surveyed) are still not aware of the Tax.

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UK Government publishes guidance on the implementation of the Food (Promotion and Placement) Regulations 2021

Supermarket shelvesThe Food (Promotion and Placement) (England) Regulations 2021 will come into force on 1 October 2022 and impact foods High in Fat, Salt and Sugar (HFSS) by introducing restrictions on volume offers and new rules on placement in retail stores and promotion. These include a 9 p.m. watershed on all advertising of HFSS foods and an outright ban on paid online advertising of HFSS foods, but additionally, the regulations prescribe the location where qualifying businesses must not place specified food inside a physical store.

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US States Charge Into the Future with Federal Support for EV Charging Infrastructure

White House at NightEarlier this year, a new $5 Billion National Electric Vehicle Infrastructure (NEVI) Formula Program was established under the Bipartisan Infrastructure Law.  The Program will provide funding to States to help with the strategic deployment of a national network of 500,000 electric vehicle (EV) charging stations by 2030, with the goal of providing convenient, reliable, affordable, and equitable charging experiences for all users.

The $5 billion will be distributed to States over five years, with $615 million available in fiscal year 2022.  The funding will be apportioned among States (including the District of Columbia and Puerto Rico) on a formula basis. Under the formula, each State receives a share of program funding equal to the State’s share of the combined amount that the Federal Highway Administration (FHWA) distributes in: (i) Federal-aid highway apportionments; and (ii) Puerto Rico Highway Program funding.  Excluding outliers like California and Texas (slated to receive $56 million and $60 million respectively), the Program will see an average of just less than $10 million distributed to each State in fiscal 2022. Continue Reading

ESG Hot Legal Issues for Food Manufacturers (UK)

Squire Patton Boggs invites you to join us for a webinar on 5 May 2022 where we will discuss the environmental, social and governance (ESG) issues that affect food manufacturers, from changes in legislation, priorities for remaining compliant, navigating supply chain transparency and how, together, these feed into the wider corporate governance obligations both current and in the future.

More event details and registration information can be found here.

New EU Ecodesign law – “Making sustainable products the norm” or empty shell?

At the end of March, the European Commission (Commission) presented the Sustainable Products Initiative (SPI) as part of a ‘Circular Economy Package I’, together with a Sustainable Textiles Strategy, and proposals for a new directive empowering consumers for the green transition (please see Sustainability Outlook March 2022), and a new Construction Products Regulation. In its new Circular Economy Action Plan (CEAP 2.0) of March 2020, the Commission had foreseen adopting the SPI in 2021.

The Commission aims at “making sustainable products the norm” and reducing negative life cycle environmental impacts of products, while benefitting from efficient digital solutions, by setting a framework for Ecodesign requirements, creating an EU digital product passport and tackling the destruction of unsold consumer products.

In particular, the SPI includes the proposal for an Ecodesign for Sustainable Products Regulation (ESPR), which would repeal the current Ecodesign Directive 2009/125. It establishes a horizontal framework and broadens the scope of the Ecodesign Directive beyond energy-related products, i.e. beyond any product that has an impact on energy consumption during use. The new Regulation would apply to all physical goods, including components and intermediate products, except food, feed, medicinal and veterinary products, living plants and animals, and products of human origin. According to the Commission’s explanatory memorandum, the ESPR is meant to address products that are not covered by existing legislation or where that legislation does not sufficiently address sustainability, and Ecodesign requirements in the delegated acts that it will adopt cannot supersede requirements set in legislative acts (of the Council and European Parliament).

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Furthering the Biden Administration’s Environmental Goals Using the Farm, Ranch, and Rural Communities Advisory Committee

AgricultureRecently, in celebration of National Agriculture Day, US EPA Administrator Regan announced that US EPA had rechartered its Farm, Ranch & Rural Communities Advisory Committee (FRRCC).  Administrator Regan simultaneously announced a new charge topic for the FRRCC as well.

The FRRCC was developed in 2007 and focuses on providing policy advice, information, and recommendations to the US EPA Administrator on a variety of environmental issues and policies relating to agriculture and rural America.  Charge topics are announced approximately every two years, with the FRRCC’s newest charge topic set for years 2022–2024.

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Environmental Justice Consideration in Affordable Housing

JusticeEnvironmental justice has a natural connection to affordable housing programs.  It remains, however, a broad and somewhat elusive term.  There is no formal definition of environmental justice in US federal law.  However, relevant agencies have developed working descriptions for the term.  US EPA generally defines it as “fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies,” while the US Department of Housing and Urban Development (HUD) describes the term as “ensuring equal protection from environmental and health hazards and providing equal and meaningful opportunity to participate in the decision-making process to achieve a healthy environment.”

The underlying concepts of fairness and equal protection adopted by these agencies originate in a number of civil rights statutes and subsequent legal mechanisms.  In particular, Title VI to the Civil Rights Act of 1964 established a federal benchmark for non-discrimination and it prohibits recipients of federal funding from discriminating based on race, color, or national origin in any program or activity.  A few years later, the Civil Rights Act of 1968 expanded upon this mandate.  The Fair Housing Act (Titles VIII and IX to the 1968 Act) prohibits discrimination as to the sale, rental, and financing of housing based on race, religion, national origin, and sex. Continue Reading

Still Time To Have Your Voice Heard In The UK COVID-19 Public Inquiry

With just under a week remaining on the Cabinet Office’s online consultation process into the COVID-19 Public Inquiry, we explore the current stage of the Public Inquiry process, the next steps, and the importance of ensuring organisations and individuals have their say in the draft Terms of Reference (“TORs”) by 7 April 2022, which will shape the future for the Inquiry process.

In May 2021, the Prime Minister announced a Public Inquiry to examine the UK’s preparedness and response into the COVID-19 pandemic and to identify lessons to be learned, including a promise to put the “state’s actions under the microscope”. The Inquiry will be chaired by the Rt Hon Baroness Heather Hallett DBE, former Presiding Judge and Vice-President of the Court of Appeal Criminal Division, who has significant experience in dealing with a range of complex Inquests and Inquiries, including acting as the Coroner for the Inquests into the deaths of the victims of the London 7/7 bombings and chairing the Iraq Fatality Investigations, which inquired into allegations of unlawful killing by British Forces.

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Crunch Time for Critical Minerals in the US

MiningFollowing up on Squire Patton Boggs’s continuing coverage of the critical minerals industry, we examine some recent reforms in the federal permitting process which aim to ease supply-side constraints by expediting the development and exploitation of critical minerals. Rapidly mounting geopolitical tensions, East/West decoupling, and longstanding supply chain stresses underlie a new reality—global logistics now operates less like a fine tuned watch and more like a game of Calvinball, where delays, ever-changing rules, and black-swan shocks are the norm.  But this disruption only goes so far—some things remain largely unchanged.  One certainty in this uncertain time is that the demand for critical minerals will continue to increase in the coming years as countries push a green transition to meet Paris Accord targets.  Countries and companies remain laser-focused on the need to obtain reliable sources of critical minerals needed to fuel this transition.

Although the demand for critical minerals is robust and largely insulated from the current political climate, critical minerals supply faces significant hurdles including both short- and long-term capacity strains given political instability in key regions, an uncertain trade outlook, and—most of all—skyrocketing demand.  The International Energy Agency reports that demand for critical minerals related to electric vehicles and battery storage will soar by orders of magnitude in the coming years, to say nothing of critical minerals’ increasing use as the United States and European Union attempt to develop independent chip/high-tech manufacturing bases and redundant critical mineral supply chains. Continue Reading