Shortly after taking office, President Biden’s Chief of Staff Ron Klain issued a regulatory-freeze memo across virtually all agencies. The action is typical of an incoming administration, especially one from the opposing party. The move allows the President’s team to review pending rules, 11th-hour actions and permanent regulations drafted by the previous administration.
The regulatory freeze begins to thaw at some point, however, and the agencies start putting their imprint on government and, often, their footprint on industry. Federal departments and agencies began in February notifying the White House’s Office of Management and Budget with the list of regulations adopted by former President Trump to be reviewed. The list will form a basis for many of the rollbacks and new restrictions on emissions and increased efficiency standards sought by environmental groups and many in the Biden administration.
President Biden signed an Executive Order on his first day in office calling for the immediate review of agency actions taken between Jan. 20, 2017 and Jan. 20, 2021. The Order, with a focus on environmental standards, stated that agencies must submit a preliminary list to the White House within 30 days of any actions being considered that could be completed by Dec. 31, 2021. The Order also has a 90-day deadline for heads of agencies to submit for White House review any actions being considered for completion by Dec. 31, 2025.
The Feb. 19 deadline to submit a list for regulatory review officially kicks off the rulemaking season here in Washington, D.C. As President Biden fills out his cabinet and senior appointees of key departments and agencies, their activities have begun to pick up. And while OSHA is receiving much attention during the COVID-19 pandemic, actions the EPA plans to take could have a lasting impact on manufacturing.
Sources in Washington indicate the EPA list included a review of passenger-vehicle greenhouse-gas standards, which is not a surprise to those of us working on environmental regulations. The Energy Department submitted a number of efficiency standards for review, some of which could affect items from industrial machinery to home appliances to, yes, showerheads.
On Feb. 26, the EPA also took steps that will serve as the foundation for their regulatory efforts. The Obama EPA created an estimate for the dollar cost to society of each ton of carbon dioxide or other greenhouse gases emitted into the atmosphere. They use this Social Cost of Carbon (SCC) in developing new rules and justifying tighter environmental regulations.
The SCC is an actual dollar amount calculated by the Obama administration at $50 per carbon ton emitted, which former President Trump lowered to below $1. Biden officials recently announced they would temporarily raise the SCC to $51 per carbon ton, with many expecting a more permanent level over $100. The higher the dollar impact of every carbon ton emitted by a manufacturing factory or power plant, the greater the benefit to the environment and public health, according to those hoping for tighter standards.
On vehicle emissions, we recently heard environmental groups are pressing President Biden to require a 60% reduction by 2030 compared with current levels. In addition, government officials are receiving pressure to set a goal for mandating zero-emission vehicles by 2035. To some, new regulations may bring opportunity in the form of new vehicles requiring a specific technology, but it means change both subtle and dramatic to others.
Separately, the Council on Environmental Quality (CEQ) is rescinding its ‘‘Draft National Environmental Policy Act Guidance on Consideration of Greenhouse Gas Emissions,’’ which was put into place by the previous administration and sought to expedite the environmental review of infrastructure projects. Job-creating and congestion-alleviating projects too often undergo lengthy delays. The Trump administration took steps to limit the review period to one year and submissions to 150 pages, which is down from the current average of three years and applications that can run into the hundreds of pages.
While many of these policies may seem abstract today, the regulatory actions taken in Washington, D.C. directly affect the regulated class – manufacturers. Even if a regulation does not directly impact a company in the sector, it likely will affect its customer or supplier. Whether a refrigerant subject to new rules or industrial boilers facing stricter efficiency standards, manufacturers should closely monitor the EPA’s activities this spring.
President Biden is under tremendous pressure to deliver on his promise to make climate change central to his government’s policies. These are just the steps taken in the first 40 days, with many more to go before the symbolic 100-day mark. The regulators have certainly mounted up and are beginning a trot that will quickly turn into an all-out sprint. Manufacturers should expect that sprint to continue throughout 2021.