The Environmental Protection Agency is considering an effective ban of a chemical compound called ethylene oxide. However, abruptly eliminating the chemical from use could have profound negative consequences for manufacturers and make modern life much more difficult.
The background: Ethylene oxide is a chemical used in a wide range of products, from textiles to plastics to antifreeze. It’s also used to sterilize certain medical devices—and in some cases, it’s the only chemical effective for that purpose.
The problem: The EPA is considering a new regulation that would set the acceptable levels of the chemical in the atmosphere so low that it amounts to a ban on the compound.
- “If you took a monitor outside in any U.S. city center, where no manufacturing production occurs, the level of ethylene oxide would be higher than the level the EPA is proposing,” said NAM Vice President of Domestic Policy Brandon Farris.
- “So anywhere that manufactures or uses ethylene oxide would be above the level they’re suggesting. The EPA is effectively banning it by creating a level that’s so low it can’t possibly be met.”
The impact: Because there are no current substitutes for some uses of ethylene oxide, a de facto ban would have immediate and serious impacts.
- “If this rule is finalized, a large number of medical devices could no longer be sterilized, and a lot of items that are relied on for modern life, such as textiles, plastics, household cleaners and adhesives, could not be produced in their current form,” said Farris. “If the EPA moves forward with this proposal, there will be no alternatives for the critical uses of this compound.”
The timeline: The final rule is expected to be released in the next few months. If the EPA chooses to finalize the rule in its current form—which would create a de facto ban on production and usage—manufacturers would be required to find a replacement for the chemical immediately. Developing a replacement in such a short amount of time will be difficult if not impossible.
Read the full story here.
Next on our list of misguided, burdensome regulations is a Securities and Exchange Commission misstep: climate rules that would force manufacturers to meet impossible deadlines and disclose sensitive information, without doing anything to protect investors.
The background: Last year, the SEC proposed a new rule that would require companies to disclose a massive amount of information, much of it impractical to collect or immaterial to investors.
- First, the proposed rule requires qualitative descriptions of companies’ climate-related risks and any efforts to respond to those risks, including internal metrics and confidential strategies.
- Second, it mandates quantitative reporting of companies’ greenhouse gas emissions, while compelling companies to conduct quantitative climate impact analyses within their consolidated financial statements.
- The result? An unworkable framework that imposes uniform mandates that do not align with manufacturers’ efforts to respond to climate change—but do impose an enormous burden on manufacturers across the country.
The response: The NAM has laid out a series of necessary changes that the SEC must make to reduce compliance costs and limit liability risks associated with the rule’s requirements. Specifically, the NAM is calling on the SEC to do the following:
- Strike disclosure of Scope 3 emissions, which requires companies to track emissions data from suppliers and customers throughout the supply chain. While some manufacturers are already working to understand these emissions, the data collection, estimation and reporting methodologies are still evolving—and the proposed mandate could have a disproportionate impact on small businesses swept into the reporting regime.
- Rescind accounting changes that would require climate impact analyses of companies’ consolidated financial statements on a line-by-line basis.
- Delay annual GHG emissions reporting, granting manufacturers more time to collect and verify data.
- Adjust the climate-related risk disclosures and Scope 1 and Scope 2 emissions reporting requirements to make the provisions less prescriptive and more aligned with existing company practices.
- Fine-tune the guidelines for reporting on climate-related goals to avoid penalizing companies that set ambitious targets.
- Remove requirements that companies disclose competitively sensitive information about the internal tools they use to understand and plan for climate risks, scenarios and activities.
NAM in action: Since the SEC first unveiled this attempt at regulatory overreach, the NAM has been on the move.
- The NAM led more than 50 other manufacturing associations in a letter calling on Congress to insist that the SEC develop a more workable version of the rule.
- The NAM also urged Congress to exercise stricter oversight of the SEC, push back against the agency’s regulatory onslaught and ensure the SEC’s rules remain within the agency’s statutory authority.
- NAM President and CEO Jay Timmons made revising the climate rule a focal point of the NAM’s corporate finance agenda.
- And last, NAM Managing Vice President of Policy Chris Netram testified about the harms to small manufacturers that would result from the climate rule at a House Financial Services Committee hearing.
The last word: “Manufacturers are leaders in responding to climate change and in informing investors about this critical work, but the SEC’s climate rule is simply unworkable,” said NAM Vice President of Domestic Policy Charles Crain. “Given the complex nature of manufacturing supply chains, the rule’s costly mandates will have a disproportionate impact on our industry—and particularly on small manufacturers. The SEC must rescind, or at a minimum significantly revise, its overreaching and impractical proposal.”
The NAM is leading the charge in urging the Biden administration to walk back a proposed revision to the National Ambient Air Quality Standards for fine particulate matter (PM2.5).
With the release of a letter signed by more than 70 associations representing nearly every sector of the U.S. economy and a new video advertisement, the NAM is highlighting how these regulatory actions would devastate the economy and actively undermine President Biden’s goal to expand manufacturing in the United States.
What’s going on: When the Environmental Protection Agency set forth the tentative new air quality standards earlier this year, manufacturers quickly recognized that if enacted, the new rules would put an undue burden on the industry—and could force companies to move operations overseas.
- Soon, manufacturers and related associations across the country began to speak out about the harm to their operations and communities, even as they affirmed the industry’s longstanding commitment to a clean, safe environment for all.
The background: The EPA’s proposed changes to the National Ambient Air Quality Standards—currently under review by the White House’s Office of Information and Regulatory Affairs— would lower the primary annual particulate matter standard from 12.0 µg/m3 to between 8.0 and 10.0 µg/m3.
- The EPA has estimated the total cost of the controls required for compliance with the proposed standard at up to $1.8 billion—and that figure could go higher, the agency admitted
- What’s more, some areas in the U.S. are already in “nonattainment” with the current PM2.5 standard, so a stricter standard will only put them further away from compliance and economic growth.
The costs: According to an analysis by Oxford Analytics and commissioned by the NAM, the revisions would:
- Threaten nearly $200 billion of economic activity and put up to a million current jobs at risk, both directly from manufacturing and indirectly from supply chain spending;
- In addition, growth in restricted areas may be constrained, limiting investment and expansion over the coming years; if the PM2.5 standard moves to 8 from the current 12, nearly 40% of the country will live in nonattainment areas, putting jobs and livelihoods at risk as factories may no longer be able to operate if located in an area that is in nonattainment, and no new facilities can be built to grow economic prospects; and
- Hit California’s manufacturing sector hardest, followed by Michigan and Illinois.
Speaking out: Many manufacturers from all sectors, along with related associations, have made their concerns public.
- Michael Canty, president and CEO of Alloy Precision Technologies of Mentor, Ohio, pointed out that these regulations may force companies to move production to other countries that don’t care about emissions reductions, unlike the U.S.
- Mark Biel, CEO of the Chemical Industry Council of Illinois, also worries that this regulation could make his state less attractive for manufacturers, despite its many assets.
- Dawn Crandall, executive vice president of government relations for the Home Builders Association of Michigan, decried the potential knock-on effects for Michigan’s suffering housing market.
The last word: The proposed changes “would risk jobs and livelihoods by making it even more difficult to obtain permits for new factories, facilities and infrastructure to power economic growth,” leadership from approximately 70 industry groups told White House Chief of Staff Jeffrey Zients yesterday.
- The revisions “would also threaten successful implementation of the Infrastructure Investment and Jobs Act, the CHIPS and Science Act and the important clean energy provisions of the Inflation Reduction Act. … We urge you to ensure the EPA maintains the existing fine particulate matter standards to [safeguard] both continued environmental protection and economic growth.”
The race to remove PFAS from its remaining industry uses is on—and according to Langan’s Stewart Abrams, must be “a sprint, not a jog.”
In high demand: Abrams is a principal and director of remediation technology at Langan, a national environmental and engineering firm. He leads the consulting firm’s remediation practice, specializing in the treatment of perfluoroalkyl and polyfluoroalkyl substances, chemical compounds that were used widely in household products—including fire extinguishers—for decades.
- It’s an area of expertise that will soon be highly sought after, given the Environmental Protection Agency’s proposal earlier this year of drinking water maximum contaminant levels (MCL) of 4 parts per trillion (ppt) for both PFOA and PFOS. This will not only affect drinking water but will become an important standard for remediation sites as well.
- Langan has clients—including property owners and developers—who focus on the removal of PFAS from contaminated groundwater.
“What’s possible”: “Part of what Langan is doing is focusing on what is possible” regarding PFAS removal, Abrams said.
- “We’re looking at the treatment of groundwater and drinking water. We’re also working on how to deliver existing and new technologies to site cleanup. We’re going to have to move faster than ever before to bring these technologies to the marketplace. It’s a sprint, not a jog.”
Land remediation: Langan has long worked with property developers, helping them clear land of contaminants before building begins. PFAS issues, however, have changed the game considerably.
- “Now we’re looking at projects [for clients] where the question is, ‘How do you use water or land that’s been PFAS-contaminated?’” Abrams said.
- “Some companies have legacy contamination at the sites” they want to build on, and solutions aren’t always forthcoming, he continued.
Airports and PFAS: Another significant Langan customer sector? The aviation industry. Since 2022, airlines operating at California airports may no longer use PFAS in firefighting foam, a common use of the compounds for many years owing to their fire-extinguishing capabilities.
- “They’ve had to adopt new methods of firefighting at [California] airports,” said Abrams of Langan’s aviation clients in that state. “It’s hard because you need a lot of this fluid to address a fire given the amount of fuel on an airplane. The problem is that often the large water reservoirs at these airports have until recently contained a lot of PFAS.”
- That contamination isn’t limited to the water, Abrams added, but extends to everything the PFAS has touched. “Everything in the [firefighting] systems—the pumps, the nozzles, the piping—are contaminated, as is the storage reservoir itself. Part of the complexity of removal is cleaning all of it and then finding an alternative” surfactant, a chemical compound that can effectively extinguish fire.
- In addition, the sponge-like concrete that often lines the reservoirs at airports may have absorbed the chemical, requiring removal and replacement.
Finding solutions: About a decade ago, Langan and the New Jersey Institute of Technology began an informal research partnership.
- Members of Langan’s staff have access to NJIT’s environmental engineering laboratories, where they can set up experiments to solve client challenges. Now the company is leveraging that relationship to find solutions to PFAS problems.
- The labs are “a great [place] to bring in new ways of doing things with PFAS,” Abrams told us. “We’re exploring new treatment methods, new characterization methods, and we will be working to accelerate those technologies to market.”
Taking practical action: The strong carbon-fluorine bonds in PFAS chemicals render them harder to destroy than other contaminants, Abrams noted.
- “Unlike with other compounds—particularly volatile organic compounds and chlorinated solvents—with PFAS, we can’t quite track down all of it,” he continued. “It’s out there in the environment; it would be extremely difficult to chase down every molecule. Instead, we want to bring a theme of pragmatism to PFAS cleanup.”
“Policy can’t be developed in a vacuum,” says Dawn Crandall, executive vice president of government relations for the Home Builders Association of Michigan. “People need to look at how one policy impacts that next thing. Everything is tied together.”
That’s Crandall’s message for the Environmental Protection Agency, as it considers a proposed air quality rule to restrict particles called PM2.5. While the regulations might not appear to impact the housing industry directly, they could prevent manufacturers from expanding facilities and creating jobs in Michigan—which does affect the housing market.
The concern: If manufacturers are unable to grow in the state or open new facilities, fewer people will need housing. That’s bad news for homebuilders.
- “If you put in these EPA regulations that are going to create a barrier for companies looking to move here, and then they decide they don’t want to, that’s going to impact Michigan’s ability to be an economic destination,” said Crandall.
- “And if you make it harder for businesses to employ employees, then they don’t need housing. That has a big impact on us.”
A shaky foundation: Michigan’s housing industry is still recovering from the significant downturn it experienced about 15 years ago.
- That slump was dramatic: according to Crandall, the number of permits filed in Michigan for single-family homes fell sharply from 54,721 in 2005 to around 15,000 two years later, bottoming out to about 6,900 in 2009.
- Although the industry has seen some recovery since then, new construction remains relatively low, and Crandall worries that shocks caused by the EPA’s proposed regulations could do further harm.
- “I think we’ve hit rock bottom, and we’re slowly coming out of it,” said Crandall. “But we’re only projecting 16,000 single-family permit builds this year—and anything that’s going to impact residential construction is not good for the state of Michigan.”
Another challenge: Ultimately, Crandall is concerned that the EPA’s proposed rule will simply add to a long list of challenges for homebuilders.
- “We’re already facing enough hurdles,” said Crandall. “There’s a lack of skilled workers who can do residential construction. Material costs peaked during COVID. We get a lot of our lumber from Canada, so these Canadian wildfires could have an impact. So if PM2.5 is going to affect economic development in our state, that’s going to have an impact on us, too.”
The big idea: “We’re all connected in some form or fashion,” said Crandall. “Michigan needs to grow our population, and we can’t do that if companies don’t bring people into our state who want to live, work and play here. We’re one big ecosystem.”
The chemical industry has a wide reach. According to Mark Biel, CEO of the Chemical Industry Council of Illinois, 96% of products made in the United States are either manufactured by the chemical industry itself or using materials it produces.
- “We make everything from cell phones to packaging,” said Biel. “People don’t realize the integral role that chemistry plays in their lives.”
And for Illinois in particular, the chemical industry isn’t just making products—it’s making careers.
- “Our state has 46,000 people in the chemical industry, and the average wage is a little over $114,000,” said Biel. “We are the second largest manufacturing sector in Illinois, which is the fourth largest chemical processing state. Folks don’t realize how large and important the chemical industry is to Illinois.”
But as the Environmental Protection Agency considers imposing a new, stricter air quality standard for particles called PM2.5, chemical manufacturers in Illinois are sounding the alarm. According to Biel, the new regulations misunderstand the situation—and threaten to cause irreparable harm for manufacturers across the state.
The background: Manufacturers have long been committed to reducing particulates in the air, including PM2.5, and have made huge strides over the past half-century. But to further reduce PM2.5 will be a tall order.
- “We should be focused on enforcing the regulations we already have in the books,” said Biel. “The U.S. already has strong regulations in place—ones that many areas are still working to meet. Let us be smart about new regulations, which means we should not change air permitting before meeting current standards.”
The local angle: For the chemical industry in Illinois, the changes could be particularly damaging.
- With access to waterways, relatively inexpensive electricity and extensive natural gas pipeline infrastructure, the St. Louis and Chicagoland areas of Illinois are hubs for the national chemical industry.
- However, if the EPA’s standards become stricter, it could deter investments to these metro areas significantly.
- “It’s difficult enough to permit a new facility in the Chicagoland area, and when you throw on additional burdens, it makes it harder and harder to justify making the investment in these facilities,” said Biel.
The global stage: Especially at a time when many manufacturers are looking for ways to bring investments and supply chains back to the United States, this kind of onerous regulation could create a stumbling block.
- “Our lawmakers want manufacturing to come back to the U.S., but this regulation does the exact opposite,” said Biel. “With all the new investment, it’s important that more and more manufacturers locate in the U.S. to avoid supply chain complications and delays. This regulation hinders that development.”
The last word: “I’m bullish on the long-term prospects for our industry, but sometimes the EPA loses sight of the reality that their regulations are already sufficient,” said Biel. “The current PM2.5 standard has worked. But this proposal goes far beyond that and will hinder a crucial opportunity for the industry to grow in the U.S.”
Washington, D.C. – Following a request from White House Environmental Justice Advisory Council Chair Brenda Mallory asking the Environmental Protection Agency to lower the annual primary standard for particulate matter (PM2.5) to 8.0 μg/m3 and to lower the primary 24-hour standard to 25.0 μg/m3, National Association of Manufacturers Vice President of Domestic Economic Policy Brandon Farris released the following statement:
“Moving the PM2.5 standard all the way down to 8.0 μg/m3 as the White House Environmental Justice Advisory Council suggested means 40% of the U.S. population will live in an area considered ‘out of attainment,’ essentially halting construction on bridges, roads, manufacturing facilities and agriculture projects in areas that desperately need development.
“Manufacturing in the U.S. is already among the cleanest in the world, and we don’t have to make a choice between cleaner air and economic prosperity. The EPA can choose both by finalizing a reasonable standard that doesn’t thrust much of the country into an area where no growth can happen.
Background: A new report conducted by Oxford Economics and commissioned by the NAM warns that the EPA’s proposed air quality regulations for PM2.5 could threaten $162.4 billion to $197.4 billion of economic activity and put 852,100 to 973,900 jobs at risk, both directly from manufacturing and indirectly from supply chain spending. In addition, growth in restricted areas may be constrained, limiting investment and expansion over the coming years. Due to these limited opportunities for expansion or investment, these areas in nonattainment could lose out on an additional $138.4 billion in output and 501,000 jobs through 2027.
The National Association of Manufacturers is the largest manufacturing association in the United States, representing small and large manufacturers in every industrial sector and in all 50 states. Manufacturing employs nearly 13 million men and women, contributes $2.91 trillion to the U.S. economy annually and accounts for 55% of private-sector research and development. The NAM is the powerful voice of the manufacturing community and the leading advocate for a policy agenda that helps manufacturers compete in the global economy and create jobs across the United States. For more information about the NAM or to follow us on Twitter and Facebook, please visit www.nam.org.
Thermo Fisher Scientific of Waltham, Massachusetts, has made a big commitment to the environment, as well as to its customers and partners: to achieve net-zero emissions across its entire value chain by 2050.
By 2026, thanks to virtual power purchase agreements, all of the company’s current U.S. sites will be running on 100% renewable electricity.
And that’s not all. Last December, Thermo Fisher, a global life sciences leader, announced its intention to slash Scope 1 and 2 emissions—those generated directly by the company and by energy the company has purchased, respectively—by more than 50% by 2030 (from a 2018 baseline). At the end of 2022, the company had already cut emissions by 25%, putting it ahead of schedule.
Environmental sustainability: Thermo Fisher signed on to the Business Ambition for 1.5˚C campaign, which urges companies to reduce emissions sufficiently to cap the global temperature increase at 1.5 degrees Celsius. The campaign is led by the Science Based Targets initiative—the leading global standard setter for private companies’ climate goals—in partnership with the United Nations Global Compact and the We Mean Business Coalition.
- To reach that goal, global emissions must be halved before 2030, and the world must get to net-zero emissions before 2050, according to the SBTi.
- It’s a significant effort, but one Thermo Fisher—which is among the first companies in its industry to have its near- and long-term net-zero goals validated by the SBTi—is glad to take on.
- “Our commitment to the environment is deeply rooted in our mission to enable our customers to make the world healthier, cleaner and safer,” said Meron Mathias, vice president of Corporate Social Responsibility & Sustainability for Thermo Fisher Scientific. “By championing a healthy planet that sustains human health and natural resources, we can build a brighter future for generations to come.”
Making progress: While transitioning completely away from fossil fuels for its operations would require “clean energy technologies that aren’t yet available,” Mathias said the company has made significant recent strides in decreasing its carbon footprint. In 2022 alone, Thermo Fisher:
- Transitioned 20 of its facilities across the globe to operate without the use of fossil fuels (defined as at least 99% of total energy consumed from renewable sources).
- Powered 150 of its sites worldwide solely with renewables.
- Saw 13% of its suppliers (by spend, an industry metric) set a science-based target and another 10% commit to set a science-based target.
Key drivers of this progress include:
- Signing contracts to add 900,000 megawatt hours of renewable electricity to the electrical grid through power purchasing agreements (roughly the amount of electricity needed to power 82,000 average modern homes for a year).
- Purchasing enough wind and solar electricity to fuel all current U.S. sites by 2026, via virtual power purchasing agreements.
- Setting a Scope 3 emissions target to have 90% of its suppliers by spend set science-based targets by 2027.
All hands on deck: Thermo Fisher is also accelerating progress toward its sustainability goals in large part thanks to the company’s Practical Process Improvement Business System, according to Mathias.
- “A lot of our early wins in environmental sustainability have been through PPI,” she said. “For example, somebody seeing waste in the system, or identifying an opportunity to tweak something to make it better for the environment and customers. Our teams are empowered to find a better way every day—for our customers, our business and our planet.”
Jason Asbury wants to clear up a misunderstanding.
The vice president for geotechnical and field services at TERRADON Corporation—the largest woman-owned engineering business in West Virginia—knows that West Virginia’s leadership in the energy industry has created a negative stereotype about West Virginians and environmentalism. But he also knows that the reality is very different.
- “There’s a misconception that we don’t care about the environment, and that couldn’t be further from the truth,” said Asbury. “We’re some of the most outdoorsy people you’ll ever meet, and we care about nature, about the mountains, the waterways, the clean air—that’s why we live here. This is home for us, and we feel a duty to make sure that everything we do protects the environment.”
But as the Environmental Protection Agency considers a more restrictive standard for clean air, Asbury is also warning that the rule is unrealistic and ultimately harmful, and that it will cause painful repercussions in West Virginia and beyond.
A strict standard: The EPA rule under consideration, which would govern particles known as PM2.5, would impose additional tight regulations on manufacturers and others across the country. According to Asbury, those regulations would harm businesses without resulting in real benefits.
- “It’s potentially overkill,” said Asbury. “Everybody in sectors from engineering to construction and manufacturing is doing all they can to ensure we have clean air—but we’re trying to balance having clean air with being profitable and having jobs and economic growth in our communities. Groups like ours are already working toward environmental goals, and this rule hinders that.”
A heavy burden: The EPA’s proposed rule would impose significant costs and delays for companies, Asbury continued.
- “It’s more burdensome on the permitting and regulatory side to attempt to meet a standard that may or may not be attainable,” said Asbury. “That causes design overruns and more costly projects.”
- “It causes us to miss deadlines and push projects back. If projects get canceled, we’re laying off staff. And if folks don’t want to go through this extra layer of regulation, then there’s a potential for bigger job losses in the community.”
A message to policymakers: Asbury wants policymakers to understand that these rules aren’t just about numbers on a spreadsheet; they have real human consequences.
- “Have you ever tried to do what you’re asking others to do?” said Asbury. “Have you ever tried to run a project under these regulations? Have you ever had to tell people that they don’t have a job due to a project being killed because of regulations like this one? It’s easy to make these rules when you’re not responsible for signing the front of a check.”
Manufacturers have long been leaders in sustainability, as have their partners in the agricultural industry. But as the Environmental Protection Agency considers imposing new restrictive air standards, groups across the country are speaking out in opposition.
In California, a group called the Nisei Farmers League is making noise.
Formed by a small group of Japanese American growers in 1971 as a “mutual protection society,” the NFL has become a well-respected organization committed to serving the needs of growers, farm workers and other members of the agriculture community in California. Today, they are sounding the alarm about a proposed EPA rule that would enforce a tighter national ambient air quality standard for fine particle pollution known as PM2.5—a move that could impact everything from permitting to international competition.
Widespread impacts: According to NFL President Manuel Cunha Jr., the regulations could be devastating for growers in California and farmers across the country.
- “There are issues with this regulation that the public just doesn’t realize,” said Cunha. “It impacts jobs. It impacts our ability to move freight. If you think the cost of food is high today, it will be even higher if this rule goes into effect.”
A closer look: Cunha knows the impacts of regulations like this one firsthand. He tells the story of a colleague who uses machinery to dehydrate fruits like apricots and peaches, but whose machinery would be unaffordable if he was forced to adhere to the stricter standard.
- “If they come out with a new standard, he’ll have to shut down,” said Cunha. “He can’t afford to build new equipment—the cost is unsustainable. It’s not economically feasible. And that’s what they’re telling our farmers to do.”
Impeding growth: Rapid shifts in environmental standards have also made it difficult for growers and other members of the agricultural community to adjust and succeed.
- “These standards keep changing, and it’s impossible to keep up,” said Cunha. “Our area in the San Joaquin Valley has seven plans with the EPA that are waiting for approval, and every time we turn around, there is another standard holding us back.”
- Meanwhile, strict standards imposed on other parts of the supply chain create costs that get passed along to farmers.
A message to policymakers: Cunha is speaking out because he wants policymakers to think about the realities of the proposed rule—including the costs that states will bear and the ripple effects throughout the agricultural supply chain.
- “How do we keep jobs?” said Cunha. “How do we keep our rural communities alive if you’re developing rules that don’t have the facts and the science behind them? Politicians are going on the basis of what looks and sounds good, but you have to realize that what you’re doing is driving out small farmers.”