When Career Fairs Tell Government Recruiters: “Don’t Bother to Show Up”
Headlines this weekend refer to “renewed chaos” over e-mails sent to federal employees at most (some? all?) agencies of the government — asking employees to list their five accomplishments for the week. In our February 24, 2025, blog item, we explored how employees might answer such vague requests in the absence of more guidance about who is asking and what is to be reported.
The larger issue is that the current turmoil and confused information surrounding budget and staffing outcomes at the U.S. Environmental Protection Agency (EPA) and other agencies will have impacts not only in the near term but also will impair future capabilities over a much longer timeframe. Just how long is uncertain.
In the end, “pruning” the budget and workforce may result in greater productivity or performance improvement by some measures, yet even that outcome will be in the eye of the beholder. One can disagree on program priorities as part of the debate over climate change versus energy production. What will be less obvious and harder to predict about the future is the impact on EPA programs, even if designated a priority, given the turmoil and fear that federal employees will face over the next months.
Regarding chemical and pesticide regulation programs, these impacts could be significant. Both programs need to be ably and sufficiently staffed to maintain a predictable course for new and innovative products to enter the market. Chemical and pesticide products both need EPA approval for market access and are the responsibility of EPA’s Office of Chemical Safety and Pollution Prevention (OCSPP). Responsible for implementing the Toxic Substances Control Act (TSCA) and the Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), OCSPP staff review new products and new uses of products to ensure environmental and public health protection. OCSPP is a “science-heavy” office when compared to other media programs, with a proportionately larger fraction of its staff representing the wide variety of scientific disciplines needed to review pesticide and chemical safety as required by law.
To review chemical and pesticide products, OCSPP staff review hundreds of studies relevant for assessing toxicology, chemistry, aquatic and terrestrial toxicity, worker safety, movement of chemical exposure through the air or soil, and other technically complex, sophisticated questions regarding chemical and pesticide applications that come through the door. New products typically have improved environmental or health profiles compared to existing ones, as companies rarely invest in riskier or dirtier products. Without sufficient numbers of technically capable staff, the time needed for EPA to review submissions will inevitably lengthen, regardless of targeted or required deadlines (OCSPP has both). The time it takes with current staffing and budget levels is already frustrating for companies for a variety of reasons. These frustrations, in part, may be justification enough for some to take a blunt approach to budget cuts. And on paper, forcing the programs to “reinvent” or “reform” their way of doing business might result in a more rapid process.
But given the approach taken to date, with talk of chainsaws, axes, and woodchippers in the headlines, public trust in any reforms will be suspect regardless of the outcome of any “efficiency improvements.” There are a variety of reports by the General Accountability Office (GAO) and EPA’s Inspectors General (IG) over the years suggesting improvements to the chemical and pesticide review programs. At the same time, there appears little linkage between any of those recommendations and the “woodchipper approach” to program reforms.
The longer-term risk to program performance will include at least two impacts from the current approach. First, regardless of any program reforms or improvements, or with any budget reductions, changes to improve performance will be seen as giving priority to production outputs over public health and environmental protection. This would be the case even if all changes fit comfortably under the heading of GAO or IG recommendations.
The even greater impact will be on the morale of current staff and an impediment to the recruitment of future employees. Current staff face the specter of budget cuts, which are unsettling in any organization, public or private (will I, or do I, have a job this week?). Decisions to cut budgets or change program priorities may be no surprise given the election, but the process used to date is uncertain and chaotic and designed at least in part to intimidate the workforce.
This leads to contemplating how new employees might be recruited to work for EPA or any government agency. OCSPP managers have continually mentioned that recruiting new staff in critical science disciplines is especially difficult given the traditional pay scale and characteristics of work at government agencies (e.g., opportunities for career development, advancing pay scales).
The current tumult surrounding government work — how does the probationary period work, how will new employees be evaluated, what are expectations for career prospects — would make attending career fairs to recruit new employees a fool’s errand. Over the long run, future recruitment of any new workers at EPA and other agencies may be the most impactful result of the present upheaval.
A snarky summary of reports where current employees have been fired over the weekend by e-mail might be: “Just a note — don’t bother to show up tomorrow.” It may soon be that fresh graduates with the latest technical skills and knowledge in core science disciplines tell government recruiters: “Just a note — don’t bother to show up tomorrow.”
BETO Postpones 2025 Project Peer Review
The U.S. Department of Energy’s (DOE) Bioenergy Technologies Office (BETO) announced on February 7, 2025, that its 2025 Project Peer Review, initially planned for April 22-25, 2025, is postponed until a future, yet to be determined, date. According to BETO, approximately 200 projects in its research, development, and demonstration portfolio “will be presented to the public and systematically reviewed by experts from industry, academia, and federal agencies.” BETO notes that the 2025 Project Peer Review will have several simultaneous review sessions of projects within BETO’s program areas, including renewable carbon resources, conversion technologies, systems development and integration, and data, modeling, and analysis.
Latest Update on Per- and Polyfluorinated Substances (PFAS) in Europe
European Union
Universal Restriction of PFAS – The European Chemicals Agency’s (ECHA) Committee for Risk Assessment (RAC) is scheduled to meet from March 3-7, 2025, for its 72nd session. During this meeting, the Committee will discuss the proposed restriction on PFAS, focusing on their use in fluorinated gases, transport, and energy sectors. The discussions will address the current status of the proposal, next steps, and the general approach for evaluating the restriction.
In the main two strategic documents released earlier this month. A Competitiveness Compass for the EU and the Clean Industrial Deal (CID), no express reference is made to the universal PFAS restriction proposal. However, both strategies mention the adoption of a Chemicals Industry Package in late 2025 without releasing more specific details.
EU Member States
France
National law proposing PFAS ban approved – On February 20, the French National Assembly passed the country’s first law regulating PFAS. The bill was approved in its Senate version and is now considered definitively adopted.
Effective January 1, 2026, the law bans the manufacture, import, export, and marketing of products containing PFAS in items such as clothing, footwear, cosmetics, and ski wax. The ban will be extended to all textile products by 2030, unless deemed “necessary for essential uses.” The law also includes a “polluter pays” provision, requiring companies to pay €100 for every 100 grams of PFAS released into the environment. Cookware, initially included in the scope of the ban, was ultimately excluded.
With this adoption, France joins Denmark in taking action on PFAS ahead of the proposed EU-wide restriction.
Measurement of PFAS in the air – On February 5, a regional environmental monitoring association revealed the first-ever measurements of PFAS in the air in France, detecting concentrations of 22-38 PFAS substances in urban areas. The findings show that PFAS levels range from a few picograms per cubic meter in Lyon to higher concentrations near factories in Pierre-Bénite. Despite the presence of substances such as PFOA and PFOS, the study suggests that these airborne pollutants are not linked to previously stored soil contamination.
Other Developments
PFAS pesticide fluopyram – 29 NGOs have called for a ban on the PFAS pesticide fluopyram, which degrades into the toxic compound TFA, harmful to aquatic environments, particularly groundwater. The European Commission has recently extended fluopyram’s approval until June 2026.
Peter Sellar contributed to this article
Captive Power Projects: A Summary of the Western Africa Regulatory Environment
Recent increases in construction and financing costs are directly affecting the development of energy projects across Africa. Captive power projects (CPPs) offer the possibility of mitigating this challenging landscape for both the developers themselves and those funding them. For those unfamiliar with the concept, CPPs are a type of power plant which provide a localised source of power to the end consumer. They are typically used in power-intensive industries for which a continual and consistent energy supply is paramount. In West Africa, CPPs are of particular interest to mining companies looking for reliable sources of energy. However, the successful development of CPPs in the region will be largely determined by the level of liberalisation in the country’s energy sector, and the right of non-state entities to develop, construct, operate and maintain these projects.
The energy sector across Western Africa has traditionally been restricted to a public monopoly closely associated with the sovereignty of a country, designed to protect the national utility company. When this type of regulatory framework prohibits or inhibits the production, transport and supply of electricity, two structures are usually considered:
where the development, construction, operation, and maintenance of a CPP serves the company’s own needs and this is permitted by the state’s regulation, the project falls under the self-production model (SPM) and the company can, as is often the case, subcontract with energy companies to ensure the supply of energy; or
where the relevant regulation permits development, construction, operation, and maintenance of a CPP for the purpose of supplying electricity to a separate private company, the project falls under the independent producer model (IPM) and can supply energy via off-grid infrastructure.
Bracewell has prepared a report summarising the applicable regulations for the two models outlined above which covers the following 11 countries: Benin, Burkina Faso, Cameroon, Chad, Côte d’Ivoire, Democratic Republic of Congo, Guinea (Conakry), Mali, Mauritania, Sénégal and Togo.
This report provides a high-level overview of existing and proposed regulation based on available sources. It is not a substitute for bespoke legal advice from lawyers in the jurisdictions concerned. Due to the nature of the region, the relatively recent development of the CPP landscape, and the inherent uncertainty in the interpretation of these regulations, we recommend a thorough technical and legal analysis of projects which should consider specific location and bankability issues prior to committing to a CPP project.
As the report illustrates, the energy sector of several countries — such as Burkina Faso, Mali and Togo — remains largely monopolised by the national electricity company, even where the company’s monopoly has been officially terminated by new legislation. In other counties — such as the Republic of Guinea — the legislation remains under development, so while the current framework gives limited guidance, there are no prohibitions laid down either. In contrast, many regions in West Africa have renovated the structure and essence of their energy legislation, demonstrating an intentional and welcome movement away from state-governed monopolies. Countries including Mauritania, Benin, Cameroon and Côte d’Ivoire have all implemented (to varying degrees) a legal framework or, as often called, electricity or energy codes, that allow freedom of energy production. These enable the development of CPPs via either of the two models outlined above. However, it is worth noting that the transmission (rather than production) of the electricity is often still state-regulated. In some countries, such as Chad, while the transmission is under state monopoly, the distribution and construction of CPPs can be carried out by private actors.
In several regions, the relevant authorisations, concessions and/or licences for off-grid production in relation to IPMs are dependent on power purchase agreements being entered into with entities that constitute “Eligible Clients,” a term usually defined in the relevant energy code which shows a maintained, albeit reduced, level of control on the part of the state. The authorisation of SPMs is largely dependent on the installed capacity of the CPP, where sale of surplus is authorised, but the amount is capped by reference to a restricted percentage of the project’s installed capacity. The identity of the buyer is also often restricted, as above, to an entity constituting an “Eligible Client” or, in some jurisdictions, such as Togo, the grid operator. The various authorisations and concessions are granted by the relevant ministerial committees responsible for the state’s energy sector.
For the sake of comprehensiveness, references in the report are occasionally made to regimes with installed capacity thresholds that are likely too low to support the development of a CPP project.
While the report has outlined some of the trends we are seeing as regulations develop, the details for each state vary, with some requiring further investigation with the relevant administration. It is therefore important to ensure that each CPP proposal is tailored and considered in line with the relevant state’s particular legislation and restrictions.
Flick the Switch Board: Get Plugged into the Latest UK Guidance on EEE and WEEE
Waste treatment, recycling and take back obligations in relation to electrical and electronic equipment (EEE) and waste of such electrical and electronic equipment (WEEE) have long been a focus area for EU regulators, and now we are seeing increased enforcement in the United Kingdom. Although the European Union and United Kingdom are largely aligned in some intention behind the reuse, recycling and recovery obligations applicable to electronic brands, there are also notable differences in implementation which companies should be alive to when operating across both jurisdictions.
To assist with this, the Environment Agency of the United Kingdom recently published four sets of guidance on EEE and WEEE, namely:
Guidance on when EEE becomes WEEE for the purposes of the UK WEEE regulations, to properly classify and manage waste;
Guidance for waste operators and exporters on how to classify some items of WEEE, waste components and wastes from their treatment in England, focusing on identifying hazardous chemicals and persistent organic pollutants;
Guidance on shipping WEEE into and out of England from 1 January 2025; and
Guidance on reporting the placing of EEE on the UK market.
We highlight some key points for consumer electronics brands in this alert.
WHAT PRODUCTS DOES THE NEW GUIDANCE APPLY TO?
EEE is broadly defined as any product that is dependent on electric currents or electromagnetic fields to work properly, and which is designed for use with a voltage rating of 1,000 volts or less for alternating current and 1,500 volts or less for direct current.
This definition therefore includes a wide variety of consumer products, such as large and small household appliances, information technology and telecommunications equipment, lighting, tools, toys, leisure and sports equipment, medical devices and many others. The most recent guidance notes are therefore relevant to many consumer products. For the latest UK guidance on what qualifies as EEE under the regulations, see here.
1. Guidance on When EEE Becomes WEEE
The primary aim of this guidance is to help companies, that hold EEE they no longer need, to prevent that EEE from inadvertently becoming WEEE. These parties include EEE producers as well as treatment facilities, collection facilities, producer compliance schemes and waste carriers. According to the legal definition of WEEE, any EEE which the holder discards, intends to discard or is required to discard becomes WEEE.
However, the guidance provides that EEE intended to be reused can avoid becoming WEEE if all the reuse conditions as described in the latest guidance are satisfied. This is relevant as it could potentially avoid triggering WEEE obligations in some cases (such as registering and reporting the EEE as WEEE, organising or financing its collection, treatment and recycling and so forth).The reuse requirements for this exemption are:
The EEE is reused for the same purpose for which it was designed (the use must not be subordinate or incidental to the original use);
The previous holder intended for it to be reused;
No repair, or no more than minor repair, is required to it when it is transferred from the previous holder to the new holder, and the previous holder knows this;
Any necessary repair is going to be done;
Its use is lawful; and
It is not managed in a way that indicates that it is waste, for example, it is not transported or stored in a way that could cause it to be damaged.
Ultimately, the assessment of whether a substance or object is waste should be made by taking into account all the relevant circumstances.
2. Guidance on How to Classify Some Items of WEEE, Waste Components and Wastes From Their Treatment in England, Focusing on Identifying Hazardous Chemicals and Persistent Organic Pollutants
This guidance is relevant to waste operators and exporters who must classify all the WEEE leaving their premises by way of a waste transfer note or a consignment note.
Certain types of WEEE are known to include hazardous chemicals or persistent organic pollutants, and guidance on classifying such waste has already been produced by the UK Environment Agency previously.
However, there are certain items of WEEE which require the producer or distributor to carry out a self-assessment, for which guidance is provided. These include:
Office equipment – non-household types such as photocopiers and printers;
Medical devices – Category 8;
Monitoring and control instruments – Category 9; and
Automatic dispensers – Category 10.
3. Guidance for Importing and Exporting WEEE
This third guidance, which is intended to ensure compliance with environmental regulations and proper waste management practices, requires companies that are exporting or importing WEEE into or from England, to notify all WEEE shipments for recovery in the European Union and Organisation for Economic Co-operation and Development (OECD) countries using new codes for hazardous and non-hazardous WEEE. Some of the existing waste shipment classification codes will cease to exist from the beginning of 2025. In addition, the guidance reiterates that hazardous WEEE and wastes must not be shipped to non-OECD countries. It is also noted that if any EEE is being exported with a purpose of reusing it, such EEE should not be classified as waste. For any WEEE to be exported out of the United Kingdom, the import requirements of a destination country should also be carefully considered.
4. Guidance on Reporting the Placing of EEE on the UK Market
This guidance details the duty to report how much EEE you place on the market either to your producer compliance scheme or on the WEEE online service if you are a small producer. Placing on the market refers to when EEE becomes available for supply or sale in the United Kingdom. This occurs by sale, loan, hire, lease or gifting of EEE by UK manufacturers, UK distributors, importers and customers. It is important to understand the regulatory obligations at each level of the supply chain and to what extent those can be transferred by way of contractual clauses. This does not encompass EEE products which are made or imported in the United Kingdom and then exported without being placed on the UK market.
If you have placed EEE on the UK market, you must keep accurate records to report the amount of EEE tonnage you placed on the market and exported. Evidence can be taken in the form of invoices, delivery notes and export documentation like bills of lading, customs documents and receipts. You must report your business-to-consumer (B2C) EEE quarterly, and your business-to-business (B2B) EEE annually.
PRACTICAL TIPS
The recent UK guidance on EEE and WEEE is helpful in clarifying certain aspects of its reuse, classification and associated export and import requirements. EEE brands or companies dealing with such equipment should familiarise themselves with these latest rules to ensure compliance, at the risk of prosecution and an unlimited fine from a magistrates’ court or Crown Court. As a first step, producers should consider:
If anticipating the reuse of EEE, make sure they satisfy all of the reuse conditions to avoid it becoming WEEE;
Reviewing their current processes for classifying and handling EEE and WEEE;
Specific classification lists and guidance applicable to the particular WEEE they have or handle;
Before exporting or importing WEEE or its components, verify the requirements for notification of transit and destination countries; and
Keep accurate records of the amount of EEE placed on the UK market and report quarterly for B2C or annually for B2B.
Exchanging the SEC: Previewing the Next Four Years
The election of President Trump means a changing of the guard at the US Securities and Exchange Commission. President Trump has nominated Paul S. Atkins, a former SEC commissioner, as chairman of the agency, and he is currently working through the Senate confirmation process. Once confirmed, we anticipate a shift in SEC policy on a number of key areas during Chairman Atkins’s term.
A New Majority Takes Control
With the recent resignations of two Democratic commissioners in January, Republicans now hold a 2-1 majority at the SEC. The two Republican commissioners—Mark Uyeda (the current acting SEC chairman) and Hester Peirce—both previously served on then-Commissioner Atkins’s personal staff at the SEC as his counsel and have long-standing relationships with him. Both Acting Chairman Uyeda and Commissioner Peirce often viewed policy and enforcement issues differently than former SEC chair Gary Gensler and frequently dissented from key rulemakings and enforcement cases during Gensler’s term.
Uyeda and Peirce’s many dissenting statements from actions taken under the Gensler SEC likely preview a shift in public policy preferences for the SEC over the next four years, and Acting Chairman Uyeda has already put in place key senior personnel and set in motion a process to unwind several initiatives undertaken during Chair Gensler’s term. President Trump’s many recent executive orders seeking to reorient the executive branch also help to set the tone for the new Republican SEC majority. Mr. Atkins’s own public statements and professional activities over the years further suggest that he will approach many issues differently than his predecessor.
The SEC’s remit is large, and Chairman Atkins will no doubt focus on a range of reforms to the SEC’s processes for rulemaking and enforcement, as well as a potential redesign of the agency’s overall organization. By providing a sampling of various topics, we hope to illustrate the broader approach the SEC is likely to take over the next four years. Below we discuss several representative areas where we expect a change in the reconstituted SEC.
A Survey of Select Priorities
Climate Reporting Rule
In March 2024, the SEC adopted sweeping and controversial climate disclosure rules for public companies. A series of petitioners brought judicial challenges around the country to the SEC’s climate rules, and the cases were consolidated before the federal Eighth Circuit Court of Appeals. The SEC has voluntarily stayed compliance with the rules while the litigation remains pending.
The ascendant SEC majority does not support the current climate rule. The two sitting Republican commissioners each dissented when the SEC adopted the rules, and they have called for the SEC to return to traditional notions of financial materiality when undertaking future rulemaking. Paul Atkins has in the past also been skeptical of the SEC’s efforts in the climate area.
The case challenging the climate rule is now fully briefed, but the Eighth Circuit has not yet scheduled oral argument. Acting Chairman Uyeda in early February instructed the SEC staff to petition the court to delay scheduling oral argument in light of the change in administrations. The SEC could eventually abandon defense of the rule, but a group of Democratic state attorneys general has intervened in the case and would likely seek to continue to defend the current rule.
Because of the uncertainty surrounding the ultimate outcome of the litigation process, the SEC is instead likely to commence a process to repeal the rule through notice-and-comment rulemaking. Prior judicial precedent makes clear that an agency may repeal a rule in this manner, and lays out the procedure to do so. Ironically, a Fifth Circuit case decided during Chair Gensler’s term concerning a challenge to his efforts to repeal several rules governing proxy advisors provides a roadmap to proceed. Under the caselaw, the SEC may change course with a new administration, but if the new policy is based on facts different from those underlying the prior policy, a more detailed explanation of that rationale is required in the SEC adopting release.
Cryptocurrency and Digital Assets
President Trump campaigned heavily on the promise that he would reform the federal government’s restrictive view on cryptocurrency and digital assets, and he issued an executive order overhauling the federal approach to the digital asset sector. Immediately after President Trump’s inauguration, and even before the President’s executive order, the SEC announced the formation of a new Crypto Task Force. The task force is led by Commissioner Hester Peirce and draws on staff from around the agency. Its mission is to “collaborate with Commission staff and the public to set the SEC on a sensible regulatory path that respects the bounds of the law.” It will also coordinate with other state and federal agencies, including the Commodity Futures Trading Commission.
The SEC press release announcing the task force’s creation is somewhat critical of the agency’s prior approach to regulating digital assets, noting that the agency “relied primarily on enforcement actions to regulate crypto retroactively and reactively, often adopting novel and untested legal interpretations along the way.” The press release observed, “Clarity regarding who must register, and practical solutions for those seeking to register, have been elusive.” The announcement concludes, “The SEC can do better.” This sort of self-criticism at the SEC, even on a change in administrations, is atypical.
In a wide-ranging public statement entitled “The Journey Begins,” SEC Commissioner Hester Peirce previewed next steps for the SEC’s Crypto Task Force and provided a 10-point, nonexclusive agenda for the SEC Crypto Task Force:
providing greater specificity as to which crypto assets are securities;
identifying areas both within and outside the SEC’s jurisdiction;
considering temporary regulatory relief for prior coin or token offerings;
modifying future paths for registering securities token offerings;
updating policies for special purpose broker-dealers transacting in crypto;
improving crypto custody options for investment advisers;
providing clarity around crypto lending and staking programs;
revisiting SEC policies regarding crypto exchange-traded products;
engaging with clearing agencies and transfer agents transacting in crypto; and
considering a cross-border sandbox for limited experimentation.
The SEC’s efforts continue to pick up pace. The SEC withdrew controversial Staff Accounting Bulletin 121 on custody of crypto assets. The news media has widely reported on reassignment of key personnel in the agency’s specialized enforcement unit focusing on Crypto Assets and Cyber, which has formally been renamed the Cyber and Emerging Technology Unit. Further, the SEC has dismissed or delayed prosecution of its enforcement cases against several prominent cryptocurrency businesses. While these developments will be welcomed by the cryptocurrency industry, they will also expect a major SEC rulemaking push on digital assets under Chairman Atkins.
Cybersecurity Reporting on Form 8-K
Cybersecurity is another area where Chair Gensler was active in SEC rulemaking and enforcement, and where Uyeda and Peirce were sometimes critical. In July 2023, for example, the SEC adopted rules requiring public companies to report material cybersecurity incidents on Form 8-K under new Item 1.05. Since reporting became required in December 2023, 26 separate companies have disclosed material cybersecurity incidents under this requirement. Of course, far more than 26 public companies have had to respond to cybersecurity incidents of one kind or another since December 2023. Very few companies are therefore reaching the conclusion that these events were material for SEC reporting purposes.
Unlike climate and crypto where we anticipate further SEC rulemaking, we assign a low probability to any organized effort to repeal the cybersecurity Form 8-K reporting requirement. Though compliance with the rules is moderately burdensome for companies in the midst of a cybersecurity incident, there are far more burdensome reporting rules (compensation disclosure and analysis, for example), and the SEC will likely prioritize other matters on its rulemaking agenda. It is possible that the new chair will instruct the SEC staff to release additional interpretive guidance on cybersecurity reporting under Form 8-K, but the SEC staff has already made an extensive effort to discourage companies from making immaterial Form 8-K filings under Item 1.05, both through comment letters and other staff interpretive guidance. So, Item 1.05 is an artifact of the Gensler era that is likely to survive.
Other Future Rulemaking
As alluded to above, over the next four years we also expect the SEC to change direction on rulemaking. It is doubtful whether many items on the SEC’s Fall 2024 rule list under the Regulatory Flexibility Act involving priorities of former Chair Gensler will see further action. For example, the rule list includes placeholders for proposals on topics such as “Corporate Board Diversity,” “Human Capital Management Disclosure,” and “Enhanced Disclosures by Certain Investment Advisers and Investment Companies about Environmental, Social, and Governance Investment Practices.” We do not expect the SEC to take further action on these or similar matters. Instead, in addition to the matters discussed above, we expect the SEC to focus its rulemaking resources on other topics that have been priorities of prior Republican administrations. Such topics include facilitating capital raising, expanding the definition of “accredited investor”, reform of the shareholder proposal process under SEC Rule 14a-8, and matters related to capital market structure.
Enforcement
The change in SEC leadership will also lead to a shift in SEC enforcement priorities and an enhanced focus on protecting retail investors. A frequent area where Uyeda and Peirce dissented from enforcement actions under prior Chair Gensler concerned cases where the majority sought to expand existing law or otherwise apply SEC precedent creatively. The SEC under Gensler brought several novel cases alleging failures of disclosure controls and procedures or internal controls over financial reporting in cases involving cybersecurity incidents, for example. Rather than continue to push the envelope, we expect the SEC to return to more traditional areas of enforcement.
To this end, we anticipate that SEC enforcement in the coming years will prioritize cases alleging investor fraud where there are clear misstatements or omissions of material facts. Other core SEC enforcement priorities such as insider trading, accounting fraud, Ponzi schemes, affinity frauds and other scams impacting retail investors will also likely see greater emphasis. Cases alleging only technical rule violations without investor harm or pursuing cutting-edge theories of liability are likely to be less common.
ESG enforcement is a specific area where we expect SEC priorities to shift. Under the prior administration, the SEC brought several greenwashing enforcement cases, for example. Commissioners Uyeda and Peirce were especially critical of greenwashing cases that focused on alleged failures in corporate controls or other technical violations of the law without clear fraud. Over the next four years, we expect the SEC to bring fewer cases of this kind.
Congress Puts DOE & EPA Grants/Loans Under the Microscope
Changes in Washington mean changing priorities in federal expenditures.
Such is the case with Congress’s approach to energy and environmental spending under the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction Act (IRA) passed during the Biden Administration. IIJA and the IRA allocated an additional $200 billion combined to the Department of Energy (DOE) and the Environmental Protection Agency (EPA). This influx of appropriations allowed these agencies to greatly expand their loan and grant programs in recent years, targeting renewable energy technologies and environmental justice programs.
As extensively discussed in prior client alerts, these programs have been targeted by the Executive Branch for special scrutiny and in some cases, the Federal government has simply stopped paying awardees funds due.
With Republicans now controlling Congress, they are taking a closer look at the loans and grants awarded by DOE and EPA under those two landmark laws, especially those that were issued in the final days of the Biden Administration.
The House Energy and Commerce Committee’s Oversight Plan for the 119th Congress announced, that the Committee “will continue to review management and implementation of clean energy and advanced technology grant and loan programs authorized under the Energy Policy Act of 2005, the Infrastructure Investment and Jobs Act (IIJA), the Inflation Reduction Act (IRA),” and “[t]he Committee will also conduct general oversight of the EPA, including review of the agency’s funding decisions, resource allocation, grants, research activities, compliance and enforcement actions, public transparency, implementation of new statutory authorities, such as the IIJA and IRA, and respect for economic, procedural, public health, and environmental standards in regulatory actions.” Further, “[t]he Committee will also conduct oversight over the DOE’s grant and loan programs that fund production in foreign jurisdictions, particularly in facilities controlled by China and the CCP.”
Following through on this declared intention, on February 26, the Energy and Commerce House Subcommittee on Oversight and Investigations held a Congressional hearing titled “Examining The Biden Administration’s Energy And Environment Spending Push.” Subcommittee Chair Gary Palmer (R-AL) said in his opening remarks, “As this Subcommittee examined last Congress, spending large amounts of funding, particularly in short timeframes carries tremendous risk.”
Rep. Palmer also questioned the DOE and EPA’s abilities to ferret out waste, fraud, and abuse, and said the Congressional hearing is designed “to evaluate whether the appropriate due diligence was done to ensure taxpayer dollars went to eligible parties and the funds are being used appropriately.”
In addition, the Committee received testimony from the EPA Office of Inspector General (OIG), the DOE OIG and from the Government Accountability Office (GAO), which have reported on ..risk factors for waste, fraud, and abuse. According to the Chairman, “These risks increased under past infusions of funding as agencies rushed to move large amounts of funding is a short amount of time.”
Concurrent Actions from the Administration
On Monday, March 3, 2025, EPA announced that the new Administrator Lee Zeldin requested an IG probe of the management of the Greenhouse Gas Reduction Fund, a $20 billion climate fund. In a statement, the EPA said that the Justice Department and FBI are conducting “concurrent investigations” of the fund. Should the IG identify clear examples of fraud, waste, and abuse, that could become the basis to cancel prior obligations.
What’s Next to Consider
Companies that have received DOE and EPA loans or grants in recent years, especially at the conclusion of the Biden Administration, should anticipate increased risk of Congressional or OIG inquiry. These inquiries can be both factual and political in nature. It will be imperative to accurately answer the question, “how did you spend taxpayer dollars.” Inquiries from Congress can be especially difficult to navigate and will benefit from the advice of experienced counsel who can help navigate the company through difficult political terrain.
U.S. EPA Approves Class VI Injection Well Primacy in West Virginia
On February 26, 2025, the U.S. Environmental Protection Agency (EPA) published a notice in the Federal Register approving West Virginia’s application for Class VI injection well primary enforcement authority (primacy) pursuant to the Safe Drinking Water Act (SDWA) underground injection control (UIC) program. West Virginia is the first state in the Eastern U.S. to receive primacy. Primacy gives West Virginia the responsibility of overseeing and implementing a Class VI permitting program. Class VI wells are used to inject carbon dioxide into deep rock formations for permanent storage, known as carbon capture and sequestration (CCS), which is a tool used to reduce carbon dioxide emissions into the atmosphere. Point source emissions such as those from industrial facilities or power generation are common sources of carbon dioxide emissions and can be candidates for CCS. North Dakota, Wyoming, and Louisiana have already been granted Class VI primacy, and Alaska and Arizona currently have primacy applications pending with EPA. EPA has pledged to “fast-track” the agency’s review and approval of other Class VI well primacy applications.
The Class VI injection well permitting process generally starts with the applicant submitting an application, which undergoes a completeness review to ensure all required information is included. An applicant may receive a notice of deficiency or a request for additional information regarding their application. The application then undergoes a technical review to ensure the project does not pose a risk to drinking water. EPA indicates that it aims to complete its review of the permit application and issue Class VI permits “within approximately 24 months,” but states that have received Class VI permit primacy have completed the review process more quickly. Class VI well permit application requirements include site characterization, modeling to determine the impact of injection activities through the lifetime of the operation, well construction requirements, testing and monitoring throughout the life of the project, emergency and remedial response plans, operating requirements to prevent endangerment to human health or drinking water, and financial assurance mechanisms. If the application passes technical review, a draft permit is prepared and is made available for public comment period prior to the final permit being issued. Other requirements that apply to CCS projects in West Virginia are set forth in the West Virginia Underground Carbon Dioxide Sequestration and Storage Act, W.Va. Code § 22-11B-1, et seq.
CCS projects are eligible for the 45Q federal tax credit. The entity eligible to claim the tax credit is the owner of the capture equipment, and eligibility is determined based on the type of facility and its annual carbon capture thresholds. The eligibility thresholds are 1,000 metric tons of carbon dioxide for direct air capture facilities, 12,500 metric tons for industrial facilities, and 18,750 metric tons for electric generating units. Eligible projects that begin construction before January 1, 2033, can claim the tax credit for up to 12 years after being placed in service.
The European Commission’s Clean Industrial Deal
On February 26, 2025, the European Commission (EC) published a Communication titled “The Clean Industrial Deal: A joint roadmap for competitiveness and decarbonisation,[1]” encompassing a set of measures with the objective of enhancing competitiveness and resilience of EU industries while advancing decarbonisation. The two key focus areas of the Clean Industrial Deal are energy-intensive industries and the clean-tech sector.
The Deal also emphasizes circular economy principles to reduce reliance on external suppliers for raw materials, ensuring sustainable use of Europe’s limited resources. Importantly, the Clean Industrial Deal confirmed the adoption of the Chemicals Industry Package for the end of 2025. According to the Clean Industrial Deal Communication, the chemical package will “recognise the strategic role of the chemicals sector as ‘industry of industries’ and of critical molecules.”
The main legislative proposals and measures from the Clean Industrial Deal include:
The Industrial Decarbonisation Accelerator Act, to accelerate permitting for industrial access to energy and decarbonisation efforts, including the modernization of steel production facilities. It will also introduce a low-carbon product label for steel and, eventually, cement, enabling companies to benefit from a green premium and providing consumers with information on the carbon intensity of products.
The revision of the Public Procurement Directive
The Circular Economy Act, which will establish a Single Market for waste and reusable materials
A new Clean Industrial Deal State Aid Framework, to enable faster approval of State aid measures to promote renewable energy deployment, industrial decarbonisation, and ensure adequate manufacturing capacity for clean technologies
The delegated act on low-carbon hydrogen: This act will define the conditions for producing low-carbon hydrogen in a practical way. It complements the comprehensive regulatory framework on hydrogen, providing industry with greater certainty and predictability, both of which are essential for encouraging investment.
The strengthening and expansion of the Carbon Border Adjustment Mechanism to other ETS sectors and downstream products
The Clean Industrial Deal marks a step for Europe to maintain its industrial strength while driving forward its green transition. The Commission also published a set of Questions and Answers[2] and a Factsheet document[3].
[1] https://commission.europa.eu/document/download/9db1c5c8-9e82-467b-ab6a-905feeb4b6b0_en
[2] https://ec.europa.eu/commission/presscorner/detail/en/qanda_25_551
[3] https://ec.europa.eu/commission/presscorner/api/files/attachment/880548/Factsheet Clean Industrial Deal.pdf
Environmental Law Monitor: Navigating the Shifts in Environmental Policy and Law Under the Trump Administration [Podcast]
On this episode of the Environmental Law Monitor, Daniel Pope and Taylor Stuart discuss the shifting landscape under the new Trump administration, comparing regulatory actions and priorities with those of previous administration, and delve into the complexities of NEPA regulations, endangered species and the impact of political changes on environmental legal practice. They explore how these transitions will affect legal practitioners and the energy sector and speculate on what to expect in the coming months.
Episode Highlights
[2:50] The Trump Administration’s Approach to NEPA: Taylor and Daniel discuss the significant actions from the Trump administration impacting environmental law, namely the Council on Environmental Quality’[JP1] s action to remove NEPA regulations from the Code of Federal Regulations. They briefly review the current state of NEPA and its impact on federal agencies.
[9:05] The Impact of Federal Workforce Downsizing on Environmental Law Space: Environmental legal practitioners will likely see a shift in their day-to-day work, particularly if they communicate often with agencies. Taylor expects to see an uptick in citizen lawsuits by NGOs challenging Trump’s administrative actions.
[12:51] The Trump Administration’s Efforts to Roll Back Environmental Regulations: Taylor and Daniel discuss the current administration’s positions on the Good Neighbor Rule and the Endangered Species Act, litigation surrounding these regulations/rules and the complexities around overturning them.
[24:28] Trump 2.0 vs. Trump 1.0: Compared to the first administration, the second Trump administration is much more prepared to carry out its environment agenda. Taylor expects to see progress on and clarity around energy and environmental issues, especially given the administration’s prioritization of energy independence.
The Omnibus Package: Changes in Sustainability and Due Diligence Reporting Requirements Under the CSRD and the CSDDD
On February 26, 2025, the European Commission (EC) released its much-anticipated Omnibus Package, aimed at streamlining EU regulations, enhancing competitiveness, and unlocking greater investment potential. The context for the proposal is the Competitiveness Compass introduced in January 2025 and the Commission’s work programme published on February 11, which mentioned a series of proposals – among which is the Omnibus Package – to drastically reduce the regulatory and administrative burden by achieving at least 25% reduction in administrative burdens and at least 35% for SMEs until the end of the EC’s mandate.
The first Omnibus Package includes the following set of measures:
A proposal for a Directive amending the CSRD and the CSDDD (Omnibus II)[1]
A proposal that postpones the application of all reporting requirements in the CSRD for companies that are due to report in 2026 and 2027 (so-called wave 2 and 3 companies) and which postpones the transposition deadline and the first wave of application of the CSDDD by one year to 2028 (Omnibus I)[2]
A draft Delegated act amending the Taxonomy Disclosures and the Taxonomy Climate and Environmental Delegated Acts open for public consultation until 26 March 2025[3]
A proposal for a Regulation amending the Carbon Border Adjustment Mechanism Regulation (to which only the Annex has been published)[4]
A proposal for a Regulation amending the InvestEu Regulation
In this Advisory, we will focus on the changes introduced by the Omnibus Package in the Corporate Sustainability Reporting Directive (CSRD) and the Corporate Sustainability Due Diligence Directive (CSDDD).
I. Amendments to the Corporate Sustainability Reporting Directive (CSRD)
Today’s package proposes a two-year delay in the reporting requirements for large companies that have not yet begun implementing the CSRD, as well as for listed SMEs (Waves 2 and 3). This postponement aims to give co-legislators time to finalize the Commission’s proposed substantive changes. However, the CSRD has already been transposed into national laws across most EU member states, and many U.S. companies have begun preparations to comply with reporting obligations for financial years starting on or after January 1, 2025. As a result, while some companies may benefit from the additional time, others—having already invested in compliance efforts—now face uncertainty about the evolving regulatory landscape and whether further changes may impact their reporting strategies.
The main changes include:
1. Reduction of the scope of reporting companies:
The Commission proposes raising reporting thresholds to better align with the Corporate Sustainability Due Diligence Directive (CSDDD), potentially excluding many companies from the scope of the CSRD by 80%. In detail, this means:
Under the current framework, EU companies and groups fall within the reporting scope if they exceed at least two out of three thresholds: a balance sheet total of €25 million, a worldwide net turnover of €50 million, or a workforce of 250 employees. However, under the proposed changes, only EU entities with at least 1,000 employees would be required to report, and they must also exceed either a €25 million balance sheet total or a €50 million net turnover. This shift significantly narrows the scope of companies subject to reporting obligations.
For non-EU ultimate parent companies, the current rules require reporting if the company generates at least €150 million in EU net turnover at the group level and has either an EU subsidiary already subject to CSRD or an EU branch with a turnover of at least €40 million. The proposed changes raise the EU net turnover threshold to €450 million and require that the company have at least one large EU subsidiary—defined as an entity exceeding two out of three criteria: a €25 million balance sheet total, a €50 million turnover, or 250 employees—or an EU branch generating €50 million in turnover.
2. Restrictions on Value Chain Reporting:
At present, companies are required to disclose information on their own operations, subsidiaries, and both upstream and downstream value chains, with certain reporting obligations benefiting from a three-year transition period. Under the Omnibus Package, however, CSRD-compliant companies would no longer be obligated to gather data from entities within their value chain that do not fall under CSRD’s scope. Instead, they would refer to new voluntary reporting standards established by the Commission, which will be based on the Voluntary Sustainable Reporting Standard for Non-Listed SMEs (VSME) developed by EFRAG.
3. No delay to assurance requirements and no transition to reasonable assurance:
CSRD reporting will continue to be subject to limited assurance, and the Omnibus Package does not introduce any further delays beyond the two-year general stop-the-clock extension. However, in response to concerns about excessive assurance procedures raised by the first wave of CSRD reporters, the Commission intends to issue targeted guidance on assurance requirements before finalizing limited assurance standards, which are expected to be adopted by October 1, 2026.
Under current rules, the Commission is required to assess the feasibility of transitioning to reasonable assurance and adopt corresponding standards by October 1, 2028. The Omnibus Package removes this obligation, meaning that CSRD reports will remain under limited assurance indefinitely. This change eliminates the possibility of stricter assurance requirements in the future, reducing the compliance burden on companies.
4. Significant revisions to the ESRS:
The Commission has reaffirmed its commitment to revising the European Sustainability Reporting Standards (ESRS). The revised delegated act will aim to reduce the number of required data points, clarify provisions that have been deemed unclear, and eliminate redundant reporting requirements. These updates are expected to be finalized in time for the second wave of CSRD-reporting companies, whose obligations will now begin for financial year 2027, rather than 2025 as originally planned.
5. Deletion of sector-specific standards requirement:
Previously, sector-specific ESRS standards were scheduled for adoption by June 30, 2026. However, the Omnibus Package proposes deleting this requirement, meaning companies will no longer be subject to mandatory sector-specific reporting standards. Instead, they will need to rely on entity-specific disclosures whenever material sustainability issues are not adequately addressed by the existing ESRS framework.
II. Amendments to the Corporate Sustainability Due Diligence Directive (CSDDD)
The CSDDD is scheduled to come into effect on July 26, 2027. Unlike the CSRD, however, the CSDDD has not yet been incorporated into the national laws of any EU member states. If the proposed Omnibus package passes without changes, the scoping thresholds will stay the same, meaning that companies previously identified as falling under the CSDDD will likely remain within its scope. A one-year delay will push back the transposition deadline to July 26, 2027, and extend the start of its application to July 26, 2028. In the meantime, the necessary guidelines by the Commission will be advanced to July 2026, to provide additional guidance and allow an extra year to prepare for compliance.
The main changes to the CSDDD include:
1. Exempting companies from the requirement to consistently carry out detailed assessments of potential or actual negative impacts in complex value chains involving indirect business partners and requiring full due diligence beyond direct partners only when the company has credible evidence suggesting that such impacts may have occurred or could occur in those areas.
2. Simplifying various aspects of sustainability due diligence to reduce unnecessary complexity and costs for large companies. This includes extending the time between regular assessments and updates from one year to five years, while clarifying that a company must evaluate the effectiveness of its due diligence measures and update them if there are reasonable grounds to believe they are no longer sufficient. Additionally, the stakeholder engagement requirements will be streamlined, and the obligation to terminate business relationships as a last resort will be removed.
3. Limiting the flow of information companies can request from their small and medium-sized business partners (defined as companies with fewer than 500 employees) to the information outlined in the CSRD’s voluntary sustainability reporting standards (VSME standard), unless additional data is needed for mapping impacts not covered by these standards, and the information cannot reasonably be obtained in other ways.
4. Removing the EU’s harmonized civil liability conditions and leaving the responsibility for defining civil liability standards to national laws. This also includes revoking the obligation for Member States to allow trade unions or NGOs to initiate representative actions and letting national law determine whether its civil liability rules override those of third countries where harm occurs.
5. Aligning climate mitigation transition plan requirements with those in the CSRD.
6. Extending maximum harmonization to more provisions concerning core due diligence obligations to ensure a consistent level playing field across the EU.
7. Eliminating the review clause on including financial services within the scope of the due diligence directive.
III. Next Steps
The legislative proposals are currently undergoing the ordinary legislative procedure. The Commission has urged the European Parliament and the European Council to expedite the Omnibus package without revisiting other parts of the legislation. However, once the legislative process begins, the Commission will have limited influence over whether the Parliament and Council propose additional amendments. As a result, a seamless adoption of the proposed changes is not guaranteed, and further amendments or new requirements may still arise.
As a directive, the Omnibus II Proposal amending the CSRD and CSDDD requires that, even if it is quickly agreed upon and adopted, member states will have 12 months to incorporate the omnibus text into their national laws.
[1] Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives 2006/43/EC, 2013/34/EU, (EU) 2022/2464, and (EU) 2024/1760, as regards certain corporate sustainability reporting and due diligence requirements. Available at: https://commission.europa.eu/document/download/892fa84e-d027-439b-8527-72669cc42844_en?filename=COM_2025_81_EN.pdf
[2] Proposal for a DIRECTIVE OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL amending Directives (EU) 2022/2464 and (EU) 2024/1760 as regards the dates from which Member States are to apply certain corporate sustainability reporting and due diligence requirements. Available at: https://commission.europa.eu/document/download/0affa9a8-2ac5-46a9-98f8-19205bf61eb5_en?filename=COM_2025_80_EN.pdf
[3] https://ec.europa.eu/info/law/better-regulation/have-your-say/initiatives/14546-Taxonomy-Delegated-Acts-amendments-to-make-reporting-simpler-and-more-cost-effective-for-companies_en
[4] ANNEXES to the Proposal for a Regulation of the European Parliament and of the Council amending Regulation (EU) 2023/956 as regards simplifying and strengthening the carbon border adjustment mechanism. Available at: https://commission.europa.eu/document/download/dc72f9cb-2b58-465a-8a33-8c5d6b6efe8b_en?filename=COM_2025_87_annexes_EN.pdf
EPA OIG Publishes Independent Audit of EPA’s FYs 2022 and 2021 (Restated) TSCA Service Fee Fund Financial Statements
On February 26, 2027, the U.S. Environmental Protection Agency’s (EPA) Office of Inspector General (OIG) published a report entitled Independent Audit of the EPA’s Fiscal Years 2022 and 2021 (Restated) Toxic Substances Control Act Service Fee Fund Financial Statements. Under the Toxic Substances Control Act (TSCA), as amended by the Frank R. Lautenberg Chemical Safety for the 21st Century Act, EPA is required to prepare and OIG to audit the accompanying financial statements of the TSCA Service Fee Fund. OIG rendered a qualified opinion on EPA’s fiscal years (FY) 2022 and 2021 TSCA Service Fee Fund financial statements, “meaning that, except for material errors in expenses and income from other appropriations and earned and unearned revenue, the statements were fairly presented.” OIG noted the following:
Material weaknesses: EPA materially understated TSCA income and expenses from other appropriations and EPA materially misstated TSCA earned and unearned revenue;
Significant deficiency: EPA needs to improve its financial statement preparation process; and
Noncompliance with laws and regulations: EPA did not publish an annual chemical risk evaluation plan for calendar year 2022.
OIG states that during its user fee analysis, it found that the TSCA fee structure in the fees rule for FY 2022 “appeared reasonable based on the data available when the EPA developed the fees rule.” According to OIG, the TSCA fees collected “adequately offset the actual or projected costs of administering the provisions of TSCA for the three-year period.” The fees collected in FYs 2020 – 2022 met the intent of TSCA to defray 25 percent of the specified costs of carrying out Sections 4 and 5, parts of Section 6, and Section 14.
OIG recommends that the chief financial officer:
Correct the calculation in the on-top adjustment for income and expenses from other appropriations;
Provide training for calculating the TSCA income and expenses from other appropriations on-top adjustment;
Correct the TSCA revenue balances;
Develop and implement accounting models for TSCA revenue-related activity;
Develop and implement a plan to strengthen and improve the preparation and management review of the financial statements; and
Correct other errors in the TSCA financial statements.
OIG recommends that the Assistant Administrator for Chemical Safety and Pollution Prevention develop and implement a plan to publish chemical risk evaluation plans at the beginning of each calendar year. EPA agreed with OIG’s recommendations and provided estimated completion dates for corrective actions.