Modernizing Permitting and Securing Minerals: Key Takeaways from Recent Presidential Actions
On April 15, 2025, President Trump took two additional actions building on previous initiatives focused on streamlining and supporting domestic mining and mineral production, including the Immediate Measures to Increase American Mineral Production executive order issued on March 20, 2025 (the Mining Order) and the Unleashing American Energy executive order from January 20, 2025. These actions are:
Updating Permitting Technology for the 21st Century, which seeks to modernize and streamline the federal permitting process for infrastructure projects (the Permitting Directive); and
Ensuring National Security and Economic Resilience Through Section 232 Actions on Processed Critical Minerals and Derivative Products, which mandates an evaluation of how the importation of processed critical minerals and their derivative products could affect national security.
Together, these actions reflect an urgent commitment to facilitate domestic mineral production, enhance national security, and promote economic growth. In addition, on April 18, 2025, the Federal Permitting Improvement Steering Council (Permitting Council), released its initial list of ten transparency projects under the Priority Projects directive of the Mining Order. There will be more to come on this action in an upcoming post.
Permitting Directive
The Permitting Directive mandates that executive departments and agencies maximize the use of technology in environmental reviews and permitting processes. The directive is intended to apply to all types of infrastructure projects such as mines, roads, bridges, factories, and power plants. Key highlights include:
Digital Transition: The directive seeks to eliminate paper-based applications and reduce the duplication of data submissions. This is intended to facilitate better cooperation among agencies (including the ability for interagency use of the same analyses) and streamline the approval process to increase transparency and predictability of permit schedules.
Establishment of the Permitting Technology Action Plan: The chairman of the Council on Environmental Quality (CEQ) is tasked with developing a strategy to modernize the technology used in federal permitting and environmental reviews resulting in a Permitting Technology Action Plan.
Creation of the Permitting Innovation Center: The chairman of the CEQ is also tasked with establishing and leading an interagency Permitting Innovation Center. This new center will focus on designing and testing new prototypes to enhance the efficiency of the permitting process, ensuring that federal infrastructure projects can move forward on a timely basis.
Tariff Probe on Critical Minerals
In conjunction with the Permitting Directive, President Trump ordered an investigation under Section 232 of the Trade Expansion Act of 1962 to determine whether imports of processed critical minerals and their derivative products threaten to impair national security. This action aims to address risks to and vulnerabilities of the US manufacturing and defense industrial bases by reliance on global supply chains for critical minerals and derivative products. Key highlights of the executive order include:
National Security Concerns: The order identifies potential risks to national security and economic stability due to US reliance on global supply chains for critical minerals and derivative products that are crucial inputs for US manufacturing and the industrial base, including risks of potential disruption due to geopolitical events or natural disasters and potential for price and market manipulation.
Review Timeline: Commerce Secretary Howard Lutnick has been directed to begin a national security review under Section 232 of the Trade Expansion Act of 1962 and has been given 180 days to report findings, including recommendations on whether to impose tariffs. Section 232 of the Trade Expansion Act of 1962 allows the President to request that the Department of Commerce investigate to determine the effect of specific imports on US national security.
Focus on Domestic Production: The review is intended to assess vulnerabilities in the US critical minerals (including rare earths and uranium) supply chain, the economic impact of foreign market distortions, and potential trade remedies to ensure a secure and sustainable domestic supply of these essential materials. The Commerce Secretary is directed to report on the following:
Identification of current US imports of processed critical minerals and derivative products, the foreign sources of such critical minerals and derivative products, and the percent, volume, and dollar value of such imports by country;
Risks associated with source countries of critical minerals and derivative products and analysis of the distortive effects of any predatory economic, pricing, and market manipulation strategies and practices used by such countries
The demand for processed critical minerals by manufacturers of derivative products in the US and globally; and
A review and risk assessment of global supply chains for processed critical minerals and their derivative products and an analysis of the current and potential capabilities of the US to process critical minerals and their derivative products.
These recent actions reflect a dual strategy to bolster US mining, energy, and manufacturing and address vulnerabilities in the critical mineral supply chain. By integrating technology into the permitting process and identifying supply chain vulnerabilities, the administration aims to enhance domestic manufacturing, mineral production, and energy and secure long-term economic resilience and national security.
OFAC Issues Updated Guidance to Shipping and Maritime Sector Regarding Evasion of Iranian Oil Sanctions
On April 16, 2025, the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) issued an update to its Sept. 2019 advisory, addressed to the global shipping and maritime sector, regarding sanctions evasion activities in connection with the shipment of Iranian-origin petroleum, petroleum products, and petrochemical products. The update was prompted by the Feb. 4, 2025 National Security Presidential Memorandum (NSPM-2), which directs the U.S. Department of the Treasury to implement a vigorous sanctions program to deny Iran and its terrorist proxies access to revenue.
Previously, on Oct. 11, 2024, Secretary of the Treasury Janet Yellen, in consultation with Secretary of State Anthony Blinken, had designated the petroleum and petrochemical sectors of the Iranian economy pursuant to Executive Order 13902, which authorizes the imposition of sanctions on any designated sector of the Iranian economy.
Iran relies on oil sales revenues to fund its malign activities, including its nuclear weapons and ballistic missile programs, and its support of terrorist groups. The oil shipments create significant sanctions risks for shipping companies, vessel owners, managers, operators, insurers, port operators, port service providers, financial institutions, and others in, or that work with, the maritime industry.
Iran’s Deceptive Practices
Iran-linked networks deploy an array of deceptive practices designed to circumvent sanctions, including:
Use of a “shadow fleet” of tankers. Iranian cargo is often transported on a shadow fleet of tankers, comprised of older, poorly maintained vessels that operate outside of standard maritime regulations. On Dec. 6, 2023, the International Maritime Organization (IMO) issued a resolution urging relevant stakeholders to avoid aiding illegal operations by the shadow fleet, but some stakeholders and jurisdictions continue to do so, by allowing substandard tankers to call at their ports; by overlooking adherence to international maritime regulations such as regular port state control inspections; and by providing bunkering, flagging, and crew management services to tankers sanctioned by OFAC or to other shadow fleet vessels. Iran also uses a separate shadow fleet of gas carriers to transport liquefied petroleum gas, primarily to China.
Use of ship-to-ship transfers to obscure origin and destination. While ship-to-ship (STS) transfers can be legitimate, Iran often uses multiple such transfers (typically three to five per shipment) to obfuscate the origin of the cargo and/or the involvement of sanctioned vessels. Multiple transfers are a strong risk factor for sanctions evasion. This is especially so when the transfers are conducted at night, in unsafe waters, near sanctioned jurisdictions, terminals, or refineries, or involve a vessel with missing or manipulated Automatic Identification System (AIS) data.
Use of falsified documents. To obscure the origin and destination of shipments, Iran-linked networks falsify cargo and vessel documents, including bills of lading, certificates of origin, invoices, packing lists, proof of insurance, and lists of last ports of call.
Disabling or tampering with AIS transponders. To mask their movements, including port calls and STS transfers, vessels transporting Iranian cargo often disable or tamper with their transponders. This is usually done together with other data manipulation, such as falsely reporting the Maritime Mobile Service Identity (MMSI) number or IMO number of the vessel. The updated guidance cautions not to rely solely on a single data point in verifying vessel activity for compliance.
Use of complex vessel ownership and management structures. Iran-linked networks use multiple shell companies and vessel-owning SPVs in high-risk, low-transparency, and low-regulation jurisdictions. Ship brokers in lax jurisdictions help facilitate transfers between and among shell companies.
Oil brokering networks. Oil brokers outside Iran help facilitate sales of Iranian petroleum and petroleum products, largely to China, often several steps removed from the initial sale. These oil brokers frequently create or distribute falsified documents, as noted above.
Identifying and Mitigating Sanctions Risks
To safeguard against these practices, and to avoid unwitting violations of sanctions laws, the updated guidance advises maritime sector stakeholders to review their sanctions compliance programs, and to enhance their due diligence and strengthen their internal controls as appropriate. The recommendations include:
Verify cargo origin. Recipients of cargo should conduct due diligence to corroborate the origin of goods. Red flags include vessels exhibiting deceptive behavior, or suspected links to sanctioned persons or locations. Testing samples of the cargo can reveal chemical signatures unique to Iran’s oil fields. Certificates of origin from Oman, the UAE, Iraq, Malaysia, or Singapore should be thoroughly investigated. Shipowners or charterers involved in STS transfers should request documentation regarding vessel STS history or verification of the last time the tank of the offloading vessel was empty, to ensure the cargo is not of Iranian origin.
Verify insurance. Parties should verify that vessels have adequate and legitimate insurance coverage, and are not relying on sanctioned insurance providers, or on new and untested providers without valid basis.
Verify flag registration. Vessels registered in jurisdictions known to service shadow fleet vessels, or that have flown multiple flags in a short period of time should be investigated as to ownership, voyage history, and flag history. The IMO’s Global Integrated Shipping Information (GISIS) database should be checked, to see if the vessel is flying a “FALSE” or “UNKNOWN” flag.
Review shipping documentation. Any indication that shipping documentation has been manipulated is a red flag that should be fully investigated. Documents related to STS transfers should establish that the cargo was delivered to the port reflected on the shipping documentation.
Know your customer (KYC) and know your vessel (KYV). In addition to conducting KYC due diligence (enhanced as appropriate), there should be KYV due diligence conducted on vessels, vessel owners, ultimate beneficial owners and group ultimate owners, and operators involved in contracts, shipments, and related maritime transactions. For vessels, this includes researching the IMO number and vessel history, including travel patterns, available STS history, ownership history, insurance, flag history, ties to evasive activities, actors, or regimes, and assessing risks associated with the owners, operators, or managers.
Monitor for manipulation of vessel location data. Irregularities in AIS data (including gaps in the data) could indicate manipulation, a serious red flag, warranting enhanced due diligence before further engagement.
Implement contractual controls. Contracts should contain representations and warranties that counterparties are not engaging in activity that violate, or that would cause a U.S. person to violate, U.S. sanctions laws, and that allow termination when such circumstances arise. In addition, contracts should allow termination based on certain types of suspicious activity.
Refuse service or port entry to sanctioned vessels. Port agents, operators, and terminals should engage in due diligence to ascertain whether a vessel is sanctioned, and should refuse service or port entry to such vessels.
Leverage available resources. A fair amount of information is available through open-source databases and from organizations in the maritime sector. These resources should be consulted.
The U.S. government continues to prioritize efforts to curtail Iran’s ability to generate revenue from its energy sector. Iran-linked networks have been finding ways to thwart U.S. sanctions. Companies in the maritime sector are particularly at risk of sanctions violations, which – even if inadvertent – potentially carry steep penalties, as the OFAC sanctions program is a “strict liability” regime. Up-to-date sanctions compliance programs are essential. Katten is ready to assist in implementing and upgrading sanctions compliance programs, and guiding clients through these deep and turbulent waters.
Administration Proposes Rescinding the Endangered Species Act Regulatory Definition of “Harm”
On April 17, the U.S. Fish and Wildlife Service (“FWS”) and National Marine Fisheries Service (“NMFS”) (collectively, the “Services”) published a notice of proposed rulemaking that would rescind the Endangered Species Act (“ESA”) regulatory definition of “harm,” which currently incorporates habitat modification or degradation into the ESA statutory definition of “take.” 90 Fed. Reg. 16,102 (Apr. 17, 2025). Comments on the proposed rule are due by May 19, 2025.
This proposed rule reflects a significant reset of a core element of the ESA to narrow the application of the statute and is the first salvo in the Trump Administration’s anticipated efforts to revise the regulatory framework implementing the ESA. Following Executive Order 14154, “Unleashing American Energy” (Jan. 20, 2025), the Secretary of the Interior released a corresponding Secretarial Order 3418 directing, in part, actions to suspend, revise, or rescind the Biden Administration’s 2024 ESA rules that revised the regulations implementing Sections 4, 4(d), and 7. This next suite of proposed rules are anticipated to be published in October 2025.
Background
The ESA prohibits the “take” of endangered species, and the prohibition can be applied to threatened species. 16 U.S.C. §§ 1538(a)(1)(B)-(C) & 1533(d). The term “take” is statutorily defined as “to harass, harm, pursue, hunt, shoot, wound, kill, trap, capture, or collect, or to attempt to engage in any such conduct.” Id. § 1532(19) (emphasis added). A person can receive authorization to incidentally take an ESA-listed species through the Section 7 consultation process or a permit issued pursuant to Section 10.
By regulation, the Services have defined “harm” as “an act which actually kills or injures wildlife. Such act may include significant habitat modification or degradation where it actually kills or injures wildlife by significantly impairing essential behavioral patterns, including breeding, feeding or sheltering.” 50 C.F.R. § 17.3 (FWS’s definition); see also 50 C.F.R. § 22.102 (NMFS’s materially identical definition). In 1995, the U.S. Supreme Court, relying on Chevron, upheld the regulation in a 6-3 decision, holding that the Services reasonably construed the intent of Congress by including the “significant habitat modification or destruction” provision within the definition of “harm.” Babbitt v. Sweet Home Chapter of Communities for a Great Or., 515 U.S. 687, 708 (1995) (Justice Scalia authored the dissent).
Proposed Rescission
In the proposed rule, relying on Justice Scalia’s dissent in Sweet Home and the Supreme Court’s recent decision in Loper Bright Enterprises v. Raimondo (which overruled the Chevron doctrine), the Services state that the regulatory definition of “harm” is inconsistent with the historical understanding of “take.” As the Services explain, “take” has long meant “to reduce [wild] animals, by killing or capturing, to human control.” Accordingly, “harm,” when read in conjunction with the other verbs in the statutory definition of “take,” requires an “affirmative act[] . . . directed immediately and intentionally against a particular animal—not [an] act[] or omission[] that indirectly and accidentally cause[s] injury to a population of animals.”
Pursuant to Loper Bright, the Services concluded that the existing regulatory definition of “harm” does not match “the single, best meaning of the statute.” Instead of proposing a replacement, the Services intend to rely on the definition of “take” in the ESA statute because further elaborating on one subcomponent of that definition is unnecessary given the comprehensive statutory definition. The recission of the regulatory definition of “harm” would apply prospectively and would not affect already granted permits.
Implications
While prospective in application, if finalized, the recission of the definition of “harm” would have significant, nationwide implications. First, the scope of what constitutes “take” would be much narrower, given the removal of habitat modification and the apparent focus on acts directed immediately and intentionally against a particular animal. As a result, many future activities and projects would have reduced exposure to liability for a potentially prohibited take. Second, in the permitting context, the narrower scope of “take” would likely result in corresponding limitations on the scope of measures that could be required either to “minimize” the impact of incidental take in Section 7 consultations or to “minimize and mitigate” the impact of take authorized by a Section 10 incidental take permit. Third, in the absence of a regulatory definition or any further guidance, some uncertainty regarding the scope and interpretation of “take” would remain, which could result in increased litigation challenging certain applications of the statutory definition. Finally, as has become the norm with respect to ESA regulations, subsequent administrations could reinstate the regulatory definition of “harm” or develop a new definition or interpretation of that term perpetuating regulatory instability.
April Updates on Maine’s Net Energy Billing Program
As we discussed in our February alert, the Maine Legislature continues to consider bills that would further limit or eliminate Maine’s Net Energy Billing (NEB) program. Since February, the Legislature introduced four new bills geared toward rolling back the NEB program:
LD 515, An Act to Reverse Recent Changes Made to the Law Governing Net Energy Billing and Distributed Generation, would bring the NEB program back to how it existed prior to 2017 and require the PUC to initiate a rulemaking to amend its NEB rules to that effect.
LD 839, An Act to Lower Consumer Electricity Costs by Prohibiting the Recovery Through Rates of Costs Attributable to Net Energy Billing, would provide for the payment of NEB costs from the state’s General Fund rather than through electrical rates.
LD 1317, An Act to Promote Responsible, Cost-effective Energy in Maine by Amending the Tariff Rates Applicable to the Commercial and Institutional Net Energy Billing Program, would amend the commercial and institutional NEB program starting in 2026 by directing the PUC to establish the tariff rates at a rate greater than 12¢ per kilowatt-hour but not exceeding the previous year’s rate. Starting in 2028 and onward, LD 1317 requires the tariff rate to equal 12¢ per kilowatt-hour.
LD 1321, An Act to Reform Net Energy Billing by Establishing Limitations on the Programs’ Duration and Compensation, would:
Limit the Kilowatt-Hour Credit Program to distributed generation resources with a nameplate capacity of 20 kilowatts or less; limit to 10 the number of customers or meters to a single project and only allow a customer to have a financial interest in up to five distributed generation resources.
Allow customers to only offset their electricity supply charges with NEB credits.
Require all NEB resources to sell their Renewable Energy Credits (RECs) within the state of Maine (and not outside the state).
Set the tariff rate to the supply rate of the standard-offer service rate.
Prohibit participation in the program beyond December 31, 2045.
On April 10, 2025, the Energy, Utilities, and Technology (EUT) Committee held a public hearing on LD 1317 and 1321, receiving mixed testimony from proponents and opponents on the proposed changes.
The EUT Committee also held a work session on three of the four NEB bills that we identified in our February alert, voting ought not to pass on two bills—LD 257 (An Act to Eliminate the Practice of Net Energy Billing) and LD 450 (An Act to Lower Electricity Costs by Repealing the Laws Governing Net Energy Billing), and tabling two others—LD 32 (An Act to Repeal the Laws Regarding Net Energy Billing) and LD 515 (An Act to Reverse Recent Changes Made to the Law Governing Net Energy Billing and Distributed Generation).
We will continue to monitor these bills and provide updates as appropriate.
The Missing Piece to Your Business’ Litigation Team: Using A National Coordinating Counsel to Manage Your Mass Tort Litigation
Businesses, large and small, can find themselves overwhelmed by litigation quickly, if and when they find themselves in the crosshairs of a developing litigation. For years, the best example of these crosshairs was those focused mainly on asbestos and those entities that either supplied or manufactured with asbestos. However, over recent years we have seen that focus shift to other types of litigation, including cosmetic and pharmaceutical talc, industrial talc, crystalline silica, benzene, PFAS, pharmaceuticals, and many others. With most of these developing litigations, there are plaintiff firms that specialize in investigating entities involved with the products or activities at issue, and then bringing an onslaught of suits against those entities. Once an alleged tie is found between any mass litigation and an entity, the entity can find themselves named in almost every suit filed across the nation by national plaintiff firms. This often happens before an entity can truly appreciate the magnitude of the impact of these lawsuits.
Many entities attempt to manage this litigation in-house, not knowing that they have options on how best to manage their entity’s litigation issues. However, many times a better alternative is to hire a National Coordinating Counsel (“NCC”) to assist in managing the litigation for the entity. The NCC’s job is to manage every aspect of an entity’s litigation across jurisdictions relating to a specific topic or topics. The use of an NCC allows for streamlined work, implementation of national litigation strategies, and better and more predictable litigation outcomes.
In particular, there are advantages to hiring an NCC at every level of litigation. Below we will outline the basics of why hiring an NCC can benefit your entity at different levels of litigation. We will be publishing a series of follow-up articles on each specific aspect of litigation mentioned below and how hiring an NCC can assist in bringing more value to your entity as compared to attempting to manage the litigation in-house.
Case Management
The NCC’s main role is to manage your entity’s litigation across jurisdictions. This will include tracking all of the relevant deadlines in your cases, including trial dates, expert discovery deadlines, written discovery deadlines, depositions, and motion practice. The NCC tracks this information in real time by having open lines of communication with local counsel in each jurisdiction and creating reports based on that communication so that the information can be presented in a quick and easily digestible manner to your entity. However, this role goes well beyond just tracking relevant events in cases. The NCC is able to report trends involving different plaintiff firms, experts, product identification, and strategies for defenses. The NCC will use these trends and information from across jurisdictions to help develop and implement defense strategies.
For example, Personal Jurisdiction and Forum Non-Conveniens defenses can be suggested based on not only the facts of a case, but also the knowledge of different jurisdictions case specific laws regarding causation, available defenses, damages, as well as others. The NCC is also able to track litigation in each jurisdiction to determine which jurisdictions are more likely to go to trial, jurisdictions with higher settlement values, and jurisdictions that plaintiffs are likely to refile cases against your entity as the sole defendant after a successful Personal Jurisdiction or Forum Non-Conveniens motion. The NCC is able to communicate with local counsels to determine all the facts so your entity can be confronted with only issues and possible solutions rather than having to find those solutions yourselves. This case management also branches out too many other aspects of the case, including discovery, corporate representatives, experts, and trials, as mentioned below.
Discovery
Perhaps one of the biggest roles an NCC can play to ease the burden of litigation on an entity is to manage written discovery. When responding to discovery across cases and across jurisdictions, a national strategy is required. This strategy will ensure that responses are uniform across cases and that your entity is not committing discovery fraud. An NCC can draft all discovery responses across jurisdictions to ensure that all objections and responses are phrased the same way nationwide. However, it is also possible to have local counsel draft your responses and to have the NCC review these responses to ensure similar objections and responses. Either way, the NCC ensures that each inquiry made to your entity is responded to in a uniform way. It avoids contradictions that, when discovered by plaintiff firms, can lead to motion practice and accusations of discovery fraud, which can lead to hefty and punitive penalties.
An NCC ensures that document productions are consistent nationwide to similar requests. When a plaintiff firm is filing cases against your entity in multiple jurisdictions, they are expecting to receive the same documents in response to their requests regardless of the jurisdiction. Without an NCC providing oversight, it is possible that documents can be omitted from disclosure or that documents can be accidentally produced. Either way, this can lead to discovery motions and/or sanctions for discovery fraud. Discovery fraud is a serious risk if your discovery responses and document productions are not managed at a national level, the consequences of which can plague your entity for the rest of its life in the litigation.
Furthermore, an NCC can assist in the drafting and use of confidentiality orders to protect your documents. This needs to be done on a national level, as disclosure in one jurisdiction would require disclosure in all jurisdictions. Tracking your documents and protecting your interests on a national level requires a national strategy that would need to be micromanaged by your entity’s legal department if your entity is not using an NCC.
Beyond written discovery, having an NCC can help ensure that a national strategy is undertaken for gathering discovery in cases. This includes the use of subpoenas for records, the use of private investigators, and the use of other resources. Additionally, having an NCC can assist in gathering discovery across states, as they can link local counsel across jurisdictions for more efficient use of interstate discovery subpoenas or Freedom of Information/Open Public Records Act requests. Overall, they implement a strategy across jurisdictions with the local counsels so that your entity can leave no stone unturned while not having to dedicate resources within your entity to do so.
Corporate Representative Depositions and Trial Testimony
Corporate Representative depositions and trial testimony are another opportunity for an NCC to provide your entity value. First, if your entity is new to the litigation, an NCC can assist in determining the best person or persons to serve as a corporate representative. They can assist in the search by interviewing possible candidates and providing your entity with the pros and cons of each candidate. Once a corporate representative is established, the use of an NCC allows for consistent preparation of your corporate representative for all depositions and trial testimony to ensure that the testimony given on behalf of your entity is consistent. Part of this preparation is the development of a corporate story, for which your corporate representative will be the mouthpiece. This is of the upmost importance, as this will be how your entity is represented to a jury at trial. A compelling corporate story can be the difference between a large plaintiff verdict and a defense verdict.
The preparation of your entity’s corporate story, as well as your corporate representative, can include mock depositions, document reviews, and review of written discovery. This implementation of a consistent strategy across cases and jurisdictions avoids the issues presented when each local counsel is responsible for preparing a corporate representative. This also saves time and resources that would be required if each local counsel had to prepare for each corporate representative deposition by reviewing transcripts and discovery from other jurisdictions. An NCC can constantly be up-to-date without constant review of what has previously happened with a corporate representative. This makes your corporate representative testimony consistent for the witness, the client, and for plaintiff counsel. This leads to positive and predictable outcomes.
Experts
An NCC team allows for efficient management of experts and expert discovery across cases and jurisdictions. An NCC team allows for each expert to have a specific point of contact. This creates a consistent relationship and avoids issues with ensuring the experts are provided with materials and payments consistently. It allows for consistent reports and more involved strategy development across cases. It also allows for a better relationship to develop, which often allows for experts to be more forgiving if issues to arise and reports are needed on an expedited basis. In-house management or management by local counsels of these issues may not result in as favorable outcomes.
Further, as a part of an overall expert strategy, having an NCC allows for a more tactical approach to retaining experts. This includes using multiple experts from the same field across different cases so that that your entity is not reliant on one expert in case there is conflicting trial dates, a conflict with a co-defendant, or an issue with retention in any particular case. Further, this allows for more in-depth management of costs. This also allows for experts to better manage their time while your entity’s entire case load is getting the full attention it deserves. This level of management is possible with an NCC because they are able to dedicate the time and their expertise in a way that local counsel and in-house attorneys cannot.
Further, an NCC team allows for consistent expert depositions, Daubert hearings, and trial testimony from your experts. This is similar to corporate representatives, discussed above. The consistent time spent in preparation for depositions and reviewing reports allows for a direct relationship on behalf of your entity with the expert, as well as a consistent strategy that builds and adapts over time. Further, this facilitates inclusion of cutting edge science and publications within your experts opinions, which substantially supplements your entity’s defenses. This is just another way an NCC team adds value to your entity.
Trial Teams
While no entity wants to find itself at trial, the fact of the matter is that every entity named in a lawsuit must prepare as if a trial is inevitable. This ensures that the entity is prepared in the unlikely event that a matter goes to trial. An NCC team is your entity’s insurance policy that a trial team will be prepared under those circumstances. An NCC team helps create consistent work product for both pre-trial filings and trial itself. This stems from having developed a trial strategy that can be used as a basis for every case. Different elements of this strategy would include development of a corporate story, development of defenses such as expert defenses or state-of-the-art defenses, development of cross-examinations of plaintiff’s experts, and more. An NCC team will constantly be developing and perfecting motions in limine, openings and closings, and cross-examinations that will come together to form a trial handbook. This will allow trial counsel to have a step-by-step plan of how your entity should be defended at trial.
Moreover, this NCC work helps lead to a more consistent and predictable defense, which helps manage outcomes. The NCC team manages trial dates across jurisdictions so that an entity can ensure it is prepared for any trial issues that may come up in any of their cases. This also allows for the entity to have better forecasting of what cases will go to trial, which cases will resolve, and what issues may arise at any time. Due to this, an entity can be better prepared for outcomes and can prepare for what can be expected during any particular time period.
Case Resolution
Resolving cases outside of trial is also the job of your NCC. An NCC can more effectively resolve cases than individual local counsel because they can do so on a larger scale. Further, an NCC can devote more resources and time to forming the relationships with plaintiff firms that allow for these resolutions. Your NCC team can create value when negotiating by creating group settlements across jurisdictions, but your NCC can also create value by producing creative solutions when negotiating with plaintiff firms. They can take advantage of early settlement opportunities or could develop different frameworks depending on your entity’s circumstances.
It is easier for your NCC team to develop creative deals as compared to local counsels or in-house counsel because they will be dedicating more time and resources to building a relationship with the different plaintiffs’ firms on behalf of your entity. Further, they will spend more time on behalf of your client developing relationships with co-defendants on behalf of your entity. This can help develop your defenses, which will impact the overall outcomes of your cases.
Your NCC team will also be tracking different points of data regarding the outcomes in your cases to allow for better projections for future matters. This includes the past history of cases with each plaintiff firm, past history of cases with each product, past history of cases with product use during different time periods, past history in each jurisdiction, as well as many other data points. All of this combines for more information so that your entity can be better prepared to handle the litigation it faces and can navigate a future given its involvement in the litigation.
Overall, an NCC team is the missing piece to your business’ litigation team. An NCC team manages your litigation, but more importantly, they add value to produce better and more predictable outcomes. For your organization to continue to succeed, it should be proactive regarding the possibility of mass litigation. This includes involving an NCC as soon as possible, as it allows your NCC to provide as much value as possible by preparing as much as they can before the cases start rolling in.
EU Deforestation-Free Products Regulation (EUDR): Simplification is Taking Shape in EU Commission’s Guidance
On 15 April 2025, the European Commission issued a series of documents with a view to simplifying and amending Regulation (EU) 2023/1115 on deforestation-free products (‘EUDR’).
In line with the broader simplification trend that marks the beginning of the second Von der Leyen Commission, the documents bring about an easing in reporting requirements as well as clarification. They are expected to bring about together a 30% reduction of administrative costs, and considerably reduce the number of due diligence statements that companies need to file.
The initiative follows a period of high uncertainty in the end of 2024, during which discussions on the postponement of the EUDR’s application by one year were associated with a strong push for a reopening of discussions on the substance of the EUDR obligations. To avoid lengthy discussions, the Council and the European Parliament had at the time decided to only amend EUDR provisions setting out delays.
The updated EUDR Guidance and FAQ seem to aim to remedy certain concerns raised since, notably by the conservative majority at the Parliament (EPP), by introducing the following simplification elements:
Companies can reuse existing due diligence statements when goods, that had been previously placed on the market are reimported;
An authorised representative can now submit a due diligence statement on behalf of members of company groups;
Companies may submit their due diligence statements annually instead of a batch-specific declaration;
Non-SME operators and traders can now fulfill their duty to ‘ascertain upstream due diligence’ by collecting and referencing their direct suppliers’ DDS numbers, without systematically checking every single statement or being required to collect information included under Article 9
They are accompanied by a Draft delegated Act submitted for consultation until 13 May 2025, providing further precisions to the list of products included under Annex I of the EUDR (e.g. that are subject to the due diligence requirements), notably considering the exemption of certain packaging elements from the EUDR requirements.
While the above simplifications appear to remedy certain concerns of the industry, the choice of non-binding guidance ensures an efficient decision-making process but leaves some uncertainties in the implementation of the EUDR requirements. Ultimately, clarification by way of an amendment to the text of the EUDR itself could be required to bring about further clarity.
Nayelly Landeros Rivera contributed to this article
Germany’s Supply Chain Law at a Crossroads: The Implications of the Proposed Shift to the CSDDD
In April 2025, CDU, CSU, and SPD – the coalition parties almost certainly forming Germany’s next federal government – announced their intention to repeal the German Supply Chain Due Diligence Act (Lieferkettensorgfaltspflichtengesetz (LkSG)) as part of a broader initiative to reduce administrative and economic burdens. According to the coalition agreement, the LkSG shall be replaced with legislation implementing the EU Corporate Sustainability Due Diligence Directive (CSDDD) in a bureaucracy-light and enforcement-friendly manner. The reporting obligations under the LkSG shall be abolished immediately, and enforcement of existing obligations shall be suspended, except in cases of grave human rights violations, until the new EU-aligned framework enters into force and is implemented in German law.
This legislative shift is causing widespread uncertainty among companies, many of which have already undertaken significant efforts to implement the LkSG since it came into force in January 2023. The law currently obliges large enterprises with more than 1,000 employees since 2024 onwards to establish comprehensive due diligence mechanisms, including annual risk assessments, grievance mechanisms, and supply chain monitoring, with potential fines reaching up to 2% of global turnover in the event of non-compliance.
While some industry associations have welcomed the repeal as a step toward deregulation, the announcement has also raised significant concerns within the business and legal communities. Numerous companies have already made considerable investments to comply with the LkSG, establishing compliance systems, internal governance structures, and supplier monitoring mechanisms. The prospect of a repeal, especially after only a short period of application, has introduced legal uncertainty and operational ambiguity, particularly with respect to future compliance expectations.
From a legal perspective, the formal abolition of the LkSG would require a new act adopted by the parliament. Earlier attempts to initiate such a legislative reversal failed due to insufficient parliamentary support. Nevertheless, the linkage of national legislation with the EU’s CSDDD offers a feasible path for reform by way of harmonized substitution rather than outright repeal. The CSDDD covers both human rights and environmental obligations and applies not only to direct suppliers but, under certain conditions, also to indirect supply chain actors. Notably, the CSDDD introduces civil liability provisions and imposes obligations on a broader spectrum of business activities, including downstream operations such as recycling and distribution.
The EU Commission’s Omnibus proposals aim to address some of the implementation challenges previously identified under the LkSG. Proposed key modifications include limiting the scope of due diligence to direct business partners unless specific risks are identified further down the supply chain, reducing the frequency of effectiveness monitoring from annually to once every five years, and restricting the information that can be demanded from SMEs. These reforms are intended to strike a balance between ensuring substantive sustainability commitments and preserving economic viability, particularly for companies operating within complex global value chains.
Despite these developments, civil society organizations have strongly opposed the dismantling of the LkSG. The “Initiative Lieferkettengesetz”, a coalition of over 140 NGOs, religious institutions, and trade unions, has described the planned repeal as a serious regression in the protection of human rights and environmental standards. They argue that the LkSG has already led to tangible structural improvements and that weakening it sends the wrong signal to companies that have acted in good faith.
Meanwhile, supervisory authorities such as the Federal Office for Economic Affairs and Export Control (BAFA) have begun to enforce the LkSG with targeted inquiries and audits, particularly in high-risk sectors. These enforcement activities prompted many companies to accelerate their compliance efforts, contributing to the establishment of internal processes that may now remain relevant under the forthcoming CSDDD regime.
Considering the transitional phase between the phasing out of the LkSG and the implementation of the CSDDD, companies are advised to avoid dismantling existing due diligence systems prematurely. While certain regulatory relief may be on the horizon, reputational and legal risks remain, particularly in the event of adverse public exposure or litigation. Moreover, the CSDDD will introduce new obligations concerning environmental risks, for which most businesses will need to gather additional information and develop appropriate compliance tools.
In conclusion, the repeal of the LkSG marks a turning point in Germany’s supply chain regulation. While the transition to EU-level harmonization promises simplification in some areas, it also brings new challenges and legal uncertainties. Companies are well advised to maintain a forward-looking compliance posture, preparing not only for reduced national reporting burdens but also for the broader and more integrated responsibilities under the CSDDD.
New Section 232 Trade Investigation on Imports of Processed Critical Minerals and Their Derivative Products Could Result in Trade Actions Later This Year
On April 15, 2025, President Trump signed an Executive Order directing the Secretary of Commerce to initiate a new investigation under Section 232 of the Trade Expansion Act of 1962 (Section 232) on imports of processed critical minerals and their derivative products. The investigation will evaluate the impact of imports of these materials on U.S. national security and resilience and address vulnerabilities in supply chains, the economic impact of foreign market distortions and potential trade remedies to ensure a secure and sustainable domestic supply of these essential materials. This is the third such investigation initiated this month and the fifth of President Trump’s second term.
Processed critical minerals and their derivative products are key building blocks of the U.S. defense industrial base and integral to sectors ranging from transportation and energy to telecommunications and advanced manufacturing. The new Section 232 investigation will encompass the following “critical minerals,” “rare earth elements,” “processed critical minerals” and “derivative products”:
“Critical minerals” are those included in the “Critical Minerals List” published by the United States Geological Survey (USGS) pursuant to section 7002(c) of the Energy Act of 2020 (30 U.S.C. 1606)1, as well as uranium.
“Rare earth elements” means the 17 elements identified as rare earth elements by the Department of Energy (DOE) in the April 2020 publication titled “Critical Materials Rare Earths Supply Chain” 2 and also includes any additional elements that either the USGS or DOE determines in any subsequent official report or publication should be considered rare earth elements.
“Processed critical minerals” refers to critical minerals that have undergone the activities that occur after critical mineral ore is extracted from a mine up through its conversion into a metal, metal powder or a master alloy. These activities specifically occur beginning from the point at which ores are converted into oxide concentrates; separated into oxides; and converted into metals, metal powders and master alloys.
“Derivative products” includes all goods that incorporate processed critical minerals as inputs. These goods include semi-finished goods (such as semiconductor wafers, anodes and cathodes) as well as final products (such as permanent magnets, motors, electric vehicles, batteries, smartphones, microprocessors, radar systems, wind turbines and their components and advanced optical devices).
Section 232 requires the Secretary of Commerce to complete an investigation and submit a report to the President within 270 days of initiating any investigation. The report will detail risks and provide recommendations to strengthen domestic production, reduce dependence on foreign suppliers and enhance economic and national security.
The President then has up to 90 days to decide whether to concur with the report and take action. Action may include import tariffs, quotas or other measures as needed to address the threat.
Although this timeline provides for action in approximately one year, there is nothing preventing the Administration from moving more quickly to finalize a report or take action.
President Trump’s directive that Commerce investigate imports of critical minerals and their derivative products closely follows the initiation of Section 232 investigations on semiconductor and pharmaceutical imports earlier this month. Earlier this year, the President also issued executive orders directing Commerce to investigate imports of copper and lumber under this same provision, marking a continuation of the Trump Administration’s use of Section 232 as a preferred mechanism to bolster domestic production and reduce reliance on foreign suppliers. Prior actions on specific critical minerals and materials completed during President Trump’s first term resulted in either findings of no national security threat (vanadium) or trade actions other than tariffs, such as working groups and negotiations with allies to improve supply (uranium and titanium sponge).
[1] Aluminum, antimony, arsenic, barite, beryllium, bismuth, cerium, cesium, chromium, cobalt, dysprosium, erbium, europium, fluorspar, gadolinium, gallium, germanium, graphite, hafnium, holmium, indium, iridium, lanthanum, lithium, lutetium, magnesium, manganese, neodymium, nickel, niobium, palladium, platinum, praseodymium, rhodium, rubidium, ruthenium, samarium, scandium, tantalum, tellurium, terbium, thulium, tin, titanium, tungsten, vanadium, ytterbium, yttrium, zinc and zirconium.
[2] The lanthanide series (lanthanum, cerium, praseodymium, neodymium, promethium, samarium, europium, gadolinium, terbium, dysprosium, holmium, erbium, thulium, ytterbium and lutetium) as well as scandium and yttrium.
March 2025 Bounty Hunter Plaintiff Claims
California’s Proposition 65 (“Prop. 65”), the Safe Drinking Water and Toxic Enforcement Act of 1986, requires, among other things, sellers of products to provide a “clear and reasonable warning” if use of the product results in a knowing and intentional exposure to one of more than 900 different chemicals “known to the State of California” to cause cancer or reproductive toxicity, which are included on The Proposition 65 List. For additional background information, see the Special Focus article, California’s Proposition 65: A Regulatory Conundrum.
Because Prop. 65 permits enforcement of the law by private individuals (the so-called bounty hunter provision), this section of the statute has long been a source of significant claims and litigation in California. It has also gone a long way in helping to create a plaintiff’s bar that specializes in such lawsuits. This is because the statute allows recovery of attorney’s fees, in addition to the imposition of civil penalties as high as $2,500 per day per violation. Thus, the costs of litigation and settlement can be substantial.
In March of 2025, product manufacturers, distributors, and retailers were the targets of 283 new Notices of Violation (“Notices”), as well as 75 amended Notices, alleging a violation of Prop. 65 for failure to provide a warning for their products. This was based on the alleged presence of the following chemicals in these products. Noteworthy trends and categories from new Notices sent in March 2025 are excerpted and discussed below. A complete list of all new and amended Notices sent in March 2025 can be found on the California Attorney General’s website, located here: 60-Day Notice Search.
Food and Drug
Product Category
Notice(s)
Alleged Chemicals
Assorted Prepared Food and Snacks: Notices include sunflower seeds, granola, instant soup, chips, crackers, and energy bars
50Notices
Cadmium, Lead and Lead Compounds, Mercury and Mercury Compounds
Dietary Supplements: Notices include pea protein powder, protein shake blends, dietary fiber supplements, and cinnamon supplements
33Notices
Cadmium, Mercury and Mercury Compounds, Lead and Lead Compounds, Bisphenol A, Perfluorooctanoic Acid (PFOA), and Perfluorooctane Sulfonate (PFOS)
Fruits and Vegetables: Notices include pickled ginger, kale chips, and dried mango slices
12Notices
Lead and Lead Compounds
Seafood: Notices include shrimp, crab cakes, mussels, and anchovies
9Notices
Cadmium and Lead and Lead Compounds
Assorted Prepared Food and Snacks: Notices include coconut water, black beans, and plant-based chicken
5Notices
Bisphenol A (BPA)
Cannabinoid Products: Notices include gummies and coffee
5Notices
Delta-9-tetrahydrocannabinol
Seafood: Notices include anchovies, smoked clams, and sardines
5Notices
Perfluorononanoic acid (PFNA) and its salts, Perfluorooctanoic Acid (PFOA), and Perfluorooctane Sulfonate (PFOS)
Noodles, Pasta, and Grains: Notices include penne and gluten-free fusilli
4Notices
Lead and Cadmium
Spices and Sauces: Notices include mole, curry, and vegan Bolognese
4Notices
Lead and Lead Compound
Fruits and Vegetables: Notices include mushrooms and pineapple slices
2Notices
Bisphenol A (BPA)
Seafood: Notices include chunk light tuna
1Notice
Bisphenol A
Cosmetics and Personal Care
Product Category
Notice(s)
Alleged Chemicals
Personal Care Items: Notices include shower caps and body tape
6Notices
Perfluorooctanoic Acid (PFOA)
Personal Care Products: Notices include lotion, hair oil, and shave gel
6Notices
Diethanolamine
Personal Care Products: Notices include hair growth jelly
1Notice
Lead
Consumer Products
Product Category
Notice(s)
Alleged Chemicals
Glassware and Ceramics: Notices include serving dishes, mugs, bowls, and vases
34Notices
Lead
Plastic Pouches, Bags, and Accessories: Notices include clutches, toy baskets, travel cases, and cross-body bags
33Notices
Di(2-ethylhexyl)phthalate (DEHP), Diisononyl phthalate (DINP), and Di-n-butyl phthalate (DBP)
Clothing: Notices include jackets, hoodies, shoes, and shorts
15Notices
Di(2-ethylhexyl)phthalate (DEHP), Diisononyl phthalate (DINP), and Di-n-butyl phthalate (DBP)
Housewares: Notices include umbrellas, shower curtain liners, and washcloths
15Notices
Perfluorooctane Sulfonate (PFOS) and Perfluorooctanoic Acid (PFOA)
Housewares: Notices include tablecloths, corkscrews, and rope lights
11Notices
Di(2-ethylhexyl)phthalate (DEHP), Diisononyl phthalate (DINP) and Di-n-butyl phthalate (DBP)
Tools: Notices include first aid kits, clamps, valves, safety vests, and natural gas conversion kits
11Notices
Di(2-ethylhexyl)phthalate (DEHP), Diisononyl phthalate (DINP), and Lead
Gloves
4Notices
Chromium (hexavalent compounds)
Housewares: Notices include lunch bags, generator covers, and athletic tape
4Notices
Perfluorooctanoic Acid (PFOA)
Moth Balls
4Notices
Naphthalene and p-Dichlorobenzene
Housewares: Notices include canes, brass bells, and air fresheners
3Notices
Lead
Jackets
3Notices
Perfluorooctanoic Acid (PFOA)
Sports Equipment: Notices include jump ropes and hockey sticks
2Notices
Di(2-ethylhexyl)phthalate (DEHP)
Furniture Wax
1Notice
Toluene
There are numerous defenses to Prop. 65 claims and proactive measures that industry can take prior to receiving a Prop. 65 Notice in the first place. Keller and Heckman attorneys have extensive experience in defense of Prop. 65 claims and in all aspects of Prop. 65 compliance and risk management. We provide tailored Prop. 65 services to a wide range of industries, including food and beverage, cosmetics and personal care, consumer products, chemical products, e-vapor and tobacco products, household products, plastics and rubber, and retail distribution.
Powering Africa’s Digital Future: The Challenge of Energy for Data Center Development
As the global economy increasingly digitizes, the infrastructure supporting this shift must evolve accordingly. In Africa, where the demand for digital services is surging — fueled by mobile penetration, fintech innovation, and a young, connected population — the case for expanding data center capacity is clear. However, the continent’s potential is hindered by underdeveloped energy infrastructure, presenting a significant bottleneck.
Why Data Centers Matter
Data centers form the backbone of digital transformation, underpinning cloud storage, AI applications, e-commerce platforms, and digital government services. According to the International Energy Agency (IEA), global electricity consumption by data centers is projected to exceed 800 TWh by 2026, up from 460 TWh in 2022. A significant portion of this demand comes from generative AI and machine learning applications, which consume up to 10 times more energy than traditional searches.
Africa, despite being one of the fastest-growing regions for digital adoption, accounts for less than 1% of the world’s data center capacity. The Africa Data Centres Association estimates that the continent requires at least 1,000 MW of new capacity across 700 facilities to meet demand. Yet, meeting this need will depend not only on digital infrastructure investments but also on solving a persistent and costly energy challenge.
The Energy Challenge: Costs, Capacity, and Volatility
Data center development will play a pivotal role in ensuring digital sovereignty and fostering a resilient, domestically-driven digital economy in Africa.
Sub-Saharan Africa exemplifies both the promise and the challenges of this transformation. While demand for digital services is accelerating, access to reliable energy remains a major obstacle. Many countries across the region grapple with limited energy access, high electricity costs, and outdated infrastructure characterized by frequent outages and heavy reliance on imported fuel sources.
This interplay of costs and reliability poses significant challenges for energy-intensive data centers. According to recent industry analysis, energy supply has emerged as the single most critical issue facing digital infrastructure investors. As demand for electricity rises—driven by AI, cloud computing, and the digitization of public services—grid expansion is struggling to keep pace. As a result, securing reliable, affordable power is now a top strategic priority for data center developers and investors alike.
Despite these challenges, several sub-Saharan countries—including Côte d’Ivoire, Gabon, and Senegal—are making significant progress. While legacy grid issues persist, these countries are actively investing in renewable energy projects that could create the enabling environment needed for sustainable data center growth.
Côte d’Ivoire: In June 2023, the country launched its largest solar power plant in Boundiali, delivering 37.5 MWp of capacity with an expansion target of 83 MWp by 2025. This project aligns with Côte d’Ivoire’s national goal to source 45% of its electricity from renewable energy by 2030.
Senegal: The Taiba N’Diaye Wind Farm, commissioned in 2021, is West Africa’s largest wind energy project, with a total capacity of 158 MW. It plays a central role in Senegal’s broader strategy to diversify its energy mix and reduce dependence on imported fossil fuels.
Gabon: Though less frequently spotlighted, Gabon is actively positioning itself as a renewable energy leader in Central Africa. In 2021, the government launched a hydropower development strategy to boost clean energy capacity. Notably, the Kinguélé Aval Hydroelectric Project, co-financed by the African Development Bank and IFC, will add 35 MW of capacity upon completion and help stabilize electricity supply in the Estuaire province, home to Libreville—the capital and potential hub for digital infrastructure. Gabon has also attracted investment in solar hybrid systems for rural electrification, aiming to reduce diesel reliance and support the decentralization of energy access. These initiatives create a more stable power framework suitable for future data center deployment.
Lessons from Leading Data Center Markets
Morocco is emerging as a pivotal player in North Africa’s data center market, driven by international energy investments and its strategic position connecting Europe, Africa, and the Middle East. Major global tech companies, including Oracle, Microsoft, Google, and Amazon Web Services (AWS), are drawn to Morocco’s rapidly expanding digital economy and its modern infrastructure. The country is fostering a favorable environment for data center growth through government-backed initiatives that enhance ICT infrastructure, making Morocco an attractive destination for both local and international data center operators.
The country’s stability and investments in renewable energy further position it as a sustainable choice for data center operations. With projects like those from Africa Data Centres, Gulf Data Hub, and N-ONE Datacenters, Morocco’s growing data center ecosystem is poised to meet the increasing demand for cloud computing and data storage across North Africa and beyond. By 2028, Morocco is expected to be a key hub for digital services, offering world-class data center facilities.
Looking to other pioneers in the continent, countries like Kenya and South Africa offer valuable lessons. Kenya, rich in geothermal resources, has attracted significant investments such as a $1 billion geothermal-powered data center from Microsoft and G42. This clean, non-intermittent energy solution provides a reliable power source for data centers. Similarly, South Africa is leading solar integration, with projects like the 12 MW solar farm being developed by Africa Data Centres and Distributed Power Africa, designed to power critical centers like Johannesburg and Cape Town. Such initiatives showcase the potential for public-private partnerships to address challenges of grid unreliability and position Africa as a growing leader in sustainable data center infrastructure.
These examples underscore the importance of strategic planning, infrastructure investment, and the integration of renewable energy sources in building resilient, sustainable data centers.
Policy and Legal Implications
From a legal perspective, developing a data center project requires meticulous contractual structuring. Long-term Power Purchase Agreements (PPAs) and Behind-the-Meter (BtM) agreements introduce project-specific risks — notably, the risk that delays in one part of the project (either the power plant or the data center) could lead to disruptions. Legal advisors must anticipate and address potential regulatory challenges, grid permitting complexities, and the need for future-proofing clauses to safeguard the project’s viability.
A comprehensive review of existing legislation, identification of key obstacles, and potential time-consuming issues (such as securing land) are crucial steps in ensuring the project’s success. Moreover, structuring energy supply projects to support data center operations is fundamental for ensuring the project’s bankability.
Conclusion: A Call to Action
Africa stands at a crossroads: with the right investments in both digital and energy infrastructure, the continent could leapfrog into a new era of economic autonomy and technological resilience. However, if energy bottlenecks are not addressed head-on, Africa risks falling behind just as the world accelerates into a data-driven future.
The roadmap is clear: invest in renewables, embrace innovative models like BtM PPAs, partner across sectors, and establish clear regulatory frameworks. Energy is no longer a background concern for digital infrastructure investors — it is the cornerstone. Data center growth and power sector development must now proceed hand-in-hand.
For Africa, this is not just a technical challenge — it is a strategic imperative.
Petitions Filed to Add Chemicals to List of Chemical Substances Subject to Superfund Excise Tax
On April 2 and April 3, 2025, the Internal Revenue Service (IRS) announced that petitions have been filed to add the following chemicals to the list of taxable substances:
Polyisobutylene (90 Fed. Reg. 14521): Petition filed by TPC Group, Inc., an exporter of polyisobutylene;
Acrylonitrile butadiene styrene (90 Fed. Reg. 14687): Petition filed by Trinseo LLC, an importer and exporter of acrylonitrile butadiene styrene;
Acrylonitrile-butadiene rubber (90 Fed. Reg. 14684): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of acrylonitrile-butadiene rubber;
Chloroprene rubber (90 Fed. Reg. 14691): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of chloroprene rubber;
Emulsion styrene butadiene rubber (90 Fed. Reg. 14692): Petition filed by Michelin North America, Inc., an importer of emulsion styrene butadiene rubber;
Emulsion styrene-butadiene rubber (90 Fed. Reg. 14686): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of emulsion styrene-butadiene rubber;
Ethylene vinyl acetate (VA < 50 percent) (90 Fed. Reg. 14688): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of ethylene vinyl acetate (VA < 50 percent);
Ethylene vinyl acetate (VA ≥ 50%) (90 Fed. Reg. 14683): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of ethylene vinyl acetate (VA ≥ 50 percent);
Ethylene-propylene-ethylidene norbornene rubber (90 Fed. Reg. 14695): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of ethylene-propylene-ethylidene norbornene rubber;
Hydrogenated acrylonitrile-butadiene rubber (90 Fed. Reg. 14686): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of hydrogenated acrylonitrile-butadiene rubber;
Hydrogenated acrylonitrile-butadiene rubber (90 Fed. Reg. 14685): Petition filed by Zeon Chemicals L.P., an importer and exporter of hydrogenated acrylonitrile-butadiene rubber;
Isobutene-isoprene rubber (90 Fed. Reg. 14689): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of isobutene-isoprene rubber;
Solution styrene-butadiene rubber (90 Fed. Reg. 14690): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of solution styrene-butadiene rubber;
Bromo-isobutene-isoprene rubber (90 Fed. Reg. 14694): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of bromo-isobutene-isoprene rubber;
Poly(ethylene-propylene) rubber (90 Fed. Reg. 14690): Petition filed by Arlanxeo USA LLC and Arlanxeo Canada Inc., importers and exporters of poly(ethylene-propylene) rubber;
Solution styrene-butadiene rubber (90 Fed. Reg. 14693): Petition filed by Michelin North America, Inc., an importer of solution styrene-butadiene rubber; and
Styrene-acrylonitrile (90 Fed. Reg. 14693): Petition filed by Trinseo LLC, an importer and exporter of styrene-acrylonitrile.
Comments on the petitions are due June 2, 2025. More information on the Superfund excise tax on chemicals is available in our July 13, 2022, memorandum, “Superfund Tax on Chemicals: What You Need to Know to Comply” and our May 19, 2022, memorandum, “Reinstated Superfund Excise Tax Imposed on Certain Chemical Substances.”
Six Questions Flowing From President Trump’s Recent Suite of Energy-Focused Actions
President Trump’s energy-focused ambitions will generate work for regulators at all levels of the government.
In the first two weeks of April, the president issued several orders and a related memorandum that could potentially turn energy regulation on its head by overturning nearly a century of precedent on regulation of the electric industry, including challenging the so-called Insull regulatory compact and the role of each state in regulating the electric industry’s operations within its borders.
The Trump Administration seeks to promote “baseload” energy development by limiting states’ ability to adopt climate mitigation strategies (including cap and trade and renewable portfolio standards) and by taking new authority to permit development of reserves of fossil fuels and other minerals critical to the energy space. In combination, these actions affect nearly all aspects of the energy space and potentially portend radical changes to the balance between state and federal energy regulation if carried through.
Below, we will summarize each of these actions, outline how they fit into the context of President Trump’s broader agenda, and outline issues for the regulated community to watch.
President Trump’s Executive Orders and Memoranda
Promoting Coal and Fossil Fuels
In an Executive Order titled “Reinvigorating America’s Beautiful Clean Coal Industry and Amending Executive Order 14241,” the Trump Administration reaffirmed its position that “coal is essential to our national and economic security” and detailed a number of policies designed to expand and encourage coal-fired electricity generation:
Encouraging Domestic Coal Mining:The Order calls for a report on coal reserves on federal land and the termination of an Obama-era moratorium on leases for coal extraction on federal land. The Order also directs the recently created Energy Dominance Council to designate coal as a “mineral” pursuant to a March Executive Order on Immediate Measures to Increase American Mineral Production.
Encouraging Coal-Fired Electricity Generation: The Order directs federal agencies to review existing federal rules, policies, and guidance aimed at transitioning away from coal-fired generation and to revise or rescind those policies where possible. The Order also directs agencies to identify and promote opportunities for the export of American coal, and to research and provide funding or other support for the use of coal-fired energy to power artificial intelligence data centers or for the development and improvement of coal-related technologies.
Limiting Administrative Requirements:The Order directs agencies to identify types of coal-related activities that could be categorically excluded from environmental impact reviews under the National Environmental Policy Act. The Order further calls for investigation into whether coal may be considered a “critical material” for the production of domestic steel.
A second related Executive Order titled “Regulatory Relief for Certain Stationary Sources to Promote American Energy” granted a two-year extension for coal-fired power plants to comply with federal Mercury and Air Toxics Standards emissions limitations.
Finally, a third Executive Order titled “Strengthening the Reliability and Security of the United States Electric Grid” authorized the use of emergency powers to require existing fossil fuel-fired power plants to stay online. Citing its earlier declaration of a “National Energy Emergency,” the Administration preemptively invoked Section 202 of the Federal Power Act, which allows the Federal Energy Regulatory Commission (FERC) to require specific energy generation or facility interconnection to meet energy demands in times of war or emergency. The Order directs FERC to identify regions where federal intervention may be necessary and specifically directs the agency to prevent certain large energy generation resources “from leaving the bulk-power system or converting the source of fuel” if the conversion would reduce total energy generation.
Limiting State Influence on Energy Regulations
A separate Executive Order, “Protecting American Energy From State Overreach,” seeks to limit state climate change laws that the Trump Administration claims are harming domestic energy production. Specifically calling out New York and Vermont laws imposing liability for greenhouse gas emissions as well as California’s carbon emission cap-and-trade system, the Order directs the Attorney General to identify and “take all appropriate action to stop the enforcement of” state laws that burden the “identification, development, siting, production, or use of domestic energy resources.” While we do not know what state laws the Attorney General will identify and presumably seek to preempt through litigation, likely suspects would include state decarbonization requirements and environmental justice programs. Federal agencies have already sought to curtail funding for many of these programs.
Rolling Back Federal Regulatory Hurdles
President Trump signed an Executive Order entitled “Zero-Based Regulatory Budgeting to Unleash American Energy” seeking to require reexamination of regulations which have the potential to sit on the books unexamined for long periods of time. For agencies touching upon energy issues (e.g., US Environmental Protection Agency, the US Army Corps of Engineers, and the US Department of Energy), agencies must include a “sunset rule” rendering regulations invalid no more than five years in the future unless the Director of the White House Office of Management and Budget determines that the new regulation or amendment “has a net deregulatory effect.”
Additionally, President Trump issued a memorandum to the heads of Executive Departments, “Directing the Repeal of Unlawful Regulations.” The memorandum notes that several recent US Supreme Court decisions have placed limits on the power of federal agencies, including Loper Bright Enterprises v. Raimondo (reducing deference given to agency interpretations of statutes), West Virginia v. EPA (preventing agencies from resolving “major” economic or political questions), and Sackett v. EPA (narrowing the definition of water bodies subject to federal Clean Water Act regulation). The memorandum suggests that many regulations, arguably in conflict with those decisions, remain on the books and directs the heads of federal agencies to identify any “potentially unlawful regulations” and to “immediately take steps to effectuate the repeal” of those regulations in whole or in part. The memorandum directs agency heads to, where possible, invoke the “good cause” exception of the Administrative Procedure Act to repeal regulations without the usual public notice and comment, arguing that notice and comment is “unnecessary” where the existing regulations are inconsistent with a Supreme Court ruling.
The Orders in Context
These orders collectively reorient the US energy space. Pointing to the nation’s large reserves of coal, oil, natural gas, and critical minerals as well as the capacity for nuclear, hydropower, biofuel, and geothermal energy production, the Trump Administration has repeatedly promised the development of a “Golden Era” of US energy dominance.
With these actions, the Trump Administration fleshes out how it intends to assert “energy dominance.” Below are six open questions:
1. Are fuel choices driven by regulation or by practical concerns (like technology or cost)?
The current set of executive orders implicitly assume that regulatory burden alone has compelled the transition toward renewable energy. But the truth is more complicated. While the United States historically relied on a substantial fleet of coal-burning power plants, recent years have seen many states actively encouraging energy producers to move away from fossil fuels for power generation, in favor of renewable sources of energy like wind and solar. A combination of factors have caused coal generation capacity to fall over 50% from 302 GW/year in 2013 to 181 GW/year in 2023. This switch does not necessarily fall along “red state vs. blue state” lines, with states including Texas, Idaho, and South Dakota toward the top of the nation in terms of renewable energy development. It remains to be seen whether the removal of federal limitations will reverse that trend.
2. Will this regulatory shakeup spur long-term energy development?
Large-scale energy production is a long-term investment that needs to be cost effective over decades. The combination of these orders reenforcing supports for “baseload” power may result in a situation where a project’s long-term viability is more certain. However, state renewable portfolio standard requirements or state programs encouraging renewable development may present headwinds.
3. Will future federal actions undercut state energy programs?
Energy planning seeks to balance considerations including energy security (i.e., that energy is always available), affordability, sustainability, and resilience (i.e., that energy facilities are sited in such a manner that they will be available for their expected lifespan). While the Trump Administration is clearly focused on overall affordability of energy, the recent suite of orders may undercut state-level balancing efforts, particularly those focused on “energy justice” in terms of grid planning. (For more, see here.) We will continue to watch whether this will occur.
4. How much litigation will result from the executive orders?
As we have discussed, executive orders alone cannot displace regulations or federal statutes. The mechanics of how these orders work — through processes like limiting public participation requirements — are likely to result in allegations that statutory rights to public participation are violated. Finally, states including California, Colorado, Illinois, Maryland, Minnesota, North Carolina, Oregon, and Rhode Island have passed broad-state specific legislation seeking to reduce emissions.
5. Will US Congress need to weigh in to preempt state laws?
One of the executive orders directs the Attorney General to review state programs to find issues preempted by federal law. We have discussed the drift between federal environmental policy and the policy in some states. (See here, here, and here.) Recent Supreme Court decisions in the preemption space have limited preemption to areas where Congress has spoken directly. (See here and here.)
6. How will these orders impact future renewable energy project development?
Many renewable energy projects currently in development are moving forward through this period of uncertainty based on utility planning for compliance with state regulatory requirements, such as renewable portfolio standards. If the effort to “limit state overreach” results in the weakening or elimination of state compliance standards, one of the most effective demand-pulls for renewable energy could effectively be shut down.