ESG and Supply Chains in 2024: Key Trends, Challenges, and Future Outlook
In 2024, supply chains remained a critical focal point for companies committed to environmental, social, and governance (ESG) principles. Given their significant contribution to a company’s environmental footprint and social impact, supply chains have become an essential area for implementing sustainable and ethical practices.
Advancements in technology, evolving regulatory frameworks, and innovative corporate strategies defined the landscape of ESG in supply chains this year. However, challenges such as data reliability, cost pressures, and geopolitical risks persisted in 2024. Here are seven observations highlighting progress, challenges, and potential future directions in ESG and supply chains.
1. Regulatory and Market Drivers
Governments and international organizations introduced stringent regulations in 2024, compelling companies to prioritize ESG considerations in their supply chains. These policies aimed to address environmental degradation, human rights abuses, and climate-related risks while fostering greater transparency and accountability.
EU’s Corporate Sustainability Due Diligence Directive (CSDDD): The European Union’s CSDDD came into force, mandating companies operating in the EU to identify, prevent and mitigate adverse human rights and environmental impacts throughout their supply chains. This regulation required businesses to map their suppliers, assess risks, and implement corrective actions, driving improvements in traceability and supplier accountability.
U.S. Uyghur Forced Labor Prevention Act (UFLPA): In the United States, the Department of Homeland Security’s enforcement of the UFLPA intensified. This act targeted goods produced with forced labor, particularly in China’s Xinjiang region, and placed the burden of proof on companies to demonstrate compliance. Businesses were required to adopt rigorous traceability systems to ensure their products were free from forced labor.
Carbon Border Adjustment Mechanisms (CBAMs): Carbon tariffs, implemented by the EU and other regions, incentivized companies to measure and reduce the carbon intensity of imported goods. These mechanisms encouraged businesses to collaborate with suppliers to lower emissions and adopt cleaner technologies.
2. Advances in Supply Chain Traceability and Transparency
Technological innovations were central to advancing supply chain traceability and transparency, enabling companies to identify risks, ensure compliance, and improve sustainability performance.
Blockchain Technology: Blockchain emerged as a cornerstone of supply chain transparency. By creating immutable records of transactions and product origins, blockchain technology provided stakeholders with verifiable proof of ethical sourcing and environmental compliance. Companies used blockchain to authenticate claims about sustainability, such as the origin of raw materials and the environmental credentials of finished goods.
Artificial Intelligence (AI): AI played a transformative role in supply chain management, helping companies analyze supplier risks, predict disruptions, and optimize logistics for lower emissions. AI-powered tools also enabled real-time monitoring of supply chain activities, such as emissions tracking, labor compliance, and waste reduction.
Internet of Things (IoT): IoT sensors provided granular, real-time data on supply chain metrics, such as energy consumption, shipping efficiency, and waste generation. This technology enabled companies to address inefficiencies and enhance the sustainability of their operations.
3. Responsible Sourcing Practices
Responsible sourcing became a cornerstone of supply chain ESG efforts, with companies adopting ethical and sustainable procurement practices to address environmental and social risks.
Raw Material Sourcing: Businesses focused on sourcing raw materials like cobalt, palm oil, and timber from certified suppliers to ensure compliance with environmental and labor standards. Industry-specific certifications, such as the Forest Stewardship Council and the Roundtable on Sustainable Palm Oil, gained prominence.
Fair Trade and Ethical Labor: Companies partnered with organizations promoting fair wages, equitable treatment, and safe working conditions. Certifications like Fair Trade and Sedex Responsible Business Practices helped businesses verify their commitment to ethical labor practices throughout their supply chains.
Local Sourcing: To reduce carbon footprints and enhance supply chain resilience, some companies prioritized local sourcing of raw materials and components. This shift minimized emissions from transportation and provided economic support to local communities.
4. Decarbonizing Supply Chains
As companies pursued net-zero commitments, decarbonizing supply chains became a top priority in 2024. Key strategies included:
Supplier Engagement: Companies collaborated with suppliers to reduce emissions through energy efficiency measures, renewable energy adoption, and low-carbon manufacturing techniques.
Sustainable Logistics: Businesses invested in cleaner transportation methods, such as electric vehicles, hydrogen-powered trucks, and optimized shipping routes. The rise of “green corridors” for shipping exemplified collaborative efforts to decarbonize freight transport.
Circular Economy Integration: Companies embraced circular economy principles, focusing on reusing materials, designing for recyclability, and minimizing waste. Circular supply chains not only reduced environmental impact, but also created cost-saving opportunities and new revenue streams.
5. Challenges in ESG Supply Chain Management
Despite progress, companies faced significant challenges in implementing ESG principles across their supply chains.
Data Gaps and Inconsistencies: Collecting reliable ESG data from multitiered supply chains remains a critical hurdle. Smaller suppliers often lack the tools or expertise to comply with reporting requirements, leading to incomplete transparency and inconsistent metrics.
Cost Pressures: Implementing sustainable practices, such as adopting renewable energy or traceability technologies, requires significant upfront investment. These costs are particularly burdensome for small and medium-sized enterprises (SMEs) and create financial tension for larger companies balancing competitive pricing.
Geopolitical Risks: Trade restrictions, regional conflicts, and sanctions disrupt global supply chains, complicating compliance with ESG regulations like forced labor bans or carbon tariffs. Navigating these challenges requires constant adaptation to volatile geopolitical landscapes.
Greenwashing Risks: Increasing regulatory and public scrutiny amplifies the consequences of unverified sustainability claims. Missteps in ESG disclosures expose companies to legal risks, reputational damage, and loss of stakeholder trust.
Supply Chain Complexity: Global supply chains are vast and intricate, often spanning multiple tiers and regions. Mapping these networks to monitor ESG compliance and identify risks such as labor violations or environmental harm is a resource-intensive challenge.
Technological Gaps Among Suppliers: While advanced technologies like blockchain improve traceability, many smaller suppliers lack access to these tools, creating disparities in ESG data collection and compliance across the supply chain.
Resistance to Change: Suppliers in regions with weaker regulatory frameworks often resist adopting ESG principles due to limited awareness, operational costs, or lack of incentives, requiring significant corporate investment in education and capacity-building.
Market Demand for Low-Cost Goods: Consumer demand for affordable products often conflicts with the higher costs of implementing sustainable practices, especially in competitive industries such as fast fashion and consumer electronics.
Resource Scarcity and Climate Impacts: Extreme weather events, rising energy costs, and material shortages – exacerbated by climate change – disrupt supply chains and increase the difficulty of maintaining ESG commitments.
Measurement and Reporting Challenges: A lack of universally accepted metrics for critical ESG indicators, such as Scope 3 emissions or biodiversity impact, complicates efforts to measure progress and report transparently across supply chains.
6. Leading Examples of ESG-Driven Supply Chains
In 2024, several organizations across various industries demonstrated innovative approaches to integrating ESG principles into their supply chains. These efforts highlighted best practices in sustainability, transparency, and ethical procurement, including a number of the recent advances noted above.
Outdoor Apparel Brand: A leading outdoor apparel company prioritized fair labor practices and reduction of environmental-related impacts in its supply chain. The brand collaborates with suppliers and other brands to develop and utilize tools to measure and communicate their environmental impacts, which allows for industry-wide benchmarking and large-scale improvement.
Global Food and Beverage Producer: A major food and beverage producer expanded its regenerative agriculture program by collaborating with farmers to enhance soil health, reduce greenhouse gas emissions, and promote biodiversity. Additionally, the company leveraged blockchain technology to ensure traceability in its supply chains for commodities such as coffee and cocoa, strengthening its commitment to sustainability.
Global Furniture Retailer: A prominent furniture retailer invested heavily in renewable energy and circular design principles to decarbonize its supply chain by reducing, replacing and rethinking. A formal due diligence system employs dozens of wood supply and forestry specialists to assure that wood is sourced from responsibly managed forests.
Multinational Technology Company: A technology giant implemented energy-efficient practices across its supply chain, including transitioning to renewable energy sources for manufacturing facilities and using AI-powered tools to optimize logistics, with a goal of becoming carbon neutral across its entire supply chain by 2030.
Consumer Goods Manufacturer: A global consumer goods manufacturer introduced water-saving technologies into its supply chain, particularly in regions facing water scarcity. The company also prioritized reducing plastic waste by incorporating recycled materials into its packaging and partnering with local recycling initiatives.
Global Shipping Firm: A logistics and shipping company adopted low-carbon transportation technologies, such as green fuel for its vessels, decarbonizing container terminals, electric powered vehicles for landside transport, and optimized routes to minimize emissions. The firm also collaborated with industry partners to develop “green corridors” that support cleaner and more sustainable freight transport.
7. Future Directions in ESG and Supply Chains
Integrating ESG principles into supply chain management is expected to continue evolving, with the following trends among those shaping the future:
AI-Powered Supply Chains: Artificial intelligence will transform supply chain management by predicting risks, optimizing logistics, and enhancing sustainability. Advanced analytics will enable businesses to identify inefficiencies and implement targeted improvements, reducing emissions and ensuring ethical practices. There will, however, be challenges accounting for the growing number of laws and regulations worldwide governing AI’s use and development.
Circular Economy Models: Supply chains will embrace circular economy principles, focusing on waste reduction, material reuse, and extended product life cycles. Closed-loop systems and upcycling initiatives will mitigate environmental impacts while creating new revenue streams.
Blockchain-Enabled Certification Programs: Blockchain technology will enhance transparency and accountability by providing real-time verification of ESG metrics, such as emissions reductions and ethical sourcing. This will foster trust among consumers, investors and regulators.
Supply Chain Readiness Level (SCRL) Analysis: ESG benefits will continue to flow from the steps taken by the Biden Administration to strengthen America’s supply chains over the past four years. Additionally, the Department of Energy’s Office of Manufacturing and Energy Supply Chains SCRL tool that was recently rolled out to evaluate global energy supply chain needs and gaps, quantify and eliminate risks and vulnerabilities, and strengthen U.S. energy supply chains is expected to facilitate decarbonization of supply chains.
Decentralized Energy Solutions: Decentralized energy systems, including on-site renewable energy installations and energy-sharing networks, will reduce dependence on traditional power grids. These solutions will decarbonize supply chains while promoting sustainability.
Nature-Based Solutions: Supply chains will integrate nature-based approaches, such as agroforestry partnerships and wetland restoration, to enhance biodiversity and provide environmental services like carbon sequestration and water filtration.
Advanced Water Stewardship: Companies will adopt innovative water management practices, including water recycling technologies and watershed restoration projects, to address water scarcity and ensure sustainable supplies for all stakeholders.
Scope 3 Emissions Reduction: Businesses will prioritize reducing emissions across their value chains by collaborating with suppliers, setting science-based targets, and implementing robust carbon accounting tools.
Industry-Wide Collaboration Platforms: Collaborative platforms will enable companies to share sustainability data and best practices and develop sector-specific solutions. This approach will help address systemic challenges, such as decarbonizing aviation or achieving sustainable fashion production.
Developments in ESG and supply chains in 2024 reflect a growing recognition of their critical role in achieving sustainability goals. From enhanced regulatory frameworks and technological innovations to responsible sourcing and decarbonization efforts, companies are making strides toward more sustainable and ethical supply chains.
However, challenges such as data gaps, cost pressures, and geopolitical risks highlight the complexities of this transformation. By addressing these issues and embracing future opportunities, businesses can create resilient, transparent, and sustainable supply chains that drive both success in business and environmental and social progress.
NYSERDA Issues Request for Information in Preparation for Sixth OREC Solicitation with Transmission Issues in the Forefront
As New York’s fifth Offshore Wind Renewable Energy Certificate (OREC) solicitation enters its final stages, the New York State Energy Research and Development Authority (“NYSERDA”) issued a Request for Information (“RFI”) on December 18, 2024, to solicit feedback concerning its next solicitation, which has been dubbed “NY6”.
While NYSERDA has requested feedback on a number of general concepts, including the structure, timeline and eligibility criteria for NY6, the RFI is notable for its focus on the relationship between generation and transmission. In particular, NYSERDA is seeking feedback on how to encourage applicants to optimize the coordination between offshore wind generation projects and ongoing or new transmission projects. The RFI builds on the New York State Public Service Commission’s (the “Commission”) Order Addressing Public Policy Requirements for Transmission Planning Purposes, issued June 22, 2023, (the “PPTN Order”).
In previous solicitations, NYSERDA sought radial offshore wind projects inclusive of generation, export infrastructure, and interconnection with the onshore grid. NY6 may mark an evolution in New York’s approach to offshore wind project infrastructure in which NYSERDA looks to separate transmission aspects of projects from generation aspects. Subject to Commission approval, in NY6, NYSERDA may elect to solicit “Generation-Only” proposals that would prioritize utilization of the transmission projects being developed and undertaken pursuant to the PPTN Order.
Respondents have until January 29, 2025 at 3 pm Eastern Standard Time to submit comments to the RFI. All comments should be emailed to [email protected], with the subject line “NY6 RFI Comments”.
Stay tuned for more on the Offshore Wind space, including additional insights into developments under the incoming Trump administration.
AFIDA Penalties Are Coming: Costs for Renewable Development May Be More Than You Think
When evaluating the all-in costs of a renewable development project, it is critical that costs associated with Agricultural Foreign Investment Disclosure Act (AFIDA) enforcement and compliance are considered. Since its enactment in 1978, AFIDA has provided for substantial penalties for the failure to file, or the late filing, of mandated reports on agricultural acreage held by an entity with an ultimate non-U.S. parent.
AFIDA reporting requirements are applicable to any non-U.S. based direct or indirect owner of agricultural land, which includes every company organized in the United States but in which a significant interest or substantial control (i.e., ten percent or more) is held by a non-U.S. parent.
A substantial percentage of renewable development in the United States is driven by companies that fall within the bounds of AFIDA’s reporting obligations, yet a small number of renewable developers appear to be current with their AFIDA reporting obligations.
Both the acquisition and disposition of agricultural land are required to be reported to the United States Department of Agriculture within 90 days of the acquisition or disposition. Stated another way, each executed lease or fee interest purchase of agricultural land, or the disposition of either, starts the clock ticking.
If AFIDA compliance reporting and potential penalties are not yet on your company’s diligence checklist, this may be about to change.
Penalties for failure to file or late-filing can be a substantial cost to renewable development. Federal regulations enable penalties of up to 25% of the fair market value of the land, as determined by the USDA.
Although penalties have been an option since AFIDA’s enactment, a review of the USDA’s annual report to Congress reveals that relatively few, and relatively small, penalties were assessed up until 2010. The USDA assessed only eight penalties for AFIDA violations between 2012-2022, although the number of filings dramatically increased during the same time period. AFIDA filings were made for 911 parcels of land in 2012, which jumped to 6,363 parcels in 2021. No penalties were assessed for AFIDA violations during the period 2015-2018 due to low levels of staffing in the office tasked with enforcing the law.
The number of AFIDA compliance and enforcement specialists at the USDA has doubled within the last year and a half, in part due to questioning of the gap in AFIDA enforcement by concerned members of the House. In response to this concern, the USDA responded by noting its increased staffing and its renewed commitment to assessing ex post penalties starting with late filings in the calendar year 2021 and going forward.
If your company acquires leasehold or fee interests in agricultural property and has a non-U.S. parent, it is very likely that Federal AFIDA reporting obligations apply. More than half of all states have similar reporting requirements as well.
If AFIDA is applicable to your business, it is critical that you engage counsel experienced in AFIDA matters to rectify any historical failures to report and establish a process for ongoing AFIDA compliance. Waiting until the final due diligence call to mention AFIDA compliance to counterparties is not your best strategy.
AFIDA in Brief:
Who Must Report?
Foreign investors who have significant interest or substantial control and acquire, dispose of, or hold an interest in U.S. agricultural land must report their holdings and transactions to the U.S. Department of Agriculture. Interests include land owned as well as land leased for ten years or more. This includes:
Foreign individuals.
Foreign organizations.
Foreign governments.
U.S. organizations – if a significant interest or substantial control is directly or indirectly held by foreign individuals, organizations, or governments.
How is Agricultural Land Defined by AFIDA?
Land exceeding 10 acres in the aggregate that has been used within the last 5 years for farming, ranching, forestry, or timber production.
Land exceeding 10 acres in which 10 percent is stocked by trees of any size, including land that formerly had such tree cover and will be naturally or artificially regenerated.
Landholding totaling 10 acres or less in the aggregate if producing annual gross receipts in excess of $1,000 from the sale of farm, ranch, forestry, or timber production.
Canada’s Competition Bureau Seeks Feedback on Proposed Environmental Claims Guidelines
Competition Bureau Canada (the Bureau) announced just before Christmas that it is seeking public comments on draft guidelines (the Guidelines) for assessing environmental claims for compliance with Canada’s Competition Act (the Act). The Act was amended in June 2024 by adding two specific provisions to existing general prohibitions for false and misleading representations and unsupported performance claims to address environmental claims. Under the recent amendments, marketing claims about the environmental benefits of a product must be based on “adequate and proper testing” conducted before the claim is made, and claims about the environmental benefits of a business or business activity must “be based on adequate and proper substantiation in accordance with an internationally recognized methodology.”
The proposed Guidelines are based on six high-level principles, aimed at ensuring that environmental claims comply with all of the Act’s provisions, including the recent amendments:
• Environmental claims should be truthful, and not false or misleading.• Environmental benefit of a product and performance claims should be adequately and properly tested.• Comparative environmental claims should be specific about what is being compared.• Environmental claims should avoid exaggeration.• Environmental claims should be clear and specific, not vague.• Environmental claims about the future should be supported by substantiation and a clear plan.
The principles outlined by the Bureau are consistent with generally accepted global principles for advertising, such as those reflected in the International Chamber of Commerce (ICC) Marketing and Advertising Commission’s Advertising and Marketing Communications Code (available at The ICC Advertising and Marketing Communications Code – ICC – International Chamber of Commerce). The Federal Trade Commission’s (FTC) Guides for the Use of Environmental Marketing Claims (the FTC Green Guides) reflect these same general principles. Similar to the FTC Green Guides, the Bureau’s proposed Guidelines are not enforceable regulatory provisions, but are intended to help businesses understand how the Bureau is likely to apply the Act to green claims.
However, the Bureau’s proposed Guidelines are more general than the FTC Green Guides and do not address specific green claims, such as “recyclable,” “compostable,” and the like. Illustrative examples in the Guidelines appear to focus on general substantiation principles (e.g., is substantiation suitable, appropriate, and relevant to a marketing claim) rather than specific thresholds (e.g., a “substantial majority” threshold (60%) for unqualified “recyclable” claims as in the FTC Green Guides). Unlike the EU directive on green claims adopted last spring (EU 2024/825), which prohibits certain “generic environmental benefit claims” (e.g., “green,” “eco-friendly,” “biodegradable”), neither the Guidelines nor the Act’s provisions bar specific claims or mandate independent certification of claims. And finally, like the FTC Green Guides, the Guidelines are intended to promote truthful advertising to foster a fair and competitive marketplace, not to advance environmental policy.
Importantly, the Guidelines are geared to promotional and marketing representations made to the public, not representations made exclusively for another purpose, such as representations to investors or shareholders. Where the same representations are made to the public and to investors or shareholders in Canada, however, the business must be mindful of the principles of the Guidelines. Businesses interested in sharing information to Canadians about the environmental benefits of their products, services, processes, and operations should be mindful of the Guidelines. For those who wish to weigh in on the draft Guidelines, the deadline for comments is February 28, 2025.
Pumping the Brakes? Outlook for State and Federal Vehicle, Engine, and Equipment Emissions Standards
With the start of the second Trump administration just over a week away, there are many uncertainties with respect to how the new administration will regulate vehicle, engine, and equipment emissions, and the steps the second Trump administration may take to roll back emission standards set during the Biden administration. However, one thing is certain, there will be changes; and those changes are likely to impact how industry develops new mobile source products, meets emission standards, invests in new technologies, and considers any federal rollbacks of the mobile source obligations set by California and adopted by other states that implement California’s mobile source rules.
Many have speculated that the new administration will take aim at the U.S. Environmental Protection Agency’s (EPA’s) emission standards issued for model year 2027 and later light- and medium-duty vehicles and the new greenhouse gas emission standards set for heavy-duty highway vehicles finalized by the Biden administration in the spring of 2024. Whether there will be a full-scale rollback of those standards or more measured changes is unclear. However, any changes to the federal standards would require a new EPA rulemaking which could take a year or more to accomplish, leaving regulated industry facing uncertainty going into 2026 with respect to the specific standards that will apply for the 2027 model year.
Perhaps more clear is that the change in administration will almost certainly effect at least some of California’s mobile source rules. Under Section 209 of the Clean Air Act, states are preempted from adopting or enforcing emissions standards for new vehicles and engines. However, Section 209 of the Clean Air Act allows California to request that the EPA waive this preemption so that California can enforce more stringent standards in the state. Under Section 209 of the Clean Air Act, unless the EPA finds certain limited grounds for denial it must grant California’s waiver request. Section 177 of the Clean Air Act also allows other states to adopt California’s mobile source standards.
While EPA has never denied a waiver request from California, in the first Trump administration, EPA withdrew California’s waiver for its Advanced Clean Cars I rule. That waiver was subsequently reinstated by the Biden administration, followed by a deluge of litigation related to EPA’s overall waiver authority since then. For example, on December 16, 2024, the Supreme Court denied certiorari in the State of Ohio et al. v. EPA where the joining states argued that the Clean Air Act’s preemption waiver provision violated “equal sovereignty”. While the Supreme Court declined to take on the constitutionality of EPA’s waiver authority in that case, similar challenges may be raised in the future, given that EPA has recently approved a number of new waiver requests and is set to approve the remaining outstanding waiver requests in the coming days.
Regardless of the waiver-related litigation, the Trump administration is likely to withdraw at least some of the EPA’s recently approved waiver requests, which would remove California’s and the states proceeding under the authority of Section 177 to enforce rules covered by the waiver once the waiver is withdrawn.
Currently, there are two California rules awaiting EPA waiver approval or authorization:
In-Use Locomotive regulation
Advanced Clean Fleets regulation
The Trump administration is expected to deny any waivers that remain pending after taking office, which would make those rules unenforceable in California and in the other states that have adopted the California rules. In particular, the Advanced Clean Fleets regulation faces ongoing litigation and industry pushback, which will be difficult for California to overcome if that waiver is denied.
EPA has also recently approved waivers for six additional California rules:
Advanced Clean Cars II regulations
Heavy-Duty Omnibus Low NOx regulations
Small Off-Road Engines (SORE) Amendments
Commercial Harbor Craft Amendments
Transport Refrigeration Unit (TRU) Amendments
In-Use Off-Road Diesel-Fueled Fleet Amendments
How the Trump administration will address these recently issued waiver approvals is less certain. If the first Trump term is any indication, it is likely that all or some of these recently issued waivers will be withdrawn, triggering protracted litigation and industry uncertainty. During Trump’s first term, following the withdrawal of the Advanced Clean Cars I rule waiver, the California Air Resources Board (CARB) entered into voluntary agreements with certain auto manufacturers that imposed alternative greenhouse gas standards as a stopgap while the waiver withdrawal was litigated and to help provide some regulatory certainty for automakers while the state of the regulations was in flux. CARB also indicated that it would retroactively enforce the Advanced Clean Cars I rule if the waiver was later reinstated. This could serve as a playbook for CARB during Trump’s second term if a number of the above waivers are denied or withdrawn. For example, with respect to the Heavy-Duty Omnibus Low NOx regulations, CARB previously entered an agreement with certain manufacturers that sets alternative standards for those parties in an effort to achieve regulatory certainty and stave off protracted challenges. Under that agreement, manufacturers also agreed not to challenge certain CARB regulations including the Advanced Clean Trucks regulation.
While uncertainty remains with respect to how the new administration will address vehicle, engine, and equipment emission standards and requirements, there will be changes that may require regulated industry to adjust current compliance, production, and investment plans, particularly with respect to electric and other zero-emission technologies, related infrastructure, and supply chain arrangements.
EPA Proposes Updated General Clean Water Act NPDES and Construction Permits
Key Takeaways
What Happened? The U.S. Environmental Protection Agency (EPA) proposed the 2026 version of the National Pollutant Discharge Elimination System (NPDES) Multi-Sector General Permit (MSGP) for stormwater discharges associated with industrial activities. When finalized, this new permit will replace the current MSGP when it expires on February 28, 2026. In addition, EPA proposed a narrow modification to its 2022 Construction General Permit for Stormwater Discharges (CGP), to expand the list of areas eligible for coverage. EPA is currently soliciting public comment on all aspects of the proposed MSGP, as well as on the CGP modification.
Who Is Affected? In the short term, the 2026 MSGP will apply to industrial facilities from thirty different sectors where EPA is the NPDES permitting authority, including Massachusetts, New Hampshire, New Mexico, and the District of Columbia. In the long term, EPA’s proposed action will affect industrial facilities in states that model their NPDES stormwater general permits after EPA’s MSGP. Meanwhile, the CGP modification will affect construction activities in Lands of Exclusive Federal Jurisdiction.
Next Steps? Industrial facilities covered by the existing MSGP should consider how to engage in public comment by February 11, 2025, to ensure EPA adopts a reasonable final permit with the best information available and consistent with the law. Meanwhile, entities affected by the CGP should consider submitting comments by January 13, 2025. For more information, please contact the authors.
2026 MSGP
EPA released its proposed 2026 MSGP, which authorizes stormwater discharges associated with industrial activities in jurisdictions where EPA is the NPDES permitting authority, including Massachusetts, New Hampshire, New Mexico, and the District of Columbia. This newest version of EPA’s MSGP would take effect in February 2026, when the current 2021 MSGP expires. EPA is currently soliciting public comment on the proposed 2026 MSGP, with a comment deadline of February 11, 2025.
As with the current MSGP, the proposed coverage under the 2026 MSGP would be available in jurisdictions where EPA is the NPDES permitting authority for stormwater discharges from industrial facilities in thirty different sectors, including but not limited to: timber, chemicals, glass and cement, metals and mining, landfills, and transportation. While the proposed permit, once finalized, would immediately affect industrial facilities where EPA is the permitting authority, states implementing authorized NPDES programs could also choose to model their permits after EPA’s MSGP. This proposed permit could thus have significant short-term and long-term impacts on numerous industrial facilities.
Proposed Changes Compared to the 2021 MSGP
EPA proposed that the 2026 MSGP would differ from the current MSGP in several respects:
Considerations of Stormwater Control Measure Enhancements for Major Storms
The proposed 2026 MSGP would modify a number of considerations in the 2021 MSGP by, among other things, removing the word “temporarily” to indicate EPA’s view that “it is generally best practice to implement SCMs [stormwater control measures] on a more regular basis than just temporarily.”
The new permit also clarifies that, when evaluating whether the facility has previously experienced major storm events, the permittee must do so based on current conditions, defined as “100-year flood (the 1% -annual-chance flood) based on historical records;” and, when evaluating whether the facility may be exposed in the future to major storm and flood events, the permittee must do so based on best available data, defined as “the most current observed data and available forward-looking projections.”
The proposed 2026 MSGP also specifies that all stormwater control measures must be based on the best available data. EPA intends this requirement “to ensure stormwater control measures are resilient to withstand storms and properly manage stormwater through their lifespan to reduce pollutants in stormwater discharges.”
Water Quality-Based Effluent Limitations or Other Limitations The 2026 MSGP proposes to revise the provision on water quality-based effluent limitations to add more specific language on what discharges must not contain or result in, such as: observable deposits of floating solids, scum, sheen, or substances; an observable film or sheen upon or discoloration from oil and grease; or foam or substances that produce an observable change in color. EPA’s proposed revisions also struck the current MSGP’s vague requirement that each “discharge must be controlled as necessary to meet applicable water quality standards.” The agency likely proposed this change in anticipation of a ruling from the U.S. Supreme Court in City & County of San Francisco v. EPA, No. 23-753, a case in which the Court will decide whether EPA has the authority to impose permit requirements like the language EPA has dropped from the proposed 2026 MSGP.
Monitoring
The proposed 2026 MSGP would include a new provision requiring a majority of sectors to conduct “report-only” indicator analytical monitoring for Per- and Polyfluoroalkyl Substances (PFAS).
EPA is also proposing to shift certain sectors from “report-only” indicator monitoring to benchmark monitoring for pH, total suspended solids (TSS), and chemical oxygen demand (COD). The benchmark monitoring parameters would be based on indicator monitoring results collected under the 2021 MSGP.
The proposed 2026 MSGP sets new benchmark monitoring for ammonia, nitrate, and nitrite by operators in subsector I1.
EPA also proposes that several new subsectors conduct benchmark monitoring for various specific metals based on EPA’s industry analysis of pollutants that stem from common activities.
The 2026 MSGP further proposes a heightened monitoring schedule for benchmark monitoring that would require operators to conduct quarterly monitoring for the first three years of permit coverage (or a minimum of twelve quarters or monitoring periods of sampling). By comparison, the current MSGP calls for benchmark monitoring only in the first and fourth year of a permittee’s permit coverage.
Finally, the schedule for impaired waters monitoring would also change to mandatory quarterly monitoring for the entire five-year permit term, a departure from the current MSGP’s requirement to conduct impaired waters monitoring only in the first and fourth years of permit coverage.
Additional Implementation Measures (AIM)
The 2026 MSGP would add to current AIM Level 1 response requirements by requiring facilities to conduct an inspection to identify the cause of a benchmark exceedance.
EPA also proposes to require operators to obtain express EPA approval of a natural background exception before discontinuing compliance with AIM. Under the current a claimed natural background exception is “automatically in place and the operator [is] not required to wait for verification from EPA to discontinue [AIM] compliance.”
The 2026 MSGP would require operators to submit an AIM Triggering Event Report to EPA anytime a facility triggers AIM at any level.
Additionally, EPA proposes required corrective action equivalent to AIM Level 1 responses when facilities discharging into impaired waterbodies detect a pollutant causing an impairment.
Public Comment
EPA welcomes, and interested parties should consider submitting, public comments on any aspect of the proposed 2026 MSGP. Additionally, EPA is requesting specific feedback on the following issues:
A host of questions pertaining to 6PPD-quinone, including how to identify sources of 6PPD-quinone in stormwater discharges and the types of best management practices permittees might implement to reduce 6PPD-quinone in their discharges;
What methods to use for PFAS indicator monitoring;
Whether EPA should include benchmark monitoring for iron and magnesium;
Whether to require PFAS-related benchmark monitoring for some or all of the sectors identified for PFAS-indicator monitoring; and
Whether to require impaired waters monitoring throughout the entire permit term, and any alternative approaches.
CGP Modification
In parallel, on December 13, 2024, EPA proposed a narrow modification to the 2022 CGP, which covers stormwater discharges from regulated construction activities in areas where EPA is the permitting authority. If adopted, the proposed modification would take effect in early 2025. EPA is currently soliciting public comments on the proposed CGP modification, with a comment deadline of January 13, 2025.
The CGP modification aims to expand the list of areas eligible for coverage to include construction projects in Lands of Exclusive Federal Jurisdiction. As the 2022 CGP failed to clarify, this proposed modification would specifically provide eligibility for all Lands of Exclusive Federal Jurisdiction without disrupting permit coverage for ongoing construction activities. The proposed CGP modification also clarifies the requirements for projects discharging to receiving waters within the Lands of Exclusive Federal Jurisdiction. Operators of such projects would follow the same requirements as used in the CGP for discharges to sensitive waters.
Next Steps
EPA is currently soliciting public comments on both proposed permits. All comments for the MSGP should be submitted to EPA by February 11, 2025, while comments for the CGP should be submitted by January 13, 2025. While EPA has not yet scheduled any public hearings, it plans to host informational webinars on the 2026 MSGP. The agency’s timetable for acting on these permits may also change after the new Trump administration takes office. For instance, new EPA personnel may modify and re-propose a version of the 2026 MSGP that better reflects the new administration’s priorities. Ultimately, engaging in public comment is an important opportunity for regulated industries to provide information and recommendations to EPA and help shape their stormwater permit obligations in years to come.