Farm to Fly Act Reintroduced in Congress, Would Expand Use of Biofuels for Aviation
On January 16, 2025, Senators Jerry Moran (R-KS), Chuck Grassley (R-IA), Tammy Duckworth (D-IL), Pete Ricketts (R-NE), Amy Klobuchar (D-MN), and Joni Ernst (R-IA) reintroduced the Farm to Fly Act (S. 144), which would help accelerate the production and development of sustainable aviation fuel (SAF) through existing U.S. Department of Agriculture (USDA) programs to allow further growth for alternative fuels to be used in the aviation sector and create new markets for American farmers. According to Moran’s January 21, 2025, press release, the Farm to Fly Act would:
Clarify eligibility for SAF within current USDA Bio-Energy Programs, expanding markets for American agricultural crops through aviation bioenergy;
Provide for greater collaboration for aviation biofuels throughout USDA agency mission areas, increasing private sector partnerships; and
Affirm a common definition of SAF for USDA purposes, as widely supported by industry to enable U.S. crops to contribute most effectively to aviation renewable fuels.
The press release notes that in September 2024, Senators Moran, Duckworth, Klobuchar, and John Boozman (R-AR) launched the Sustainable Aviation Caucus “to promote the longevity of the aviation and renewable fuels industries.” Representatives Max Miller (R-OH), Mike Flood (R-NE), Brad Finstad (R-MN), Nikki Budzinski (D-IL), Claudia Tenney (R-NY), Tracey Mann (R-KS), Mike Bost (R-IL), Don Bacon (R-NE), Randy Feenstra (R-IA), Dusty Johnson (R-SD), Mark Alford (R-MO), Eric Sorensen (D-IL), Mariannette Miller-Meeks (R-IA), and Michelle Fischbach (R-MN) reintroduced companion legislation (H.R. 1719) in the House on February 27, 2025.
Supreme Court Update: Republic of Hungary v. Simon (No. 23-867)
In Republic of Hungary v. Simon (No. 23-867), the Supreme Court addressed, for the second time, whether Jewish survivors of the Hungarian Holocaust have alleged enough facts to pierce the sovereign immunity of Hungary and its state-owned railway. And just as it did the last time, a unanimous Court concluded that the plaintiffs hadn’t done enough for U.S. courts’ exercise of jurisdiction over Hungary. In so doing, the Court rejected the D.C. Circuit’s “comingling” theory of the FSIA’s expropriation exception. We’ll explain exactly what that means in a second, but for those who want to cut to the chase, the end result is that it is now very difficult for plaintiffs to sue foreign states over alleged expropriations of property in cases where the foreign state long ago sold the disputed property, effectively limiting the expropriation exception to disputes over specifically identifiable pieces of property that are still in the foreign state’s possession.
Understanding Simon’s holding requires a bit of background on the complicated law of sovereign immunity. For most of its history, the United States adhered to the “absolute” theory of foreign sovereign immunity, under which foreign states were essentially always immune from suit in United States court. That changed in 1952, when the State Department adopted the so-called restrictive theory of immunity, which “restricts” sovereign immunity to cases where the foreign state is acting in its sovereign capacity, while abrogating immunity for commercial acts. In 1976, Congress codified the restrictive approach with the Foreign Sovereign Immunities Act (“FSIA”). It grants foreign states and their agencies and instrumentalities a baseline of immunity in U.S. court, subject to various statutory exceptions. Consistent with the restrictive theory, most of those exceptions deny states sovereign immunity for their commercial activities (like entering contracts). One of them, though, the so-called expropriation exception, has a different focus. Drafted in response to Communist nations’ expropriation of American-owned property abroad, it eliminates a foreign state’s sovereign immunity in any suit where “rights in property taken in violation of international law are in issue.” But the exception also contains what’s called the “commercial nexus,” which limits the exception to cases where the expropriated “property or any property exchanged for it” is present in the United States in connection with certain types of commercial activity here.
In 2010, a group of Jewish survivors of the Hungarian Holocaust sued Hungary and Hungary’s national railroad in federal court, seeking compensation for Hungary’s genocide of hundreds of thousands of Hungarian Jews in 1944–45. One part of Hungary’s genocidal campaign was property expropriations: Before sending Jews to their death, Hungary stripped them of their personal property, which it then auctioned off. While no recognized FSIA exception allowed the plaintiffs to assert tort-like claims over their mistreatment, they asserted that they could sue for the value of that stolen property under the expropriation exception. But unlike most expropriation-exception cases—where a plaintiff seeks to reclaim an identifiable piece of property still in the foreign state’s possession—the property was long gone. Plaintiffs tried to avoid that problem by arguing that the proceeds Hungary obtained from selling off their property amounted to “property exchanged for” their long-lost possessions. And while the plaintiffs could not trace those specific funds to Hungary’s present day commercial activity in the United States, they argued they didn’t have to: Because Hungary “commingled” the proceeds from those property confiscations with the funds in its general treasury, all the money in its treasury became “property exchanged for” their stolen property. And because Hungary uses money in its general treasury to engage in some commercial activity in the United States (like buying military hardware), a small piece of those proceeds are likely present in the United States now in connection with commercial activity here.
The District Court and then the D.C. Circuit endorsed this “commingling” theory, holding that plaintiffs’ allegations were enough to satisfy the expropriation exception’s commercial nexus and that the burden should be on Hungary to disprove that any of the proceeds from its property theft had made their way to the United States. At the same time, the lower courts rejected several other arguments made by Hungary that the expropriation exception didn’t cover the plaintiffs’ claims. One of those other holdings made its way to the Supreme Court back in 2020, alongside a companion case, Federal Republic of Germany v. Philipp. In that case, the Court ultimately held that the expropriation exception is not satisfied by allegations that a foreign state expropriated the property of its own nationals. Hungary argued that Philipp disposed of the case, but on remand, the D.C. Circuit concluded that some of the Simon plaintiffs were not Hungarian nationals when their property was taken. In the meantime, though, the Second Circuit had considered and rejected the D.C. Circuit’s comingling theory, holding that in order to satisfy the expropriation exception, a plaintiff had to plead and prove that identifiable property—or in cases of sold property, specifically identifiable proceeds from the sale of that property—were present in the United States. The D.C. Circuit declined to reexamine its earlier decision endorsing the commingling theory, so the Supreme Court granted cert to resolve this newly arisen circuit split.
Writing for a unanimous court, Justice Sotomayor rejected the D.C. Circuit’s expansive approach to the expropriation exception’s commercial nexus. She started with some points where the parties agreed: In a suit involving a piece of property that the foreign state still owns—say a work of art—the expropriation exception clearly requires the plaintiff to plead that the property is “present in the United States” in connection with commercial activity here. And if the foreign state exchanged that originally expropriated work of art for another piece of identifiable property—say another work of art—the plaintiff would have to show that this subsequently acquired work of art is present here in the United States. But what happens if rather than exchanging the expropriated work of art for another piece of art, the foreign state sells it? In some cases, the proceeds from that sale can still be traced to the United States, say if the foreign state transferred the proceeds to a particular bank account and then used those funds for some transaction here. But plaintiffs and the D.C. Circuit held that this level of specificity wasn’t required given the fungible nature of money: In essence, they argued the once a foreign state sells expropriated property and commingles the proceeds in its general treasury, any specific tracing requirement goes out the window and all the state’s money presumptively becomes property “exchanged for” the original disputed property unless the foreign state can disprove any alleged connection.
The Court concluded that this went too far for two main reasons. First, not unlike plaintiffs in any other suit, plaintiffs in FSIA cases have to “plausibly” allege that an exception to foreign immunity applies. But states raise money from all sorts of sources, and they spend it on a wide range of commercial and non-commercial activities both at home and abroad. As a general matter, then, it is not “plausible” that the specific proceeds from Hungary’s auctioning off of Jewish-owned property in 1944 and 1945 have ended up in the United States today in connection with one of Hungary’s limited commercial actions here. The factual connection between 1944 Hungary and present-day Hungary’s purchases of military hardware in the United States is just not that plausible given all that’s happened in the interim. Second, the expropriation exception is itself a bit of an anomaly, as it departs from the “restrictive” theory of sovereign immunity by subjecting foreign states to suit in the United States for takings of property, “sovereign” acts if there ever were any. Justice Sotomayor was thus unwilling to read the expropriation exception’s commercial-nexus requirement in a way that would further extend the exception’s reach.
All this is not to say that a plaintiff can never rely on the expropriation exception to sue a foreign state over the expropriation of property the foreign state has since sold. Rather, Justice Sotomayor took pains to point out prior examples—including one that figured prominently in Congress’s creation of the expropriation exception—where the proceeds from the sale of expropriated property could be directly tied to the United States without relying on some commingling presumption. And while Sotomayor acknowledged that it may be difficult for plaintiffs to provide similar evidence in many other cases, including perhaps this one, that is the inevitable result of the statute Congress created. The Court thus once again remanded to the D.C. Circuit where the plaintiffs can decide whether to try to plead and prove that the specific proceeds from the sale of property stolen from them can be traced to the United States.
Supreme Court Update: Lackey v. Stinnie (No. 23-621)
In Lackey v. Stinnie (No. 23-621), the Supreme Court addressed a question that had divided the circuits: If a plaintiff sues under Section 1983 and obtains a preliminary injunction, but subsequent events moot the suit before the district court can make that temporary relief permanent, is the plaintiff a “prevailing party” entitled to attorney’s fees under Section 1988(b)? Rejecting the approach favored by most lower courts, a 7-2 Supreme Court held that they are not.
The case began in Virginia, where state law required courts to suspend the license of any driver who had failed to pay “any fine, costs, forfeitures, restitution, or penalty lawfully assessed against him.” Such suspensions remain in effect until the driver paid the amount due in full or entered into a payment plan approved by a court. In 2016, a group of drivers whose licenses were suspended under this provision and alleged that they could not pay the fines required to reinstate their license sued the Commissioner of the Virginia Department of Motor Vehicles in federal court under Section 1983. The drivers alleged that the law violated the due process and equal protection clauses because it did not provide them with adequate notice before their licenses were suspended, and it applied even to people who were financially unable to pay the fines. The drivers sought declaratory relief, preliminary and permanent injunctive relief, and attorney’s fees under 42 U.S.C. § 1988(b).
In December 2018, the District Court entered a preliminary injunction against the law, holding (among other things) that the drivers were likely to prevail on the merits. Although Virginia could have appealed the preliminary injunction, it didn’t, so the case moved toward a full trial on the merits. In April 2019, a few months before trial was scheduled to begin, Virginia moved to stay the suit, arguing that it would soon become moot because the Virginia General Assembly was likely to pass a law eliminating the fines in an upcoming legislative session. The District Court entered the stay, and the next year, the General Assembly repealed the law and reinstated any licenses that had been suspended under it. Given that legislative change, the parties agreed the case was moot and stipulated to a dismissal, but the drivers asserted they were “prevailing parties” entitled to recover their attorney’s fees under Section 1988(b). The District Court refused to award fees, concluding that a party who obtains just a preliminary injunction (with no final relief) is not a prevailing party under Section 1988(b). Relying on circuit precedent, a Fourth Circuit panel affirmed, but the en banc Fourth Circuit then took up the case and overruled its precedent. In doing so, it joined the majority of the other courts of appeals in holding that a plaintiff who obtains “concrete, irreversible relief” on the merits of their claim via a preliminary injunction can be a prevailing party if the suit then becomes moot before a final judgment. Because the lower courts had divided on how to apply Section 1988(b)’s prevailing-party standard to cases like this one, the Court granted cert.
A 7-2 Court reversed the Fourth Circuit in an opinion written by Chief Justice Roberts. The Chief began by reciting the familiar “American Rule,” which provides that a prevailing party is generally not entitled to recover their attorney’s fees unless a statute expressly authorizes the court to award them. Section 1988(b) obviously is such a statute, as it provides that a “court, in its discretion, may allow the prevailing party, other than the United States, a reasonable attorney’s fee as part of the costs.” But the statute doesn’t define when someone is a “prevailing party.” So Roberts looked to legal dictionaries, which generally define the term as looking at who prevailed at “the end of the suit . . . when the matter is finally set at rest.” A preliminary injunction, by contrast, requires a party to show only that they are “likely to succeed on the merits,” meaning that a party who obtains a preliminary injunction may nonetheless go on to lose the suit on the merits. Preliminary injunctions are thus at most a “transient victory.” And that transient victory does not become any more final when some “external event” (like the legislature changing the law) makes it impossible to obtain enduring, court-ordered relief. In short, because a preliminary injunction does not conclusively resolve a case, a party obtaining a preliminary injunction, without more, is not a prevailing party entitled to recover fees.
Justice Jackson, joined by Justice Sotomayor, dissented. She emphasized that Section 1988(b) was enacted precisely because Congress wished to depart from the American Rule in civil rights litigation. Under both the plain language and the Court’s precedent, she concluded that securing a preliminary injunction is enough for a plaintiff to qualify as a prevailing party so long as the preliminary injunction is never reversed by a final ruling on the merits. She also objected to the significant practical consequences of the majority’s approach: It is hardly unique for civil-rights cases to be mooted out either by settlement or legislative action, and depriving successful litigants of attorney’s fees in those cases may deter the filing of meritorious suits, deter settlements, and reward gamesmanship from defendants.
Accessibility Law in Canada: Cross-Country Disability Access Legislation
Some jurisdictions in Canada are subject to accessibility legislation that sets disability access standards, such as for provincially regulated organizations operating in the provinces of Ontario and Manitoba and for federally regulated industries (such as telecommunications, transportation, etc.).
These laws generally do not provide a direct right of action for alleged violations of disability access standards. Rather, recourse is available through other legislation that prohibits discrimination on the basis of disability, including human rights legislation in every Canadian jurisdiction.
Quick Hits
Organizations that are provincially regulated in Ontario and/or Manitoba, and/or organizations that are federally regulated (e.g., telecommunications, railways, etc.) are currently subject to accessibility legislation.
Provincially regulated private-sector organizations in other Canadian provinces and territories are not currently subject to accessibility standards legislation.
For federally regulated organizations, the Accessible Canada Act (ACA) requires development of an accessibility plan in consultation with people with disabilities and annual reporting on progress. The next deadline, for private-sector organizations to file their second progress report, is June 1, 2025.
In Ontario, the Accessibility for Ontarians with Disabilities Act (AODA) applies to all organizations and requires compliance reporting every three years. The next deadline is December 31, 2026.
In Manitoba, the Accessibility for Manitobans Act sets accessibility standards for all organizations. The next deadline is for meeting information and communication standards by May 1, 2025.
Provincial Accessibility Legislation
Ontario has Canada’s oldest and most fulsome accessibility legislation: the Accessibility for Ontarians with Disabilities Act, 2005 (AODA). Organizations operating in Ontario are required to meet the standards set out in the AODA and its regulations. Every three years, organizations covered by the AODA must submit a report regarding their compliance to the Ontario Ministry of Seniors and Accessibility. The next reporting deadline is December 31, 2026.
Manitoba was next to enact accessibility legislation with the establishment of the Accessibility for Manitobans Act in 2013. Organizations are currently subject to accessibility standards under the legislation and were required to meet those standards for customer service in 2018 and employment in 2022.
The next deadlines are to meet the information and communication standards by May 1, 2025 (some specific public-sector organizations had earlier deadlines) and the transportation standard by January 1, 2027 (with the exception of accessibility upgrades to existing buses operated by conventional transit operators). Standards for the design of outdoor public spaces are in development.
Several other provinces have enacted accessibility legislation under which accessibility standards will or may apply to private-sector employers once established by regulation at some point in the future.
British Columbia’s Accessible British Columbia Act (2021) currently applies only to school districts, educational institutions, municipalities, health authorities, and other public-sector organizations, who were required to comply by September 1, 2024.
Saskatchewan’s Accessible Saskatchewan Act (2023) currently applies only to the government of Saskatchewan.
Accessibility legislation in New Brunswick (the 2024 Accessibility Act), Newfoundland and Labrador (2021’s An Act Respecting Accessibility in the Province), and Nova Scotia (Accessibility Act (2017)) do not yet impose accessibility standards on organizations, as regulations are still in development.
Several other provinces and territories do not have accessibility legislation at this time: Alberta, Northwest Territories, Nunavut, and Prince Edward Island.
Federal Accessibility Legislation
Notably, federally regulated organizations (e.g., telecommunications, railways, etc.) operating in any Canadian province or territory are subject to the federal Accessible Canada Act (ACA), regardless of whether the jurisdiction has separate provincial accessibility legislation.
Under the ACA, organizations are required to develop an accessibility plan that identifies barriers to accessibility in seven priority areas (including employment, the built environment, communication, information technology, procurement, design and delivery of programs and services, and transportation). Organizations are required to consult with people with disabilities in preparing their plans, which should outline the actions that are being taken to address the identified barriers.
Private-sector organizations were required to publish their first accessibility plans by June 1, 2023. Annual progress reports setting out what has been done to address the identified barriers were required to be published in June of each of the next two years (i.e., June 1, 2024) for the first progress report and June 1, 2025, for the second progress report. The following year, by June 1, 2026, organizations are required to publish a new accessibility plan, and the reporting cycle continues. Governmental organizations have their deadlines one year before private-sector organizations.
Arbitrator Selection in International Automotive Supply Chain Disputes
Why Arbitrator Selection Matters
International automotive supply chains often involve tight just-in-time deadlines, so resolving disputes quickly and efficiently is critical. When arbitration is the designated resolution method, the arbitrator’s qualifications and experience can significantly affect the speed, fairness, and effectiveness of the process. Choosing an arbitrator with relevant industry expertise and strong procedural management skills can help minimize business disruptions and financial risks.
Key Considerations for Selecting an Arbitrator
Industry-Specific Expertise
Select arbitrators with a solid background in automotive manufacturing, logistics, or supply chain operations.
Knowledge of OEM-supplier relationships, production timelines, and quality control standards is essential for understanding contractual obligations and industry best practices.
Legal and International Trade Knowledge
The arbitrator should be well-versed in the contract’s governing law.
If the dispute involves multiple jurisdictions, an arbitrator with cross-border contract enforcement experience is highly beneficial.
Experience in Supply Chain Disputes
Prior experience resolving contract breaches, supply chain interruptions, force majeure claims, and pricing conflicts is key.
An arbitrator familiar with assessing damages from delayed deliveries, nonconforming goods, or production disruptions can expedite dispute resolution.
Case Management Skills
Effective arbitration depends on an arbitrator’s ability to enforce clear timelines, oversee evidentiary processes and prevent unnecessary delays.
Selecting arbitrators with a strong track record of efficiently managing proceedings can reduce the risks of drawn-out disputes.
Ask potential arbitrators whether their schedules permit them to expeditiously decide the dispute, including granting emergency interim relief if appropriate.
Impartiality and Neutrality
Ensure the arbitrator has no conflicts of interest from prior business dealings or industry ties that could compromise neutrality.
Established institutions such as the ICC International Court of Arbitration (ICC), the International Centre for Dispute Resolution (ICDR), which is affiliated with the American Arbitration Association, and the Singapore International Arbitration Center (SIAC) offer pre-screened arbitrators known for their impartiality.
Best Practices for Arbitrator Selection
Define Arbitrator Qualifications in Contracts
Prevent selection disputes by specifying qualifications such as:
“Arbitrator must have at least five years of experience in international automotive supply chain disputes.”
“Arbitrator must be licensed to practice law in the following jurisdiction: ______________.”
Keep in mind that if the qualifications are too specific it may increase the time it takes for arbitrator selection, thereby delaying resolution of the dispute.
Utilize Established Arbitration Institutions
Many arbitration bodies provide industry-specific arbitrators, including:
ICC– commonly used in global supply chain agreements.
ICDR– well-suited for North American contracts.
SIAC– preferred for disputes in Asia-based supply chains.
Consider Three-Arbitrator Panels for Complex Cases
For high-value disputes or supply chain disruptions, a three-member tribunal can provide broader perspectives.
Each party selects one arbitrator, and the third neutral arbitrator is appointed by the institution or panel. Alternatively, all three arbitrators can be selected from a list proposed by the institution.
Keep in mind that dealing with the schedules of three arbitrators as opposed to one can significantly slow down the process and increases arbitrator fees.
Incorporate Virtual Arbitration for Efficiency
Many institutions now facilitate remote hearings and digital case management.
SIAC and ICDR support virtual arbitration, reducing costs and logistical delays associated with international disputes.
Final Takeaways
Selecting the right arbitrator is a strategic decision that directly affects the efficiency, fairness, and outcome of an automotive supply chain dispute. By prioritizing industry expertise, legal proficiency, procedural efficiency, and impartiality, companies can ensure smoother dispute resolution.
To minimize risks and improve arbitration outcomes, U.S. automotive executives or their lawyers should:
Clearly define arbitrator qualifications in contracts.
Choose reputable arbitration institutions with emergency relief options.
Consider three-arbitrator panels for high-stakes disputes.
Explore virtual arbitration to reduce costs and speed up proceedings.
CSRD Slashed: EU’s Corporate Sustainability Regulations Significantly Reduced
On 26 February 2025, the European Commission (the “Commission”) adopted a new package of proposals to simplify the regulations on sustainability. Their aim is to combine the competitiveness and climate goals of the European Union, which we reported on here, as part of their aim for a “simpler and faster” Europe.
The proposals, packaged in an “Omnibus”, dramatically reduce the scope and reporting required under the Corporate Sustainability Reporting Directive (“CSRD”), the Corporate Sustainability Due Diligence Directive (“CSDDD”) and the EU Taxonomy (“Taxonomy”).
We set out below the key changes proposed for CSRD.
The Omnibus’ aims for the CSRD are to make it “more proportionate and easier to implement by companies” through:
Reduction of scope:
“large undertakings” in scope of CSRD are redefined as those with over 1000 employees on a group or standalone basis, rather than 250 employees, with the financial thresholds of EUR 50 million turnover or a balance sheet total above EUR 25 million remaining static. This is significantly impactful reducing the scope of companies in scope of CSRD by around 80% (and aligns more with the CSDDD threshold). Listed SMEs are no longer in scope unless they meet the “large undertakings” thresholds; and
non‑EU parents will only be in scope of CSRD if they generated EU‑derived turnover of EUR 450 million, rather than EUR 150 million, with either an EU large undertaking meeting the revised thresholds set out above or with an EU branch with EUR 50 million in turnover to align with that required of “large undertakings”, revised upwards from EUR 40 million.
Postponement of reporting: for those companies who were due to report on year 2025 in year 2026 who remain in scope as they have over 1000 employees, there will be a two‑year delay to reporting.
A shield – the value chain cap: for companies not in scope of the CSRD (those with less than 1000 employees), the Commission will adopt by a delegated act a voluntary reporting standard leveraging the standard that was developed for SMEs. This standard is intended to act “as a shield” by limiting the amount of information that companies and banks falling into scope of the CSRD can request from companies in their value chains with few than 1,000 employees.
Reporting standards to be revised: the European Sustainability Reporting Standards (“ESRS”), which are at the heart of CSRD’s requirements, are to be revised via a delegated act to substantially reduce the number of data points, clarify unclear provisions and improve consistence with other legislation. They will remove datapoints that are deemed least important for general purpose sustainability reporting, prioritise quantitative datapoints over narrative text and further distinguish between mandatory and voluntary datapoints. Clearer instructions will be provided on how to apply the materiality assessment process. There is also reference to making sure that there is “very high” interoperability with global reporting standards.
No sector‑specific standards will be required
Limited assurance to remain: there will be no uplift to reasonable assurance over time.
Next steps
There is no impact assessment on the potential economic, social and environmental effects as the Commission has deemed the Omnibus to be so urgent and important that a derogation from the need to provide the impact assessment was granted under the Commission’s Better Regulation Guidelines. However, the market and a range of stakeholders will no doubt hotly debate the impact across all these areas. The Commission itself acknowledges that the proposed changes to CSRD may “partially diminish the positive impacts” but that the “reduction of administrative burden” should lead to economic and competitive gains.
The Commission has called on the European Parliament and European Council to “reach rapid agreement” on the proposals. The legislation needs European Parliament approval with a majority of MEPs voting in favour and at least 55% (15 out of 27) of Member States voting in favour at the European Council. It will then come into force following its publication in the EU Official Journal.
This legislation is also in the form of a Directive and requires national transposition by each Member State, which had not yet occurred across the EU for the current guide of CSRD. It could be that we witness some gold‑plating or an emergence of a range of EU Member State expectations through national guidelines at a juxtaposition with the aims of the EU’s Single Market.
25 Percent Tariffs on Imported Automobiles?
his week, President Donald Trump made remarks during a press conference indicating that he was planning to impose tariffs “in the neighborhood of 25 percent” on imported automobiles, perhaps as early as April 2. It was unclear whether the targeted automobile tariffs are related to the so-called “reciprocal tariffs” that are being studied by the government across all products from all countries.
During this week’s press conference, the president expressed his understanding that the European Union has already lowered its tariffs on imported automobiles from 10 percent to 2.5 percent. However, the EU has released an FAQ indicating that it has made no such concession, and pointing out that the U.S. imposes a 25 percent tariff on pickup trucks.
The auto tariff referenced in this week’s press conference is reminiscent of the findings of the Section 232 investigation of imported automobiles performed during President Trump’s first administration. Although that investigation concluded that imports of automobiles harmed U.S. national security, the recommended 25-35 percent tariff was never imposed.
Car plants are being canceled in other locations now because they want to build them here. And you read about a couple — not that I want to mention names or anything — but you read about a couple of big ones in Mexico just got canceled because they’re going to be building them in the United States. And that’s very simply because of what we’re doing with respect to taxes, tariffs, and incentives.
www.whitehouse.gov/…
Restoring Western North Carolina’s Infrastructure: NCDOT Receives $250 Million in Federal Emergency Relief Funds
The Federal Highway Administration (FHWA) has announced an immediate allocation of $352.6 million in Emergency Relief funds to support recovery efforts following the devastation caused by Hurricane Helene in September 2024.
Of this funding, the North Carolina Department of Transportation (NCDOT) will receive $250 million to repair damaged roadways and bridges, including Interstate 40. Another $32.6 million will be split between the U.S. Forest Service and the National Park Service to make repairs along the Blue Ridge Parkway and other roadways located in national forests.
The Impact of Hurricane Helene
Hurricane Helene left a trail of destruction across the Southeast, including widespread flooding, landslides, and structural damage to roadways and bridges. Western North Carolina, known for its mountainous terrain and vital transportation routes, was particularly hard-hit. The storm caused severe washouts, rockfalls, bridge collapses, and pipe failures, creating hazardous conditions and disrupting travel.
The cumulative cost of federally eligible damage is still being assessed, but early estimates suggest the total will exceed $4 billion. In response, federal, state, local, and tribal agencies have mobilized to restore accessibility and safety to the affected areas.
Emergency Relief Funds: A Lifeline for Infrastructure Recovery
The FHWA’s Emergency Relief program plays a crucial role in providing financial assistance to repair and reconstruct damaged transportation infrastructure after natural disasters. The program’s “quick release” funding mechanism ensures that states receive immediate support for urgent repairs, reducing delays in reopening critical routes.
The newly allocated $250 million for NCDOT will be directed toward repairing damage along North Carolina’s roadways, including I-40, a key transportation corridor linking North Carolina to Tennessee.
Challenges and Considerations for Construction Professionals
While the federal funding is a significant step toward recovery, construction professionals working on these repair projects must navigate several key challenges:
State and Federal Procurement Requirements – Public contracts for federally funded infrastructure projects come with strict guidelines. Even though these projects are state-managed, they often require compliance with federal laws and regulations. Contractors need to ensure they are complying with all applicable laws and requirements, which may include:
The Federal Acquisition Regulation;
The Build America Buy America Act;
Davis-Bacon Act wage standards;
Minority business participation mandates; and
Bonding and insurance requirements, among others.
Licensing Concerns – If you are an out-of-state contractor interested in performing work in Western North Carolina as part of the state and federal disaster relief effort, it is critical that you understand and comply with North Carolina’s licensing laws.
Looking Ahead: A Resilient Future for North Carolina’s Infrastructure
The infusion of federal emergency relief funds into North Carolina’s transportation network is a welcome development for residents, businesses, and the construction industry. As the state embarks on the challenging task of rebuilding, collaboration among government agencies, engineers, contractors, and legal professionals will be essential to achieving a resilient and efficient transportation system.
For construction firms and industry stakeholders, the recovery efforts present both opportunities and responsibilities. With careful planning, regulatory compliance, and strategic risk management, North Carolina can emerge from this disaster with stronger, more sustainable infrastructure that serves future generations.
D.C. Court Finds A Piggyback Statute Of Limitations In Segway-Crash Case
According to court filings, on October 11, 2019, a Segway struck Marilyn Kubichek and Dorothy Baldwin as they strolled along a D.C. sidewalk.
On December 20, 2022, they filed two complaints in the Superior Court based on the Segway incident – one against the operator of the Segway that they said hit them, and one against the tour organizer. The cases were consolidated into one proceeding, Kubichek et al. v. Unlimited Biking et al.
Unfortunately for Ms. Kubichek and Ms. Baldwin, the statute of limitations for negligence in D.C. is three years. Their claims had become untimely before they filed their complaints.
Defendant Eduardo Samonte asserted the statute of limitations in a motion to dismiss, which was granted.
In fact, the order granting Mr. Samonte’s motion actually dismissed the case against both defendants. But the other defendant, Unlimited Biking, had not asserted the statute of limitations.
The question for the Court of Appeals was whether the complaint against Unlimited Biking could be dismissed based on Mr. Samonte’s motion.
Generally speaking, it’s on a defendant to assert the statute of limitations as a defense to the claims against it. Courts don’t do that on their own, and a defendant that fails to assert the statute in its answer to the complaint, or in a motion to dismiss, typically waives the defense.
The Court of Appeals returned to a 1993 case called Feldman, which had suggested that a trial court might have the power to invoke the statute-of-limitations defense on its own, but only if it “is clear from the face of the complaint” that the statutory period has expired.
In the Kubichek case, the Court of Appeals found that it was not clear from the complaints that the statute of limitations had expired.
So – back to court for Unlimited Biking, right?
Not so fast. The Court of Appeals proceeded to fashion a new, “narrow exception” whereby the dismissal of the complaint against Unlimited Biking could be affirmed.
The rule used by the Court appears to work this way:
One defendant asserts the statute of limitations.
+
The plaintiffs have a chance to litigate the issue.
+
The facts relevant to the application of the statute of limitations are not disputed.
+
The relevant facts are the same with respect to both defendants.
=
The trial court may dismiss claims against a defendant that did not assert the statute of limitations.
No litigator or party should neglect to assert a statute-of-limitations defense at the earliest opportunity in a case where the defense may apply. But, after Kubichek, if you are so neglectful, your co-defendant may save you.
Just one more reason why persons who have been harmed and believe they have legal claims should be careful not to wait too long to go to court.
January 2025 ESG Policy Update— Australia
Australian Update
Mandatory Climate-Related Financial Disclosures Come Into Effect
The first phase of the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (Cth) (Bill) commenced on and from 1 January 2025. The Bill amends the Corporations Act 2001 (Cth) to mandate that sustainability reporting be included in annual reports.
The first phase requires Group 1 entities to disclose climate-related risks and emissions across their entire value chain. Group 2 entities will need to comply from 2026, followed by Group 3 entities from 2027.
First Annual Reporting Period Commences on
Reporting Entities Which Meet Two out of Three of the Following Reporting Criteria
National Greenhouse and Energy Reporting (NGER) Reporters
Asset Owners
Consolidated Revenue for Fiscal Year
Consolidated Gross Assets at End of Fiscal Year
Full-time Equivalent (FTE) Employees at End of Fiscal Year
1 Jan 2025(Group 1)
AU$500 million or more.
AU$1 billion or more
500 or more.
Above the NGERs publication threshold.
N/A
1 July 2026(Group 2)
AU$200 million or more.
AU$500 million or more.
250 or more.
All NGER reporters.
AU$5 billion or more of the assets under management.
1 July 2027(Group 3)
AU$50 million or more.
AU$25 million or more.
100 or more.
N/A
N/A
Mandatory reporting will initially consist only of climate statements and applicable notes before expanding to include other sustainability topics, including nature and biodiversity when the relevant International Financial Reporting Standards (IFRS) Sustainability Disclosure Standards are issued by the International Sustainability Standards Board (ISSB).
Entities are also not required to report Scope 3 emissions, being those generated from an entity’s supply chain, until the second year of reporting. Further, there is a limited immunity period of three years for Scope 3 emissions in which actions in respect of statements made may only be commenced by the Australian Securities and Investments Commission (ASIC) or where such statements are criminal in nature.
Further information on the mandatory climate-related disclosures can be found here.
New Vehicle Efficiency Standard Comes into Effect
On 1 January 2025, the New Vehicle Efficiency Standard (NVES) came into effect.
The NVES aims for cleaner and cheaper cars to be sold in Australia and to cut climate pollution produced by new cars by more than 50%. The NVES aims to prevent 20 million tonnes of climate pollution by 2030.
Under the NVES, car suppliers may continue to sell any vehicle type they choose but will be required to sell more fuel-efficient models to offset any less efficient models they sell. Car suppliers will receive credits if they meet or beat their fuel efficiency targets.
However, if a supplier sells more polluting cars than their target, they will have two years to trade credits with a different supplier or generate credits themselves before a penalty becomes payable.
The NVES aims to bring Australia in line with the majority of the world’s vehicle markets, and global manufacturers will need to comply with Australia’s laws. This means that car suppliers will need to provide Australians with cars that use the same advanced fuel-efficient technology provided to other countries.
For Australians who cannot afford an electric vehicle, it is hoped the NVES will encourage car companies to introduce more inexpensive options. There are approximately 150 electric and plug-in hybrids available in the US, but less than 100 on the market in Australia. There are also currently only a handful of battery electric vehicles in Australia that regularly retail for under AU$40,000.
Inaugural Australian Anti-Slavery Commissioner Appointed
On 2 December 2024, Mr Chris Evans commenced a five-year term as the inaugural Australian Anti-Slavery Commissioner (Commissioner), having been appointed in November 2024.
Mr Chris Evans previously served as CEO of Walk Free’s Global Freedom Network “Walk Free”. He and Walk Free played a significant role in campaigning for the introduction of the Modern Slavery Act 2018 (Cth) (Modern Slavery Act).
Prior to his time at Walk Free, Mr Evans was a Senator representing Western Australia, serving for two decades.
The Australian Government has committed AU$8 million over the forward estimates to support the establishment and operations of the Commissioner.
Among other functions, the Commissioner is to promote business compliance with the Modern Slavery Act, address modern slavery concerns in the Australian business community and support victims of modern slavery. We expect the Commissioner will take a pro-active role in implementing the McMillan Report’s recommendations for reform of the Modern Slavery Act supported by the Australian Government including penalties on reporting companies who fail to submit modern slavery statements on time and in full and the Commissioner’s disclosure of locations, sectors and products considered to be high-risk for modern slavery.
For more information on the role of the Commissioner, you can read our June 2024 ESG Policy Update – Australia.
View From Abroad
Trump Administration Provides Early Insight Into Their Position on ESG-Related Regulations
On 20 January 2025, shortly after new US President Donald Trump was inaugurated, the White House published the America First Priorities (Priorities). Several of these priorities are relevant to ESG-related policies and have been incorporated into Executive Orders and Memoranda issued by President Trump.
These Priorities, Executive Orders and Memoranda provide an insight into the new administration’s position on ESG-related regulations and include the following:
Reviewing for rescission numerous regulations that impose burdens on energy production and use, including mining and processing of non-fuel minerals;
Empowering consumer choice in vehicles, showerheads, toilets, washing machines, lightbulbs and dishwashers;
Declaring an “energy emergency” and using all necessary resources to build critical infrastructure;
Prioritising economic efficiency, American prosperity, consumer choice and fiscal restraint in all foreign engagements that concern energy policy;
Withdrawing from the Paris Climate Accord;
Withdrawing from any agreement or commitment under the UN Framework Convention on Climate Change and revoking any financial commitment made under the Convention;
Revoking and rescinding the US International Climate Finance Plan and policies implemented to advance the US International Climate Finance Plan;
Freezing bureaucrat hiring except in essential areas; and
Ordering those officials tasked with overseeing diversity, equity and inclusion (DEI) efforts across federal agencies be placed on administrative leave and halting DEI initiatives taking place within the government.
It is expected that the Trump administration will continue to prioritise economic growth over the perceived costs of ESG-related initiatives. Corporate ESG obligations may decrease, potentially creating short-term reporting relief and less shareholder pressure on companies to adopt ESG-focused policies.
Any relaxation of ESG-related regulations in the US may have extra-territorial effects on other jurisdictions as they determine whether to pause, roll-back or expand their reform programs in response. Multinational enterprises may find it difficult to navigate these potentially increasingly divergent national regimes.
UK Accounting Watchdog Recommends Sustainability Reporting Standards
On 18 December 2024, the Financial Reporting Council, as secretariat to the UK Sustainability Disclosure Technical Advisory Committee (TAC), recommended the UK Government adopt International Sustainability Standards Board reporting standards, IFRS S1 (Sustainability-related financial information) and IFRS S2 (Climate-related disclosures) (the Standards).
The purpose of these Standards is to provide useful information for primary users of general financial reports. Broadly:
IFRS S1 provides a global framework for sustainability-related financial disclosures and addresses emissions, waste management and environmental risks; and
IFRS S2 focuses on climate risks and opportunities.
Adopting these Standards in tandem ensures that companies account for their full environmental impact. TAC has also recommended minor amendments to the Standards for better suitability to the UK’s regulatory landscape. For example, extending the ‘climate-first’ reporting relief in IFRS S1 will allow entities to delay reporting sustainability-related information, by up to two years. This will allow companies to prioritise climate-related reporting.
This endorsement comes after the TAC was commissioned by the previous government to provide advice on whether the UK Government should endorse the international reporting Standards. Sally Duckworth, chair of TAC, stated that the adoption of these reporting standards is “a crucial step in aligning UK businesses with global reporting practices, promoting transparency and supporting the transition to a sustainable economy”.
With more than 30 jurisdictions representing 57% of global GDP having already adopted the Standards, the introduction of these Standards in the UK will align UK companies with international reporting standards and provide greater transparency and accountability, which is important for achieving sustainability goals and setting strategies going forward.
Sustainable Investing Spotlight for 2025
Whilst Europe has dominated the sustainable investing charge with regulators prioritising disclosure and reporting initiatives, 2025 is set to be a challenging year with the Trump administration expected to reorder priorities in the US that are likely to impact the sustainability landscape going forward. Investment data analytics from Morningstar predicts that there will be six themes that will shape the coming year:
Regulations
The US Securities and Exchange Commission (SEC) may reverse rules requiring public companies in the US to disclose greenhouse gas emissions and climate-related risks and roll back a number of other sustainability related initiatives. This is at odds with the European Union and a number of other jurisdictions globally who are focusing on rolling out climate and sustainability disclosures.
Funds Landscape
Fund-naming guidelines that have been introduced by the European Securities and Markets Authority will see a large number of sustainable investment funds across the EU rebrand, which is likely to reshape the landscape. Off the back of the de-regulation occurring in the U.S., there is an expectation that the number of sustainable investment funds will shrink. It will be interesting to see how the market responds and what investor appetite for these products across the rest of the world, will be.
Transition Investing
Investors will look to invest in opportunities arising out of the energy transition. Institutional investment is vital to meet targets, with focus predicted to be on renewable energy and battery production.
Sustainable Bonds
It is predicted that sustainability related bonds will outstrip US$1 trillion once again. Institutional investors have been targeting sustainability related bonds to aid their net zero efforts. Global players like the EU are poised to play a critical role in the global energy transition and boost the sustainability bond markets by implementing regulatory frameworks to encourage investment.
Biodiversity Finance
Nature will increasingly be recognised as an asset class, thanks to global initiatives aimed at correcting the flawed pricing signals that have contributed to biodiversity loss. These efforts seek to acknowledge the true value of nature and address the ongoing degradation of biodiversity. There is an appetite for nature-based investment, but regulatory uncertainty and uncharted pathways remain a deterrent.
Artificial Intelligence
This prominent investment theme in 2024 is likely to continue well into this year. However, there are risks associated with this asset class. The rapid adoption and volatile regulations are proving costly, along with the immense amount of energy generation required to run artificial intelligence fuelled data centres.
Canada Releases First Sustainability Disclosure Standards in Alignment with ISSB Global Framework
The Canadian Sustainability Standards Board (CSSB) has released its first Canadian Sustainability Disclosure Standards (CSDS), which align closely with IFRS Sustainability Disclosure Standards whilst also addressing considerations specific to Canada.
Broadly, and similar to IFRS Sustainability Disclosure Standards:
CSDS 1 establishes general requirements for the disclosure of material sustainability-related financial information; and
CSDS 2 focuses on disclosures of material information on critical climate-related risks and opportunities.
The CSSB has also introduced the Criteria for Modification Framework which outlines the criteria under which the IFRS Sustainability Disclosure Standards developed by the ISSB may be modified for Canadian entities.
CSSB Interim Chair, Bruce Marchand has stated that the introduction of these standards “signifies our commitment to advancing sustainability reporting that aligns with international baseline standards – while reflecting the Canadian context. These standards set the stage for high-quality and consistent sustainability disclosures, essential for informed decision-making and public trust”.
Other features of the CSDS include:
Transition relief through extended timelines for adoption;
Its voluntary adoption by entities, unless mandated by governments or regulators in the future; and
Its role in being the first part of a multi-year strategic plan by the CSSB which includes building partnerships with First Nations, Métis and Inuit Peoples to ensure Indigenous perspectives are integrated into sustainability-related standards.
The authors would like to thank lawyer Harrison Langsford and graduates Daniel Nastasi and Katie Richards for their contributions to this alert.
Nathan Bodlovich, Cathy Ma, Daniel Shlager, and Bernard Sia also contributed to this post.
Foley Automotive Update 19 February 2025
Foley is here to help you through all aspects of rethinking your long-term business strategies, investments, partnerships, and technology. Contact the authors, your Foley relationship partner, or our Automotive Team to discuss and learn more.
Key Developments
Automakers and suppliers are delaying certain investment decisions and considering a range of scenarios to adjust production and supply chains in response to President Trump’s tariff policies that include a 25% tariff on certain automobile and semiconductor imports that could be announced as soon as April 2, the potential for broader “reciprocal tariffs” on all countries that tax U.S. imports, 25% levies on steel and aluminum imports, and uncertainty over proposed 25% tariffs on all U.S. imports from Mexico and Canada that were paused for a “one month period” as of February 3.
Major automakers are reported to be increasing their lobbying efforts over concerns certain tariff and trade policies of the Trump administration will lead to higher manufacturing costs and job losses in the U.S.
Foley & Lardner partner Greg Husisian provided insights in Manufacturing Dive on the potential ramifications of President Trump’s 25% tariffs on steeland aluminum imports, as well as commentary in CNN here and here regarding the Trump administration’s proposed “reciprocal tariffs” on numerous trading partners. Visit Foley & Lardner’s 100 Days and Beyond: A Presidential Transition Hub for more updates on policy analysis and the business implications of the Trump administration across a range of areas.
Vehicle imports represented 53% of 2024 U.S. new light-vehicle sales, according to analysis from GlobalData featured in CNBC. The top three nations for U.S. vehicle imports last year were Mexico (16.2%), Korea (8.6%) and Japan (8.2%).
Canada accounts for roughly 20% of U.S. steel imports and 50% of aluminum imports. The U.S. exported over $16 billion of steel and aluminum products to Canada in 2024.
Environmental Protection Agency Administrator Lee Zeldin on February 14 announced plans to submit certain California emissions waivers for Congressional review. The action could result in a repeal of waivers approved under the Biden administration that supported California’s Advanced Clean Cars II, Advanced Clean Trucks, and Omnibus NOx rules. Earlier this month, the U.S. Supreme Court denied the Trump administration’s request to pause three cases so the EPA could reevaluate Biden-era regulations that include the decision to grant California a Clean Air Act waiver allowing the state to implement its own greenhouse gas emissions standards for vehicles.
OEMs/Suppliers
Ford informed suppliers it will delay the launch of its next-generation F-150 pickup truck, according to a report in Crain’s Detroit.
Ford reported 2024 net income of $5.9 billion on total revenue of $185 billion, representing year-over-year increases of 37% and 5%, respectively. The automaker projected its 2025 operating profit could decline by 17% to 31% YOY due to challenges that include pricing competitiveness, lower sales volumes, and the expectation for up to $5.5 billion in losses for its EV and software operations.
Private equity firm KKR and Taiwanese electronics giant Hon Hai Precision Industry (Foxconn) were reported to be considering investments in Nissan following the automaker’s breakdown of merger discussions with Honda.
GM laid off 79 hourly workers at its CAMI Assembly plant in Ingersoll, Ontario. The plant produces the BrightDrop electric commercial van.
Isuzu will invest $280 million to establish a commercial truck manufacturing plant in South Carolina.
GM intends to close a plant in Shenyang, China, as part of a broader restructuring in the nation in response to declines in market share, according to unnamed sources in Reuters.
Market Trends and Regulatory
The Wall Street Journal provided a breakdown of the U.S. market share and production of certain overseas automakers that could be affected by new import tariffs.
The Alliance for Automotive Innovation expressed its support for the nomination of Jonathan Morrison to serve as Administrator of the National Highway Traffic Safety Administration. Morrison most recently held a position at Apple, and he previously served as NHTSA’s Chief Counsel during the first Trump administration.
A Rhode Island federal judge ruled on February 10 that substantive effects have persisted for the now-rescinded January 27 Office of Management and Budget memorandum (M-25-13) that called for a freeze on certain federal grants, loans and other financial assistance. The judge also “rejected the administration’s argument that some funds — including assistance under the Inflation Reduction Act (IRA) and the Infrastructure Investment and Jobs Act (IIJA) — have remained properly frozen in an effort to ‘root out fraud,’ writing that his order required all frozen funding to be restored.”
Automakers are among the entities lobbying the Trump administration to pursue a gradual phaseout of certain EV tax credits rather than an abrupt end.
A Massachusetts federal judge ruled against automakers that sought to block implementation of the state’s “right-to-repair” law. In the lawsuit filed in 2020, automakers had cited concerns that included cybersecurity risks and the potential for inconsistencies with certain federal laws.
Automotive News provided an overview of the manufacturing investments that could beat risk if the IRA or large portions of it are repealed.
Auto insurance costs may rise for consumers if vehicle repair costs are impacted by tariffs on auto parts.
A report in Automotive News predicts an increase in automotive plants with the flexibility to produce multiple propulsion systems.
BYD is reported to be pursuing discussions to sell European automakers carbon credits to help mitigate the effects of stricter emissions standards in the European Union. The European Commission could announce an action plan next month in response to automakers’ concerns over the compliance costs associated with 2025 CO2 emissions targets in the bloc.
The Trump administration agreed to pause additional layoffs at the U.S. Consumer Financial Protection Bureau, according to a February 14 court order. However, the future of the lending institutions’ regulator is currently unclear.
Autonomous Technologies and Vehicle Software
BYD will include advanced driver-assistance systems as a standard feature in many of its future models sold in China at no additional cost to buyers. Capabilities of BYD’s “God’s Eye” system will vary depending on the vehicle classification. The automaker is also developing plans to integrate software from Chinese AI startup DeepSeek.
GM announced a goal for its Super Cruise hands-free driver-assist system to reach $2 billion in annual revenue within five years.
Industry stakeholders at the 5g Automotive Association symposium emphasized the importance for automakers to invest in vehicle-to-everything (V2X) connectivity.
Lyft plans to debut driverless rides in Mobileye-powered robotaxis as soon as next year, beginning in Dallas.
Electric Vehicles and Low Emissions Technology
J.D. Power predicts 2025 U.S. EV market share will hold at 9.1%,to match last year’s sales levels of 1.2 million units.
Toyota plansto begin shipping batteries for North American electrified vehicles from its Battery Manufacturing North Carolina plant in April 2025. This is Toyota’s first in-house battery manufacturing plant outside Japan and it represents nearly a $14 billion investment.
Electric truck maker Nikola filed for Chapter 11 bankruptcy protection.
Automaker-backed EV charging company Ionna plans to continue adding infrastructure at pace without relying on NEVI funding, with a priority on hubs around cities to serve drivers that are not able to install a home charger.
Rivian’s electric van is now available for purchase by any entities with a fleet of commercial vehicles. The vehicles were previously exclusively sold to Amazon.
A group of Republican senators introduced legislation to establish a $1,000 tax on new EV purchases to fund federal road repairs.
Analysis by Julie Dautermann, Competitive Intelligence Analyst
Texas Senate Bill 6 and Impacts on Large Load Development in ERCOT
On 12 February 2025, Texas Senate Bill 6 (SB6), authored by Sen. Phil King and Sen. Charles Schwertner, was filed. The low bill number on this indicates it is a priority bill and will likely have momentum. If passed, this bill will directly impact entities currently in or contemplating a co-location arrangement in the Electric Reliability Council of Texas (ERCOT) region. A co-location arrangement is where generation and load are located at the same point on the grid.
If passed, SB6 would require the Texas Public Utility Commission (PUC) to, “implement minimum rates that require all retail customers in that region [ERCOT] served behind-the-meter to pay retail transmission charges based on a percentage of the customer’s non-coincident peak demand from the utility system as identified in the customer’s service agreement.” Many large load entities have pursued co-location arrangements to avoid transmission costs so if passed this will result in a shift. The bill would require the PUC to develop standards for interconnecting large loads in a way to “support business development” in Texas “while minimizing the potential for stranded infrastructure costs.”
Additionally, SB6, if passed, would require the PUC to establish standards for interconnecting large load customers at transmission voltage in ERCOT. SB6 would have these interconnection standards apply to facilities with a demand of 75 MW or more but allows the PUC to determine a lower threshold if necessary. As part of these interconnection standards, the large load customer must disclose to the utility whether the customer is pursuing a duplicate request for electric service in another location (both within and outside of Texas), the approval of that duplicative request would cause the customer to change or withdraw their interconnection request. This likely would result in the utility having a better sense of which large load will move forward in the interconnection queue versus those that are duplicative. The large load customer would also be required to disclose information about its on-site backup generating facilities. The bill would allow ERCOT, after reasonable notice, to deploy the customer’s on-site backup generating facility. As part of the PUC standards for interconnection, the large load customer would have to provide proof of financial commitment which may include security on a dollar per MW basis, as set by the PUC.
SB6 also requires a co-located power generation company, municipally owned utility, or electric cooperative, to submit a notice to the PUC and ERCOT before implementing a new net metering arrangement between a registered generation resource and an unaffiliated retail customer if the retail customer’s demand exceeds 10% of the unit’s nameplate capacity and the facility owner has not proposed to construct an equal amount of replacement capacity in the same general area. Additionally, SB6 would require a new net metering arrangement be consented to by the electric cooperative, electric utility, or municipally owned utility certified to provide retail electric service at the location. The PUCT would have 180 days to approve, deny, or impose reasonable conditions on the proposed net metering arrangement, as necessary to maintain system reliability. Such conditions may include:
That behind-the-meter load ramp down during certain events;
That generation reenter energy markets in the ERCOT power region during certain events; and
That the generation resource will be held liable for stranded or underutilized transmission assets resulting from the behind-the-meter operation.
If the PUC does not act within the 180-day period, the arrangement would be deemed approved.
SB6 would also require large load that is interconnected after 31 December 2025 to install equipment that allows the load to be remotely disconnected during firm load shed. Finally, SB6 would require the PUC to study whether 4 Coincident Peak transmission cost allocation is appropriate.