Legislative Update: Chemical industry urges rollback of Biden-era TSCA rules

Chemical industry urges rollback of Biden-era TSCA rules

The American Chemistry Council (ACC) urged the White House Office of Management and Budget (OMB) to rescind or substantially revise multiple Biden-era environmental rules, particularly those issued under the Toxic Substances Control Act (TSCA). In comments submitted on May 12 in response to OMB’s April 11 request for deregulatory input, ACC identified several EPA rules that it claims are scientifically flawed, legally unsound, or impose burdensome and technically infeasible compliance demands. Among them are TSCA procedural and risk management rules on solvents, EPA’s updated user-fees rule, and revisions to the voluntary Design for the Environment (DfE) program.

ACC focused heavily on the EPA’s 2024 TSCA risk evaluation “framework” rule. The group contends the rule misinterprets TSCA by requiring the agency to evaluate all conditions of use, rather than focusing only on those posing the greatest potential risk. ACC also criticized the framework for issuing a single risk determination for an entire chemical, rather than assessing each use case separately, and for failing to consider the required use of personal protective equipment in worker exposure assessments. Legal challenges to the rule are already pending, though the D.C. Circuit has paused proceedings amid signals the Trump EPA plans to revise it.

EPA FY26 Budget Slashes State Grants and Redefines Federal Oversight

The Environmental Protection Agency’s (EPA) proposed fiscal year 2026 budget marks a significant shift in federal environmental policy The Trump administration’s plan calls for the elimination of nearly all categorical grants to states and a roughly 90% reduction in water infrastructure funding. These cuts total a proposed 54% reduction in EPA’s overall budget.

According to the EPA’s “budget in brief” released May 30, nearly all state support programs would be eliminated except for a few tribal programs. Notably, the budget proposes cutting  Clean Water State Revolving Funds (CWSRF) funding by $1.5 billion and Drinking Water State Revolving (DWSRF) funding by $976 million, while also reducing funding under the Water Infrastructure Finance and Innovation Act.

Regarding infrastructure funding, the EPA justified steep cuts to the CWSRF and DWSRF by citing historical federal investments of over $243.9 billion. The agency argues that responsibility should now shift to the states, many of which can rely on loan repayments and interest to sustain future projects. However, the proposal has faced pushback from state and environmental organizations.

EPA Proposes to Repeal Greenhouse Gas Limits on Power Plants  

The EPA announced plans on June 11 to repeal federal greenhouse gas emissions limits for power plants, effectively dismantling a key Biden-era climate policy. The rule currently mandates that existing coal-fired and new natural gas-fired power plants implement carbon capture technology to reduce 90% of their carbon dioxide emissions. Flanked by House Energy and Commerce Chairman Brett Guthrie (R-KY) and Sen. Kevin Cramer (R-ND),  EPA Administrator Lee Zeldin stated that the agency aims to finalize the repeal by December and also intends to revoke a separate rule targeting mercury emissions from power plants, citing cost concerns raised by plant operators.

Zeldin framed the move as part of a broader agenda to bolster U.S. energy production and ensure reliable electricity supplies, particularly for emerging sectors such as artificial intelligence.  He argued that the volume of greenhouse gas emissions from domestic fossil fuel power plants does not meet the threshold under the Clean Air Act for federal regulation. The EPA’s proposed repeal also questioned the global efficacy of U.S. emissions reductions, stating that only “extraordinary” international action could meaningfully impact climate-related public health risks. Zeldin reiterated that the agency would revisit the 2009 “endangerment finding,” which provides the scientific basis for regulating greenhouse gases.

Chairman Guthrie emphasized the need for abundant domestic energy to drive industrial growth and AI development, asserting that loosening environmental restrictions is key to competing with China. Organizations, including the American Petroleum Institute and the National Association of Manufacturers, praised the rollback as a step toward restoring industrial competitiveness and reducing regulatory burdens.

Senate Pushes for Late June Vote on Reconciliation Package

Senate Republicans are targeting the last week of June for a floor vote on their version of the budget reconciliation package, though several politically sensitive issues remain unresolved. At a June 12 meeting, chairs from key Senate committees—including Finance, Environment and Public Works, Energy, Homeland Security, and Agriculture—presented updates on their sections of the House-passed bill (H.R. 1). While discussions yielded details on expected changes to nutrition assistance programs and a general outline for modifying the phase-out of clean energy tax credits, no final decisions were made on critical elements such as Medicaid, Medicare, and the state and local tax (SALT) deduction cap.

Senate Republicans are continuing to assemble their version of the reconciliation package, with the Finance Committee responsible for key components, including tax cuts and Medicaid funding. While several committees have already drafted text, the Finance panel’s contribution remains the most significant, and senators aim to complete the full package by Friday, though delays are possible. Unlike the House, the Senate plans to bypass committee markups and instead offer a substitute amendment to the House-passed bill directly on the floor.

One of the most politically sensitive issues remains the House proposal to raise the SALT deduction cap to $40,000 for households earning up to $500,000, a measure estimated to cost $353 billion. Senate Republicans are skeptical of the provision’s fiscal implications, while House Republicans from high-tax states—including California, New York, and New Jersey—have threatened to vote against the final bill if the cap is reduced. Homeland Security and Government Affairs Chairman Sen. Rand Paul (R-KY) also continues to voice objections to the spending levels in his committee’s portion of the bill, calling for further scrutiny.  The Republican conference is scheduled to reconvene on June 16 for further discussion, particularly regarding the Finance Committee provisions.

Despite these unresolved issues, Senate leadership is moving forward with an ambitious schedule. The report language is expected to be finalized by the end of next week, with the full legislative text ready by June 23. The plan includes holding a “vote-a-rama”—a marathon session of amendment votes—leading to passage before the July 4 recess. However, Sen. Mike Rounds (R-SD) warned that the timetable hinges on how quickly the Congressional Budget Office (CBO) can provide cost estimates, a process complicated by the volume and complexity of provisions requiring “Byrd bath” reconciliation compliance reviews.

Meanwhile, on June 11, House Republicans approved a procedural measure (H. Res. 492) to preserve the viability of their sweeping reconciliation package (H.R. 1) by stripping out provisions that would have violated Senate Byrd budget rules and ensuring that the bill could proceed to Senate consideration without triggering a procedural filibuster that would have effectively killed the bill given unified Democratic opposition.

Senate GOP Targets Methane Fee, EV Rules, and Climate Grants in Reconciliation Package

The Senate Environment and Public Works Committee released its section of the budget reconciliation package, which largely mirrors the House’s version (H.R. 1) by targeting key clean energy and emissions programs established under the 2022 reconciliation law. The Senate proposal includes a decade-long pause on enforcing the methane emissions tax and rescinds all unobligated funds related to the tax’s implementation. It also repeals a Biden administration EPA tailpipe emissions rule for light- and medium-duty vehicles, a move Republicans frame as a rejection of a federal mandate to accelerate electric vehicle adoption.

Of the 28 sections in the Senate title, 25 relate to full or partial repeal of climate and environmental programs, including rescissions of unobligated funding from the Greenhouse Gas Reduction Fund, climate justice block grants, and clean heavy-duty vehicle programs. Committee Chair Sen. Shelley Moore Capito (R-WV) emphasized the package fulfills Republican pledges to curb perceived regulatory overreach from the Inflation Reduction Act (IRA), though the panel has not provided a projected deficit impact. The committee has been instructed to remain within a $1 billion deficit increase ceiling under the budget resolution.

Additionally, the Senate package would implement a new opt-in fee for expedited environmental reviews under the National Environmental Policy Act (NEPA), set at 125% of review preparation costs. These reviews would be subject to firm one-year or six-month timelines, depending on the type of assessment, and notably would be shielded from judicial review.

Senate Confirms Fotouhi as EPA Deputy Amid California Emissions Waiver Fight

The Senate confirmed David Fotouhi as deputy administrator of the Environmental Protection Agency (EPA) on June 10 by a 53-41 party-line vote

Several Senate Democrats, led by Sen. Alex Padilla (D-CA), attempted to block the nomination in protest, citing what they described as an abuse of the Congressional Review Act (CRA) and a breach of states’ rights under the Clean Air Act. Padilla (D-CA) has placed a blanket hold on all EPA nominees, including the pending nominations for  Aaron Szabo and Jessica Kramer for assistant administrator roles, and Catherine Hanson for chief financial officer.

Supreme Court Limits NEPA Review’s Scope

On May 29, the U.S. Supreme Court unanimously ruled to narrow the scope of environmental reviews required under the National Environmental Policy Act (NEPA), marking a significant win for developers and energy advocates. The ruling reversed a decision from the D.C. Circuit Court and sided with the U.S. Surface Transportation Board in a case concerning the approval of the 88-mile Uinta Basin Railway in Utah. Writing for the majority, Justice Brett M. Kavanaugh emphasized that courts must afford substantial deference to agency decisions under NEPA and held that agencies are not obligated to assess the environmental impacts of projects that are separate in time or location from the project under review.

The Court reaffirmed that NEPA is fundamentally a procedural statute, and its role is limited to ensuring that agencies adequately address the environmental effects of the specific project in question. It rejected the argument that the Surface Transportation Board had to consider the indirect or cumulative effects of other potential projects in its environmental impact statement. This clarification limits the ability of courts to expand NEPA’s reach and reasserts agency discretion in determining the appropriate scope of environmental reviews.

Industry groups, including the U.S. Chamber of Commerce and the American Petroleum Institute (API), praised the ruling as a needed check on what they describe as the misuse of NEPA to stall energy and infrastructure development. They characterized the decision as a victory for permitting reform and an opportunity to accelerate essential projects while maintaining basic procedural safeguards. Marty Durbin of the Chamber called NEPA’s current application a “national embarrassment,” and API leadership framed the ruling as a step toward modernizing U.S. infrastructure policy.

EPA Issues Interim Final Rule to Delay Biden Methane Standards

The EPA has shifted course and is now advancing an interim final rule to immediately delay compliance deadlines under the Biden-era methane regulations for oil and gas operations. While the Office of Management and Budget (OMB) originally received a “proposed” rule on June 4, that notice was quickly replaced on June 5 with a new designation indicating review of an “interim final rule.” This procedural change enables the EPA to delay deadlines without waiting for the traditional public comment process to conclude, although a post-issuance comment period will still occur.

The move aligns with the Trump administration’s broader strategy of rapidly rolling back rules from the prior administration using expedited procedures. Industry observers believe this action sets the stage for broader revisions to the methane standards, especially as the EPA reviews whether to alter underlying emissions guidelines. Interim final rules are typically more difficult to challenge in court until they are finalized.

EPA plans multi-year delay and overhaul of CWA chemical spill rule

The EPA is planning to delay implementation of the Biden-era Clean Water Act (CWA) “worst case” hazardous substance spill rule by up to five years while it broadly reconsiders the regulation. The delay, which could be issued as an interim final rule (IFR), would pause the current June 1, 2027, compliance deadline and potentially be followed or accompanied by an Advance Notice of Proposed Rulemaking (ANPRM) to revise or rescind the rule.  The Trump administration has cited the rule under an executive order directing agencies to target potentially “unlawful” regulations. Originally required by the 1990 CWA amendments but delayed for decades, the rule mandates facility response plans for sites with large quantities of hazardous substances near navigable waters that could pose environmental risks.  In addition to the delay, EPA’s forthcoming ANPRM is expected to propose significant changes, including changes to its spill rule thresholds, climate terms, and compliance scope