U.S. Chemical Industry Receives Multiple Regulatory Reliefs

The Trump administration in the United States has been in power for over seven months, during which time the U.S. chemical industry has at times benefited from favorable policies and at other times been hindered by regulatory burdens. Recently, the U.S. government introduced a series of measures that have eased multiple regulations affecting the chemical industry.

Eric Byler, president and CEO of the National Association of Chemical Distributors, pointed out that the federal government is now focused on eliminating redundant or unnecessary regulations, with several key agencies responsible for chemical oversight actively participating in this effort, including the Department of Transportation (DoT), the Occupational Safety and Health Administration (OSHA), the Department of Homeland Security (DHS), and the Environmental Protection Agency (EPA).

The U.S. Environmental Protection Agency has initiated a comprehensive review of regulations directly impacting the chemical industry. For example, factories relying on ethylene oxide to sterilize medical devices no longer need to comply with the Ethylene Oxide National Emission Standards for Hazardous Air Pollutants (NESHAP). The EPA has also granted exemptions from the National Emission Standards for Hazardous Air Pollutants for Hazardous Organic NESHAP (HON) to several chemical plants, most of which produce commodity plastics and petrochemical products.

According to the American Chemistry Council (ACC), the House Appropriations Committee recently included a provision in an appropriations bill that prohibits funding for the EPA's Integrated Risk Information System (IRIS). The ACC argues that the IRIS program has led to overly stringent regulation of chemicals such as formaldehyde, ethylene oxide, hexavalent chromium, and inorganic arsenic. A bill has been introduced in Congress proposing to permanently ban the use of IRIS assessments in federal rulemaking.

Taking advantage of the U.S. regulatory streamlining efforts, the ACC is also pushing for reforms to certain provisions within the U.S. chemical safety regulatory system—provisions that have repeatedly caused the EPA to miss statutory deadlines for approving new commercial chemicals and have made the review process for existing chemicals increasingly cumbersome. This regulatory framework is the Toxic Substances Control Act (TSCA). Regarding new chemicals, the ACC is calling for the repeal of the New Chemicals Framework Rule, arguing it fails to address any issues causing the EPA to consistently miss its 90-day review deadlines. For existing chemicals, the ACC points out that the Risk Evaluation Framework Rule contains unreasonable assumptions, such as assuming workers do not properly use personal protective equipment (PPE) when handling chemicals.

Byler noted that if the House considers a new tax bill in the fall, the chemical industry may gain another benefit: the potential repeal of the "Superfund tax." This tax applies to numerous basic chemicals and their derivatives, and the chemical industry has long advocated for its elimination.

Additionally, there are signs that the U.S. may revive the national chemical facility anti-terrorism program, known as the Chemical Facility Anti-Terrorism Standards (CFATS). The program expired two years ago, leaving the chemical industry without national-level anti-terrorism safeguards amid rising geopolitical risks. Representative Andrew Garbarino, a Republican from New York, was recently selected as the new chair of the House Homeland Security Committee. This new leadership could create opportunities to reconsider and restart the CFATS program.

However, during periods of intense policy change, benefits can come alongside setbacks. Currently, a U.S. appeals court recently suspended the country’s reciprocal switching program and remanded it back to the Surface Transportation Board (STB), the primary railroad regulator, for further review.

The chemical industry has long supported reciprocal switching, viewing it as a way to enhance competition among rail carriers and improve service. Reciprocal switching allows one railroad operator to handle a customer’s freight on behalf of another carrier. In mid-2024, the STB finalized a rule making it easier for companies to request reciprocal switching when rail service is proven inadequate. However, this new rule has faced challenges from railroad companies.