- Bureau of Land Management;
- US Fish and Wildlife Service (FWS);
- Bureau of Ocean Energy Management;
- Bureau of Safety and Environmental Enforcement;
- Office of Surface Mining Reclamation and Enforcement.
2. To what extent do regulators enforce environmental requirements?
Regulators typically have broad discretion in deciding whether to enforce environmental laws. Most federal and state environmental laws include enforcement provisions that authorise regulators to pursue administrative, civil and/or criminal enforcement actions, or otherwise issue orders to compel compliance with environmental laws.
Many federal environmental laws also allow for ''citizen suits," where private parties can initiate an enforcement action against alleged violators of environmental laws.
The EPA and the DOJ collaborate on enforcing federal environmental laws. In March 2020, the EPA issued a temporary policy regarding enforcement of environmental regulatory obligations during the 2019 novel coronavirus disease (COVID-19) pandemic. Under this policy, the EPA has exercised enforcement discretion for certain cases of non-compliance resulting from the pandemic.
3. To what extent are environmental non-governmental organisations (NGOs) and other pressure groups active?
Environmental NGOs play an active role in the development of environmental policy and regulation through public advocacy, research, lobbying, grassroots and shareholder activism activities.
Further, Environmental NGOs, many with a stated mission to advance environmental protection and justice, pursue citizen enforcement of environmental laws and challenges to federal, state and local environmental regulatory decisions.
4. Is there a permitting regime for polluting emissions to land, air and water? Can companies apply for a single environmental permit for all activities on a site or do they have to apply for separate permits?
Integrated/separate permitting regime
There are no integrated permitting regimes in the US. Permitting authorities take a single-medium approach, under which separate permits are issued to address potential impacts to or by distinct environmental media (for example, air, water, waste, wetlands and natural resources). Some media-specific permits, however, consolidate requirements under different state and federal regulatory programmes into one permit, such as Title V operating permits under the CAA (see Question 8, Air pollution).
Regulated entities must apply for separate permits to conduct activities impacting distinct environmental media.
5. What is the framework for the environmental permitting regime?
Permits and regulator
Environmental permits are issued by federal, state, and local regulators. Federal environmental permits are largely overseen by the EPA. The EPA can work, however, in concert with state regulatory authorities to manage environmental permitting regimes.
Length of permit
The duration of environmental permits varies depending on the regulatory regime and can be subject to modifications, renewals and terminations. For example, National Pollutant Discharge Elimination System (NPDES) Permits under the Clean Water Act and Title V Operating Permits under the CAA have five year terms that can be renewed. Hazardous waste permits under the RCRA have terms up to ten years that can be renewed.
Restrictions on transfer
Transferring an environmental permit typically requires that notice be provided to the applicable regulator. In some cases regulatory approval of the transfer may be required.
Violations of environmental permits can result in civil or criminal penalties. Civil penalties can result in monetary penalties or equitable relief in the form of remedial or corrective actions. Criminal penalties can result in monetary fines or imprisonment.
Water pollution and abstraction
6. What is the regulatory regime for water pollution (whether part of an integrated regime or separate)?
Permits and regulator
The CWA is the main federal law regulating water pollution and water quality. Under the CWA:
- The EPA regulates discharges of pollutants to navigable waters of the US from "point sources" (that is, discernible, confined and discrete conveyances, such as pipes), including industrial and storm water discharges, sanitary sewer overflows and other discharges.
- With certain exceptions, point source discharges must be covered under a National Pollutant Discharge Elimination System (NPDES) permit, which incorporates industry-specific effluent limitations and other regulatory requirements. The EPA has delegated NPDES permitting and enforcement authority to a majority of states.
- States (or the EPA) must establish and implement water quality standards for various contaminants. States can also, but are not required to, establish permitting programmes governing non-point source surface water pollution.
- The Army Corps (or authorised states) can issue "Section 404" permits authorising discharges of dredged or fill material into jurisdictional waters.
Historically, states have regulated groundwater. The US Supreme Court ruled in 2020, however, that discharges of pollutants that are conveyed through groundwater to navigable waters of the US can be regulated under the CWA.
Under the SDWA, the EPA sets national standards and requirements for public drinking water systems. the EPA identifies contaminants that may be harmful to human health and establishes maximum permissible contaminant levels in public water supplies. The SDWA also protects underground drinking water sources by establishing permitting requirements for various classes of underground injection wells. the EPA can delegate primary enforcement responsibility for both of these programmes to the states.
The CWA prohibits discharging pollutants through a point source into a water of the US without, or in violation of the terms of, a NPDES or Section 404 permit. US laws also prohibit discharging oil or hazardous substances in a harmful quantity, and dumping material into ocean waters without, or in violation of, a permit.
The SDWA prohibits:
- Tampering with public water systems.
- Violating standards for finished drinking water.
- Underground injections without, or in violation of the terms of, an underground injection control permit.
Violations of the CWA can result in injunctive relief, including:
- Cessation of discharges.
- Remediation of contaminated sediments resulting from NPDES violations.
- Removal of illegally discharged dredged or fill material and remediation of affected wetlands.
Fines can be imposed for CWA violations, but monetary damages are not available.
In certain cases, CERCLA and/or RCRA can also provide for the clean-up of contaminated surface and groundwater (see Question 22, Investigation and clean-up).
The CWA and the SDWA both establish civil penalties for violations, which the EPA periodically adjusts for inflation. As of December 2020, civil penalties per violation per day are (subject to caps per violation) between:
- USD19,505 and USD56,460 under the CWA.
- USD10,263 and USD59,017 under the SDWA.
Criminal penalties are:
- Under the CWA:
- a prison term of between one and 15 years (for example, for knowingly endangering a person); and
- fines of between USD2,500 and USD100,000 per day.
- a prison term of between three and 20 years (for example, for tampering with a public drinking water system); and
- fines
Private parties can also file "citizen suits" to enforce the CWA or SDWA, including assessment of penalties.
7. What is the regulatory regime for water abstraction (whether part of an integrated regime or separate)?
Permits and regulator
There is no uniform permitting or regulatory regime governing water abstraction. Instead, states control water rights allocation based generally on two common law water rights doctrines:
- Riparian doctrine: this applies to the majority of states east of Texas and provides that the owner of land adjacent to a body of water has reasonable rights to use the water from that source.
- Prior appropriation doctrine: this applies to the majority of states west of Texas and provides that the first person to use a body of water for beneficial use is entitled to an allocation for the use of that water.
A hybrid of these two doctrines is applied to surface water in California and Oklahoma.
Similarly, groundwater abstraction schemes follow a variety of common law water rights doctrines, including the doctrines of:
- Absolute ownership.
- Reasonable use.
- Correlative use.
- Prior appropriation.
- Beneficial purpose doctrines.
The US water abstraction framework is rooted in principles of property rights rather than regulatory prohibitions. Regulatory authorities can, however, prohibit or restrict abstraction of surface or groundwater from specified locations (such as for critical habitat or resource conservation). Depending on the jurisdiction, regulators can also require issuance of a licence to withdraw surface or groundwater.
Compensation is generally based on damages arising from infringement of individual property rights.
There is no uniform penalty framework related to water abstraction.
8. What is the regulatory regime for air pollution (whether part of an integrated regime or separate)?
Permits and regulator
The CAA is the main federal law regulating air pollution. Under the CAA, the EPA:
- Issues and periodically reviews minimum national ambient air quality standards (NAAQS) for six "criteria pollutants" known to be harmful to human health:
- sulphur dioxide;
- carbon monoxide;
- particulate matter;
- nitrogen dioxide;
- ground-level ozone and lead.
- Issues New Source Performance Standards (NSPS) for newly constructed, modified and reconstructed stationary sources of air emissions. Certain large industrial facilities must also implement air pollution controls when constructing new facilities or modifying or reconstructing existing facilities in accordance with the New Source Review (NSR) and the Prevention of Significant Deterioration (PSD) permitting regimes. State or local regulators with delegated permitting authority can issue PSD and NSR permits.
- Regulates mobile sources of air pollution (such as motor vehicle engines, farm and construction machines) and fuels. Motor vehicle engines must be certified by the EPA and include emission control technologies to comply with the NAAQS.
- Issues National Emissions Standards for Hazardous Air Pollutants (NESHAPs) to address emissions of hazardous air pollutants.
- Issues emission standards, requirements and restrictions applicable to other categories of air pollutants, including pollutants that cause acid rain and ozone depleting substances.
The California Air Resources Board (CARB) is the only state-run agency permitted to issue emissions standards under the CAA. States can implement the air quality standards proposed by either EPA or CARB. Otherwise, states are primarily responsible for ensuring that regulated stationary sources comply with most CAA requirements. States can also impose more stringent air pollution control requirements unless pre-empted by certain federal CAA programmes.
The CAA requires major stationary sources of air pollutants and a limited number of smaller sources (for example, solid waste incineration units and certain non-major sources that are subject to NESHAPs) to obtain ''Title V'' operating permits. States or local regulators usually issue Title V permits, but the EPA can issue them in limited circumstances. Title V permits must contain all applicable CAA requirements that apply to an emissions source (for example, NSPS, PSD and NSR requirements).
The CAA prohibits various activities, including:
- Constructing or operating a major source of air emissions without the necessary permits or in violation of such permits.
- Violating NESHAPs.
- The manufacture, sale or installation of defeat devices (that is, any mechanism that circumvents an emission control device on an engine).
- Tampering with an emission control device on a motor vehicle.
Federal environmental statutes do not provide private causes of action for clean-up or compensation relating to air emissions. Most courts have rejected attempts by citizen groups to use federal environmental statutes for this purpose. If air emissions create a nuisance, however, affected entities can seek compensation under state tort laws. Additionally, private parties can use the "citizen suit" provisions of the CAA to compel compliance with CAA emission standards or limitations.
The EPA and state regulatory agencies have authority to compel emissions sources to comply with applicable emissions and air quality standards. The EPA designates areas or regions that do not meet the NAAQS with respect to any criteria air pollutant as "non-attainment regions", in which more stringent air emissions requirements can be imposed to emissions sources until compliance with the NAAQS is achieved.
The CAA establishes civil penalties for violations, which the EPA periodically adjusts for inflation.
As of December 2020:
- Civil penalties are between USD9,753 and USD102,638 per violation per day, subject to caps per violation.
- Criminal penalties are:
- a prison term of between one and 15 years (for example, for knowingly or negligently endangering a person); and
- fines of between USD2,500 and 100,000 per day.
Private parties can also file "citizen suits" to enforce the CAA, including assessment of penalties.
9. Is your jurisdiction party to the United Nations Framework Convention on Climate Change (UNFCCC), the Kyoto Protocol and/or the Paris Agreement? How are the requirements under those international agreements implemented or being implemented?
The US is a party to the UNFCCC and the Paris Agreement, but is not a party to the Kyoto Protocol.
As an Annex I country under the UNFCCC, the US provides financial and technical assistance to support technology transfer, capacity building and climate mitigation and adaption in developing countries through bilateral and multilateral programmes. Additionally, in 2014, the US announced a voluntary Nationally-Determined Contribution (NDC) to reduce GHG emissions by 26% to 28% below 2005 levels by 2025.
The US withdrew from the Paris Agreement in November 2020, but rejoined in February 2021. The Biden Administration has announced a number of initiatives to implement and build upon the Paris Agreement's objectives, including developing the country's NDC, pursuing green recovery efforts, creating a new Special Presidential Envoy for Climate position, developing a climate finance plan to assist developing countries with climate change initiatives, and prioritising climate in US foreign policy and national security.
10. Are there any national targets or legal requirements for reducing greenhouse gas (GHG) emissions? How far are the targets aligned with the 1.5 degree target in the Paris Agreement, if at all?
Has a climate emergency been declared? Is there a national strategy on climate change?
The Biden Administration seeks to put the US on a path to achieve a carbon pollution-free electricity sector by 2035 and net-zero emissions, economy-wide, by 2050. The Administration has alsocommitted to align the US with the Paris Agreement's emissions reduction objectives.
Many US companies have voluntarily set their own targets for reducing GHG emissions, including by committing to sourcing 100% renewable energy, committing to achieving net zero carbon emissions across their businesses, and setting emissions reduction targets in line with the Paris Agreement.
President Biden's January 2021 Executive Order on "Tackling the Climate Crisis at Home and Abroad" ("Climate Order") outlines a decisive national strategy on climate change, including:
- Making climate policy central to US foreign policy and national security decisions;
- Establishing a National Climate Task Force;
- Orienting federal procurement practices towards carbon-free electricity, zero-emission vehicles and stimulation of clean energy industries; and
- Addressing disproportionate climate impacts on disadvantaged communities.
On the regulatory level, the EPA has issued nationwide regulations restricting GHG emissions from the energy sector, including CO2 emissions from electric utility generating units under the Clean
Power Plan (2015) and methane emissions from natural gas operations (2016). Both sets of regulations were ultimately replaced or rolled back by EPA.
In January 2021, EPA's replacement rule for the Clean Power Plan, the Affordable Clean Energy Rule (2019), was vacated and remanded to the EPA by a federal court, leaving the EPA to reassess the national approach to regulating GHG emissions in the power sector. It appears likely, however, that the EPA will resume use of its regulatory authorities to reduce GHGs across various sectors.
The EPA and other federal agencies will also continue to offer climate change research grants and financial and technical resources to support local climate adaptation programmes.
As of March 2021, over 130 localities across the US (including Chicago, New York City and San Francisco) have declared climate emergencies. While certain members of Congress have pushed for a climate emergency declaration, the US has not yet declared a national climate emergency.
11. Do any emissions/carbon trading schemes operate?
There is no national-level emissions/carbon trading scheme. However, two state-level carbon trading schemes currently operate in the US:
- Regional Greenhouse Gas Initiative (RGGI). Eleven north eastern and mid-Atlantic states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, Vermont and Virginia) participate in a regional CO2 cap-and-trade system for fossil fuel-fed power plants with a capacity of 25 MWs or more. Launched in 2009, RGGI establishes a regional cap on the amount of CO2 that power plants can emit by issuing a limited number of tradable CO2 allowances. Power plants can comply with the cap by purchasing allowances from quarterly auctions, from other generators within the region, or from offset projects.
- California's AB-32 Cap-and-Trade Programme. In 2013, California launched the first economy-wide emissions trading platform in the US, covering large electric power plants, large industrial plants and fuel distributors. Covered emitters must hold enough allowances to cover their emissions, and can buy and sell allowances on the open market. The programme's GHG cap declined by 3% annually from 2015 to 2020 and is designed to decrease an additional 5% from 2021 to 2030.
12. Are there any national targets or legal requirements for increasing the use of renewable energy (such as wind or solar power)? Is there a national strategy on renewable energy?
Renewable Portfolio Standard (RPS) policies have been considered by Congress but have yet to be signed into law. Such policies would require utility companies to source a certain amount of the energy they generate or sell from renewable sources.
More than half of all US states have a RPS in place. State RPS policies vary widely on several elements, including RPS targets, covered entities, the resources eligible to meet requirements and cost caps. Certain states have implemented aggressive changes to their RPS targets in the last several years, including California, New York, New Jersey, Maryland and Massachusetts.
President Biden's Climate Order emphasises a national strategy on renewable energy, with targets including increasing renewable energy production on public lands and waters, and prioritising federal funding for innovation, commercialisation, and deployment of clean energy technologies and infrastructure.
13. Do any renewables support schemes operate?
Federal agencies supporting renewable energy development and use are the:
- Department of Energy (DOE), which assists state and federal agencies with developing and implementing renewable energy programmes, and operates renewable energy funding and incentive programmes, including RD&D grants and cooperative agreements, production incentives, loan guarantees, and technology transfers.
- Department of Agriculture, which supports development of biofuels, such as ethanol and wood energy.
- Department of the Treasury, which administers tax credits and other incentives for renewable energy production and investments in renewable energy.
- Small Business Administration, which offers loan programmes for facility upgrades and renewable energy projects.
Congress also periodically authorises funding to support renewable energy. For example, the COVID-19 Economic Relief Bill passed in December 2020 contained about USD35 billion in funding for renewable energy RD&D.
14. Are there any national targets for increasing energy efficiency (for example, in buildings and appliances) or legal requirements for achieving energy efficiency standards? Is there a national strategy on energy efficiency?
Two DOE programmes set standards for energy efficiency in the public and private sector:
- DOE's Appliance and Equipment Standards Program sets minimum energy efficiency standards for about 60 categories of appliances. States can choose to enforce standards that are more demanding than federal standards by requesting a waiver from DOE. Along with the District of Columbia, 15 states currently enforce efficiency standards for appliances and equipment not yet covered by federal mandates.
- DOE's Federal Energy Management Program (FEMP) sets energy efficiency standards for federal buildings. DOE also supports the development and adoption of energy codes at the state and local levels. State and local governments can choose to adopt national model energy codes or develop their own energy codes.
The Biden Administration has promoted a broader national strategy on energy efficiency, including with respect to household appliances, equipment and buildings. The President's Climate Order directs agencies to review a number of actions taken during the previous administration related to energy efficiency, including changing the process that DOE uses to set national energy-saving standards.
15. Do any mandatory or voluntary labelling schemes exist to identify energy efficient goods or buildings?
The Federal Trade Commission has issued guidelines that require manufacturers of major home appliances to place energy labels on their products indicating energy consumption.
While about a 35 US cities and states have mandated energy disclosure and benchmarking for large commercial and multifamily buildings, mandatory disclosure is less common in the residential single-family sector. In 2012, DOE released the Home Energy Score to provide a standard assessment of energy-related assets to compare energy use across the housing market and to encourage home energy upgrades. DOE updated the Home Energy score in 2014.
In 1992, the EPA established the Energy Star Program, a voluntary labelling scheme jointly administered with DOE. The programme label products, homes, commercial buildings, and industrial plants as more energy-efficient than others in the marketplace. For example, energy-efficient light bulbs certified by Energy Star use up to 90% less energy than standard bulbs. Homes, commercial buildings, and industrial plants also earn Energy Star certifications based on an energy performance rating by EPA.
US-based non-profit organisations also offer voluntary energy efficiency labels:
- Green Seal has implemented a voluntary ecolabel since 1992, the Green Seal of Approval, which endorses energy efficient appliances.
- The US Green Building Council has developed Leadership in Energy and Environmental Design (LEED), a global green building certification programme that includes a set of rating systems for the design, construction, operation, and maintenance of green buildings, homes, and neighbourhoods.
16. Do any energy efficiency support schemes operate?
A number of federal agencies support energy efficiency initiatives:
- DOE supports the development and implementation of building energy codes and operates energy efficiency funding and incentive programmes, including RD&D grants and cooperative agreements and weatherisation assistance.
- The Department of the Treasury provides tax credits and other incentives for energy efficiency, including energy efficient home improvements and business investments in energy efficiency.
- The Department of the Interior supports energy efficiency projects on tribal lands.
- The Department of Housing and Urban Development provides energy efficient mortgages and loan programmes.
- The Small Business Administration offers loan programmes for facility upgrades and energy efficiency projects.
- The Federal National Mortgage Association (Fannie Mae) has a "Green Financing" loan programme that supports energy efficiency projects.
- The Department of Agriculture provides loans to promote energy efficiency for agricultural producers and rural businesses.
- The Department of Veterans Affairs provides energy efficient mortgages.
Environmental impact assessments
17. Are there any requirements to carry out environmental impact assessments (EIAs) for certain types of projects?
The National Environmental Policy Act (NEPA) requires federal agencies to evaluate the environmental impacts of proposed "major federal actions", including any adverse environmental impacts and alternative actions. Such actions include certain permitting decisions, federal land management actions and public infrastructure projects.
The degree of NEPA analysis varies depending on the anticipated environmental impacts of the proposed action:
- A federal action can be categorically excluded from a detailed environmental analysis when the action normally does not have a significant effect on the human environment.
- An Environmental Assessment (EA) may be prepared to determine whether or not a federal action has the potential to cause significant environmental impacts. If the EA determines that the no significant environmental impacts will occur, the agency will issue a Finding of No Significant Impact (FONSI) to document its conclusion.
- An Environmental Impact Statement (EIS) is required if a proposed federal action could have a significant impact on the environment. An EIS is typically a larger document that can require a significant amount of time and cost to complete (although, in practice, EAs can also be lengthy, time-consuming and costly to prepare).
An EIS and an EA must analyse the direct, indirect and cumulative impacts of a proposed action across a broad range of environmental resources, including air, water, wildlife, cultural resources, recreation, noise, and visibility, among others.
Some states, such as California, have enacted laws similar to NEPA that apply to actions requiring state or local governmental permits, approvals, or funding.
Permits and regulator
Permits are not required to complete a NEPA review.
Depending on the complexity of a proposed federal action, more than one governmental agency may be required to participate in the NEPA process, with one agency serving as the "lead" agency.
Habitats and biodiversity
18. What requirements and regimes apply for the conservation of nature, habitats and biodiversity that affect development? What assessments or obligations are required before any development begins?
Requirements and regimes
The Endangered Species Act (ESA) provides protection to species of flora or fauna designated by the FWS as endangered or threatened, as well as habitat areas for such species deemed to be "critical".
The ESA prohibits the unlawful "taking" of endangered or threatened species, including harassing, harming, pursuing, hunting, shooting, wounding, killing, trapping, capturing, or collecting such species. Development or other activities that would result in an unlawful taking may be authorised with an Incidental Take Permit.
Federal agencies are required to consult with the FWS about proposed actions that may affect endangered or threatened species or critical habitat to ensure neither are adversely impacted. Critical habitat designations do not impose consultation obligations on private parties so long as their activities do not have a federal nexus.
In addition to the ESA, the Antiquities Act and Wilderness Act enable the federal government to restrict commercial uses or development on designated lands.
Prior assessments and obligations
Development activities that may adversely affect a listed endangered or threatened species may require an Incidental Take Permit before development begins. Applications for an Incidental Take Permit require the development of a Habitat Conservation Plan, which details how the impacted habitat will be maintained, enhanced or protected.
Issuance of an Incidental Take Permit is considered a major federal action, and therefore NEPA requirements apply.
Waste and the circular economy
19. What is the regulatory regime for waste?
Permits and regulator
The RCRA establishes a national regulatory framework for the management of hazardous and non-hazardous solid wastes, including solids, liquids and gases.
The RCRA grants the EPA the authority to regulate hazardous waste from the point of generation to its ultimate disposition. Hazardous wastes are either specifically listed by the EPA or the states, or exhibit one of four characteristics:
- Ignitability.
- Reactivity.
- Corrosivity.
- Toxicity.
The EPA has granted most states authority to regulate hazardous waste, but retains oversight responsibility. RCRA regulations set criteria for hazardous waste generators, transporters, and treatment, storage and disposal facilities (TSDFs).
States play the lead role in implementing non-hazardous waste programmes under the RCRA, including permitting to ensure compliance with EPA regulations.
Generators of hazardous waste above specified thresholds must obtain a generator identification number from the EPA. The RCRA also requires a permit for the treatment, storage, and disposal of hazardous waste, although some exemptions may apply.
The RCRA prohibits the disposal of hazardous wastes that do not meet applicable waste treatment standards as well as the land disposal of untreated hazardous waste, the indefinite storage of hazardous waste in lieu of treatment and the dilution of hazardous waste to avoid meeting an applicable treatment standard.
The EPA has developed minimum national technical standards for the management and disposition of solid wastes.
Generators of hazardous waste must:
- Classify and identify their waste.
- Comply with requirements for on-site accumulation and temporary storage of wastes.
- Prepare wastes for transportation off-site to a permitted TSDF in compliance with applicable transportation regulations, and prepare waste manifests for tracking shipments.
- Comply with reporting and recordkeeping obligations.
TSDFs must comply with:
- General facility standards.
- Preparedness and prevention standards.
- Contingency plans and emergency procedures.
- Manifest system, recording and recordkeeping requirements.
- Closure and post-closure requirements, including posting financial assurance.
Municipal solid waste landfills must comply with:
- Operating and design standards, including with respect to composite liners.
- Leachate collection and removal system requirements.
- Groundwater monitoring requirements.
- Safety measures, including with respect to disease control and burning of wastes.
- Closure and post-closure care requirements, including posting financial assurance.
Special rules for certain waste
The EPA has developed alternative management standards for various wastes, including:
- Universal wastes (such as batteries, lightbulbs, aerosol cans and many electronic devices).
- Household hazardous wastes.
- Used oil.
- Mixed radiological wastes.
- Polychlorinated biphenyls.
- Other targeted waste streams (such as pharmaceutical, laboratory and other "special" wastes)
With respect to universal wastes, in particular, some state programmes track EPA's alternative management standards, while others address additional or fewer wastes by comparison. If a state does not specifically deem a waste that meets the definition of hazardous waste as a universal waste, it must be managed as a hazardous waste.
Violations of RCRA trigger potential administrative, civil, and criminal penalties.
As of December 2020, civil penalties range from USD14,910 to USD76,764 per day, per violation.
The RCRA's criminal penalties include, among others, up to five years imprisonment and/or up to USD50,000 per day for knowingly treating, storing or disposing of a hazardous waste without a permit. In most cases, criminal penalties can double for subsequent violations.
Authorised states generally take the lead in enforcing hazardous waste regulations, but the EPA retains enforcement authority.
National strategy, targets and producer responsibilities
20. Is there a national strategy to tackle particular types of waste (such as plastics waste or marine litter)? What waste targets exist? What producer responsibility schemes exist?
In 2020, EPA released the US Federal Strategy for Addressing the Global Issue of Marine Litter (Marine Litter Strategy) and set a National Recycling Goal.
The Marine Litter Strategy does not contain targets, but establishes objectives for addressing marine litter, including:
- Building capacity for better waste and litter management systems.
- Incentivising the global recycling market in partnership with the private sector.
- Promoting R&D for innovative solutions and technology.
- Promoting marine litter removal.
The National Recycling Goal is to increase the national recycling rate to 50% by 2030 by reducing contamination in recycling, making the recycling processing system more efficient and strengthening the economic markets for recycled materials.
Producer responsibility schemes
There are no formal producer responsibility schemes.
21. What is the regulatory regime for asbestos?
The regulatory regime for asbestos is comprised of various laws and regulations that focus on mitigating the risk of asbestos exposure through:
- Risk management and response (EPA's Asbestos-Containing Materials in Schools Rule).
- Management of products containing asbestos (Asbestos Information Act and EPA's Restrictions on Discontinued Uses of Asbestos Rule).
- Asbestos abatement (Asbestos School Hazard Abatement Reauthorization Act).
- Worker protection programmes (Occupational Safety and Health Administration's (OSHA's) Asbestos Worker Protection Rule).
- Regulation of asbestos emissions to air (CAA).
- Clean-up of asbestos contamination (CERCLA).
- Protection of drinking water quality (SDWA).
Prohibitions vary according to statute or regulations, but generally seek to protect against human exposure to asbestos in building materials and consumer and industrial products.
Obligations vary across the federal, state, and local levels, but key obligations related to asbestos include:
- Notification requirements to regulators prior to the demolition or renovation of buildings containing certain amounts of asbestos or asbestos-containing material.
- Performance of certain work practices to minimise the release of asbestos during the demolition or renovation of buildings.
- Appropriate management and disposal of waste asbestos and asbestos-containing materials.
- Reporting to the EPA the use of asbestos in products that are not otherwise banned from the US marketplace.
Permits and regulator
Asbestos-related permits or authorisations are not administered on the federal level. The EPA is the principal federal agency enforcing asbestos laws and regulations. The OSHA, the Consumer Product Safety Commission and the Mine Safety and Health Administration all also administer federal regulations related to asbestos.
Violations of laws and regulations related to asbestos can result in substantial civil or criminal penalties, which vary by statutory and regulatory scheme. For example, civil penalties under the CAA may apply (see Question 8, Air Pollution), and criminal penalties for asbestos violations under the CAA may result in a prison term of up to five years.
22. What is the regulatory regime for contaminated land?
Regulator and legislation
CERCLA (see Question 1), also known as "Superfund," establishes a framework for the investigation and clean-up of sites contaminated with hazardous substances. CERCLA can impose strict, joint and several, retroactive liability on several categories of Potentially Responsible Parties (PRPs) for releases of hazardous substances. The EPA administers CERCLA, with state environmental agencies playing an active role in Superfund site identification, monitoring, and response activities. Many states have enacted similar laws to address remediation of contaminated sites.
Investigation and clean-up
The EPA has broad authority to require the investigation and clean-up of contaminated sites, including:
- Undertaking investigative activities itself and seeking reimbursement from PRPs.
- Requiring private parties to conduct investigative activities under governmental oversight.
An investigation typically also evaluates the feasibility and effectiveness of various options to remediate the site. Once investigation is complete, a remediation action plan can be developed, and remediation continues until completed in accordance with the plan.
The EPA and states can conduct remediation themselves and seek reimbursement from PRPs; however, EPA often issues administrative orders or enters into settlement agreements with PRPs who then undertake investigation and remediation under federal oversight.
PRPs are subject to penalties if they fail to comply with a settlement agreement or an EPA administrative order, or otherwise violate CERCLA requirements. The EPA recently raised the maximum civil penalty to USD58,328. Additionally, CERCLA contains criminal penalties for knowingly failing to notify the appropriate agency of a release of a hazardous substance into the environment above reportable quantity thresholds, including up to three years' imprisonment (or five years for second or subsequent convictions).
23. Who is liable for the clean-up of contaminated land? Can liability be excluded in transactions?
CERCLA establishes four categories of PRPs, which can include private parties and governmental entities:
- Current owners and operators of a facility.
- Past owners and operators of a facility at the time hazardous substances were disposed of.
- Generators and parties that arranged for the disposal or transport of the hazardous substances.
- Transporters of hazardous substances to a disposal site.
A PRP may be liable for:
- Government and/or private party clean-up costs.
- Damages to natural resources.
- The costs of certain health assessments.
- Performing a response or removal action where a site may present an imminent and substantial endangerment.
CERCLA liability is:
- Retroactive and thus applicable to contamination caused before the statute's enactment in 1980.
- Strict, without consideration of fault in creating the contamination.
- Joint-and-several, such that a single party can be held liable for the entire clean-up (though liability is often apportioned between identified PRPs).
A current owner of a site can be liable for investigation and clean-up of contamination on their land even if they did not cause the contamination. A current operator (for example a lessee) can also be subject to CERCLA liability, though in practice the owner of the site is typically responsible for contamination that predates the lease term.
Previous owner/occupier liability
A previous owner of a site can be liable for contamination that occurred during their ownership even if they did not cause the contamination. A prior site operator can also be liable if they had control over the activities that led to the release of hazardous substances.
Limitation of liability
CERCLA provides several liability defences, protections and exemptions, including:
- Defences for releases caused by acts of God, acts of war, or by acts/omissions of a third party with whom a PRP has no contractual relationship.
- Protections for certain landowners, including bona fide prospective purchasers, innocent landowners or contiguous property owners.
- Protections for state and local governments undertaking an emergency response to the release of a hazardous substance, as well as clean-up contractors.
- Exemptions for certain residential, small business and non-profit generators of municipal solid waste and parties who arrange for the recycling of certain substances.
Voluntary clean-up programme
EPA has also worked with states to establish voluntary clean-up programmes, which can include offering financial assistance, loans and/or tax credits to encourage voluntary clean-up by private parties. States have also enacted liability protections to further incentivise voluntary action.
Federal and state programmes also aim to drive the remediation and re-use of brownfield sites (properties where expansion, redevelopment or reuse may be complicated by the presence of contamination). For example, EPA provides grants and technical assistance to various stakeholders to assess, clean up and reuse brownfield sites, and also extends liability protections under CERCLA to certain classes of prospective purchasers.
24. Can a lender incur liability for contaminated land and is it common for a lender to incur liability? What steps do lenders commonly take to minimise liability?
Lenders with a security interest in a CERCLA facility are exempt from CERCLA liability if they did not ''participate in the management" of the facility while the borrower was still in possession of the facility. Lenders can be deemed to have participated in such management if they exercised decision-making or managerial control over environmental compliance related to the facility, thereby assuming responsibility for hazardous substance handling or disposal practices or facility operations.
Under EPA guidance, certain activities do not constitute "participating in the management", including:
- Having the capacity to influence or the right to control facility operations.
- Holding a security interest or abandoning or releasing a security interest.
- Monitoring or inspecting the facility.
- Requiring a response action in connection with a release or threatened release of a hazardous substance.
A lender can foreclose on or take title to contaminated land and still remain exempt from liability after foreclosure as long as it did not participate in management before foreclosure. Following foreclosure, such a lender can undertake a variety of actions at the site without liability so long as it tries to sell or re-lease the property or otherwise divest itself of the property at the earliest practicable, commercially reasonable time, on commercially reasonable terms.
25. Can an individual bring legal action against a polluter, owner or occupier?
Actions can be brought as follows:
- Individuals who suffer harms can bring actions against a polluter, owner, or occupier pursuant to "citizen suit" provisions of many federal and state environmental statutes.
- Responsible parties can seek contribution from other PRPs (see Question 22) under CERCLA.
- Individuals can bring legal actions for damages or injunctive relief for trespass, nuisance or under other common law doctrines.
Environmental liability and asset/share transfers
26. In what circumstances can a buyer inherit pre-acquisition environmental liability in an asset sale/the sale of a company (share sale)?
Under corporate law principles, the general rule is that pre-acquisition environmental liabilities remain with the asset seller. Recognised exceptions to the general rule in certain courts are where the:
- Buyer expressly or impliedly agrees to assume such liabilities.
- Transaction amounts to a de facto merger or consolidation.
- Buyer is a ''mere continuation'' of the seller.
- Transaction was a fraudulent attempt to escape liability.
Under corporate law principles, the general rule is that pre-acquisition environmental liabilities (including environmental liabilities resulting from the entity's former operations or business) remain with the entity acquired, when the entity is acquired through a share purchase, or a merger or consolidation of entities.
27. In what circumstances can a seller retain environmental liability after an asset sale/a share sale?
A seller of assets can be liable for clean-up costs under CERCLA and similar state laws, as well as for other statutory or tort damages, if contamination was caused during the seller's ownership or operation of a property. While it is possible for a buyer to contractually assume a seller's environmental liabilities, the assignment of liability between the parties will typically not relieve the seller of liability to a governmental authority.
Under corporate law principles, a seller typically does not retain liability after a share sale, merger or consolidation, including with respect to environmental matters. Individuals within the selling entity, however, can remain directly liable under CERCLA and state environmental laws if they were personally involved in activities that resulted in contamination.
28. Does a seller have to disclose environmental information to the buyer in an asset sale/a share sale?
There is no federal statutory requirement to disclose environmental information to a buyer in either an asset or share sale. In many transactions, however, it is to the seller's benefit to disclose known environmental liabilities and issues to the buyer (for example, to limit seller's indemnification obligations to buyer), and the parties will negotiate what information will be disclosed.
Some states require disclosure of certain environmental information to buyers or to regulators prior to a sale for permitting purposes. Additionally, Connecticut and New Jersey have property transfer laws that may require the investigation and remediation of contaminated properties in connection with a transfer of certain facilities, forcing disclosure of contamination.
29. Is environmental due diligence common in an asset sale/a share sale?
Environmental due diligence is common in asset and share sales, particularly when involving the transfer of real property or business operations that are environmentally sensitive. Lenders and insurance carriers often require environmental due diligence before issuance of a loan or extending insurance coverage.
Aspects covered by due diligence usually include:
- Contamination at current and former properties.
- Regulatory compliance with environmental, health and safety laws and permits.
- Off-site contamination and waste disposal liabilities.
- Environmental, health and safety litigation risks.
- Product regulatory and stewardship matters.
- Potential future regulations that could impact a business.
Institutional investors are also increasingly requiring complementary diligence on environmental, social and governance (ESG) matters, including with respect to climate-related risks and opportunities, energy and resource efficiency, sustainability and community impacts.
Type of assessment
Depending on the transaction, environmental due diligence can be limited to "desktop" review of publicly available records and seller-provided environmental information, or can involve an on-site physical inspection and evaluation of targeted assets and operations.
In an asset sale involving the transfer of property, a party seeking to establish a landowner defence under CERCLA must conduct ''all appropriate inquiries'' regarding the history, use, and environmental condition of the real property (see Question 23, Limitation of Liability).
The EPA regulations establish requirements for ''all appropriate inquiries" and authorise the use of the ASTM industry standard for Phase I environmental site assessments (ESAs) to comply with these requirements.
Phase I ESAs involve (at least):
- A review of records.
- Site inspection.
- Interviews with persons familiar with the property.
- Issuance of a written report documenting the assessment and identifying any environmental conditions at the site.
Environmental consultants are routinely involved in environmental due diligence and are typically the parties that perform the technical environmental reviews described above. Environmental consultants typically have standard terms and conditions for engagement, including with respect to the scope of services, timing of review, consultant indemnity obligations, liability limits, insurance requirements, confidentiality, and ownership of consultant work product.
30. Are environmental warranties and indemnities usually given and what issues do they usually cover in an asset sale/a share sale? Are there usually time limits or financial caps on environmental warranties and indemnities?
Environmental representations and warranties are commonly given by the seller in an asset purchase agreement and, depending on the transaction, can cover the following issues:
- Compliance with environmental laws and permits;
- Lawsuits or regulatory notices;
- Hazardous activities, on-site and off-site contamination and toxic torts;
- Product-related environmental liabilities;
- Transaction-triggered environmental requirements; and
- Available environmental reports and documents.
Subject to negotiated commercial limitations, asset purchase agreements can include a seller indemnity for breaches of seller's environmental representations and warranties. Asset purchase agreements also typically include an indemnity from each of the seller and buyer with respect to environmental liabilities retained by the seller and assumed by the buyer, respectively.
Environmental representations and warranties are usually provided in share purchase agreements and cover the same representations and warranties as in an asset purchase agreement. Share purchase agreements also often include representations and warranties covering assumed environmental liabilities and indemnities, given that such liabilities may transfer with an acquired entity.
Similar to asset purchase agreements, share purchase agreements often include a seller indemnity for breaches of the environmental representations and warranties, subject to negotiated commercial limitations.
Reporting and auditing
31. Do regulators keep public registers of environmental information? What is the procedure for a third party to search those registers?
Federal and state regulators maintain publicly-available environmental information, including related to:
- Facility permits, violations and penalties or settlements.
- Spills, releases and contamination.
- Environmental restrictions on real property.
- Information that is not readily accessible online may sometimes be available in hard copy, either in person or by written or telephone request.
Third party procedures
Third parties can submit formal requests under the Freedom of Information Act (FOIA) or analogous state laws, which require governmental agencies to disclose documents under their control unless a statutory exemption applies to prevent disclosure.
32. Do companies have to carry out environmental auditing? Do companies have to report information to the regulators about environmental performance?
There is no general requirement for companies to conduct environmental auditing; however, certain environmental permits can impose periodic monitoring requirements. EPA and some states have audit policies with reduced penalties for violations identified through a voluntary audit, disclosed to regulators and remedied within prescribed timeframes.
Environmental permits and regulations often impose periodic reporting requirements. For example, large quantity generators of hazardous waste are subject to biennial reporting requirements, and companies that store certain regulated chemicals on site above specified thresholds may be subject to annual chemical inventory reporting requirements.
33. Do companies have to report information to the regulators and the public about environmental incidents (such as water pollution and soil contamination)?
CERCLA, EPCRA and the CWA require reporting to the National Response Center and state and local emergency officials of certain substances released into the environment above permitted thresholds. Many states have similar release reporting laws and regulations.
34. What powers do environmental regulators have to access a company?
Under many environmental laws, regulators have broad authority to conduct inspections and review environmental records of facilities. Regulators can interview employees or representatives, review records and reports, collect samples, and observe and document conditions and operations.
35. What obligations are there on companies to report on environmental issues in their annual corporate reports?
Publicly-traded companies must report certain environmental issues in their annual reports and financial statements under US securities laws. Disclosure requirements include:
- The "material" effects that compliance with environmental regulations may have upon the capital expenditures, earnings and competitive position of the company and its subsidiaries.
- Material pending legal proceedings, as determined based on potential monetary sanctions or impact on the business or financial condition of the company.
- Known trends or uncertainties that have or might have a material, favourable, or unfavourable impact on net sales or revenues or income from continuing operations.
In 2010, the Securities and Exchange Commission (SEC) issued guidance for publicly traded corporations on disclosure of certain climate change-related business, physical and regulatory risks.
Further, in December 2020, the ESG Subcommittee of SEC's Asset Management Advisory Committee presented draft recommendations for potential new requirements with respect to ESG and climate-related disclosures.
36. What mandatory GHG, carbon reporting or transparency requirements apply to corporates, including as part of their annual corporate reporting requirements? Is reporting in accordance with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations? Do any voluntary GHG reporting schemes exist?
EPA's Greenhouse Gas Reporting Program requires annual reporting and publication of GHG data and other relevant information from large GHG emission sources, fuel and industrial gas suppliers and CO2 injection sites. Certain states, such as California, have similar programmes. Such requirements are not as robust as the reporting in accordance with TCFD recommendations.
Many US-based companies participate in voluntary GHG reporting schemes, including the TCFD and Carbon Disclosure Project (CDP):
- The TCFD was established in 2015 to develop a set of voluntary, consistent disclosure recommendations for use by companies in providing information to investors, lenders and insurance underwriters about their climate-related financial risks. Nearly 60% of the world's 100 largest public companies support the TCFD, report in line with TCFD recommendations, or both.
- CDP is an international non-profit based in the UK, Germany and the US that helps companies and cities disclose their environmental impact. CDP requests annual reports on climate risks and low carbon opportunities, including with Scope 1, 2, and 3 GHG emissions.
37. What corporate governance requirements apply in relation to climate change?
No corporate governance requirements apply in relation to climate change. Many US-based companies are taking voluntary action in relation to climate change, however, such as by setting an emissions reduction target as part of the Science Based Target initiative, committing to sourcing 100% renewable energy as part of the RE100 programme, or joining Amazon's Climate Pledge initiative.
38. What types of insurance cover are available for environmental damage or liability, and what risks are usually covered? How easy is it to obtain environmental insurance and is it common in practice?
Types of insurance and risk
Several types of insurance products cover risks associated with pollution-related liabilities. Common environmental insurance policies include:
- Premises pollution liability policies. These can cover:
- clean-up costs and third party property damage and personal injury claims arising out of new and/or existing pollution conditions;
- pollution losses arising out of the transportation and disposal of hazardous materials.
The underwriting process typically requires applicants to submit concrete data for insurance carriers to evaluate the pollution loss risks associated with a particular property, operation or product, making coverage terms tailored and potentially subject to coverage exclusions. Additionally, as insurance carriers experience mounting losses from claims, they periodically restrict or modify available coverage for pollution liabilities, or altogether exit the insurance market.
39. What are the main environmental taxes?
Excise taxes are imposed on certain goods with a view to discourage their use due to potentially deleterious environmental impacts and/or to raise revenue for certain environmental funds. For example:
- Federal and state motor fuel taxes and leaking underground storage tank taxes are imposed on the price of gasoline and diesel.
- Petroleum producers pay an Oil Spill Liability Trust Fund fee per barrel of oil, which is used to fund the federal Oil Spill Liability Trust Fund for the clean-up of oil releases.
- Coal producers pay an excise tax for underground mined coal and surfaced coal mine based on sale price per ton of coal, which is the primary source of revenue for the Black Lung Benefit Program and the Black Lung Disability Trust Fund, two programmes that support medical care costs and disability payments for coal workers suffering from pneumoconiosis.
Federal Tax Credits
Federal tax credits encourage beneficial goods and activities, including sustainable initiatives such as the redevelopment and clean-up of brownfield sites and the generation of renewable energy generation. For example, the solar investment tax credit provides a tax credit for the purchase and installation cost of a solar photovoltaic system.
The US does not have a federally mandated carbon tax, though the Biden Administration has publicly expressed support for an enforceable carbon pricing mechanism.
Depending on the product, taxes can be imposed on producers/vendors of taxed products.
There are no uniform environmental tax rates. Tax rates may be a fixed amount or based on a percentage of sale revenues, and vary according to the products and industries taxed.
40. Are there any proposals for significant reform of environmental law?
New direction for the Biden Administration. The Biden Administration has signalled that it will take a more robust approach to environmental regulation and reverse the preceding administration's approach to environmental regulations. Near-term actions such as rejoining the Paris Agreement and halting new oil and gas leases on public lands are likely to be paired with longer term efforts to expand the regulatory impact of existing environmental laws, including with respect to climate change and the regulation of surface water pollution.
Per- and polyfluoroalkyl substances (PFAS). It is anticipated that the EPA and state agencies will undertake regulatory initiatives to address the impacts of PFAS, an emerging class of contaminants. In February 2020, EPA added two types of PFAS (PFOA and PFOS) to the Contaminant Candidate List under the SDWA, triggering a 24-month timeline for EPA to set regulatory drinking water standards for these substances. EPA can broadly use the SDWA and CERLCA to require action with respect to PFAS contamination of soil and groundwater. Additionally, legislative efforts to regulate PFAS as a hazardous substance can be revived in the US Congress in the near term.
