In Washington – Insider – November 10, 2022

U.S., EU Launch EV Task Force to Avoid Domestic Content Fight 

U.S. & EU trade officials met last week to discuss the ongoing fight over domestic content restrictions included in the recently passed Inflation Reduction Act, which limits tax credits for electric vehicle (“EV”) purchases to cars manufactured in the United States. The two sides agreed to form a negotiating task force of officials from the two sides in order to avoid a more public fight on the language.   

In a positive development, EU officials told Politico they would not retaliate on U.S. products while negotiating. “Setting up this task force is already … a response of us, raising those concerns … At this stage, we are focusing on a negotiated solution before considering what other options there may be,” The EU’s Trade Minister Valdis Dombrovskis said. 

A number of trade partners with automotive industries have voiced significant opposition to this language, including the EU, Japan, and South Korea. Recently, Russia and China announced their interest in joining any possible challenge to the language at the World Trade Organization (“WTO”). 

Possible Rail Strike Delayed to December

Two major unions, the Brotherhood of Maintenance of Way Employes and the Brotherhood of Railroad Signalmen have agreed to extend their “status quo” period under federally mediated labor negotiations with U.S. railroads.  This delay prevents a strike or lockout and comes following both unions rejecting a September compromise contract created with the help of federal labor mediators. The new end of the period, and the earliest any of these unions could strike, is now December 4.

Since the parties agreed to use federal mediators to reach the September agreement, Congress can pass legislation mandating both sides agree to the deal.  This is becoming a real possibility as these two labor unions have since rejected ratifying the deal, while nine labor unions have approved it.  Two other unions are still set to vote on the agreement in the next few weeks.  According to sources briefed on the situation, the two remaining unions are expected to ratify the agreement.

ACMA is working with other associations to urge both sides in the negotiation to avoid any rail disruptions and is urging Congress to be prepared to pass legislation mandating adoption of the September compromise if necessary.

ACMA Argues for Reasonable COVID Regulations in California 

In a recent letter with other major associations, ACMA called on the California Occupational Safety and Health Standards Board to withdraw proposals that would place unreasonable demands on employers coping with COVID outbreaks in their workplaces. The letter points out that the state, like the rest of the country, is no longer in an emergency condition regarding COVID and that regulatory requirements should be scaled back accordingly. ACMA members can contact John Schweitzer for more information. 

Biden Administration Unveils Proposed Rules for Climate Disclosures

A new proposed regulation by the Biden Administration would add climate-related disclosures to federal contractors, under language released for comment on November 10, 2022.  Federal contractors with over $50 million in annual contracts would be required to publicly disclose Scope 1, Scope 2, and “relevant” Scope 3 emissions, disclose climate-related financial risks, and set science-based emissions reduction targets. Scope 1 emissions cover emissions from sources directly controlled by the business, Scope 2 emissions cover indirect emissions, and Scope 3 cover emissions both up and down the value chain.  The Biden Administration announcement links to a greenhouse gas emissions calculation tool published by the Greenhouse Gas Protocol for companies to estimate relevant emissions in each category.

This proposal is designed to work alongside proposed SEC rules for publicly traded companies, according to the Biden Administration release. Businesses with contracts between $7.5 million and up to $50 million would have fewer disclosure requirements, and businesses with contracts totaling less than $7.5 million annually would be exempt from this rule.

This proposal is subject to change following public review and comment, and ACMA will alert members once the docket for comments opens.  The comment period will be open until January 13, 2023.

The following graphic from sustainability.gov provides some details of the proposed scope of this rule, which would use the Climate Disclosure Project system for creating the necessary disclosures: