AFPM ’25: INSIGHT: New US president brings chems regulatory relief, tariffs
Al Greenwood
13-Mar-2025
HOUSTON (ICIS)–The new administration of US President Donald Trump is giving chemical companies a break on regulations and proposing tariffs on the nation’s biggest trade partners and on the world.
RELIEF FROM RED TAPE
The
new administration marks a sharp break from the
previous one of the former president,Joe Biden.
He proposed a wave of regulations towards
the end of his administration that increased
costs while providing little benefit to the
chemical industry.
Several proposed rules under that previous administration will likely fall by the wayside, said Eric Byer, president and CEO of the Alliance for Chemical Distribution (ACD), a trade group that represents chemical distributors.
So far under Trump, the regulatory climate has been mostly positive, Byer said.
Trump pledged to reduce regulations, and late in his campaign, said he would purge 10 regulations for every one introduced by his administration.
The government is conducting earnest analyses of the economic effects of rules, something that the previous administration had glossed over, Byer said.
LESS RIGID ENVIRONMENTAL
RULES
The Environmental
Protection Agency (EPA) is reviewing how it
evaluates existing chemicals for safety under
its main program, known as TSCA.
Among items it could review is the whole chemical approach that the agency adopted under the previous administration. That approach made it likely that the EPA would determine that a chemical posed an unreasonable risk. Such a finding would expose the chemical to more restrictions.
For environmental regulations in general, the EPA announced numerous reviews of existing regulations that could have far-reaching effects on costs.
The following lists some of the regulations under review:
- The National Emission Standards for Hazardous Air Pollutants (NESHAPs). The standards for chemical manufacturing will be among those that the EPA will initially review.
- The greenhouse gas reporting program.
- The Risk Management Program (RMP). One RMP rule compromised plant safety by requiring companies to share information that had been off limits since the 9/11 terrorist attacks, according to trade groups.
- The Technology Transitions Program. Currently, the program restricts the use hydrofluorocarbons (HFCs), which are used to make refrigerants and blowing agents for polyurethanes.
- Terminating the environmental justice and diversity, environment and inclusion (DEI) arms of the EPA. Environmental justice has made it harder to build chemical plants.
- Particulate matter national ambient air quality standards (PM 2.5 NAAQS). The review could lead to guidance from the EPA that increases both the flexibility and clarity of permitting obligations for chemical plants, according to the ACC.
- A rule by the previous administration that intended to account for what it described as the social cost of carbon.
- The Waters of the US Rule. The EPA wants to review the rule to reduce permitting and compliance costs.
ENDING FAVORABLE EV
RULES
The
EPA is reviewing the tailpipe rule that was
adopted by the previous administration. The
tailpipe rule gradually reduced the carbon
dioxide (CO2) emissions of automobiles.
Critics have said that this and other regulations from the previous administration were so strict, they acted as bans on vehicles powered by internal combustion engines (ICE).
The EPA will also review the standards for model years 2027 and later light-duty and medium-duty vehicles.
The Department of Transportation (DOT) wants to reset the Corporate Average Fuel Economy (CAFE) standards, which critics say unduly favor electric vehicles (EVs) by being too strict.
SUPERFUND TAX MAY BE
RESCINDED
The Republican
controlled government could repeal
the Superfund tax, which
was imposed in 2022 on several
building-block petrochemicals and their
derivatives. Confusion arose over how to
calculate the taxes for the derivatives. The
government also seems to lack the resources to
administer the program.
So far, legislators have introduced bills in both legislative chambers that would repeal the tax, including Senate Bill 1195 and House of Representatives Bill 640.
These would likely need to be part of a larger tax bill. Byer of the ACD said the repeal will not be easy. However, it does have a chance to succeed, and the effort is getting traction among legislators.
The ACD, the ACC and the American Fuel & Petrochemical Manufacturers (AFPM) were among the trade groups that signed a letter urging Congress to repeal the tax.
TARIFFS POSE RISK TO
CHEMS
The tariffs adopted and
being proposed by the US could increase costs
of imports of steel and aluminium needed to
build new plants and repair existing ones. They
also increase the costs of minerals used to
make catalysts as well as regional imports of
plastics and chemicals.
US tariffs also expose its chemical industry to retaliatory tariffs.
US tariffs could cause short term logistical disruptions because companies will be re-arranging supply chains to avoid the taxes and to secure materials from new suppliers that could be farther away.
“I think we will see some near-term reconfiguration of moving products because of the tariffed countries, predominantly China, Mexico and Canada,” Byer said. “Either way, people will reconfigure. My hope is that the reconfiguration part will only last a few weeks to a few months at most so we can get back to just doing straight on trade deals and supply chain movements without to deal with tariff stuff.”
Hosted by the American Fuel & Petrochemical Manufacturers (AFPM), the IPC takes place on 23-25 March in San Antonio, Texas.
Insight article by Al Greenwood
Thumbnail Photo: US Capitol. (By Lucky-photographer)
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