What We’re Watching is NAFEM’s overview of legislative and regulatory activities potentially impacting member companies. It provides background on all NAFEM advocacy efforts, including energy, environment, regulations, supply chain, and taxes, tariffs and trade. Additionally, the latest news on these topics is provided monthly in Advocacy Update.
Federal Advocacy Tracker
Multiple categories (ACIM, CRE, WIC/F)
DOE to establish/amend certification provisions, labeling requirements and enforcement provisions for specific types of equipment to align with energy conservation standards
The proposed Combating the Persecution of Religious Groups in China Act calls on the Government of the People’s Republic of China to unconditionally release religious and political prisoners and ensure that detainees who have not yet been released are treated humanely with access to families, lawyers, medical care and international monitoring, as well as the ability to practice their faith. It also requests that the United National Human Rights Council formally condemn China for the ongoing genocide against more than 1 million, mostly Muslim Uyghurs, and other religious and ethnic minority groups.
Details remain pending on Act that would reauthorize Trade Adjustment Assistance programs, extend and reform the Generalized System of Preferences and amend the Harmonized Tariff Schedule of the United States
States actively setting energy-efficiency standards
Colorado: Colorado passed HB23-1161 that establishes energy standards for commercial hot food holding cabinets, dishwashers, fryers, ovens, steam cookers. These products are required to meet current ENERGY STAR® requirements to be sold or leased for use in the state.
California: The California Energy Commission (CEC) issued a request for information and invitation to submit proposals toward its planned appliance-efficiency rulemaking for commercial steam cookers, convection ovens, dishwashers and fryers. According to CEC, the goal of the rulemaking is to reduce energy consumption and, if applicable, water consumption in the state. Information and proposals are due Feb. 13, 2024.
Maryland: The Maryland Energy Administration is considering looking at energy-efficiency standards for a variety of commercial refrigeration equipment, dishwashers, and steam cookers. Comments may be sent to Landon Fahrig, Asst. Div. Dir. of Policy, Maryland Energy Administration, 1800 Washington Blvd., Suite 755, Baltimore, MD 21230; phone: +1.410.537.4000; SEIFComments.MEA@Maryland.gov. Comments will be accepted through Jan. 29, 2024. A public hearing has not been scheduled.
States require manufacturers to register with appliance standards databases
The State Appliance Standards Database (SASD) is fast becoming an important registration body for commercial food equipment manufacturers, with Colorado, Hawaii, Maine, Massachusetts, New Jersey, New York and Rhode Island requiring registration. These states may issue financial penalties for products sold within their borders that don’t meet minimum energy-efficiency levels. SASD covers commercial dishwashers, fryers, steam cookers, ovens and hot food holding cabinets.
California also requires manufacturers to certify the performance of some products sold in the state via its Modernized Appliance Efficiency Database System (MAEDbS). Information is not shared between MAEDbS and SASD, so manufacturers must register with both databases to sell products in the covered states.
PFAS reduction efforts active at federal and state levels
Per- and polyfluoroalkyl (PFAS), or so called “forever chemicals,” are increasingly the focus of federal and state reduction efforts and outright bans. The chemicals were used widely in nonstick, water- and grease-resistant products, as well as some firefighting foams.
The Environmental Protection Agency (EPA) finalized its reporting and recording requirements for PFAS under the Toxic Substances Control Act (TSCA). See the Federal Advocacy Tracker above for links and deadlines.
EPA also proposed strict limits on two common types of PFAS, PFOA and PFOS, and said it wanted to regulate four others. Under the proposal, water providers, including those with wells, would be responsible for monitoring their systems for the chemicals.
California and Maine currently have the most stringent PFAS regulations in the U.S.
As of Jan.1, 2023, CA AB1200 requires manufacturers of cookware sold in the state to disclose the presence of PFAS on the product label and on the product listing for online sales, in both English and Spanish.
In Maine, a retailer may not sell any products containing intentionally added PFAS after Jan. 1, 2030.
Rhode Island SB 2152 proposes to ban all uses PFAS by Dec 31, 2032, unless the use is considered unavoidable. The broad cookware category is broadly included in the proposal.
The following states already address PFAS in drinking water and are in the process of, or expected to, expand legislation: Alaska, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Iowa, Kentucky, Maine, Massachusetts, Michigan, Minnesota, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Ohio, Rhode Island, Vermont, West Virginia and Wisconsin.
NAFEM and other members of the PFAS Ban Coalition communicated their opposition to NJ S3177, which would establish reporting requirements for manufacturers of products with intentionally added PFAS and restrictions on certain products with intentionally added PFAS. The New Jersey Assembly introduced a companion bill NJ A4758 Oct. 3, 2023.
Canada’s Draft State of PFAS Report was produced to inform decision-making on PFAS in the country. Health Canada proposes that PFAS be treated as a class that may constitute or may constitute a danger in Canada to human life or health.
EPA’s 2022 – 2026 strategic plan provides a glimpse of what’s to come
EPA’s four-year strategic plan covering 2022 – 2026 details the vision, priorities, and strategies to accomplish the agency’s mission over the next four years. The agency also issued a brief overview of its upcoming efforts.
Extended producer responsibility (EPR) efforts in states
In Canada, SORAC, the Commercial Appliance Recovery Society was formed to meet Quebec’s extended-producer responsibility initiative for commercial and institutional refrigeration and freezer equipment to comply with Recyc-Quebec (R-Q) requirements.
Multiple states have approved or are considering EPR efforts thus far aimed at packaging.
Gas stove debates continue
Administration officials filed a brief opposing the April decision by the Ninth Circuit Court of Appeals to overturn the Berkeley, California ban on natural gas hookups in new buildings. Berkley’s ban remains in effect until the legal proceedings are finalized.
Other California cities, including Sacramento, San Luis Obispo and Santa Cruz, have paused their plans until the City of Berkeley’s appeal plays out. Ordinances banning new natural gas hookups have been passed by 76 California cities.
New York is the first state to ban natural gas and other fossil fuels in most new buildings. The ban applies to new buildings shorter than seven stories by 2026, and taller buildings by 2029.
More than 100 U.S. cities have moved to restrict gas-powered appliances. Most of these bans focus on new construction.
The U.S. House of Representatives passed and advanced to the Senate the Gas Stove Protection and Freedom Act, which prohibits the federal government from banning gas stoves. The senate has, thus far, failed to take up the Act.
NAFEM advocates with others for balanced regulations for U.S. manufacturers
NAFEM joined the Manufacturers for Sensible Regulations coalition, an initiative created by the National Association of Manufacturers (NAM), to support manufacturing competitiveness. Data shows that the regulatory cost for small U.S. manufacturers is $34,671 per employee per year, more than three times the cost to the average U.S. company. Coalition members are urging the White House to protect jobs, communities and economic growth by adding a manufacturing adviser to the White House staff to coordinate and balance regulatory efforts among agencies.
California’s Proposition 65 – The Safe Drinking Water and Toxic Enforcement Act – requires companies to provide warning labels to notify people of exposure to more than 1,000 chemicals known to cause cancer, birth defects or other reproductive harm. While NAFEM reports on proposed changes in the Advocacy Update newsletter, we also recommend members closely monitor the Prop 65 changes impacting their businesses.
Panama Canal backlog impacting global shipping
Hundreds of cargo ships are in a holding pattern at the Panama Canal due to the historic drought in the region. In response, the Canal Authority reduced daily crossings, forcing ocean carriers to offload cargo, shift to much-longer routes, pay for priority passage or simply wait. Rainfall around the canal area is 30-50% below normal, a trend experts anticipate continuing into 2024.
Mexico working on alternative to Panama Canal
Mexico continues work on its trans-isthmus trade corridor. Ships would unload their cargo at either Salina Cruz, Oaxaca or Coatzacoalcos, Veracruz, with the cargo then transported 303 kilometers across the isthmus via rail and reloaded on another ship. Mexican officials estimate transport time of six hours versus the eight-to-10 hours required to pass through the Panama Canal. The first tests began in August and the corridor is expected to open by Sept. 2024.
US – Mexico border issues impact supply chain challenges
NAFEM, along with hundreds of trade associations and local Chambers of Commerce, formed the Legal Immigration and Border Enforcement Reform This Year (LIBERTY) Campaign, to call upon Congress to enact measures in 2023 to improve the border and our legal immigration system. NAFEM will continue working with LIBERTY in 2024.
Know your supply chain: Restricted entities listed on government database
The International Trade Administration maintains the Consolidated Screening List (CSL) of parties with which the U.S. restricts certain exports, reexports or transfers of items, including those addressed under the UFLPA, Russia/Belarus sanctions and others. The list is updated daily, and email updates are available at the link above.
TAXES, TARIFFS & TRADE
Hundreds of sanctions and restrictions in place against Russia
Hundreds of sanctions and restrictions are in place against Russia and third-parties allegedly helping Russia evade sanctions. The departments of Commerce, State and Treasury are acting against individuals and organizations.
Members are reminded that it continues to be critically important to understand every link, even the most minor, in your supply chain.
Continue to improve the objection form and require support documentation to increase transparency and fairness of the process.
Establish a public request process for industry-specific, general-approved exclusions.
Permit trade associations to submit exclusion requests on behalf of members not importers of record or provide an alternative option for small- and medium-sized companies to participate in the process.
EU – US truce on steel tariff dispute until after US presidential elections: The European Union (EU) announced in December that that it will extend the suspension of its retaliatory tariffs on US products related to the US Section 232 steel and aluminum tariffs until March 31, 2025. That means that European steel exports to the United States will still be subject to a tariff rate quota (TRQ). Negotiations to terminate the TRQs have dragged on for months as talks stalled on US efforts to replace the TRQs with a “green” steel club that would have the US and EU impose higher tariffs on China and other countries whose steel plants emit elevated levels of carbon emissions. The EU has threatened to retaliate on $6 billion worth of tariffs on US products such as whiskey and motorcycles if the US did not terminate the TRQs. One interesting note is that the US continues to use the exclusion process as a bargaining chip. The US-EU deal included a clause where the US agreed to “provide for further exclusions from the tariffs for EU exporters.”
Section 301 news
As expected, the U.S. Trade Representative (USTR) again extended 352 product exclusions and 77 COVID-related exclusions from Section 301 tariffs on imports from China through May 31, 2024. The exclusions were previously scheduled to expire Sept. 30. According to USTR, “The extension will enable the orderly sunsetting of the exclusions.”
The government-requested 60-day extension to file its opening brief in the litigation challenging the Section 301 tariffs was granted by the U.S. Court of Appeals for the Federal Circuit. Oral arguments are now anticipated early this year.
NAFEM continues to advocate for removal of Section 301 tariffs on steel and aluminum imports.
Focus on shipments of goods produced with Uyghur labor continues
U.S. Customs and Border Protection (CBP) closely watches for goods covered under the Uyghur (China) Forced Labor Prevention Act (UFLPA). The Act largely prohibits importing any items mined, produced or manufactured wholly or in part in the Xinjiang Uyghur Autonomous Region of the People’s Republic of China. Industrial and manufacturing materials represent the second highest volume of denied shipments; apparel is first. To clarify the UFLPA, CBP published FAQs, best practices and guidance.
NAFEM is watching US HR 4452 that would amend the Securities Act of 1934 to require discloser of whether companies’ supply chains use forced Uyghur labor.