Heavy-Handed Regulations Weaken the Chemical Industry’s Ability to Compete

As we hurtle towards a general election that threatens to be more contentious and polarizing than any before, the Biden administration is closing out its final months with an onslaught of new, heavy-handed regulations. These regulatory burdens, combined with a Congress so divided it can’t even renew or reauthorize programs critical to the success and security of American businesses in the global arena, portend lasting negative impacts on our nation’s business owners.

As leaders in the more than $27 billion chemical industry, members of the Alliance for Chemical Distribution (ACD), formerly the National Association of Chemical Distributors, uphold the highest standards of regulatory compliance and safety. However, these newest regulations impose duplicative requirements at best. At worst, they heighten security risks for complying facilities. One element they have in common is placing significant burdens on businesses of all sizes, including our paint and coatings supply chain partners, without delivering on the intended good.

Take, for example, the U.S. Environmental Protection Agency’s (EPA) Risk Management Program (RMP). This program has had an impressive track record of preventing chemical accidents while improving preparedness efforts and environmental stewardship. However, the EPA finalized changes to the RMP program that require regulated facilities, even those with strong safety records and that have never had an incident, to implement costly and burdensome new measures.

Of greatest concern is a mandate for RMP regulated facilities to disclose sensitive information about the quantity and location of products to the public, which will heighten the risk of these products falling into the hands of bad actors.

Just two weeks after announcing the RMP final rule, the EPA published the Clean Water Act Hazardous Substances Facility Response Plan final rule. This is a brand-new regulatory program that will require facilities with certain chemicals located near waterways to conduct costly hazard assessments and submit response plans, similar to the RMP, but for water releases. Many of these chemicals overlap with those covered by RMP regulations, forcing facilities to abide by two concurrent EPA programs, both of which have significant costs and duplicative requirements. The cumulative impact of these programs on facilities is significant, and these additional compliance costs will make it more difficult to provide communities across the country the chemicals they need to support their economies and protect public health.

The Occupational Safety and Health Administration’s (OSHA) final rule on the Worker Walkaround Representative Designation Process also contradicts facility safety standards. This rule significantly changes who may serve as an employee representative during an OSHA inspection, giving unauthorized individuals sweeping access to facilities’ sensitive inner workings. OSHA has repeatedly failed to explain how these changes will increase safety, raising significant concerns among facilities and their surrounding communities.

Unfortunately, these final rules come as programs that traditionally support the chemical industry are facing headwinds. The Chemical Facility Anti-Terrorism Standards (CFATS) program, created in 2007 to help prevent terrorist attacks on high-risk chemical facilities, has faced major setbacks. Despite a long bipartisan legacy, the program expired in July 2023 after one senator blocked the critical reauthorization, and the ongoing lapse in the program has created further uncertainty.

Furthermore, two important trade programs – the Generalized System of Preferences (GSP) and the Miscellaneous Tariff Bill (MTB) – expired years ago, with little Congressional urgency to renew them. The GSP program reduces prices for American importers and promotes economic growth in developing nations, while the MTB provides temporary reduction or suspension of duties on certain U.S. imports that are not domestically manufactured.

The administration’s continued efforts to impose heavy-handed red tape on businesses will soon have lasting effects as countless industries try to find ways to address these burdensome requirements. The expiration of tried-and-true security and trade programs is further hurting American companies at home and limiting their ability to compete globally.

The chemical distribution industry is a major economic engine in America, employing over 75,800 people and generating $10.82 billion in tax revenue for local communities across the country, all while delivering valuable products to every industry sector. But we represent only a fraction of the chemical industry that is so vital to American lives and the economy and is being so heavily impacted, not to mention the broader manufacturing base.

The current approach to regulations coupled with a lack of action on Capitol Hill has caused grave uncertainty and significant economic strain on businesses of all sizes, including the 98 percent of ACD members who are small businesses. We cannot effectively combat inflation or alleviate an economic downturn while burdening businesses with unnecessary and excessive regulations. These constraints place significant economic burdens and risks on our industries and supply chain partners, hindering their ability to thrive. ACD has existed for more than 50 years and is looking forward to a strong future ahead, but only if regulations are on our side.

Jennifer Gibson is senior vice president of regulatory affairs for the Alliance for Chemical Distribution, an organization representing more than 400 chemical distribution industry partners who responsibly move the essential products our world depends on.