The Week Ahead in the European Parliament – September 28, 2018

By Sebastian Vos on Posted in EU Law and Regulatory

Summary

Next week Members of the European Parliament (“MEPs”) will gather in Strasbourg for the plenary session, with interesting votes and debates ahead.

On Wednesday, MEPs will vote on a report prepared by the Committee on Envrionment, Public Health and Food Safety (“ENVI”) on a proposal for a Regulation on emission performance standards for new passenger cars and for new light commercial vehicles.  The proposal calls for cutting carbon dioxide emissions from new cars and boosting the market share of zero – and low – emission vehicles.  Furthermore, CO2 emissions from new cars should be cut by 45% by 2030, with an intermediate target of 20% by 2025.  In case of manufacturers whose average CO2 emissions still exceed these targets, they will pay a premium to the EU budget.  Also, the new rules will provide for a CO2 emission test by implementing a portable device which will measure CO2 emissions on the basis of data from cars’ fuel consumption meters.  See the proposal for a Regulation here and the draft ENVI report here.

On the same day, MEPs will vote on the report on the proposal for a Regulation on Health Technology Assessment (“HTA”).  HTA is a multidisciplinary assessment process that seeks to evaluate the added therapeutic value of health technologies (i.e., drugs, certain medical devices, medical treatments including surgical procedures, and measures for disease prevention and diagnosis) on the basis of both clinical and non-clinical elements.  The proposal aims to overcome a number of problems which, according to the report, cannot be sufficiently addressed without regulation at the EU-level.  See the proposal for a regulation here, the draft parliamentary report here.

Also, on Wednesday MEPs will debate on the Internal Market and Consumer Protection Committee (“IMCO”) report on free-flow of non-personal data.  Once voted, the report will constitute the Parliament’s position at first reading on the proposal for a Regulation introduced by the European Commission in September 2017.  The proposal has been provisionally agreed with the Council and will aim to ban barriers to the free movement of non-personal data handled by firms and public authorities. More specifically, the new regulation will prevent national rules from requiring data to be stored or processed in a specific Member State.  Non-personal data include aggregated and anonymized datasets used for big data analytics, or data on maintenance needs for industrial machines.  Furthermore, the new Regulation will only allow restrictions when non-personal data must be located for public security purposes.  The new legislation will complement the General Data Protection Regulation (“GDPR”), thus creating a framework for a common European data space.  MEPs will vote on the draft IMCO report on Thursday.  See the proposal for a Regulation here, and the draft IMCO report here.

Meetings and Agenda

Monday, October 1, 2018

Plenary session

17:00 – 23:00

Debates

  • Resumption of session and order of business
  • Free flow of non-personal data in the European Union
  • Rapporteur: Anna Maria Corazza BILDT
  • Implementation of the Council’s LGBTI Guidelines in relation to the situation in Chechnya

Special committee on financial crimes, tax evasion and tax avoidance

20:30 – 21:45

Committee on the Environment, Public Health and Food Safety

19:00 – 21:00
Debates

  • Transparency and sustainability of the EU risk assessment in the food chain – Consideration of amendments (to be confirmed)
    • Rapporteur: Renate SOMMER (EPP, DE)

Votes

  • Protection of workers from the risks related to exposure to carcinogens or mutagens at work – Adoption of draft opinion
    • Rapporteur: Joëlle MÉLIN (ENF, FR)
  • Use of Cannabis for medicinal purposes – Adoption of motion for a resolution
    • Co-rapporteurs: Dubravka ŠUICA (EPP, HR), Guillaume BALAS (S&D, FR), Urszula KRUPA (ECR, PL), Catherine BEARDER (ALDE, UK), Martin HÄUSLING (Greens/EFA, DE), Estefanía TORRES MARTÍNEZ (GUE/NGL, ES), Piernicola PEDICINI (EFDD, IT)
  • 14th meeting of the Convention on Biological Diversity (COP14) – Adoption of motion for a resolution
    • Co-rapporteurs: Norbert LINS (EPP, DE), Guillaume BALAS (S&D, FR), Jadwiga WIŚNIEWSKA (ECR, PL), Gerben-Jan GERBRANDY (ALDE, NL), Benedek JÁVOR (Greens/EFA, HU), Anja HAZEKAMP (GUE/NGL, NL), Piernicola PEDICINI (EFDD, IT), Jean-François JALKH (ENF, FR)

Committee on Civil Liberties, Justice and Home Affairs

19:30 – 20:30

  • The situation in Romania, including the independence of judiciary – exchange of views with European Commission First-Vice President Frans TIMMERMANS

Committee on Constitutional Affairs

19:30 – 22:30

Tuesday, October 2, 2018

Plenary session

Debates

09:00 – 11:20

  • Preparation of the European Council meeting of 18 and 19 October 2018

Formal sitting

11:30 – 12:00

  • Address by Milo Đukanović, President of Montenegro

Votes followed by explanations of votes

12:00 – 14:00

  • Electronic publication of the Official Journal of the European Union
    • Rapporteur: Pavel SVOBODA (EPP, CZ)
  • Single Market Information Tool
    • Rapporteur: Eva MAYDELL (EPP, BG)
  • Third countries whose nationals must be in possession of visas when crossing the external borders and those whose nationals are exempt from that requirement
    • Rapporteur: Lidia Joanna GERINGER de OEDENBERG (S&D, PL)
  • EU-Morocco Agreement for scientific and technological cooperation: terms and conditions for the participation of Morocco in the Partnership for Research and Innovation in the Mediterranean Area (PRIMA)
    • Rapporteur: Aldo PATRICIELLO (EPP, IT)
  • Provision of audiovisual media services
    • Rapporteur: Petra KAMMEREVERT, Sabine VERHEYEN

Debates

15:00 – 23:00

  • The EU’s input on a UN binding instrument on transnational corporations with respect to human rights
  • EU support to UNRWA, following the US withdrawal of financial support to UNRWA
  • Situation in Yemen
  • Emission performance standards for new passenger cars and for new light commercial vehicles
    • Rapporteur: Miriam DALLI (S&D, MT)
  • Harmonising and simplifying certain rules in the VAT system
    • Rapporteur: Jeppe KOFOD (S&D, DK)
  • Rates of value added tax
    • Rapporteur: Tibor SZANYI (S&D, HU)

Wednesday, October 3, 2018

Plenary session

Debates

09:00 – 10:00

  • The rule of law in Romania

Debates

10:00 – 12:30

  • Debate with the Prime Minister of Estonia, Jüri Ratas, on the Future of Europe

Votes followed by explanation of votes

12:30 – 14:30

  • Mobilisation of the European Globalisation Adjustment Fund: application EGF/2018/001 NL/Financial service activities
    • Rapporteur: Ivana MALETIĆ (EPP, HR)
  • Draft Amending Budget No 5/2018: cancellation of the reserve related to the support to Turkey from the Instrument for Pre-Accession (IPA II), reinforcement of the European Neighbourhood Instrument (ENI) and of the Humanitarian Aid for orther urgent actions and modification of the establishment plan of the Innovation & Networks Executive Agency (INEA) in the context of the WiFi4EU initiative
    • Rapporteur: Siegfried MUREŞAN (EPP, RO)
  • VAT: period of application of the reverse charge mechanism and of the Quick Reaction Mechanism
    • Rapporteur: Sirpa PIETIKÄINEN (EPP, FI)
  • Administrative cooperation in the field of excise duties as regards the content of electronic register
    • Rapporteur: Ivana MALETIĆ (EPP, HR)

Debates

15:00 – 23:00

  • EU Agency for Criminal Justice Cooperation (Eurojust)
    • Rapporteur: Axel VOSS (EPP, DE)
  • Mutual recognition of freezing and confiscation orders
    • Rapporteur: Nathalie GRIESBECK (ALDE, FR)
  • Distributed ledger technologies and blockchains: building trust with disintermediation
  • Humanitarian emergency in the Mediterranean: supporting local and regional authorities

Thursday, October 4, 2018

Plenary session

Debates

09:00 – 11:50

  • Public procurement strategy package
    • Rapporteur: Carlos COELHO (EPP, PT)

Votes followed by explanations of votes

12:00 – 14:00

  • Motions for resolutions concerning debates on cases of breaches of human rights, democracy and the rule of law (Rule 135)
  • Situation in Yemen

Debates

15:00 – 16:00

  • Disenfranchisement of voting rights in the EU

Special Committee on Terrorism

Debates

09:30 – 11:00

  • Exchange of views with Sir Julian KING, Commissioner for the Security Union

Committee on Budgetary Control

09:00 – 12:30

 

The Week Ahead in the European Parliament – September 21, 2018

By Sebastian Vos on Posted in EU Law and Regulatory

Summary

Next week will be a political group week and a committee week in the European Parliament. Members of the European Parliament (“MEPs”) will hold meetings with their respective political party to prepare the plenary session, to be held from October 1 to 4, 2018, in Strasbourg. During the plenary week, MEPs are expected to vote on the reform of EU rules on audiovisual media, including online streaming platforms, and on new CO2 emission reduction targets for passenger cars.

Next week, a few interesting discussions will take place in committee.

On Monday, September 24, the Committee on Industry, Research and Energy (“ITRE”) will vote on its legislative opinion on the proposal for a single use plastic Directive. The legislative proposal aims to reduce the amount of plastic marine litter from single use plastic items and fishing gear containing plastic. See the Commission proposal here, the draft opinion here , the amendments tabled to the draft opinion here.

On the same day, the Committee on Agriculture and Rural Development (“AGRI”) will debate on a proposal for a Directive on unfair trading practices in business-to-business relationships in the food supply chain. A number of amendments will be discussed, such as the extension of the scope to all agricultural products, the extension of the “buyer’s” definition to include those operators that buy and sell products on the EU market, and also the inclusion of a definition of “unfair trading practice” and the introduction of a payment term for non-perishable products set at 60 days from the receipt of the invoice. See the Commission proposal here, the draft report here, the amendments tabled to the draft report here and here. Continue Reading

U.S. Releases Final List of Tariffs on $200 Billion in Chinese Imports

By Victor Ban, Shelby Anderson, Gina M. Vetere and Christopher Adams on Posted in China, International Strategy, Trade Agreements

On September 17, the Office of the U.S. Trade Representative (USTR) released its final list of approximately $200 billion in Chinese imports subject to an additional ad valorem tariff. The final list, which covers 5,745 product categories, will take effect on September 24, 2018. The tariff rate will initially be set at 10 percent and will increase to 25 percent after January 1, 2019. The announcement of the final tariff list does not address whether the Administration will provide a product-level exclusion process from these tariffs, as it has done for two other rounds of tariffs imposed on Chinese imports earlier this year.

The Administration also announced a product-level exclusion process for the products covered by the tariffs on $16 billion in Chinese imports, which were released in August. Exclusion requests for products covered by these tariffs are due by December 18, 2018. As requests are posted to USTR’s docket, parties will have 14 days to file responses either in support of or opposition to a particular request.

Read the Full Article

 

Congressional Forecast: September

By Layth Elhassani on Posted in Congressional Action

The House and Senate are entering their respective final runs before the November midterm elections, following a two-day break for Rosh Hashanah, the Jewish New Year — even though the possibility of Hurricane Florence entering the Washington, D.C. metropolitan area cut short an already shortened week. The pressing items of business are funding the government and the pending Senate confirmation of Brett Kavanaugh to the United States Supreme Court. But several lower-profile issues remain as well.

The Senate convened briefly on Wednesday, Sept. 12, and confirmed the nomination of Charles Rettig to head the Internal Revenue Service. During the third week of September, the Senate is expected to turn to legislation aimed at combating the nation’s opioid epidemic. That bill, H.R. 6, is expected to clear the Senate with a prenegotiated amendment sponsored by Sen. Lamar Alexander, R-Tenn., the chairman of the Senate Health, Education, Labor & Pensions Committee. But it is expected that this opioids legislation will still need some work in a conference with the House before it is ready for final enactment.

The Senate is also expected to take up and pass S.2554, the Patient Right to Know Drug Prices Act, which would prohibit the use of gag clauses in Affordable Care Act plans and employer-sponsored insurance. The reach of this prohibition in the bill might be extended by amendment while it is before the full Senate, to also cover self-insured group health plans.

Much of the near-term attention in Congress in the remaining weeks of this final work period will be focused on both the Kavanaugh nomination, currently proceeding through the Senate Judiciary Committee, and on negotiations in conference over multiple packages of appropriations bills — known as “minibuses” — to fund the government over the next fiscal year. The first minibus conference report (covering military construction, Veterans Affairs, energy and water, and legislative branch appropriations bills that fund the U.S. Army Corps of Engineers and the Capitol complex), has emerged from conference and was passed by the Senate before it adjourned for the week. House action appears likely in the coming days.

Two other minibus packages (Interior, transportation, agriculture and financial services; and defense and labor, Health & Human Services and education, respectively), have proceeded into conferences to work out the differences between the House and Senate versions of each. The first of these two minibuses may prove more difficult to navigate through the bicameral conference, because members of the two bodies differ over a number of controversial riders.

Time is running short on these and other appropriations bills, such as the bill that funds the U.S.Department of Homeland Security, which has been slowed by controversy over President Donald Trump’s demand that the bill’s border security funding be augmented to reflect his plan to build a wall on the southern border. With the midterm election looming, whatever appropriations bills do not get done in the next few weeks will likely end up in a continuing resolution funding those portions of the government, likely to be passed sometime in early December.

Depending partly on the timing for resolution of these appropriations bills, Congress seems likely to attempt to finish work on three other bills: a bill reauthorizing the Federal Aviation Administration; a bill reauthorizing the Water Resources Development Act; and a new farm bill.

In particular, WRDA legislation appears most likely to move ahead. On Sept. 10, Senate Environment and Public Works Committee chairman John Barrasso, R-Wyo., and ranking member Tom Carper, D-Del., House Transportation and Infrastructure Committee chairman Bill Shuster, R-Pa., and ranking member Peter DeFazio, D-Ore., and House Energy and Commerce Committee chairman Greg Walden, R-Ore., and ranking member Frank Pallone, D-N.J., announced that they have come to an agreement on a compromise bill.

While not a conference report since the full Senate has not voted on its version, the WRDA compromise bill seems likely to start in the House, with floor action possible soon. Notably — given the tragedy relating to water quality in Flint, Michigan — the bill would include $4.4 billion for the U.S. Environmental Protection Agency‘s Drinking Water State Revolving Fund program, to improve state and locality drinking water infrastructure.

Meanwhile, the farm bill is being negotiated in a 56-person conference between the House and Senate, which formally kicked off on Sept. 5. Potential approval of the bill could give senators and House members from agriculture-heavy states and districts an important deliverable for voters in a number of key contested November races. But politically difficult issues lie ahead for the bill — such as controversial House provisions that would place restrictions on the Supplemental Nutrition Assistance Program, or food stamps.

The Kavanaugh nomination is expected to clear the Senate Judiciary Committee on a party line vote very soon. The nomination should proceed to the full Senate in late September, or early October at the latest. A few senators from each party remain undecided or at least unannounced. Yet the nomination appears to be on secure footing, with Democrats unable to mount a filibuster of the nomination under the revised interpretation of the Senate’s cloture rule that requires only majority support for shutting off debate. After Kavanaugh is confirmed, it appears likely that the Senate will soon thereafter wind down its work until after the election.

For its part, the House is also reconvening later this week, and in addition to possibly considering the WRDA compromise, Republican leadership is planning to vote on several bills reported by the House Ways & Means Committee, and other lower profile legislation, under suspension of its rules. But much attention will be on the House Ways & Means Committee chairman Kevin Brady’s, R-Tex., intended committee markup of Tax Reform 2.0, which — among other items — would make permanent certain changes to the tax code in the 2017 tax reform law, affecting individual taxpayers.

The House Republican Conference is not united on an approach relating to this legislation, with a range of perspectives from leadership and vulnerable incumbents. So it is unclear when, or if, the bill might reach the House floor. Regardless of whether the bill passes the House, since it would be subject to a 60-vote threshold supermajority in the closely divided Senate, the legislation does not appear to have a path forward.

This article was originally published in Law360.

The Heat: Forum on China-Africa Cooperation wraps up in Beijing

By Witney Schneidman on Posted in Africa, China

Witney Schneidman, Chair of Covington’s Africa Practice, recently participated in a China Global television show to assess the outcome of the 7th FOCAC meeting in Beijing that was held last week between Chinese leaders and more than 50 African leaders. LINK

This post can also be found on CovAfrica, the firm’s blog on legal, regulatory, political and economic developments in Africa.

This Week in the European Parliament – September 14, 2018

By Sebastian Vos on Posted in EU Law and Regulatory

Summary

Next week will be a constituency week for Members of the European Parliament (“MEPs”).  MEPs will go back to their home countries or convene in their parliamentary delegations to work on non-EU related matters.

However, this past week, the European Parliament held its plenary session in Strasbourg, and voted on interesting reports.

On Wednesday, MEPs approved the Parliament’s position at first reading on the Commission’s proposals for a Directive on new digital copyright rules.  The Parliament’s position was approved by 438 votes to 226, with 39 abstentions.  The text is intended to strike a balance between the extension of copyright law online and the protection of freedom of expression.  Furthermore, small and micro platforms would be excluded from the future Directive’s scope.  See the Parliament’s position here, and the Commission proposal here.

On Thursday, MEPs also adopted a resolution on a European strategy for plastics in a circular economy.  This follows the Communication on a European strategy for Plastics in a Circular Economy adopted by the European Commission in January 2018.  In its Communication, the Commission introduced initiatives at the EU level to transform the way plastic products are designed, produced, used and recycled.  In its report, the European Parliament calls for a number of additional measures, including a ban on micro-plastics in cosmetics, personal care products, detergents and cleaning products by 2020 and the establishment of a post-2020 policy for the circular economy based on a strong research and innovation pillar.  The Parliament also called for making “circularity first” an overarching principle for non-packaging plastic items, by developing product standards and revising the eco-design legislative framework.  See the adopted resolution here.

On the same day, MEPs approved their report on dual quality products in the EU Single Market.  The objective is to prevent the same branded products from being sold with different characteristics (e.g., lower quality ingredients or less product in the same packaging) depending on the Member States or the regions in which they are placed on the market.  Among others, the report calls on the Commission to amend Annex I of the Unfair Commercial Practices Directive (“UCPD”) to include dual quality as a blacklisted practice under the UCPD.  See the adopted report here.

Also on Thursday, the European Parliament approved a report on the Commission’s Communication on a European One Health Action Plan on Antimicrobial Resistance.  Among its proposals, the European Parliament calls on the European Commission to promote initiatives to encourage the use of single use hand towels in sensitive environments and further study the relation between hand drying and the spread of pathogens.  It also calls on the Commission and EU Member States to develop in cooperation with industry new incentive models that would delink payment from prescribing volumes.  See the adopted report here.

Meetings and Agenda

No official meetings in the European Parliament are planned before September 24, 2018.

Past is Prologue: A New Approach to Cross-Border Application of Dodd-Frank Swaps Provisions

By Uttara Dukkipati on Posted in Compliance Issues, Uncategorized

On September 4, 2018, in a speech to the City Guildhall in London, Chairman Giancarlo previewed a new approach to cross-border application of Dodd-Frank swaps provisions, which will be memorialized in a forthcoming white paper.

Chairman Giancarlo began his remarks with a historical overview of cross-border swaps regulation, highlighting post Dodd-Frank reforms. He then summarized the current regulatory regime, emphasizing the substantial progress that has been made in the world’s primary swaps trading jurisdictions to implement commitments made after the 2008 financial crisis at the Pittsburgh G-20 summit.

The Chairman went on to offer a mea culpa and an apologia, stating that the CFTC’s current approach to applying swaps rules to its cross-border activities has resulted in a number of problems. The Mea culpa was offered for the 2013 cross-border guidance which imposed CFTC transaction rules on swaps traded by U.S. persons even in jurisdictions committed to G-20 swaps reforms. Chairman Giancarlo expressed his view that such an approach“alienated many overseas regulatory counterparts and squandered important American leadership and influence in global reform efforts.” The Chairman allowed that CFTC’s “over-expansive assertion of jurisdiction” may have been understandable in 2013 when other G-20 jurisdictions had not yet implemented swaps reforms. However, today, he views the approach as increasingly out of sync with the world’s major swaps trading regimes, which have since adopted comparable swaps reforms. Continue Reading

How Well Do You Know Your Supply Chain? New Policy Developments Affect Defense and Security Contractors

By Zachary Mears and Jeff Bozman on Posted in Defense Issues, Government Contracts

Generating and sustaining the United States’ global economic and military superiority over more than the last half century has depended on a dominant U.S. global economic position and perpetual technological innovation. The United States has increasingly relied on a global industrial supply chain and a relatively open environment for foreign investment in early stage technology development to sustain this dominant position, but in so doing has built risk into the foundation of its competitive advantage. The U.S. Government has growing concerns that these past practices meant to extend the U.S. economic and military advantage are contributing to its erosion. As a result, the Department of Defense (DoD), other Executive agencies, and Congress are taking steps to mitigate risks across the defense industrial and innovation supply chains that provide hardware, software, and services to the U.S. Government. Continue Reading

California Legislature Passes Amendments to Expansive Consumer Privacy Law

By Alexandra Scott on Posted in Compliance Issues, Uncategorized

Less than three months ago, California enacted the California Consumer Privacy Act of 2018 (“CCPA”). Industry and privacy watch groups alike have scrutinized the law. This summer saw fierce negotiations all in the name of improving the CCPA. Last Friday, on August 31, 2018, the California legislature passed SB 1121 to amend the CCPA.

The CCPA applies to for-profit entities that conduct business in California. It has an expansive definition of personal information, and grants California residents a number of new rights, including rights to request access to and deletion of certain data, and to opt-out of the sale of data. For a more detailed summary of the CCPA, please see our previous blog post.

SB 1121 largely preserves the substance of the CCPA, but it contains the following technical edits:

  • Immediate Implementation With Tolled AG Enforcement. SB 1121 changes the implementation date of the CCPA. Under the original CCPA, implementation was delayed until January 1, 2020. Under SB 1121, the Act takes effect immediately, but the Attorney General may not bring an enforcement action until six months after the publication of the Attorney General’s final implementation regulations or July 1, 2020 — whichever is earlier. This tolled AG enforcement does not affect the timing of private litigation, which is limited to certain data security breach scenarios.
  • Clarified Exemptions for Certain Regulated Activities. SB 1121 clarified exemptions for data already regulated under the Gramm-Leach-Bliley Act (“GLBA”), the Driver’s Privacy Protection Act (“DPPA”), and the Health Insurance Portability and Accountability Act (“HIPAA”). As originally enacted, the CCPA exempted data handled pursuant to the GLBA and the DPPA only if the CCPA conflicted with those laws. Under SB 1121, data handled pursuant to the GLBA and DPPA is exempt from the CCPA — period. SB 1121 clarifies that the CCPA does not apply to a provider of health care or another entity governed by HIPPA. SB 1121 also clarifies that the CCPA does not apply to information collected (1) by an entity governed by HIPPA or (2) as part of a clinical trial.
  • Private Right of Action. SB 1121 limits private rights of action to situations which meet the following two characteristics: (1) there is a data security breach involving unredacted or unencrypted personal information and (2) the breach was caused by the company’s failure to maintain reasonable security measures. SB 1121 notes that there is no private right of action when the company cures the alleged violation within thirty days and provides the consumer an express written statement that the violations have been cured and no further violations of the act shall occur. It also eliminates the requirement that potential plaintiffs notify the Attorney General of their suit. The Attorney General requested that this requirement be deleted in his August 22, 2018 letter.
  • Press Activities and the First Amendment. SB 1121 clarifies that the CCPA’s consumer rights and business obligations do not apply to the extent they infringe on non-commercial activities of the press. The law remains vulnerable to the extent it infringes upon other activities protected under the First Amendment.
  • Local Law Conflicts. SB 1121 adds a clause to prevent confusion created by the enactment of conflicting local laws; that clause takes effect immediately.

The CCPA requires the Attorney General’s office to promulgate implementation regulations, which will further clarify the CCPA’s substantive requirements. In the meantime, SB 1121 awaits the governor’s signature.

Covington AI/IoT Update: EPA and NHTSA Seek Comment on Autonomous and Connected Vehicles

By Jake Levine on Posted in Artificial Intelligence (AI), Internet of Things (IoT)

On Friday August 24, the Environmental Protection Agency (EPA) and the National Highway Traffic Safety Administration (NHTSA) published a proposed rule in the Federal Register: The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks (“Proposed Rule”).  83 Fed. Reg. 42817.

The long-anticipated rulemaking has garnered media attention for its proposed measures to indefinitely freeze fuel economy and greenhouse gas emissions standards, and to strip California’s long-held authority under the Clean Air Act to set its own tailpipe emissions rules.  EPA’s decision to reconsider its own determination that the previous standards were appropriate as set through the year 2025 has been challenged in court by eighteen states, private parties, and environmental NGOs.

But another set of stakeholders may be interested in the rule: autonomous and connected vehicles manufacturers and parts suppliers.  Buried deep within the Proposed Rule is a request for comment from EPA and NHTSA as to how incentives such as eligibility for credits under the rule’s off-cycle program might be deployed to “facilitate increased use of these technologies, including some level of assurance that they will lead to future additional emissions reductions.”  83 Fed. Reg. 43463.  The Proposed Rule acknowledges that connected and autonomous cars have the potential to impact vehicle emissions in the future, “with their aggregate impact being either positive or negative.”  Id.

EPA and NHTSA go into some detail as to how a credit regime for connected and autonomous vehicles might work.  For example, allocating set credit amounts allocated for vehicles capable of Vehicle-to-Vehicle (V2V) or Vehicle-to-Infrastructure (V2I) communications as an incentive to enable future transportation system efficiencies.  Similarly, the Proposed Rule discusses providing credits for vehicle automation, so long as such credits incentivized emissions reductions.  EPA also seeks comment as to whether connected and autonomous vehicles that are placed in ridesharing or “other high mileage applications” should be eligible for credits under the final rule.  Such credits would contemplate the per-mile emission reduction benefits that might accrue across fleets of shared vehicles.

EPA and NHTSA are careful to note that none of these technologies has yet to prove its emissions reduction capability.  The Proposed Rule accordingly asks for comment that illustrates how manufacturers using such connected, autonomous, and ridesharing technologies would demonstrate “real world emissions benefits.”  Many observers have noted that such benefits would accrue with the increased usage of autonomous and connected vehicles so long as those vehicles were low- or zero-emission vehicles.  This is an idea that has been tested to some degree already in the states: in California, for example, the Zero Emission Vehicle (ZEV) Regulation has contemplated that manufacturers placing zero emission vehicles into “Advanced Technology Demonstration Programs” could earn additional ZEV credits.  But as a general matter, this so-called “transportation systems” credit opportunity has not driven a significant portion of the California ZEV credit generation.

Comments are due for this Proposed Rule by October 23, 2018.  Please feel free to contact Jake Levine at jclevine@cov.com for further information.

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