Environmental Regulation

State of play.

• The federal deregulatory posture is reshaping NEPA permitting across sectors. The NRC expanded its categorical exclusions under a final rule effective April 29, 2026, and CEQ issued complementary guidance directing all federal agencies to adopt a "CE-first" approach—signaling a structural shift in how routine federal actions clear environmental review .
• California's climate disclosure regime has moved from statute to imminent compliance obligation. CARB's implementing regulations for SB 253 and SB 261 impose an August 10, 2026 deadline for Scope 1 and 2 reporting by companies with over $1 billion in annual revenue doing business in California, with Scope 3 reporting beginning in 2027 and enforcement mechanisms still under development .
• Federal coal mine oversight has been rolled back and is now in active litigation. The Trump administration's 2026 OSMRE revisions—returning oversight to 2020 form and eliminating the Ten-Day Notice federal intervention process—face a D.C. District Court challenge by Citizens Coal Council, Appalachian Voices, and Sierra Club .
• State-level EPR packaging deadlines are arriving now. May 31, 2026 supply reporting deadlines are active in Oregon, Colorado, Minnesota, Maryland, and Washington, with California's June 1 EPR registration deadline under finalized SB 54 rules—the first major enforcement triggers across the seven-state program .
• For counsel advising companies with California operations or multi-state consumer product exposure, the practical baseline is a convergence of hard deadlines—August 10 for California climate disclosure, May 31 for EPR supply reports in five states, June 1 for California EPR registration, and June 22 for the first TSCA CBI expirations—requiring simultaneous compliance triage across regulatory vectors.

Where things stand.

• NEPA streamlining is accelerating across federal agencies. The NRC's expanded categorical exclusions (effective April 29, 2026) and CEQ's "CE-first" guidance represent the most concrete implementation of the administration's permitting reform agenda; a further NRC proposed rule is expected by end of May 2026 .
• California climate disclosure has an imminent Scope 1/2 deadline and a developing Scope 3 regime. CARB's implementing regulations under SB 253 and SB 261 require GHG Protocol-compliant reporting with limited assurance beginning in 2027 and potential escalation to reasonable assurance by 2030; safe harbors for good-faith Scope 3 estimates exist but litigation risk from regulators and plaintiffs' counsel is live .
• Packaging EPR is now an enforcement-stage obligation in seven states. The Circular Action Alliance operates as the primary PRO; California's final SB 54 regulations took effect May 1, 2026, with a June 1 registration deadline and $50,000-per-day penalties and sales bans beginning January 1, 2027 for noncompliance; Hawaii, Massachusetts, and New York are considering similar legislation .
• TSCA CBI claims face a hard deadline. EPA released its first list of 294 CBI claims expiring June 22–July 31, 2026—the inaugural wave under the 2016 Lautenberg 10-year sunset; extension requests must be filed through CDX at least 30 days before expiration or proprietary chemical data becomes public with no reconsideration .
• PFAS regulatory scope is expanding on multiple fronts. Six PFAS are already regulated in drinking water (June 2024 rule); the draft CCL 6 adds microplastics and pharmaceuticals as priority contaminants for the first time; state petitions seek Clean Air Act HAP designation for PFOS, PFOA, PFNA, and GenX, with EPA having 18 months to respond .
• Chemical manufacturing facilities face compressed NESHAP compliance. Updated area-source standards under CAA Section 112(d)(6) cover approximately 251 facilities; performance tests are due June 1, 2026, and compliance status reports by August 31, 2026 .
• Environmental self-disclosure is a live M&A structuring issue. EPA, DOJ, and state audit policies under CERCLA shape how environmental liabilities are valued and allocated in transactions; Phase I assessments and compliance audits are standard but allocation mechanics in current deals remain contested .
• Data center siting has become an environmental and land-use battleground. Maine vetoed a statewide moratorium but signed legislation barring data centers from state tax incentives; the No Data Center Coalition is tracking nationally blocked projects framed in environmental-racism terms .
• Carbon markets face a structural demand test. Microsoft—which accounted for approximately 87–90% of global carbon removal purchases in 2025 per Heatmap and Bloomberg reporting—has paused new purchases, leaving direct air capture, biochar, and nature-based solution developers without their primary buyer .
• The EPA's Safer Choice Program faces administrative uncertainty. The American Sustainable Business Network has mobilized a coalition of over 200 businesses seeking congressional authorization for the program amid Trump administration rollback proposals; the DoD's NDAA mandate to purchase Safer Choice-certified products adds a federal procurement dimension .
• Coal mine federal oversight is contested terrain in D.C. District Court. The 2026 OSMRE revisions restore state primacy and eliminate the Ten-Day Notice process; the litigation (1:26-cv-01348) will test whether SMCRA permits this rollback and whether federal intervention authority over Appalachian water quality and mountaintop removal impacts survives .

Latest developments.

• Citizens Coal Council, Appalachian Voices, and Sierra Club filed suit in D.C. District Court (1:26-cv-01348) on April 20, 2026, challenging OSMRE's 2026 rollback of coal mine oversight regulations—specifically the elimination of the Ten-Day Notice federal intervention process—and seeking restoration of the 2024 Biden-era rules; this is the second challenge by the same plaintiffs, who previously withdrew when Biden restored federal oversight in 2024 .

Active questions and open splits.

• Does the OSMRE rollback survive SMCRA scrutiny? The D.C. District Court challenge will test whether gutting the Ten-Day Notice process and restoring state primacy violates the Surface Mining Control and Reclamation Act; discovery on OSM's cost-benefit analysis and internal rationale will be the evidentiary battleground, and the outcome determines whether federal intervention authority over Appalachian water quality and mountaintop removal impacts survives .
• How far does the "CE-first" NEPA reform reach? CEQ's guidance applies government-wide, but its legal durability—and whether challengers can attack individual categorical exclusion expansions as arbitrary—remains untested in court; the NRC's forthcoming May 2026 proposed rule will be the next concrete test case .
• What is the litigation exposure profile under California's climate disclosure regime? CARB's regulations include safe harbors for good-faith Scope 3 estimates, but enforcement mechanisms and penalty structures are still under development; the gap between the August 10 Scope 1/2 deadline and the 2027 Scope 3 start creates a window where plaintiffs' counsel and regulators will test the boundaries—particularly for companies with data gaps in complex supply chains .
• Will PFAS regulation extend to air emissions? Three states' Clean Air Act HAP petition for PFOS, PFOA, PFNA, and GenX is pending with an 18-month EPA response window; a positive determination would impose industrial air emissions compliance obligations on a far broader set of facilities than the existing drinking water rules .
• What is the compliance standard for TSCA CBI extensions? The first wave of 294 expirations under the 2016 Lautenberg sunset is the inaugural test of EPA's substantiation review; how the agency evaluates competitive-harm claims and what appeal rights exist under TSCA Section 19 remain untested at scale .
• Can carbon removal markets sustain themselves without a dominant buyer? Microsoft's pause exposes the market's single-buyer dependency; whether policy mechanisms—tax credits, procurement mandates—can substitute for voluntary corporate demand is unresolved, with direct implications for clients holding carbon removal contracts or project-finance exposure .
• Does data center opposition generate viable environmental litigation? Communities are framing opposition in environmental-racism and resource-strain terms; the legal theories—zoning authority, EIA requirements, public nuisance—are being tested in real time across multiple jurisdictions, with no settled doctrine yet .

What to watch.

• The May 31, 2026 EPR supply reporting deadline across five states—the first major enforcement trigger that will reveal how state agencies handle noncompliance and whether penalty structures are applied uniformly .
• Early motions practice in the OSMRE coal mine oversight case (1:26-cv-01348)—specifically whether the court issues a preliminary injunction restoring the Ten-Day Notice process, which would be the first judicial test of the administration's surface mining deregulatory rationale .
• NRC's anticipated May 2026 proposed rule for further NEPA implementing regulation revisions—the next concrete signal of how far permitting streamlining extends for nuclear licensees and, by analogy, other infrastructure sectors .
• The August 10, 2026 California Scope 1/2 disclosure deadline and CARB's concurrent rulemaking on Scope 3 and assurance requirements—both will define the enforcement posture that shapes litigation risk for the 2027 Scope 3 cycle .
• EPA's June 5, 2026 close of the CCL 6 public comment period and finalization timeline for microplastics and pharmaceuticals—and whether the agency signals movement toward binding standards .
• Whether the Kharg Island oil spill cause is confirmed—structural failure, deliberate dumping, or military strike—which would determine applicable liability and cleanup frameworks and whether Gulf state regulatory responses affect US sanctions enforcement posture .