Report calls for greater alignment between EU and US toxic chemical waste regulation

TOXIC chemical waste regulations in the EU and US should be more aligned to improve transparency, according to a new report.

Planet Tracker, a UK-based green finance think tank, has also called on investors to favour companies operating in jurisdictions with clearer regulations of toxic chemical waste.

In the EU, toxic chemical waste regulation is based on the worst possible harm a substance could cause if released into the environment, while US regulations are based on the likelihood of the substance causing harm. The report says that the lack of alignment between the EU and US regulatory frameworks makes it hard to evaluate a multinational corporation’s global toxic footprint.

While industry often sees the EU’s regime as more burdensome, Planet Tracker argues that it is more reliable.

The report says that clearer regulations across jurisdictions are in businesses’ best interests as the current ambiguity increases the chances of litigation. It points to chemicals manufacturer 3M who in 2023 agreed to settle legal proceedings over PFAS contamination for US$10bn which they will pay over the next 12 years.

Richard Wielechowski, a senior investment analyst at Planet Tracker, told TCE that, "behind closed doors" corporations are hoping for greater regulation. 

"There are those out there who are trying to be greener, who are trying to do things more sustainably, who actually would welcome greater regulation because it would level the playing field."

Another difference is that the EU lists 91 classes of toxic chemicals that are subject to waste regulations, while the US lists 721 specific toxic chemical compounds. The report says that this makes it possible for manufacturers to modify chemical compounds slightly so that they are not covered by the US list but still fall under EU regulations.

 Wielechowski said: “Investors must push for transparency and advocate for robust standardised regulatory framework to protect themselves.

“While producers may favour markets with a lower regulatory burden, they risk losing access to higher-regulated markets and could face litigation challenges.

“Standardisation benefits both environmental responsibility and financial stability.”

The Trump Administration

While Planet Tracker’s report favours EU regulations and recommends greater harmonisation between the US and European frameworks, the incoming presidency of Donald Trump promises further uncertainty.

Although Trump’s campaign mantra of “drill, baby, drill” pointed towards deregulation regarding fracking, the appointment of Robert Kennedy Jr – who has promised a ban on fluorides in drinking water – as the administration’s health secretary means the direction the US takes relating to chemical pollution is less straightforward.

However, Trump allies have indicated they plan to drastically shake up the US Environmental Protection Agency (EPA). In a letter to EPA administrator Michael Regan in November, Republican chair of the House Committee on oversight and accountability accused EPA scientists of trying to “hamstring the incoming Trump administration’s ability to implement their own executive agendas”.