Horizon – News And Trends In Sustainability Law

Extended producer responsibility

Oregon packaging EPR decision appealed to the Ninth Circuit. On September 24, the National Association of Wholesaler-Distributors filed a notice of appeal from the federal district court decision in NAW v. Feldon upholding Oregon’s Plastic Pollution and Recycling Modernization Act. Following a five-day bench trial, the court held on August 27 that the state’s packaging extended producer responsibility (EPR) law violates neither the dormant Commerce Clause nor the Due Process Clause of the US Constitution. NAW’s appeal is expected to renew its arguments that 1) the law unduly burdens interstate supply chains by imposing obligations on distributors that may not control packaging or its destination and 2) Oregon improperly delegated fee-setting and program administration to a private producer responsibility organization. The appeal will mark the Ninth Circuit’s first opportunity to review a federal merits decision on the constitutionality of a state packaging EPR law. Unless the appellate court grants relief, affected businesses should continue to comply with Oregon’s program.

California: Governor Newsom vetoes bill addressing the SB 54 Plastic Pollution Mitigation Fund. On September 20, California Governor Gavin Newsom vetoed SB 1180, which would have supplied additional rules for how money from the Plastic Pollution Mitigation Fund is spent. The fund was created by California’s packaging EPR law, SB 54, and is scheduled to receive USD500 million annually from 2027 through 2037 to address the environmental and public health effects of plastic pollution. SB 1180 would have prescribed eligible projects and recipients; required funded activities to advance defined mitigation, source-reduction, research, data, or monitoring purposes; and prioritized projects benefiting communities that are most burdened by plastic pollution or projects developed through durable partnerships with California Native American Tribes. Governor Newsom said he supported the bill’s goals but concluded that adding requirements while the state administration is undertaking the foundational work of implementing SB 54 could complicate both the statute and the fund. The veto does not change SB 54’s funding obligation or timetable, but it gives the governor’s administration greater discretion in developing the fund’s initial program.

California compostables bills fail to advance. AB 1812 and SB 1031, two bills that would have changed California’s rules for products labeled “compostable,” were held in their respective appropriations committees on August 13 and did not advance before the end of the legislative session. Subject to limited exceptions, AB 1812 would have prohibited the sale of products labeled “compostable” or “home compostable” if they were made wholly or partly of plastic. It would also have revised the standards for substantiating compostability claims. SB 1031 would have tightened requirements intended to help consumers and waste processors distinguish compostable products from non-compostable products and would have required the state to study potential health effects associated with degraded compostable plastics. Because neither bill passed, California’s existing compostability-labeling requirements remain unchanged. Key questions could resurface as CalRecycle continues implementing SB 54, which includes compostable packaging requirements as part of the state’s packaging EPR program.

Maine will revise its RFP as it continues to seek an EPR steward. In an email sent on September 11, Maine’s Department of Environmental Protection (DEP) reportedly stated it will revise its request for proposals (RFP) for a Stewardship Organization (SO) to manage its EPR packaging program and will alert stakeholders when that document becomes available. As we noted last month, DEP received no bids on its original RFP, leaving stakeholders asking about their obligations under the program. Circular Action Alliance, which manages most of the existing US state-level EPR programs, chose not to participate in the RFP, issuing a public statement that the Maine RFP as scoped did not align with its “operational practices, systems and data stewardship standards”; however, Circular Action Alliance continued, “If Maine issues future RFPs with a scope more closely aligned with CAA’s operating model as a PRO, we will explore those pathways and evaluate them thoughtfully.”

Maine is not the first state unable to find a PRO to administer an EPR program. Earlier this year, Vermont too was unable to find a PRO willing to handle its household hazardous waste (HHW) program, which covers materials like adhesives, aerosols, automotive chemicals, lubricants, non-refillable propane cylinders, and cleaning solutions. In June, the state enacted ACT 158, which includes provisions that may prompt PROs to work with Vermont’s HHW. In July, the state’s Agency of Natural Resources (ANR) entered into a partnership with Reverse Logistics Group (RLG), which helps businesses address recycling and environmental regulatory compliance. While the state explores routes under ACT 158 to attract PROs, RLG will manage Vermont’s HHW program billing for in-scope manufacturers, as well as sales data collection and related tasks.

Deadline for joint status report extended in Lollicup v. Feldon. As we reported last month, the US District Court for the District of Oregon (DCDO) held that Oregon’s Plastic Pollution and Recycling Modernization Act (RMA) does not violate the dormant Commerce Clause or the Due Process Clause of the US Constitution. The effect of this milestone decision on parallel lawsuits against state packaging EPR laws remains unclear. One of the most closely watched of those suits is Lollicup v. Feldon, a putative class action, also in the DCDO, that similarly seeks to overturn the RMA on constitutional grounds. On September 10, the DCDO granted the parties’ joint motion to extend the deadline to file a joint status report. That report is due by October 16.

EU launches consultation on VAT and the circular economy. On September 10, the European Commission launched a public consultation on aligning value-added tax (VAT) rules with the objectives of the circular and low-emission economy. The initiative forms part of the upcoming Circular Economy Act and seeks views on how EU VAT rules could better support circular business models. The consultation focuses on three areas: the VAT treatment of secondhand goods, the destruction of viable goods, and VAT deduction rules for passenger cars used for business purposes. The Commission is exploring whether existing VAT rules create barriers to reuse, repair, donation, and other circular economy activities. For businesses, the initiative could lead to changes in the VAT treatment of circular business models and surplus goods, potentially reducing tax disincentives associated with reuse, repair, and donation activities. The consultation is open until November 4. Feedback will inform an evaluation and impact assessment process expected to conclude in early 2027, with findings intended to support a future proposal to amend the EU VAT Directive.

Vietnam moves to further enhance its EPR rules. After consolidating its EPR rules into a single unified, more transparent framework earlier this year, Vietnam is already moving to enhance the program with several significant updates. Among the updates are proposals that would introduce:

• Mandatory recycled content requirements for packaging and products,
  
  
• Mandatory packaging design requirements to enhance recyclability, and
  
  
• A requirement for companies to organize collection and recycling themselves, or, alternatively, to use the services of a qualified stewardship organization – at present, businesses have the option to pay into the Vietnam Environment Protection Fund to support the country’s recycling activities.

The proposed changes apply to the country’s 2020 Law on Environmental Protection and its implementing regulations. They were announced at the “Pathways for a Robust Extended Producer Responsibility System in Vietnam” workshop in Hanoi in August.

Find out more about EPR. Visit DLA Piper’s Extended Producer Responsibility Hub to learn more about the firm’s work assisting businesses with their EPR obligations up and down the supply chain.

Sustainability: Regulatory

California adds microplastics Candidate Chemicals List under Safer Consumer Products framework. On October 1, a rule adding microplastics to California’s Safer Consumer Products Candidate Chemicals List took effect. The Department of Toxic Substances Control (DTSC) adopted the rule based on its determination that microplastics are persistent, highly mobile in the environment, and associated with potential adverse impacts due to widespread human and ecological exposure. Importantly, the listing does not itself impose new compliance obligations, product restrictions, or bans. Instead, inclusion on the Candidate Chemicals List establishes the foundation for DTSC to evaluate and potentially regulate future Priority Products that contain or generate microplastics through separate rulemaking processes that would include additional public notice and stakeholder input. The development is part of California’s broader effort to address microplastic pollution, signaling increased regulatory scrutiny of products that may release microplastic across their life cycles.

EPA rescinds Carbon Pollution Standards governing power plant emissions, seeks to eliminate all GHG limits for utilities. On September 14, EPA issued a final rule rescinding the Carbon Pollution Standards, a rule finalized in 2024 that limits the CO2 emissions from coal-fired and certain gas-fired plants. That rule required existing coal plants and new high-utilization gas plants to sharply reduce their emissions, including by adopting carbon capture and storage technologies. The final rule is the latest in a series of rollbacks of key federal emissions rules, chief among them the rescission, in February this year, of the Endangerment Finding. In a separate action, the agency also issued a supplemental proposal explaining its rationale for eliminating all GHG limits on utilities. The proposal supports rescission of every remaining GHG standard for the power sector. It argues that the Clean Air Act (CAA) is best understood as focusing on local air pollutants rather than global climate change impacts. CAA section 111, it states, “does not give the agency the authority to regulate power plant emissions based on climate change,” adding, “Models continue to show that GHG emissions from power plants have no material impact on global climate change.” Applying the CAA to regulate GHG emissions from power plants, EPA states, is therefore an unlawful regulatory framework. The comment period on the supplementary proposal is open until November 2.

Lawsuits against the final rule have already been filed. On September 17, a coalition of environmental and healthcare groups, led by the American Lung Association, launched the first action challenging the rollback, filing a petition for review in the US Court of Appeals for the DC Circuit. Power plants are the second-largest source of GHG emissions in the US, after transportation.

SEC proposes rescinding Rule 14a-8. On September 16, the Securities and Exchange Commission (SEC) announced that it is proposing to rescind Rule 14a-8, which governs when public companies must include shareholder proposals in their proxy materials. As our Market Edge blog reported last year, SEC Chair Paul S. Atkins suggested in October 2025 that the agency was amenable to arguments from Delaware-incorporated companies seeking to exclude precatory shareholder proposals from company proxy materials. At the time, Atkins specifically mentioned his interest to “de-politicize shareholder meetings,” specifically pointing to ESG proposals that “consume a significant amount of management’s time and impose costs on the company.” According to the SEC fact sheet discussing the proposed rescission, “the existence of Rule 14a-8 places the Commission in the position of making judgments about the application of state law that are best left to other actors.” The existence of Rule 14a-8, furthermore, has “inhibited the development of state law and private ordering.’” A 60-day public comment period will open once the proposal is published in the Federal Register. See our alert explaining the proposed rescission.

CalRecycle is stepping up enforcement of SB 1383. The California Department of Resources Recycling and Recovery (CalRecycle) is reportedly shifting its approach to SB 1383, the Short-Lived Climate Pollutants Reduction Strategy. SB 1383, enacted in 2016, builds on a methane-reduction strategy set out in the California Global Warming Solutions Act of 2006 to mandate organic waste recycling and edible food recovery. Among other things, it requires all businesses and residents in California to separate organic materials, such as food scraps and yard trimmings, and place them in designated green bins for composting. It also requires businesses classified as Edible Food Generators to recover and donate edible food to food recovery groups or food banks rather than discard it, and to maintain records of their donations. Regulatory attention is now shifting to tighter enforcement and long-term compliance. For instance, CalRecycle is increasing its local jurisdictional audits of compost procurement rule compliance and edible food recovery programs. Meanwhile, nonprofit groups such as Californians Against Waste are urging support for SB 1383’s goals through better funding for food recovery organizations and food banks.

Healthcare coalition calls on Wisconsin political candidates to declare climate change a public health emergency. Ahead of the November election, a Wisconsin coalition of major medical associations and hundreds of healthcare and public health professionals called on the state’s next governor and state legislators to declare climate change a public health emergency. The coalition is urging legislative action on a broad scale, ranging from additional investment in public transit and public education about the health impacts of climate change to accelerating electrification of vehicles and industries. They have particularly called for legislators to commit to achieving 100-percent carbon-free electricity generation by 2040. Following the proposal of multiple new natural gas plants across Wisconsin, the coalition called for an end to construction of fossil-fuel fired electricity plants in the state. Among the associations involved in this campaign are the Wisconsin Public Health Association, the Wisconsin chapter of the American Academy of Pediatrics, the Wisconsin Nurses Association, and MKE FreshAir Collective.

EU Commission proposes simpler and more strategic public procurement rules, including environmental sustainability requirements. On September 9, the European Commission adopted a proposal for a new Public Procurement Act that would replace the existing EU procurement directives with a single regulation. The proposal would move public procurement away from a predominantly price-based approach by requiring greater consideration of quality and broader policy objectives. When awarding contracts, contracting authorities would be expected to place more weight on such factors as environmental sustainability, supply-chain resilience, innovation, and social considerations. The reforms also seek to simplify procurement processes through a single regulatory framework, fewer procurement procedures, and the creation of an integrated EU digital procurement marketplace. The Commission estimates that the changes could generate significant administrative savings for both contracting authorities and businesses.

EU publishes guidance on NZIA procurement requirements. The European Commission has published guidance on the application of Article 25 of the Net-Zero Industry Act (NZIA), which sets out how sustainability and resilience considerations should be assessed in public procurement procedures involving net-zero technologies. The guidance, issued on August 31, clarifies how contracting authorities should assess environmental sustainability, resilience, cybersecurity, and delivery-related considerations when procuring net-zero technologies. It also provides further detail on resilience assessments, including how the origin of net-zero technology products and key components should be evaluated. For manufacturers and suppliers, the guidance offers greater clarity on the factors that may influence competitiveness in procurement processes under the NZIA. The guidance will support implementation of the NZIA's procurement provisions and may be updated by the Commission as the framework develops.

UK launches review of Zero Emission Vehicle Mandate. The UK government has launched a consultation on the operation of the Zero Emission Vehicle (ZEV) Mandate, seeking views on its effectiveness and potential future amendments. The review forms part of the government's commitment to assess the Vehicle Emissions Trading Schemes (VETS) Order by early 2027. The consultation examines core aspects of the ZEV Mandate, including annual zero-emission vehicle targets, compliance flexibilities, and potential alternative policy options. In particular, the government is seeking views on whether the current sales trajectory should be maintained or replaced with lower annual targets; whether flexibilities such as credit trading, banking, and borrowing should be extended; and how plug-in hybrid electric vehicles (PHEVs) should be treated under the regime. It also explores options for defining the planned 2030 phase-out of new internal combustion engine-only cars. The review provides an opportunity for government to assess whether the current framework remains effective in supporting vehicle electrification while maintaining industry competitiveness and consumer choice. For vehicle manufacturers, suppliers, and fleet operators, it may offer an early indication of future changes to compliance requirements, market incentives, and transition timelines. The consultation closes on October 23. Feedback will inform the government's review of the ZEV Mandate and may inform potential future amendments to the VETS order.

New implementation plan advances China’s digital and green transformation agenda. On September 4, the Cyberspace Administration of China, alongside six other government agencies, issued the Implementation Plan for Promoting the Coordinated Development of Digitalization and Green Transformation (2026–2030). Key priorities for the 2026–2030 period include artificial intelligence-enabled green innovation, improved energy efficiency of digital infrastructure, digital carbon management, product carbon footprint accounting, and the development of low-carbon supply chains. The plan also promotes the use of digital technologies to support green transformation across sectors including manufacturing, agriculture, trade, and urban operations. See the plan and the official Q&A. (Both pages are in Mandarin.)

Sustainability: Litigation

SEC seeks four years of ISS client records in ESG probe. On September 4, the SEC filed a subpoena enforcement action in the US District Court for the Eastern District of Pennsylvania seeking an order to compel Institutional Shareholder Services Inc. (ISS) to produce detailed client-level voting data as part of an ongoing probe of ISS’s ESG and diversity, equity, and inclusion (DEI) services and recommendations. The probe follows Executive Order (EO) 14366, “Protecting American Investors from Foreign-Owned and Politically-Motivated Proxy Advisors,” which President Donald Trump signed in December 2025. That EO directed the SEC to review rules and practices related to proxy advisors and expressed concern that proxy advisors, including ISS, are using their power to advance and prioritize radical politically motivated agendas. In March 2026, the SEC’s Division of Examinations began an examination of ISS. On July 20, the SEC issued a formal order of investigation to determine whether ISS violated securities laws, including its fiduciary duty to provide advice in its clients' best interests. As part of the investigation, the SEC requested, among other things, four years of data on proxy recommendations and votes, including the names of clients who received recommendations and details of the votes cast on their behalf. In its court filing, the SEC alleges that ISS has refused to fully comply. On September 18, ISS filed an opposition, arguing that the demand raises First Amendment concerns and that client confidentiality is critical to protect against retaliation for protected speech and voting decisions. The case remains pending.

ISS sues to halt enforcement of Oklahoma HB 4429. ISS filed suit against Oklahoma State Attorney General Gentner Drummond, seeking to halt enforcement against it of Oklahoma’s HB 4429, the Proxy Advisor Transparency Act. Enacted in May this year and taking effect November 1, HB 4429 requires proxy advisors to disclose if their advice relies on non-financial criteria and to provide supporting financial data when their advice goes against management recommendations. It specifically calls out such advice based on ESG investing, DEI, and social credit and sustainability scores. In its complaint, ISS describes HB 4429 as unconstitutional in a number of ways, calling the law “textbook viewpoint discrimination” that unconstitutionally compels speech. The complaint also notes numerous other flaws in the law: for instance, “The law’s heavy obligations apply only if ISS makes a recommendation against company management.” ISS has obtained preliminary injunctions in three other lawsuits against similar measures in Indiana, Kansas, and Texas. Like those laws, HB 4429 is based on model legislation proposed by Consumers Defense, a nonprofit whose website states, “Our mission is to advance policy that protects Americans from the scourge of ESG in all its forms.” ISS is asking the court for a preliminary injunction preventing enforcement of HB 4429 against it. This case is in its earliest stages, but, the complaint states, “Because the law threatens ISS with prosecution and ruinous fines for exercising its rights, ISS respectfully requests a decision in advance of the law’s November 1 effective date.” See the complaint here.

Federal courts deliver setbacks to states in three climate-related suits. Three federal decisions issued within the last month limit state efforts to impose climate-related liability on fossil-fuel companies. As we reported in our August issue, on August 31, the US District Court for the Northern District of New York held that New York’s Climate Change Superfund Act was pre-empted by the CAA and the federal foreign-affairs power. The statute would have required certain fossil-fuel producers and refiners to pay a combined USD75 billion over 25 years toward climate-adaptation projects, based on emissions attributed to their products worldwide. On September 24, the US District Court for the Southern District of New York reached the same result in the federal government’s separate challenge and permanently barred enforcement of the statute. Two days earlier, the US District Court for the Western District of Michigan dismissed Michigan’s antitrust suit alleging that four oil companies and the American Petroleum Institute conspired to suppress competition from renewable energy and electric vehicles. The court held that most of Michigan’s alleged harms were not antitrust injuries and that the asserted link between the alleged conspiracy and higher energy prices was too remote. The New York decisions may affect the pending challenge to Vermont’s similar climate superfund law, while the Michigan ruling shows the difficulty of recasting climate claims as antitrust violations. These decisions arrive against the backdrop of the US Supreme Court’s decision to hear Suncor Energy Inc. v. Cnty Comm’rs of Boulder Cnty, which will review the Colorado Supreme Court’s decision denying dismissal of Boulder County’s suit for damages related to climate change. That case will decide “[w]hether federal law precludes state-law claims seeking relief for injuries allegedly caused by the effects of interstate and international greenhouse-gas emissions on the global climate” and whether federal courts have jurisdiction over such cases under Article III of the US Constitution. The Solicitor General’s motion to participate in oral arguments was granted in early September.

Dutch court allows climate case against ING to proceed. Environmental organization Milieudefensie has overcome a procedural challenge in its climate litigation against ING Groep NV, with a Dutch court ruling that the claim is admissible and rejecting the bank's objections. The case, which is expected to proceed to substantive hearings in spring 2027, seeks to hold ING accountable for the climate impacts associated with its financing activities. The litigation is among the first cases testing whether banks can be held legally responsible for climate-related harms linked to their lending and investment portfolios.

To view the full article please click here.