Top 3 takeaways: Enablon and Enhesa experts talk trends

Enhesa experts recently joined Wolters Kluwer Enablon on a joint webinar series for the US, EMEA, and APAC to outline emerging and revised compliance regulations in the United States, Europe, and Asia Pacific. In this article, we summarize the top three takeaways from the webinars, examining how PFAS, greenwashing, and carbon emissions are shaping the future landscape of sustainability and environmental compliance.  

Read on to learn how stricter PFAS regulations, including prohibitions and bans in various products, are being pushed to the forefront in multiple US state bills and Japan; how the risk of greenwashing is propelling fines in the US and Australia; and how China and the EU are reshaping the carbon emission market to mitigate pollution.

Takeaway #1 – more PFAS bans than ever before

Enhesa experts Taylor Murphy and Michiel Scholberg, with Wolters Kluwer Enablon’s Kyle Schiber, outlined how stricter regulations on PFAS are overwhelming the chemicals compliance landscape in the United States.  

PFAS — Per- and polyfluoroalkyl substances — are well known for their durable composition, harmful effects on human health, and toxicity to the environment. PFAS is present in hundreds of product categories worldwide, as well as in soil, bodies of water, and air. As more information on its harmful effects comes to light, governmental authorities across the globe are cracking down on its presence. PFAS is being prohibited or banned more than ever.  

The current regulations on managing PFAS in various states include: 

• Scrutinizing the presence of PFAS in drinking water in Arizonia and Indiana 

• Monitoring PFAS in wastewater in Illinois, North Carolina, and Hawaii 

• Assessing PFAS materials in packaging in Vermont, New Jersey, California, and Michigan 

• Tracking PFAS exposure in various consumer products in Massachusetts, New Hampshire, Maryland, Connecticut, California 

Further, New Jersey and Colorado have banned class B firefighting foams containing intentionally added PFAS. Maine recently passed legislation outlawing PFAS in nearly all products by 2030s. However, regulatory authorities are witnessing pushback at the state level, with many countries arguing it could be impossible to replace PFAS in many products.  

Outside of the US, Asia Pacific is stepping up efforts to regulate PFAS. From 1 February 2024, companies in Japan are prohibited from manufacturing, importing, and exporting PFHxS, its isomers, and related salts. And in Vietnam, a draft law to ban hazardous chemicals, including PFAS, in products mandates that companies need to provide data and information to stakeholders.  

These emerging stricter regulations will force companies to be more vigilant in their use and disposal of PFAS-contaminated products, as well as encourage them to opt for safer, more sustainable alternatives. Our experts recommended companies take stock of the chemicals in their processes and look towards more sustainable chemistry solutions.

Takeaway #2 – increased fines in greenwashing regulations

Greenwashing is the deceptive act of making a product appear more environmentally friendly than it actually is to mislead consumers and investors into supporting the brand. Around the world, there’s a number of regulations aimed at controlling and mitigating greenwashing attempts, most notably mandating that companies provide evidence to substantiate their green claims.  

Our experts discussed stricter regulations and fines in US states and Australia. In the US specifically, New York, Washington, and New Hampshire have bolstered requirements to combat the risk of greenwashing. These states are placing more emphasis on fighting against deceptive or misleading claims on recyclable plastic products. There’s been an increase in federal fines, as experts discussed: 

• In September 2023, SEC fined a large investment company USD 19 million for misleading ESG statements  

• In February 2024, a New York attorney general sued a beef producer for false net zero claims that didn’t account for the majority of GHG emissions from its supply chains 

Enhesa experts Ellen Zhang and Michiel Scholberg, along with Wolters Kluwer Enablon’s Jay Mahoney and Claire Hicks, touched on how Australia is combating greenwashing. At the end of 2023, the Australian Competition & Consumer Commission (ACCC) published “Making environmental claims: A guide for business”, to provide guidance on maintaining compliance with Australian Consumer Law (ACL). Under the ACL, businesses can’t make false or misleading claims. The publication includes eight principles to help companies avoid making unjustified claims and running the risk of financial and reputational damages. The maximum penalty for breaching ACL is AUD 50 million.

Takeaway #3 – refining the carbon emission market

Enhesa experts Octavio Sambiase and Michiel Scholberg outlined Europe’s new carbon emission storage method with Wolters Kluwer Enablon’s Paul Tours.  

By 2034, Europe aims to have their Carbon Border Adjustment Mechanism (CBAM) fully in place, to replace the Emissions Trading System (ETS). CBAM will allocate prices on carbon emissions imported into the EU. The country hopes this will incentivize countries to opt for greener policies and more sustainable goods to reduce their emissions and, therefore, reduce the cost they’re mandated to pay. 

Sectors covered by the CBAM include cement, iron, steel, aluminum, fertilizers, electricity, and hydrogen initially, but it should cover all EU ETS sectors by 2030. During the transitional period between October 2023 and December 2025, only reporting requirements will be in place, but from January 2026 only one EU reporting method will be permitted. Once fully implemented, CBAM will capture 50% more of the carbon emissions, our experts noted.  

Meanwhile in China, the Interim Regulation on the Management of Carbon Emission Trading is refining the overall carbon emission market, transitioning from being free to having both free and paid allowances. The hope in incorporating costs is that companies will try to reduce their carbon emissions to avoid running the risk of high costs and fines. The emission allowances are allocated based on production, with high-emitting industries entering first, such as chemicals, cement, steel, and civil aviation. They intend to include additional industries step by step.  

BONUS – EU Deforestation Regulation

Additionally, speakers presented the EU Deforestation Regulation (EUDR). This Regulation sets mandatory due diligence rules for companies importing or exporting certain commodities associated with deforestation and forest degradation (including soy, beef, palm oil, wood, cocoa, and coffee) to the EU market. 

Under the EUDR, companies must implement a due diligence system and issue a statement verifying that the goods are deforestation-free. They’re required to trace every relevant commodity back to its original plot of land and include geolocation information in the due diligence statement for imports and exports.  

The EUDR entered into force on 29 June 2023, but the main prohibitions and obligations don’t apply until 30 December 2024.