What does Trump’s order on deregulation mean for the chemicals industry?
The recent executive order on “unleashing prosperity through deregulation” instructs federal agencies to carry out the Trump administration’s deregulatory agenda, calling on each agency to eliminate at least 10 regulations for every new one it issues or proposes. The move casts uncertainty over the future of many Toxic Substances Control Act (TSCA) rules finalized or planned by the previous administration.
By Xiaolu Wang, Esq., Julia John, MS | Feb 12, 2025 4:40 PM EST
Regulatory background: Trump’s deregulatory agenda
- President DONALD TRUMP centered the new EPA’s mission on deregulation in a November statement announcing LEE ZELDIN as his pick to be the agency’s administrator. Zeldin “will ensure fair and swift deregulatory decisions that will be enacted in a way to unleash the power of American businesses,” Trump wrote.
- The deregulatory stance echoes that of the first Trump administration. A 2017 executive order, EO 13771, on “reducing regulation and reducing regulatory costs,” directed federal agencies to “identify at least two existing regulations to be repealed” for every new issued or proposed regulation. The EO also blocked agencies from issuing regulations not included on the most recent unified regulatory agenda. A month after releasing EO 13771, Trump followed up by directing each agency to create a regulatory reform task force he said would “ focus on eliminating costly and unnecessary regulations.” The administration repealed 5½ regulations for every new one issued, according to a White House fact sheet.
- The Heritage Foundation’s Project 2025 – a conservative executive branch blueprint published in 2023 that Trump seems to be following – took issue with the Biden EPA’s approach to risk evaluations for existing chemicals under the Toxic Substances Control Act (TSCA). The think tank called for “focus[ing] the scope of chemical evaluations on pathways of exposure that are not covered by other program offices and other environmental statutes.” The EPA should “eliminate scope creep to ensure that evaluations can be completed in a timely manner consistent with the statutory requirements,” the organization wrote. Additionally, according to Project 2025, TSCA section 6 risk evaluation and management rules should presume that workplaces meet Occupational Safety and Health Administration (OSHA) requirements for personal protective equipment (PPE) use.
EO: ‘Unleashing prosperity through deregulation’
- The second Trump administration’s EO on “ unleashing prosperity through deregulation,” released Jan. 31, builds on EO 13771. The new order, EO 14192, calls on each federal agency to identify at least 10 regulations for withdrawal for every new one it issues or proposes in fiscal year 2025. The goal is “to significantly reduce the private expenditures required to comply with Federal regulations to secure America’s economic prosperity and national security” and “ensure that the cost of planned regulations is responsibly managed and controlled through a rigorous regulatory budgeting process.”
- Under the EO, the EPA and other agencies must “ensure that the total incremental cost of all new regulations, including repealed regulations, being finalized this year shall be significantly less than zero,” as determined by the Office of Management and Budget (OMB). The EO requires any incremental costs linked to new regulations to be offset by eliminating costs from at least 10 existing regulations.
- The EO also directs the OMB to provide guidance on implementing the regulatory cap, including standards to measure regulatory costs and “methods to oversee the issuance of rules with costs offset by savings at different times or different agencies.” The order doesn’t specify timelines for the guidance’s publication.
- For future fiscal years, the EO instructs agencies to identify offsetting regulations for those expected to increase incremental cost and estimate total costs or savings for each new or repealed regulation in regulatory plans submitted to the OMB. The OMB must identify “a total amount of incremental costs that will be allowed for each agency in issuing new regulations and repealing regulations” during the annual presidential budget process.
- Like EO 13771, the new EO generally prohibits agencies from issuing regulations not included in the most recent unified regulatory agenda and mandates OMB approval for any addition or removal of regulations on the agenda. This restriction on unplanned regulatory activities means the EPA will no longer be able to deviate much from objectives laid out in the agenda.
- Notably, the EO’s definition of “regulation” encompasses rules, memoranda, administrative orders, guidance documents, policy statements and interagency agreements. Therefore, the EPA may hold or pull back many kinds of actions under the order.
TSCA rules vulnerable to repeal
- Several TSCA risk evaluation and management rules for existing chemicals could be on the Trump EPA’s rollback list. A Jan. 20 EO on “ initial rescissions of harmful executive orders” revoked a TSCA-related Biden EO on “protecting public health and the environment.” This suggests that the new EPA’s stance aligns with Project 2025 and that certain industry-opposed TSCA section 6 rules the Biden administration finalized last year could be withdrawn and redone.
- The Biden EO had prompted the previous EPA to revisit all “first 10” TSCA risk evaluations completed by the first Trump administration. The agency redid most of the assessments with various risk evaluation policy changes, including removing a Trump-era assumption of proper workplace PPE use, evaluating additional exposure routes such as air, water or disposal exposures to the general population, and explicitly considering “ fenceline communities” near industrial sites. Moreover, the Biden EPA adopted a “ whole chemical approach,” making a single determination on a substance’s unreasonable risk of health or environmental injury instead of separate determinations per condition of use (COU). In a December letter to Trump, the National Association of Manufacturers (NAM) and dozens of other industry groups described the Biden administration’s consideration of exposures as too conservative and prompting “unnecessary regulation.”
- The Trump EPA could withdraw several TSCA section 6(a) risk management rules resulting from the Biden-era revised risk determinations and reverse the underlying evaluation approach, including for the solvents trichloroethylene (TCE), perchloroethylene (PCE), carbon tetrachloride (CTC) and methylene chloride. The new EPA has already postponed the TCE rule’s effective date from January to March, pursuant to a regulatory freeze intended to allow review of any relevant “questions of fact, law, and policy” for formally published rules yet to take effect. The agency may further delay the effective date, with a potential opportunity for public comment, and pursue similar action on other rules issued in the final days of the Biden administration, such as those on PCE and CTC.
- Meanwhile, the EPA is likely to scrutinize and modify 2024 risk management proposals for 1-bromopropane (1-BP), C.I. pigment violet 29 (PV29) and n-methylpyrrolidone (NMP) with an eye toward reducing any associated regulatory burdens, possibly further delaying the already overdue final rules.
- The EPA will likely also repeal a 2024 procedural rule codifying the Biden administration’s TSCA risk evaluation approach. The EPA may think the rule causes “scope creep” because it requires the agency to evaluate all “known, intended or reasonably foreseen” COUs for a substance – including all exposure pathways – and added “overburdened communities” to the regulatory definition of potentially exposed or susceptible subpopulation (PESS). [ Read AgencyIQ’s analysis on the rule.]
- Furthermore, the EPA could withdraw a December rule looking to enhance the efficiency of TSCA section 5 premarket reviews and better align the regulations with the 2016 Lautenberg amendments. According to the American Chemistry Council (ACC), however, the Biden EPA “missed an opportunity to improve the predictability and timeliness of the TSCA New Chemicals program” with the rule, which took effect Jan. 17. The rule also codified a Biden-era policy making per- and polyfluoroalkyl substances (PFAS) categorically ineligible for low volume exemptions (LVEs) and low release and exposure exemptions (LoREXs). This provision “has hamstrung the ability to supply small quantities of critical substances” and “threatens vital industries,” the ACC wrote – potential impacts that could provide a strong rationale for the agency to repeal the rule. [ Check out AgencyIQ’s analysis on the rule.]
PFAS rules that may be withdrawn
- Other industry-criticized Biden-era rules addressing PFAS are also candidates for the chopping block. They include the 2023 TSCA section 8(a) reporting rule compelling companies – including article importers – to submit information on their use of roughly 1,500 PFAS going back to 2011. In their recent letter to Trump, NAM and the other trade organizations wrote that the rule “will only serve to impose significant costs on manufacturers of all sizes.”
- Additionally, the EPA will probably roll back 2024 PFAS drinking water limits under the Safe Drinking Water Act (SDWA). The agency will likely do the same with hazardous substance designations for perfluorooctanoic acid (PFOA) and perfluorooctane sulfonic acid (PFOS) established last year to make releasers of the compounds fund cleanup activities under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). The industry groups asked Trump “to pause these PFAS rulemakings and listings, and instead take an incremental approach to PFAS that first addresses the higher risk non-polymer PFAS chemicals.” [ See AgencyIQ’s analysis on the Biden EPA’s PFAS actions.]
Potential impacts
- So, what does EO 14192 on “unleashing prosperity through deregulation” mean for the chemicals industry? The order raises questions about the future of many chemicals-related rules finalized or proposed by the previous administration. Trump’s deregulatory agenda will probably limit regulatory activities affecting the industry, at least in the near term. Companies may face fewer compliance obligations after seeing a flurry of TSCA rules and other chemicals-related actions toward the end of the Biden administration. However, a 2021 Government Accountability Office (GAO) report concluded that the first Trump administration’s deregulatory EOs “did not substantially change selected agencies’ processes or procedures,” at the EPA and four other agencies. The new EO could have more impact because it sets out a 10-to-1 deregulatory goal — five times greater than that of EO 13771. Several Biden-era chemicals rules were met with legal challenges after their release, so the new EPA may seek voluntary remand to pull back the regulations and modify them.
- EPA regulatory repeals would probably trigger more lawsuits from environmental groups, especially for statutorily mandated, timebound actions such as TSCA risk management rules and the PFAS reporting rule. Legal challenges might result in court orders and court-enforced deadlines for further rulemaking, especially in a post-Chevron world, where the agency’s interpretation of federal statutes no longer receives automatic deference. To defend a regulatory rollback under TSCA in court, the EPA would need to show it is using the “best reading” of the law, a standard that may hurt or help the deregulatory effort depending on how well the agency makes its case. [ Check out AgencyIQ’s analysis on the 2024 Supreme Court decision overturning Chevron deference.]
- Litigation would increase uncertainty around the EPA’s regulatory activities, potentially complicating compliance for industry. Regardless of what happens, companies should keep careful track of the agency’s regulatory and deregulatory activities under the new administration to stay on top of their obligations over the coming years. [ Read AgencyIQ’s analysis for more on the Trump administration’s initial actions.]
To contact the authors of this item, please email Xiaolu Wang (xwang@agencyiq.com) and Julia John (jjohn@agencyiq.com).
To contact the editor, email Jason Wermers (jwermers@agencyiq.com).
Key documents, dates
- Executive Order 14192 of January 31, 2025: Unleashing Prosperity Through Deregulation (published Feb. 6, 2025, in the Federal Register)