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United States
U.S. Department of the Treasury (Treasury) and Internal Revenue Service (IRS) Release Proposed Regulations for Alternative Fuel Vehicle Refueling Property Tax Credit Under Section 30C
On September 19, 2024, the Treasury and the IRS issued a notice of proposed rulemaking (the Proposed Regulations) regarding certain aspects of the alternative fuel vehicle refueling property tax credit under Section 30C (the 30C Credit) of the Internal Revenue Code of 1986, as amended (the Code), pursuant to changes authorized by the Inflation Reduction Act of 2022 (IRA). Section 30C of the Code, as revised by the IRA, provides a base credit amount of six percent for qualifying property and an increased credit amount of 30 percent for qualifying property which satisfy prevailing wage and apprenticeship requirements, up to a cap of $100,000 per single item of eligible 30C property. The Proposed Regulations provide several helpful clarifications to the requirements to claim the 30C Credit, including defining a “single unit” of 30C property as each charging port (for recharging property), fuel dispenser (for refueling property), or each qualified alternative fuel storage property or electrical energy storage property, along with any property that is “functionally interdependent” or an “integral part” of such qualifying property; clarifying 30C Credit eligibility for “dual-use” property; specifying the methodology to determine geographic location requirements with respect to projects located in low-income census or non-urban census tracts; and clarifying 30C Credit recapture guidelines. Concurrently with the Proposed Regulations, the IRS issued Notice 2024-64, modifying guidance previously provided in Notice 2024-20 to provide taxpayers with mapping tools to determine whether qualifying property meets eligible census tract requirements for the 30C Credit. Treasury and the IRS have requested comments on the Proposed Regulations, which must be received by November 18, 2024.
For more information regarding the Proposed Regulations, please see our client alert.
California Governor Gavin Newsom Signs Bill Enacting Changes to Climate-Related Disclosure Laws
On September 27, 2024, California Governor Gavin Newsom signed Senate Bill 219 (SB 219), to amend the Climate Corporate Data Accountability Act and the Climate-Related Financial Risk Act. SB 219 establishes several compliance deadlines for reporting companies under the Climate Corporate Data Accountability Act (SB 253) and the Climate Related Financial Risk Act. Notably, pursuant to SB 219, covered companies now have until July 1, 2025, to publicly disclose their greenhouse gas emissions under SB 253.
For more information regarding SB 219, please see our client alert.
California Enacts Legislation to Ban the Distribution of Plastic Bags
On September 22, 2024, California Governor Gavin Newsom signed SB 1053 into law, which will ban the distribution of plastic bags at most grocery stores, convenience stores, and retailer checkouts. SB 1053 is aimed to disallow thicker plastic carryout bags which were permitted under the states’ initial plastic bag ban passed in 2014 and approved by voters in 2016 (SB 270). Commencing on January 1, 2026, SB 1053 will prohibit most grocery stores, convenience stores, and other retailers in California from distributing plastic bags to customers at the point-of-sale. The law permits such stores to provide single-use paper bags at the point-of-sale by charging the customer at least $0.10 per bag. Beginning on January 1, 2028, SB 1053 requires that the paper bags provided at the point-of-sale be composed of at least 50 percent postconsumer recycled materials, rather than the 40 percent previously required.
Europe
United Kingdom (UK) Competition and Markets Authority (CMA) Issues Tailored Guide Against Greenwashing in the Fashion Industry
On September 18, 2024, the UK’s CMA issued a practical guide against misleading environmental claims in the fashion industry, building on its 2021 Green Claims Code. The example-based practical guide reminds fashion brands that they must i) give clear, accurate, and complete information about their products, ii) clearly set out criteria used to decide which items are included in green fashion collections and detail any minimum requirements, and iii) be clear if the claim is based on only specific parts of a product’s life cycle.
In addition, the CMA stated that it had sent letters to 17 unnamed fashion brands advising them to review their green claims on this basis. Previously, on March 27, 2024, the CMA announced that it had secured commitments from fashion brands ASOS, Boohoo, and George at Asda to change the way they display, describe, and promote their green credentials.
European Commission (EC) Starts Infringement Proceedings Against Member States for Not Fully Transposing the Corporate Sustainability Reporting Directive (CSRD)
On September 26, 2024, the EC announced that it had started infringement proceedings against 17 Member States for failing to notify their national measures transposing fully the CSRD. The CSRD introduced new rules on sustainability reporting, requiring large companies and listed companies (excluding micro-undertakings) to disclose information on the social and environmental risks they face, and on how their activities impact people and the environment. The new sustainability reporting rules apply from financial years beginning on or after January 1, 2024.
European Securities and Markets Authority (ESMA) Publishes 2025 Work Program with Focus on Sustainable Finance
On October 1, 2024, European Union financial markets regulator ESMA published its annual work program for 2025, which includes a strong focus on sustainable finance issues. The program contains several specific work outputs regarding sustainability.
The previewed work outputs include: 1) collaboration with national supervisory authorities to develop supervisory tools to detect and address greenwashing; 2) assessment of vulnerabilities of financial market participants (FMPs) and products within ESMA’s remit to adverse climate-related financial shocks; 3) publication of guidance on sustainability-related claims to FMPs; 4) development of regulatory technical standards to supplement the Green Bond Regulation and the ESG Rating Regulation; and 5) additional guidance for disclosures under the Sustainable Finance Disclosure Regulation.
EC Proposes Deferring Deforestation Regulation Compliance by One Year
On October 2, 2024, the EC proposed granting in-scope entities additional time to achieve compliance with regulations addressing the risks of deforestation and forest degradation brought about by the placement or exportation of certain products from the EU market (the Deforestation Regulation). Under the EC’s proposal, large companies would have until December 30, 2025, and small- and medium-sized enterprises would have until June 30, 2026, to comply with their obligations under the Deforestation Regulation, compared with the previous respective compliance dates of December 30, 2024, and June 30, 2025. Both the European Parliament and the European Council would have to agree to the EC’s proposal.
Simultaneously, the EC published additional guidance and updated FAQs to help in-scope entities comply with the Deforestation Regulation. The Deforestation Regulation covers commodities such as cattle, cocoa, coffee, oil palm, rubber, soy, and timber, and products derived from these commodities. It requires companies trading in these goods to conduct extensive supply chain due diligence efforts to ensure that these goods do not result from recent (i.e., post-December 31, 2020) deforestation, forest degradation, or breaches of local environmental and social laws.
Australia
Australia Set to Adopt First Mandatory Climate-Based Financial Reporting Framework
On September 20, 2024, the Australian Accounting Standards Board (AASB) finalized disclosure standards for the country’s first mandatory climate-related reporting regime. The AASB approved the Australian Sustainability Reporting Standards, which are now considered to align more closely with international standards than the AASB’s earlier draft from October 2023. Australia introduced the climate-reporting regime through the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill (the Act). The Act requires both listed and non-listed companies to comply with elements of the reporting regime. Annual reporting periods will commence based on the size of an entity or its level of emissions.
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