Alert

Manufacturer’s EPA Compliance Audits: Regulatory Expectations Under Trump 2.0

February 12, 2025

The regulatory landscape likely to characterize President Donald Trump’s second term will create important implications for conducting U.S. Environmental Protection Agency (EPA) compliance audits within the manufacturing sector. Drawing lessons from the deregulatory approach of the first Trump administration, manufacturers may want to educate themselves on the shifts in enforcement priorities, regulatory oversight, and resource allocation at the federal level—all of which may affect environmental compliance programs for manufacturers. To aid businesses, manufacturers may want to engage counsel to review practical strategies for conducting effective EPA compliance audits in an era of deregulation, decentralization, and potential policy uncertainties.

Background

Effective EPA compliance audits in the manufacturing sector ensure adherence to federal environmental laws while mitigating risks tied to non-compliance, such as penalties, reputational harm, and operational shutdowns. However, compliance audits are shaped by the political and regulatory climate, which heavily influences enforcement priorities, audit guidelines, and oversight intensity. A second Trump term may likely be characterized by a continuation of its deregulatory agenda, potentially reducing EPA enforcement activities, favoring voluntary compliance, and prioritizing economic growth over stringent environmental monitoring. 

Regulatory Shifts Under a Second Trump Administration

Under the first Trump administration, significant changes in environmental oversight set the stage for long-term impacts on EPA compliance. These trends are essential to understanding the context of conducting EPA audits under a second term:

Deregulatory Focus:

Key regulations, such as the rollback of the Clean Water Rule (Waters of the United States), changes to the Clean Power Plan, and reforms to the National Environmental Policy Act (NEPA), reflect a commitment to minimizing regulatory burdens on businesses, particularly manufacturers whose operations are heavily regulated. A second term may build on these rollbacks with further efforts to relax permitting timelines and reduce restrictions on emissions and discharges.

Reduction in Enforcement Activity:

Data from the Trump administration’s first term shows marked reductions in EPA inspections, civil penalties, and initiated enforcement actions. The agency also shifted its focus toward voluntary compliance incentives rather than punitive oversight. For manufacturers, this meant fewer audits initiated by the EPA and increasing reliance on state agencies or internal compliance programs.

Decentralization of Oversight:

The Trump administration emphasized shifting regulatory authority to state and local governments, often resulting in uneven enforcement across states. Manufacturers with facilities across multiple jurisdictions may need to address potentially fragmented or inconsistent compliance expectations.

Despite these trends, compliance requirements remain complex, and audited facilities are expected to maintain adherence to federal, state, and local laws. In this framework, internal audits become a critical safeguard.

Key Components of an EPA Compliance Audit for Manufacturers

A robust audit assesses risks and control mechanisms across all relevant areas of current EPA regulations. Manufacturers may want to focus on major environmental laws which remain enforceable despite deregulatory trends:

Air Quality Regulations (Clean Air Act – CAA):

Manufacturers may want to verify compliance with emissions permits, including operating and reporting under Title V permits. Specific considerations include:

• Monitoring air emission records, including stack tests and pollutant discharge monitoring.
• Maintenance documentation for equipment like scrubbers, filters, or other air pollution controls.
• Compliance with standards for hazardous or toxic air pollutants.

Water Quality Compliance (Clean Water Act – CWA):

Under the CWA, it is expected that manufacturing facilities ensure compliance with National Pollutant Discharge Elimination System (NPDES) permits. Audit steps include:

• Reviewing discharge monitoring reports (DMRs).
• Assessing wastewater treatment systems.
• Verifying stormwater management practices and spill-prevention protocols.

Hazardous Waste Management (Resource Conservation and Recovery Act – RCRA):

Compliance with hazardous waste management regulations requires proper handling, storage, disposal, and record-keeping under RCRA. Key audit areas include:

• Ensuring waste manifests are accurate and complete.
• Inspection of on-site hazardous waste storage units.
• Proper labeling and detailed inventory tracking.

Chemical Safety (Toxic Substances Control Act – TSCA):

Manufacturers utilizing regulated chemicals may want to focus on:

• Accurate chemical inventories and compliance with TSCA reporting requirements.
• Verifying practices for handling substances flagged under the EPA’s Chemical Data Reporting (CDR).  

Emergency Preparedness (EPCRA):

Audits are expected to incorporate emergency management programs, reviewing compliance with the Emergency Planning and Community Right-to-Know Act (EPCRA). Documents to review include spill control plans, incident reporting logs, and safety data sheets (SDS).

Strategies for Conducting Compliance Audits Under Regulatory Uncertainty

Despite the reduced likelihood of stringent EPA audits in a second Trump term, proactive auditing may remain a manufacturer’s best defense against violations. Below are key considerations for adapting to a climate of reduced enforcement.

Focus on Risk-Based Auditing:

Given potential reductions in federal oversight, manufacturers may want to prioritize the highest compliance risks (e.g., air pollutants and hazardous waste disposal). Risk-based auditing ensures efforts are focused on preventing major violations that could attract regulatory scrutiny.

Develop a Strong Self-Audit Program:

The EPA’s Audit Policy encourages voluntary self-disclosure of violations in exchange for reduced fines. Manufacturers may consider designing internal audits to identify non-compliance proactively, emphasizing documentation and corrective actions.

Strengthen Supply Chain Compliance Monitoring:

It is expected that manufacturers using subcontractors or suppliers for waste transportation, emissions management, or chemical supply verify compliance throughout their supply chain. Liability for third-party noncompliance can lead to severe penalties.

Leverage Technology for Compliance Monitoring:

Flagging compliance gaps in real-time is vital. Technologies such as digital environmental management systems (EMS), emissions monitoring sensors, and automated data reporting tools increase audit efficiency and completeness.

Align with State-Specific Requirements:

Given the decentralization of oversight, it is important for manufacturers operating across multiple states to track local environmental agency priorities. This includes differences in standards for water discharges, hazardous material handling, and permitting.

Challenges and Opportunities Under a Second Trump Term

Challenges

Reduced Federal Guidance: A less prescriptive approach to environmental compliance may create ambiguities, especially regarding complex rules like RCRA and TSCA.

Inconsistent Enforcement Across States: Federal-state discrepancies may complicate compliance, especially for manufacturers with operations in multiple jurisdictions.

Opportunities

Streamlined Reporting Requirements: Focusing on deregulation could reduce bureaucratic complexity, allowing for easier reporting processes.

Voluntary Self-Audits: Facilities could benefit from the EPA’s adoption of policies that incentivize proactive compliance efforts while reducing the likelihood of civil penalties.

Recommendations for a Proactive Audit Strategy

Manufacturers preparing for EPA compliance audits under a second Trump administration may consider the following:

1. Integrating Compliance into Operational Workflows: Embed compliance responsibilities into daily workflows and train facility staff accordingly.
2. Prioritizing Documentation: Maintain meticulous records of permits, equipment maintenance logs, and monitoring data for EPA-regulated activities.
3. Engaging Environmental Attorneys: Given potential regulatory ambiguities, retaining experts to interpret regulatory changes and conduct independent audits could ensure compliance accuracy.
4. Developing a Crisis Management Plan: Establish protocols for managing potential violations, including legal response preparation and public relations strategies.

The Takeaway

It is key for manufacturers to remain vigilant and proactive when conducting EPA compliance audits, whether under strict regulatory regimes or periods of relaxed enforcement, such as those expected under a second Trump administration. Focusing on robust internal audits, risk management strategies, and leveraging voluntary compliance policies may help manufacturers navigate uncertainties while potentially reducing environmental risks and maintaining legal compliance.