On June 5, 2025, the Joint Economic Committee (JEC) of the U.S. Congress convened a hearing titled “Barriers to Supply Chain Modernization and Factor Productivity Enhancements.” Throughout the hearing, members and witnesses alike underscored the role of “regulatory friction” — especially in the form of fragmented and unpredictable requirements — as a key factor slowing investment in domestic manufacturing and threatening supply chain resilience. While the U.S. Environmental Protection Agency (EPA) and the Toxic Substances Control Act (TSCA) were not named directly, the concerns raised map closely onto the compliance challenges companies face under TSCA Section 5 and Section 6 and related programs.

A central theme across testimony was the growing reliance on sub-regulatory guidance — frequently asked questions (FAQ), policy memos, and interpretive statements — over codified rules. Several witnesses emphasized that this practice, common in environmental programs, creates uncertainty and discourages long-term capital investment. Dr. Thomas McLaughlin, Research Fellow at the Hoover Institution, pointed to agencies’ increasing use of informal guidance “instead of clear rulemaking,” noting that this ambiguity makes it difficult for businesses to plan, especially in highly regulated sectors. In his written testimony, Dr. McLaughlin observed that “[w]ithout a systematic approach to reviewing and removing outdated, redundant, or otherwise undesirable regulations, the steady buildup of government rules eventually shows up in economic outcomes ranging from business activities such as investment decisions, startup rates, and productivity growth to household outcomes such as household income and consumer expenditure.”

Committee members also highlighted the compounding effects of overlapping and uncoordinated reporting requirements. Senator James Lankford (R-OK), who earlier this year reintroduced the Intergovernmental Critical Minerals Taskforce Act, has described at other points how companies in his state feel paralyzed by the fear of noncompliance under evolving environmental standards that lack formal rulemaking. That being said, formal rulemaking often takes years, and can delay market access further. Sometimes informal guidance provides industry with the flexibility needed while agencies like EPA determine the best regulatory landscape. Others who spoke at the hearing echoed this sentiment, warning that duplicative data calls across agencies lead to confusion and divert resources from infrastructure modernization.

While TSCA was not explicitly discussed, these concerns mirror the challenges stakeholders face under EPA’s implementation of TSCA Section 5 new chemical review, Section 6 risk evaluations, and Section 8(a) data collection. Companies wishing to innovate new chemical technologies face a uniquely open ended and uncertain review process extending months, and sometimes years, beyond the requisite 90-day review period. Companies subject to risk evaluations must operate in a regulatory limbo that can last years, with the outcome — potential phaseouts or costly restrictions — unknown until the final rule is issued. Judicial challenge of final agency action might tack on several more years.

Meanwhile, companies navigating multiple and inconsistent state and federal per- and polyfluoroalkyl substances (PFAS) reporting regimes must interpret and apply ill-defined terms like “intentionally added” and “function” with limited guidance and tight timelines. (For more information about the potential for PFAS policy fragmentation, see our May 15, 2025 blog item.) The JEC hearing emphasized how the state and federal governments should attempt to work cohesively to create a more streamlined regulatory landscape while preserving advances in environmental leadership.

These issues are not unique to the private sector. As discussed in our June 2, 2025, blog item, on May 27, 2025, the U.S. Department of Defense (DOD) issued a Request for Information (RFI) seeking detailed use data on eleven chemicals currently undergoing risk evaluation under TSCA Section 6. The RFI invites manufacturers to provide information on defense-critical uses and the availability of alternatives. Responses are due by June 20, 2025. This step signals a growing recognition within the federal government that risk management decisions must account for supply chain security and industrial readiness. DOD is considering issuing additional RFIs to obtain a clearer line of sight on regulatory drivers influencing supply chain realities.

Listen to our June 12, 2025, discussion with Patricia Underwood, Ph.D., DABT, MBA,Chief Toxicologist, Principal Director — Chemical and Material Risk Management, Office of the Secretary of Defense,DOD, and Richard E. Engler, Ph.D., Director of Chemistry for Bergeson & Campbell, P.C. (B&C^®) and The Acta Group (Acta^®) in an episode of All Things Chemical^®: “Chemical and Material Risk Management Program TSCA Market Analysis.”

DOD’s proactive approach offers a potential model for EPA and other agencies. Embedding interagency input earlier in the TSCA process could improve both the pace and quality of risk evaluations. EPA could also consider piloting flexible, conditional-use extensions tied to modernization commitments — for example, allowing continued use of a substance in critical applications in exchange for documented investments in safer alternatives or emissions control.

The JEC hearing makes clear that regulatory clarity and coordination are essential to rebuilding a productive and resilient industrial base. Even without mentioning TSCA by name, the hearing highlighted the very pressures companies face under EPA’s chemical management programs: unclear compliance standards, disconnected data requests, and prolonged uncertainty about new product approval despite considerable capital investment and unclear future legal obligations.

EPA has opportunities to reduce these pressures. Codifying frequently referenced guidance through notice-and-comment rulemaking, aligning reporting obligations across programs, and engaging earlier with agencies like DOD and the U.S. Department of Commerce could provide the predictability and coordination manufacturers need to invest confidently in modernization. To the extent of trying “new ideas” or probing varied regulatory options, a pilot program could reward those who might be willing to volunteer if such program participation provided an interim safe harbor of sought-after certainty while emerging rules and definitions are further clarified.