The Environmental Vanguard is a quarterly newsletter from McGuireWoods, bringing key insights from leading environmental attorneys and consultants at the forefront of regulatory, litigation and policy developments. This issue covers:
- federal court decisions pausing the DOI’s stop work orders on offshore wind projects;
- EPA’s proposed new rule revising the definition of “waters of the United States”;
- an update on the Superfund Excise Tax, and
- EPA’s final rule amending the Legacy CCR Rule.
Look for new editions every quarter and feel free to reach out to the McGuireWoods team with questions about litigation, regulatory, enforcement or other environmental law issues.
I. Four Federal Courts Enjoin DOI From Pausing Construction on Offshore Wind Projects
On Dec. 22, 2025, the U.S. Department of the Interior (DOI) paused construction for five large-scale offshore wind projects located on federal waters on the East Coast claiming national security concerns. The DOI’s press release stated that the national security concerns were classified and referenced the potential for the massive turbine blades to interfere with radar.
All five offshore wind project developers brought lawsuits against the federal government seeking to overturn the stop work orders. Since Jan. 12, 2026, four federal judges preliminarily enjoined the stop work orders during the pendency of the lawsuits. This allowed four of the projects — Revolution Wind in Rhode Island, Empire Wind in New York, Coastal Virginia Offshore Wind in Virginia and Vineyard Wind in Massachusetts — to continue construction during the pendency of their lawsuits. All four judges stated they found the classified national security justifications unconvincing as compared to the irreparable harm the stop work orders were causing.
These decisions mark a short-term win for developers of offshore wind projects and demonstrate the importance of pursuing legal action. The government must still provide a sufficient explanation to block major projects already under construction.
II. EPA Proposes New Rule Revising Definition of ‘Waters of the United States’
On Nov. 20, 2025, the U.S. Environmental Protection Agency and the U.S. Department of the Army published a proposed rule to revise the definition of “waters of the United States” (WOTUS) under the Clean Water Act. The WOTUS definition determines which waters and wetlands are subject to federal permitting and pollution control requirements under the Clean Water Act.
The proposed rule would narrow federal jurisdiction by limiting WOTUS primarily to traditional navigable waters, territorial seas, impoundments of jurisdictional waters and relatively permanent tributaries. In doing so, the agencies seek to clarify and revise key terms that have generated litigation and regulatory uncertainty. Notably, the proposal would remove “interstate waters” as an independent basis for jurisdiction, providing that waters crossing state lines are jurisdictional only if they otherwise meet the regulatory criteria.
EPA and the Army emphasize that the proposal is intended to implement the U.S. Supreme Court’s 2023 decision in Sackett v. EPA, which limited federal jurisdiction to relatively permanent waters and wetlands with a continuous surface connection to such waters. The agencies assert that the revised definition will provide greater regulatory clarity and predictability for states, tribes, regulated entities and other stakeholders.
Since the close of the 45-day public comment period on Jan. 5, 2026, stakeholders are closely evaluating the proposal, as changes to the scope of jurisdictional waters could streamline federal permitting for certain projects while shifting greater responsibility for water resource protection to state and tribal authorities — though a final rule is likely to join the long list of WOTUS rules that have been challenged in the courts.
III. Superfund Excise Tax Update
As of Jan. 1, 2026, the IRS’s Superfund Excise Tax applies to dozens of additional chemicals and substances.
Congress passed the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) in response to widespread environmental contamination at thousands of industrial and commercial sites throughout the United States. CERCLA established classes of potentially responsible parties (PRPs) who may be liable and held accountable for the costs of remediating environmental contamination and related federal public health studies. CERCLA also authorized the Hazardous Substance Superfund Trust Fund to finance the remediation of contaminated sites without PRPs, which provides federal taxpayer-funded cleanup. EPA administers and oversees the remediation of contaminated sites prioritized for federal involvement under the Superfund program. EPA also coordinates cleanup activities with states where the sites are located.
CERCLA and subsequent law passed by Congress established a three-part tax system to finance the Superfund. This included (1) an excise tax on crude oil and imported petroleum products, (2) an excise tax on certain domestic chemical feedstocks and imported petrochemicals and inorganic chemicals and (3) a special environmental tax on corporate income. These Superfund Excise Taxes accounted for most of the Superfund’s financing until the taxing authority expired at the end of 1995. Since then, the Superfund primarily relied on transfers from the U.S. Treasury General Fund until Congress reauthorized some of the excise taxes during the 117th Congress.
As part of the Infrastructure Investment and Jobs Act, Congress reinstated Superfund Excise Taxes on chemicals and taxable substances, effective July 1, 2022. As a result, the Superfund Excise Taxes apply to two categories of taxable substances: (1) a tax on the sale or use of “taxable chemicals” under Internal Revenue Code (IRC) Section 4661 and (2) a tax on the sale or use of imported “taxable substances” under IRC Section 4671. Regarding the taxable chemicals, IRC Section 4661(b) lists 42 chemicals, each with a specific tax rate imposed on a per-ton basis. That tax is imposed on the manufacturer, producer or importer of the taxable chemical. As for taxable substances, IRC Section 4672(a)(3) provides an “initial list” of 50 taxable substances, with the tax to be paid by the importer. But a taxable substance is defined by IRC Section 4672(a)(2) as a product that contains “more than 20 percent” of taxable chemicals by weight or appraised value.
That said, effective Jan. 1, 2026, the IRS added dozens of additional chemical substances to the list of taxable substances under IRC Section 4672 and subject to the tax imposed by IRC Section 4671. The IRS provided the updated list and prescribed tax rates for taxable substances in the instructions to Form 6627, Environmental Taxes. Regardless, manufacturers, producers and importers of the taxable chemical and taxable substances should pay close attention to future IRS Notices and decisions that implicate additional Superfund Excise Taxes.
IV. EPA’s Final CCR Rule
On Feb. 6, 2026, EPA published a final rule amending its Legacy Coal Combustion Residuals (CCR), Surface Impoundments and CCR Management Units framework, commonly known as the Legacy CCR Rule, to extend key compliance deadlines for regulated entities. This new rule provides additional time to complete facility evaluation reports, identify coal combustion residual management units and implement groundwater monitoring and corrective action requirements originally established in the May 8, 2024, Legacy CCR Rule. Importantly, while the new final rule relaxes the timing for meeting these obligations, it retains the substantive regulatory structure and obligations of the Legacy CCR Rule regime. The final rule became effective Feb. 9, 2026.
The environmental team at McGuireWoods helps clients navigate complex regulatory challenges, permitting, enforcement actions, litigation, and crisis response across air and climate, water, waste, and natural resources. McGuireWoods Consulting adds critical depth with lobbying, policy advocacy, and site selection and incentive negotiations, helping businesses manage risk and capitalize on opportunities in a shifting regulatory landscape. For questions or to discuss these topics in more detail, contact the authors or your McGuireWoods or McGuireWoods Consulting contact.
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