Biden to Sign Bill Allowing Chip Projects to Skirt Key Environmental Review

More than two years ago, President Biden signed a law that aimed to ramp up the nation’s production of semiconductors by offering generous subsidies and tax credits to companies. Since then, chip manufacturers have invested billions of dollars into new plants across the country.

But industry groups, along with federal officials, have long warned that lengthy federal environmental reviews could delay manufacturing projects for months or years, which could slow the country’s ability to scale up its chip manufacturing capacity.

In the coming days, Mr. Biden is set to sign a bill that would weaken federal environmental reviews for certain semiconductor manufacturing projects that receive subsidies through the 2022 CHIPS and Science Act. The bill, which has divided Democrats, underscores the challenges facing Mr. Biden as he tries to advance his economic agenda alongside his ambitious climate goals.

The legislation would exempt qualifying chip projects from reviews under the National Environmental Policy Act, or NEPA, which requires federal agencies to assess the potential environmental effects of proposed major federal actions before they can proceed. The House passed the bill last week, and the Senate unanimously passed it in December.

Proponents say the legislation would help to expedite the construction of chip manufacturing facilities, which would strengthen the U.S. economy and help to reduce the nation’s dependence on other countries for critical chips that can power items as varied as smartphones, cars and weapons systems. They say that projects will still have to comply with various federal, state and local environmental regulations and permitting requirements.

Democrats who oppose the bill, however, say it would allow companies to skirt an important step aimed at reducing potential harms to the environment and workers. They argue that taxpayer-funded projects should be subject to a more holistic federal environmental review process, which would allow for more transparency and community input.