Navigating EPA's New Enforcement Playbook: How Compliance-First Policy Reshapes Risk for Regulated Entities

With the advent of the new year, regulated entities will be watching to see how US Environmental Protection Agency’s (EPA) Office of Enforcement and Compliance Assurance (OECA) will implement its December 2025 Memorandum on Reinforcing a “Compliance First” Orientation for Compliance Assurance and Civil Enforcement Activities. The memo reflects a shift in policy away from enforcement and toward identification, efficient resolution, and environmental compliance. However, the memo still leaves open questions on how the OECA may use enforcement mechanisms to further the administration’s agenda and whether a “compliance first” culture will level the playing field for the regulated industry or do the exact opposite.

The memo outlines six factors as the foundation for the new policy’s “compliance-first” framework: 

Encourages Use of Compliance Tools and Programs

OECA will focus on deploying compliance assistance tools (proactive outreach, technical assistance, and training) and promote voluntary compliance through voluntary audits and self-reporting by the regulated industry (what OECA has coined “find and fix”).

Encourages Federal-State Coordination and Deference to State Enforcement

OECA will be working with state counterparts to ensure consistent compliance determinations. OECA will work more cooperatively with co-regulators by providing technical assistance, training, and collaborative tools to its state counterparts to align priorities and prioritize compliance, strengthen co-regulator capacity, and foster information exchange. The memo also directs OECA’s activities to “affirmatively demonstrate proper deference and support to state leads in most compliance enforcement work.” 

Encourages Open Communication Between Industry and EPA

EPA personnel are expected to provide open communication to regulated entities on milestones and deliverables to enhance transparency and to facilitate those entities taking early, proactive steps to address any findings. OECA will also encourage two-way communication so that (1) EPA personnel can “better tailor compliance assurance and potential corrective actions to the specific context of a regulated entity’s operations, potentially making compliance solutions more effective and more economically feasible,” and (2) it can “establish trust and promote a sustainable self-reporting culture.” 

Encourages Tailored Findings of Violation and Consistent Enforcement Application

EPA will endeavor to give more clear and tailored findings of violation. To that end, the memo directs regional counsel to consult with the relevant Office of General Counsel and OECA office where a regulated entity raises concerns about how EPA has applied the law to their case. OECA also announced it will be creating a document “consolidat[ing] criteria across all media” to define specific categories of violations for formal enforcement, informal enforcement, and warnings. This forthcoming document will reportedly operate as an agency-wide guidance document with consolidated violation categories that will assist EPA in determining appropriate and uniform enforcement.  

Modifies Injunctive Relief Approach

Renews the agency’s focus on achieving efficient, economical, and swift compliance, and therefore directs injunctive relief to be well-tailored to the specific violations. The memo rescinds EPA’s April 2021 guidance memorandum issued under the Biden administration that had set forth expansive injunctive relief tools for civil enforcement settlements, such as third-party audits or advanced monitoring and public reporting. The memo discourages settlement terms that do not have a clear nexus to the governing statute and implementing regulations; this change includes prohibiting any future settlement from including a Supplemental Environmental Project and requiring that any settlement containing mitigation or stipulated remedies be pre-approved by the OECA assistant administrator prior to initiating negotiations with the regulated entity. 

Directs Enforcement Decisions to Focus on Programmatic Impact and Stakeholder ImpacT

Clarifies that decision-making must now use the “LEAPS” factors, applying Law, Evidence, and Analysis, as well as Programmatic impact and Stakeholder impact. This means that enforcement decisions must be legally sound, supported by evidence, logically analyzed, bolster EPA’s overall program efficiency and goals, and reflect consideration of fairness and other public policy effects on regulated entities, states, Tribes, and other impacted communities. 

Taken together, OECA’s memo could reshape compliance and enforcement dynamics for industry, but also could become a source of confusion for industry. Specifically, it may: (A) introduce unclear expectations under the compliance-first approach, (B) pressure companies to incur significant upfront compliance and audit costs without any guarantee of competitive advantage, (C) provide opportunities to challenge inconsistent or unreasonable regional interpretations, (D) increase litigation risk in progressive states, as state governments may pursue stricter enforcement in response to federal policy changes, (E) heighten OECA’s focus on companies operating in industries that are at odds with the administration’s agenda , (F) create a potential new pathway for companies to invoke the “diligent prosecution” bar to preempt citizen suits, and (G) signal enforcement priorities through explicit carve-outs that exempt a majority of conventional EPA cases from being subject to the compliance assurance and informal enforcement policy suggested by the memo.

(A) Compliance-First Guidance: Unclear Expectations and Missed Opportunities for Minor Violations

The memo’s compliance-first language is vague, leaving regions and regulated entities uncertain about practical implementation. Should inspections resemble audits, with recommendations rather than findings? Without an audit privilege or changes to penalty policies, the guidance does little to incentivize voluntary auditing or address minor violations that are quickly corrected. This gap suggests a missed opportunity to align enforcement with the realities of day-to-day compliance.

(B) Upfront Compliance Costs Without Competitive Certainty

The memo may place regulated companies in a challenging position by encouraging substantial upfront investment in audit and compliance processes, without assurance that competitors will undertake similar expenditures. Additionally, it remains uncertain what relief companies that proactively invest in compliance efforts will receive in an enforcement action if they disclose their audit results.

(C) Leveraging Interpretation Review: Opportunities and Practical Strategies for Regulated Entities

One positive aspect of the memo is its interpretation review process, which creates a pathway to challenge inconsistent or unusual regional legal interpretations by escalating them to headquarters. Companies can use this mechanism strategically:

• Highlight internal compliance efforts when responding to minor violations.
• Ask whether a contested interpretation has undergone the review process outlined in the guidance.
• Emphasize that the company does not fall under the high-risk categories identified in footnote 7 of the memo (discussed below).

These steps can help regulated entities turn ambiguity into leverage.

(D) Rising Litigation Costs in Progressive States

Notwithstanding the foregoing, with the administration’s deference to state enforcement, progressive states may take a more aggressive enforcement approach to compensate for the administration’s enforcement priority shift. Crucially, this could result in a patchwork of enforcement initiatives depending on the state, which could critically impact companies operating in multiple jurisdictions that would otherwise benefit from resolving enforcement matters federally on a company-wide basis rather than state-by-state. Inevitably, patchwork enforcement could lead to fragmented corrective action requirements due to divergent priorities or policies, increased compliance costs and legal fees due to heightened complexity of seeking multiple agency sign-offs rather than a unified agency resolution, and inefficient operations.

(E) Risk for Those in the Crosshairs of the Administration’s Political Agenda

For regulated entities not aligned with the administration’s objectives or that otherwise operate in spaces not highlighted by the administration’s executive orders and political priorities, access to settlement tools may be limited and enforcement could proceed more aggressively. Enforcement actions must now account for the administration’s executive orders and guidance from EPA Administrator Lee Zelden, including his “Powering the Great American Comeback” initiative that is defined as “restoring American energy dominance.”¹ With traditional settlement strategies discouraged (see above Factor 5) and new notice-of-violation requirements (see above Factor 4), both mandating involvement from senior EPA leadership in certain cases, the new policy ensures the administration’s agenda will be embedded in every enforcement action or settlement. 

(F) Facilitates Diligent Prosecution Bar to Citizen Suits

The memo suggests that OECA will be more willing to engage in resolution of issues raised in citizen suit notice-of-intent letters. Many environmental laws bar citizen suits if regulators are “diligently prosecuting” the same violations; therefore, a quick complaint filing could shield a defendant from activist lawsuits. This collaborative strategy could dramatically weaken environmental groups’ plans to fill enforcement gaps if federal enforcement retreats.

(G) Footnote 7 Factors: What They Reveal About EPA Enforcement Priorities

Footnote 7 of the memo lists exceptions—such as immediate threats, blatant or repetitive noncompliance, and refusals to provide information—that may trigger enforcement regardless of the memo’s compliance-first tone. These factors likely represent compromise language from seasoned OECA staff, but they also reflect the fact that most EPA cases fall within these categories. Understanding this carve-out is essential for anticipating enforcement risk.

The primary takeaway from OECA’s memo is that regulated entities must adopt proactive compliance and strategic planning to navigate the administration’s policy shift, which attempts to align enforcement with its priorities. This shift presents a challenge, and an opportunity to clarify expectations, advocate for consistent interpretations, and position strong compliance efforts as a defense against heightened scrutiny. What it does not do is present a compliance holiday. The uncertainties of this as well as the threat of state or citizen enforcement mean that compliance with environmental laws should still be an important priority for the regulated community.

If you have questions about how these developments may affect your organization or would like to discuss tailored compliance strategies, please contact our team. We are here to help you navigate these evolving initiatives and mitigate potential risks.