EPA's Compliance First Policy: What Manufacturing Facilities Actually Need to Know
EPA's December 2025 Compliance First memo shifts enforcement strategy but doesn't eliminate penalties. Here's what manufacturers need to do now to protect themselves.
When the EPA’s Office of Enforcement and Compliance Assurance (OECA) issued its December 5, 2025 memo on Compliance First strategy, a dangerous assumption spread across manufacturing facilities: the EPA is going easy on enforcement.
⚡ TL;DR: EPA’s Compliance First policy prioritizes voluntary disclosure and penalty relief for facilities that self-audit and report violations within 21 days. Facilities that don’t cooperate face faster escalation and reduced settlement flexibility. Enforcement hasn’t stopped—it’s just restructured to reward transparency.
That assumption is wrong. And it’s exposing facilities to serious regulatory risk.
The memo is real. The policy shift is substantial. But it doesn’t mean enforcement-free. What it actually means is this: the EPA has reorganized how it pursues violations — and for facilities that understand the new system, there are genuine advantages. For facilities that misinterpret the shift as a green light to deprioritize compliance, the consequences are worse than before.
⚠️ What’s at stake: Non-disclosure of violations can result in full penalty exposure—$37,500–$70,000+ per day per violation. Facilities discovered by EPA rather than self-reporting face penalties 2-3x higher than those using voluntary disclosure. A 90-day air permit violation costs $3.4M–$6.3M; the same violation disclosed within 21 days costs $0 in gravity penalties.
Here’s the reality from the data: the EPA assessed $652 million in civil penalties in FY2025 and completed 2,127 civil enforcement cases — the highest in nine years. The memo took effect in early December. Enforcement didn’t stop. It just changed shape.
Understanding that shape — and knowing exactly where your facility stands in it — is now critical to manufacturing operations. Let’s break down what the memo actually requires, who it affects, and where facilities are making costly mistakes.
What Changed in EPA Enforcement Philosophy
The December 5 memo from Acting Assistant Administrator Craig Pritzlaff fundamentally reordered EPA enforcement priorities. Instead of leading with penalties and formal enforcement action, the memo directs EPA staff to deploy compliance assistance first — proactive outreach, technical guidance, training, and voluntary audit programs — before escalating to formal action.
This sounds soft. It isn’t. It’s a recalibration of enforcement strategy with teeth.
Under the new framework, EPA staff must use the LEAPS framework to evaluate every enforcement decision: Law, Evidence, Analysis, Programmatic impact, and Stakeholder impact. Every step must be documented, transparent, and defensible. This framework actually gives regulated facilities new tools to challenge questionable interpretations.
The memo also requires that findings of violation be “clear and unambiguous” based on the best reading of statutes and regulations. Expansive or creative interpretations are expressly rejected. Facilities now have a formal pathway to elevate interpretation disputes for national-level review rather than accepting a regional inspector’s reading at face value.
This changes the game — but only for facilities that know how to play it.
The 21-Day Window Most Manufacturers Don’t Know About
Here’s where Compliance First creates immediate value for manufacturing facilities: the EPA’s eDisclosure portal and voluntary disclosure policy now have teeth again.
Under the EPA’s Audit Policy, facilities that discover violations through internal audits and disclose them within 21 calendar days can qualify for penalties reduced to zero — meaning 100% elimination of gravity-based penalties if all conditions are met.
The conditions are:
- Systematic discovery — the violation was found through a formal internal audit or environmental compliance assessment, not just stumbled upon
- Prompt disclosure — reported within 21 days of discovery through the eDisclosure portal
- Expeditious correction — corrected within 60 days (or a documented timeline for complex issues) with proof of correction submitted through eDisclosure
- Prevention of recurrence — documented measures to prevent the same violation from occurring again (updated procedures, training, engineering controls)
- No repeat violations — the facility hasn’t had the same violation type within the past three years
- No imminent danger — the violation doesn’t create immediate health or environmental risk
If a facility doesn’t meet all six conditions, the penalty reduction drops to 75% of gravity-based penalties — still significant, but not total elimination.
What makes this critical under Compliance First: EPA staff are now explicitly directed to track whether facilities cooperate with compliance assistance and voluntary disclosure. Cooperation matters. Non-cooperation triggers formal enforcement, and that’s where penalties escalate and negotiating room shrinks.
How Compliance First Actually Changes Enforcement
The Compliance First memo doesn’t eliminate penalties. It creates a fork in the road for manufacturing facilities.
For facilities that cooperate:
- Compliance assistance comes first — EPA offers training, technical support, guidance on interpretation questions
- Voluntary disclosure pathways become actual pathways with real penalty relief
- Interpretation disputes can be elevated for national review (versus being stuck with regional readings)
- Settlement negotiations focus on correction and prevention, not maximum penalty extraction
For facilities that don’t cooperate:
- EPA escalates to formal enforcement faster
- Supplemental environmental projects (SEPs) — historically used to offset penalties with community benefit work — are prohibited pending further guidance
- Injunctive relief (court-ordered corrective actions) is now narrowly tailored to the specific violation; EPA can’t pursue unnecessary operational changes
- Penalties are more rigid because one negotiating tool (SEPs) is off the table
The asymmetry is sharp: cooperation unlocks penalty relief; non-cooperation removes negotiating leverage.
State Enforcement Is Filling the Federal Gap
One critical detail manufacturers often miss: the Compliance First memo applies to federal EPA enforcement strategy. It does not constrain state environmental agencies, and 13 state attorneys general have publicly signaled they oppose the approach.
For manufacturers in iSi’s primary service region, this matters:
Kansas & Oklahoma (EPA Region 7): KDHE and Oklahoma DEQ operate delegated federal programs. Both have remained quiet on independent enforcement changes. Enforcement continues at federal baseline levels. A Q1 2026 enforcement action against a Kansas building materials manufacturer resulted in an $781,175 penalty for Clean Air Act violations — showing that federal-level enforcement momentum hasn’t slowed even under Compliance First.
Texas (EPA Region 6): TCEQ operates with significant independent authority and has historically maintained its own enforcement cadence regardless of federal policy shifts. TCEQ does not align with federal softening; Texas facilities should expect no reduction in scrutiny from state enforcement.
California, New York, Vermont: These states have publicly signaled they will increase independent enforcement to compensate for federal policy shifts. If your facility has operations in these states, expect the opposite of federal Compliance First.
The practical rule: the federal baseline applies, but your state may operate above it.
What Manufacturers Must Do Now
The Compliance First policy doesn’t change the underlying environmental laws. Facilities still must comply with the same permit limits, reporting deadlines, and operational standards. What changes is the enforcement approach and the incentive structure for how violations are handled.
Step 1: Internal Compliance Audit If you haven’t run a comprehensive internal audit of your environmental compliance in the past year, schedule one now. The 21-day disclosure window starts the moment you discover a violation — not when it’s confirmed by EPA. An internal audit that surfaces violations gives you the 21-day window to act.
Step 2: Know Your eDisclosure Portal If your facility discovers a violation, you have 21 calendar days to report it through EPA’s eDisclosure portal. This isn’t optional if you want penalty relief. Create an account now if you haven’t already. Know who in your organization can log in and submit disclosures.
Step 3: Document Your Correction Process The 60-day correction window is firm. After disclosure, you must correct the violation and submit proof through eDisclosure. This requires documentation: updated SOPs, training records, inspection reports, or engineering modifications. Anything less creates a gap in your audit trail.
Step 4: Respond to EPA Outreach Under Compliance First, EPA will increase proactive outreach to regulated facilities. When EPA or your state environmental agency offers compliance assistance (training, guidance, technical support), take it. The memo explicitly directs EPA staff to document whether entities cooperated with assistance — and cooperation is tracked as part of enforcement decision-making.
Step 5: Challenge Interpretation Disputes Immediately If EPA is applying a regulation in a way you believe is incorrect, the Compliance First memo requires such disputes be elevated for national-level review. Don’t accept a regional inspector’s reading at face value. Escalate it in writing, and document the escalation.
Step 6: Review Your Permit Language If you hold Title V air permits, NPDES wastewater discharge permits, RCRA hazardous waste generator status, TRI reporting obligations, or EPCRA emergency planning requirements, schedule a permit audit. These are the permit categories most affected by Compliance First. Know where you stand on permit limits and reporting deadlines.
💰 The cost of non-compliance: A manufacturing facility that discovers a violation and self-reports within 21 days pays zero gravity penalties plus remediation costs. The same facility discovered by EPA pays full penalty exposure: $37,500–$70,000+ per day × duration. A 60-day violation costs $2.25M–$4.2M. Self-disclosure saves the facility $2.25M–$4.2M in penalties.
The SEP Prohibition Hits Settlement Economics
For any manufacturing facility currently in EPA enforcement proceedings or expecting a consent decree, one change matters immediately: supplemental environmental projects (SEPs) are prohibited in federal settlements pending further guidance.
SEPs have historically been a negotiating tool — facilities could offer to fund community environmental projects (habitat restoration, pollution reduction, research) to offset civil penalties. It reduced the total cost of settlement because some portion of penalty dollars got redirected to public benefit.
That tool is gone. Penalties are now more rigid. If you’re in settlement discussions, expect less room for creative penalty reduction and more straightforward penalty calculations tied directly to the violation severity.
What This Means for Your Facility
The Compliance First policy is not a free pass. It’s a different enforcement posture with real advantages for facilities that understand it and real vulnerabilities for those that misinterpret it as a softening of enforcement rigor.
The practical outcome: facilities with active compliance programs that discover and disclose violations will see meaningful penalty relief. Facilities that hope to avoid detection or that ignore known violations will face enforcement action with fewer negotiating options.
For manufacturing operations, this means one critical shift: compliance isn’t optional, and it’s not something to deprioritize based on federal policy rhetoric. It’s foundational to operations now more than ever — because the difference between proactive disclosure and reactive enforcement is penalty exposure measured in six and seven figures.
If your facility hasn’t run a comprehensive environmental compliance assessment in the past 18 months, now is the time. The 21-day disclosure window and the penalty relief available under the audit policy can save your organization significant regulatory costs — but only if you know what you’re looking for.
Every satisfactory compliance program starts with knowing where the gaps are. iSi Environmental helps manufacturing facilities run compliance assessments that identify violations before EPA does, document internal audits that qualify for penalty relief, and prepare disclosure documentation that stands up to EPA review. If you’re uncertain where your facility stands under the new Compliance First framework, that’s exactly the conversation to have now.
Frequently Asked Questions
Q: What is EPA’s Compliance First policy and when did it take effect?
EPA’s Compliance First policy, issued December 5, 2025, restructures enforcement to emphasize voluntary compliance assistance before formal enforcement action. The policy directs EPA staff to offer technical guidance, training, and compliance support first. It does not eliminate penalties. It creates incentives for facilities to self-disclose violations and cooperate with compliance programs.
Q: How can a facility eliminate penalties under the 21-day disclosure window?
A facility can receive 100% penalty relief if it: (1) discovers the violation through a formal internal audit, (2) discloses it to EPA within 21 calendar days through eDisclosure, (3) corrects it within 60 days with documented proof, (4) implements prevention measures, (5) hasn’t had the same violation type in three years, and (6) the violation doesn’t create imminent danger. If any condition is missed, penalty reduction drops to 75%.
Q: Does Compliance First apply to state environmental agencies?
No. The federal Compliance First memo only applies to EPA enforcement. State environmental agencies (KDHE, Oklahoma DEQ, TCEQ, etc.) are not bound by the policy. States retain independent enforcement authority and some states are increasing enforcement to compensate for federal policy shifts.
Q: What’s the eDisclosure portal and how do I use it?
EPA’s eDisclosure portal is an online system for reporting violations discovered through internal audits. Facilities create accounts and submit disclosure reports with details of the violation, discovery method, correction timeline, and prevention measures. Disclosure must occur within 21 days of violation discovery to qualify for penalty relief. Access at https://www.epa.gov/compliance/epas-edisclosure.
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