LawFlash

Environmental Protection Agency Reinstates California Emissions Waiver

March 09, 2022

In a move that was telegraphed at the outset of the Biden-Harris administration, the US Environmental Protection Agency announced March 9 that it is reversing a Trump-era decision to revoke California’s authority to set tailpipe emission standards more stringent than those established by the Agency. This action restores California’s role in setting more stringent emission and fuel efficiency standards that, in practice, tend to drive the US market as a whole. 

Background

In the 1960s, California sought and received a waiver under the federal Clean Air Act (commonly known as the “California Waiver”) that allows the state to set its own tailpipe emissions standards for new motor vehicles. The waiver was granted in part to address the state’s unique air pollution problems, based on the determination of the Environmental Protection Agency (EPA) that:

  • California’s standards are at least as protective as federal standards, and the state’s determination of that fact was not arbitrary and capricious;
  • California’s standards are needed to meet compelling and extraordinary conditions; and
  • California’s standards are not inconsistent with certain Clean Air Act provisions related to technical feasibility and lead time to manufacturers.

The California Waiver effectively established California as the driver of vehicle emission standards nationally because automakers were reluctant to produce a separate class of vehicles that met the state’s more stringent requirements. Rather than abandon the enormous auto market in California—and in the 13 other states that eventually adopted the standards pursuant to the California Waiver—automakers have instead produced vehicles for the entire US market that comply with California’s stricter standards.

In September 2019, as part of its broader effort to scale back greenhouse gas regulations, the Trump administration revoked the California Waiver, citing both safety and economic reasons. This provoked significant backlash from California, environmental groups, and even most auto manufacturers—many of which subsequently made voluntary commitments regardless of the rollback. California and other states filed suit to challenge the administration’s action, arguing not only that Congress intended for California to design and implement its own emission-control program so that it could address “extraordinary [climate] conditions,” but also that the EPA lacked authority under the Clean Air Act to rescind the Waiver. The lawsuit did not proceed, however, in light of an executive order issued by President Biden on the first day of his presidency that, among other things, directed the EPA and the National Highway Traffic Safety Administration to reconsider the prior administration’s recission of the California Waiver.

Reinstating the California Waiver

In April 2021, the Biden-Harris administration directed federal agencies to take steps to reverse the former administration’s revocation decision and once again allow California to set its own tailpipe emission standards. This past December, the National Highway Traffic Safety Administration moved to reinstate the California Waiver, declaring that the 2019 revocation will “no longer form an improper barrier to States exploring creative solutions to address their local communities’ environmental and public health challenges.” With the March 9 announcement, the EPA has followed suit in restoring the Waiver.

With the Waiver reinstated, California is expected to push forward its ambitious goals in cutting greenhouse gas emissions from vehicular sources, which constitute a substantial portion of total US emissions. The move will allow the state to set aggressive emissions and efficiency standards, as well as implement policies outlined in a September 2020 California executive order directing state agencies to include enhanced zero-emission vehicle standards for the next round of tailpipe emission standards—2026 to 2035—and to possibly require that 100% of new passenger car and truck sales be zero-emission vehicles by 2035. Further, California’s Advanced Clean Trucks rule, which would require a select number of new medium and heavy duty trucks to be zero-emissions vehicles by 2025, may also gain traction on a national level.

Looking Ahead

While the Biden-Harris administration has ambitious goals to reduce greenhouse gas emissions in the coming decades, the prospects for bold, omnibus climate change legislation at the federal level have waned over the past year. Against that backdrop, the reinstatement of the California Waiver represents a significant victory for climate advocates. California has both the means and the motivation to enact more aggressive emission-reduction measures for mobile sources, which may be what the Biden-Harris administration is counting on to make further progress on at least some of its climate goals.

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