By Valerie Volcovici
WASHINGTON, Feb 13 (Reuters) – President Donald Trump’s repeal of a cornerstone federal climate regulation will immediately free automakers from costly tailpipe emissions standards, but the move could spark lawsuits and force businesses to navigate an uncertain future of multiple state and regional rules.
Trump’s Environmental Protection Agency on Thursday finalized its revocation of the “endangerment finding” for vehicles, a 2009 determination that greenhouse gas emissions endanger human health. The finding gave the agency authority to regulate emissions from vehicles, as well as other sectors that burn or produce fossil fuels.
Trump said the country’s “biggest deregulatory action” in history would save companies more than $1 trillion in compliance costs. Environmental groups denounced the move, which was praised by some industry groups but met with caution by others.
Ten lawyers and analysts interviewed by Reuters said the companies face a complicated ride, citing looming court challenges and the possibility that a mix of state and regional emissions rules would supersede a single federal rule.
“This federal withdrawal will cause an unprecedented disruption to 15 years of regulatory progress, threatening public health, local communities, industries, natural resources, and public investments,” said Rob Bonta, attorney general for the state of California, which is weighing a lawsuit.
Matthew Leopold, an environmental lawyer at Holland & Knight who served as the EPA’s general counsel during the first Trump administration, said the company’s strategies for adjusting to the repeal will depend on how quickly the legal challenges reach and are resolved by the US Supreme Court.
He said utilities and other large emitters will seek a clearer understanding of the implications.
“While this initial rulemaking is focused on motor vehicle regulation, it will have ripple effects on other EPA programs as well. It is the foundation of all EPA greenhouse gas regulation in all sectors,” Leopold said.
The EPA relied on the hazard finding to regulate power plants, vehicle manufacturers and oil and gas operations. Transportation and energy make up about half of US greenhouse gas emissions.
Trump has called climate change a “distraction” and has withdrawn the United States, the world’s largest historical emitter, from international efforts to combat it.
CAUTIOUS REACTION
The first Trump administration did not seek to review the hazard finding, as industry groups opposed the move and then-EPA Acting Attorney General David Fotouhi said the disruption was too risky.
The EPA was bolder this time after Supreme Court cases such as Loper Bright Enterprises v. Raimondo found that Congress, not administrative agencies, should make that determination, the agency said in a press release Thursday.
The EPA’s decision drew praise from some industry groups representing smaller oil and gas operators – the Independent Petroleum Association of America and the Marcellus Shale Association. The trade group for companies that supply equipment for internal combustion engine vehicles called the Specialty Equipment Market Association, or SEMA, said it will “have a direct impact on the range of new vehicle options that exist in the coming years.”
Environmental groups blasted the move and noted that some major industry groups didn’t seem to be on board either.
David Doniger, senior counsel for the Natural Resources Defense Council, pointed to public comments from Ford and Honda last fall. Both automakers supported keeping the finding in place to ensure a stable regulatory environment.
“They’re worried about the political pendulum swinging back in a few years,” Doniger said.
Honda did not respond to a request for comment on the EPA’s decision. Ford praised the administration for addressing the “imbalance between current emissions standards and customer choice” but said it advocated a single national emissions standard instead of separate state standards.
The Alliance for Automotive Innovation did not endorse Trump’s repeal of the threat Thursday but said “the auto emissions regulations finalized in the previous administration are very challenging for automakers to achieve given the current market demand for EVs.”
The American Petroleum Institute said it was not in favor of overturning the hazard finding but supported the administration’s action to end the electric vehicle mandates for cars.
API Senior Vice President of Policy and Regulatory Affairs Dustin Meyer said in a statement that the trade group supports federal regulation of emissions — including methane from oil and gas operations.
“Our focus now is working on sustainable policies that reduce emissions while meeting growing energy demand,” he said.
The Chamber of Commerce said on Thursday that it will take a few days to analyze the rule and its impact.
“While we have not called on the EPA to review and rescind the agency’s 2009 Endangerment Finding, we are carefully reviewing the specifics of this final rule and will engage with our members to evaluate its long-term implications and impacts,” said Marty Durbin, president of the Global Energy Institute in the House.
The Edison Electric Institute, which represents large American investor utilities, said “We are reviewing this new action and will continue to work with the Administration to strengthen grid reliability and lower energy costs for all customers.”
In public comments last year, EEI said that rescinding the hazard finding could open the door to a regional mix of regulation and legal action.
Ann Carlson, a professor of environmental law at the University of California law school, agreed with that assessment, saying that the federal authority to regulate greenhouse gases no longer preserves state actions.
“If greenhouse gases are not subject to the Clean Air Act, there is an argument that states can then regulate them independently,” she said.
(Reporting by Valerie Volcovici; additional reporting by David Shepardson; Editing by David Gregorio)