Gas War: Appeals Court Upholds EPA Approval of California Emissions Rules

On Tuesday, a U.S. appeals court agreed to uphold the Environmental Protection Agency's decision to re-grant a waiver that allows California the ability to set its own tailpipe emissions limits and electric vehicle mandates.

For those that don’t recall this particular saga of the Great American Gas War, the EPA reinstated a waiver under the Clear Air Act that allowed California to establish vehicle emission rules that went beyond federal standards in 2022. Originally instituted by the Obama administration in 2013, the waiver was ended by the Trump administration in 2019 on the grounds that it effectively allowed California to move the nation toward more stringent fuel economy standards and mandatory electrification.

The stated concern was that the North American market would cater to California due to its relatively large economy, something Donald Trump alleged would result in a surplus of expensive EVs nobody wanted to buy and higher prices across the board. The matter quickly turned into a major legal battle between a coalition of blue states and the federal government. California and allied Democratic territories launched numerous lawsuits in a bid to avoid having its waiver revoked. It likewise demanded automakers make a formal agreement to adhere to its emissions standards (regardless of what the federal government said) if they wanted to continue selling products within its borders.

Joe Biden ultimately restored the waiver by executive order after taking office. Now under new leadership the EPA formally reinstated the waiver under the Clear Air Act to California in 2022. The federal regulators likewise did an about face regarding the Trump-era decision to prohibit other states from adopting the California tailpipe emission standards. That same year, the California Air Resources Board (CARB) finalized a plan to end the sale of gasoline vehicles sold within the state by 2035. The plan was likewise accompanied by rising requirements for zero-emission vehicle sales starting from 2026.

While the White House is technically supposed to be prohibited from deciding what Americans can and cannot purchase, the EPA recently updated tailpipe emission limits through 2032 that fall short of Californian standards. However, they’ll effectively require manufacturers to have a vehicle breakdown that’s at least half plug-in vehicles by 2030 to adhere to its goals.

All of the above has encouraged legal challenges from 17 Republican-led states that have alleged these decisions are effectively manipulating the automotive market and run the risk of crippling the oil industry. However, according to Reuters, the three-judge panel of the United States Court of Appeals for the District of Columbia has rejected the case.

From Reuters:

California Governor Gavin Newsom said the "court sided with common sense and public health against the fossil fuel industry and Republican-led states. This ruling reaffirms California’s longstanding right to address pollution from cars and trucks."

Republicans argued the rules gave California an unconstitutional regulatory power denied to other states.

The court rejected that argument and said reversing the EPA decision would address state claims if automakers responded by selling fewer EVs or by lowering prices of gas-powered models and said there was no evidence to support that conclusion.

While this isn’t the first time California has been granted a regulatory waiver by the EPA, it’s hard to argue that what the state is doing isn’t influencing the industry and shaping the American automotive landscape. Sadly, whether or not you think that’s a good thing probably has more to do with who you vote for than what you actually think. The issue has become almost a parody of partisan government.

As for the industry itself, despite many companies having agreed to follow California’s rules in the past, many are now questioning whether or not these goals are feasible. The Alliance for Automotive Innovation, an industry lobbying group representing just about every major manufacturer, has been so wishy-washy on the topic that it’s almost not worth listening to. But its current take is that the automotive sector might have trouble reaching the goals laid out by California and even the EPA. Meanwhile, automakers spent the last decade telling everyone that electric vehicles would reach parity with combustion-engine vehicles by 2025 and have relentlessly been messaging that they’re pivoting toward all-electric vehicles as quickly as possible.

[Image: Boeang Sadewa/Shutterstock.com]

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