The Impact of a Trump EPA on California's Mobile Source Rules

Under Clean Air Act (CAA) Section 209(a) (42 U.S.C. § 7543), states are preempted from adopting or enforcing emissions standards for new motor vehicles or new motor vehicle engines. However, because California had adopted its own clean air regulations addressing motor vehicle emissions prior to the adoption of the CAA, Section 209(b) allows California to request that the U.S. Environmental Protection Agency (EPA) waive this preemption so that California can enforce more stringent standards in the state. This process is colloquially referred to as "California's waiver."

EPA is required to grant a waiver as long as the state has determined that the state standard is, in the aggregate, at least as protective of public health and welfare as applicable federal standards. However, if the determination of the state on that point is arbitrary and capricious, or if the state does not need the standard to meet compelling and extraordinary circumstances or the standards are not consistent with CAA Section 7521(a), then EPA shall not grant the waiver.

Under CAA Section 177 (42 U.S.C. § 7507), other states are allowed to adopt California's standards and opt in to the more stringent regime, allowing California to impact motor vehicle markets across the nation.

EPA has never denied a waiver request; however, in President-Elect Donald Trump's prior term, EPA withdrew a waiver for California's Advanced Clean Cars I (ACC) regulation – a rule that set manufacturer emission standards for light-duty vehicles in model years (MY) 2017 to 2025. This was done despite there being no provision in the CAA that addresses waiver withdrawal.

Currently, there are five California regulations waiting for EPA waivers or authorizations (the analogous approval for rules that regulate off-road sources):

• Small Off-Road Engine regulation
• In-Use Diesel-Fueled Transport Refrigeration Units (TRU) and TRU Generator Sets regulations
• In-Use Off-Road Diesel-Fueled Fleets regulations
• In-Use Locomotive regulation
• Advanced Clean Fleets regulation

It is expected that a Trump Administration EPA will deny any waivers or authorizations still pending when the transition occurs, making any provision of those regulations mandating emission standards unenforceable by California. In addition, it is possible that the Trump Administration EPA would try to "claw back" previously granted waivers by either the Congressional Review Act or withdrawing waivers. This could impact waivers granted in late 2024, including for ACC II (manufacturer light-duty vehicle emission standards for MY 2026 to 2035) and Heavy-Duty Low-NOx Omnibus (manufacturer emissions standards for heavy-duty trucks).

In recent years, a spate of lawsuits challenging the waiver process has been filed. In December 2024, the U.S. Supreme Court granted certiorari in Diamond Alternative Energy v. EPA, a case challenging the Biden Administration's regranting of the waiver for ACC, which the previous Trump Administration had withdrawn. The Court granted certiorari on the issue of standing and redressability but did not grant certiorari on the plaintiff's second question regarding the lawfulness of the waiver as a whole. The Court also declined certiorari for a second set of plaintiffs in a related action in Ohio v. EPA. That case had asked the Court to opine on the constitutionality of the waiver provision under a state equal sovereignty theory. Another case challenging the waiver for California's Advanced Clean Trucks rule is being held in abeyance in the U.S. Court of Appeals for the D.C. Circuit, pending final decisions in the Diamond Alternative Energy and Ohio cases.

The unknown outcome of these cases – and of the Trump Administration EPA's actions related to California's waiver requests – leave much uncertainty for regulated entities, especially considering that California will have to take action once rules that are either denied waivers or potentially held at EPA for four years in an effort to stall implementation. The state's response – whether it be new rulemaking, holding existing rules for four years and hoping for a more receptive administration, litigation or attempting to enforce rules despite lack of a waiver – will hugely impact anyone who buys or operates motor vehicles in California and elsewhere in the nation.

20 Posts in 20 Days Leading to Inauguration Day on Jan. 20

Holland & Knight's Transportation & Infrastructure Industry Sector Group is prepared to assist industry clients in adapting to the anticipated changes by the new administration. Our team is writing new blog posts each day leading up to President-Elect Donald J. Trump's inauguration, with insights regarding likely impacts on the various segments of the industry, including Aviation, Construction, Maritime, Freight Rail, Motor Carriers, Transit and Autonomous Transportation. Bookmark our Election Impacts on Transportation & Infrastructure resource page to follow along.