California’s zero-emission vehicle mandates survive legal challenge

The U.S. Court of Appeals for the District of Columbia has extended California’s authority to enforce its own tailpipe regulations, rejecting a legal challenge initiated by the fossil fuel industry and a coalition of seventeen conservative states. The unanimous decision by the three-judge panel was handed down on April 9th, preserving the continuity of California’s current regulatory framework. The Advanced Clean Cars Program has governed new car sales since Model Year 2017 and is scheduled to sunset at the end of Model Year 2025. The controversial program requires automakers to sell fleets with a steadily increasing percentage of electrified vehicles and has been adopted by several other progressive states. Its ambitious successor, Advanced Clean Cars II, includes bold mandatory quotas that would boost the combined sales share of zero-emission vehicles and plug-in hybrid electric vehicles to 100% by 2035.

Legal arguments against California’s zero-emission vehicle mandates have been debated for over a decade. Under Section 209 of the Clean Air Act, California can request a waiver from the Environmental Protection Agency allowing it to enforce more aggressive emission standards using its own regulatory framework. Section 177 authorizes other states to adopt California’s tougher standards once the waiver has been granted. In 2013, the Obama Administration’s EPA granted the waiver, and the Advanced Clean Cars Program went into effect in 2017. The Trump Administration’s EPA revoked the waiver in 2019, but automakers had already designed cleaner vehicle fleets to comply with the program, and a coalition of automakers that included Honda, Ford, Volvo, BMW, and Volkswagen entered into an agreement with California that honored the existing standards. The Biden Administration’s EPA restored the original 2013 waiver in March of 2022, prompting the legal challenge that has now been defeated.

The recent decision represents a significant victory for California and the EPA, but it does not resolve major legal issues that will threaten the viability of the Advanced Clean Cars II Program. Automakers did not take part in the recent challenge against the 2013 waiver, and significant legal arguments were left unaddressed when the judges ruled that the petitioners did not have legal standing to challenge the EPA’s waiver decision. The fossil fuel industry and their state allies were unable to show that a ruling in their favor would redress the harm that the waiver decision allegedly imposed upon them. Automakers had already designed their fleets to comply with the ongoing regulations, which would sunset anyway in 2025. The only legal issue that was resolved on its merits was a constitutional challenge from the conservative states claiming that Section 209 grants favorable treatment to California that violates the equal sovereignty principle. The judges ruled that the Constitution grants Congress extensive power to regulate commerce and that the longstanding waiver provision is consistent with that broad authority.

The EPA is currently reviewing comments regarding a new waiver that would authorize the commencement of the Advanced Clean Cars II Program in 2027. It is likely that the waiver will be granted fairly soon, and that the EPA’s decision will provoke a forceful new legal challenge from the same stakeholders. In the long run, the mitigation of tailpipe carbon dioxide will be driven by the willingness of auto consumers to embrace electrification, not by the outcomes of drawn-out legal confrontations.