California Auto Emissions Case Gets US Supreme Court Review

(Bloomberg) -- The US Supreme Court will hear a clash involving California’s stringent vehicle pollution limits, agreeing to decide whether fuel producers have a legal right to sue over the regulations.

The justices said Friday they will hear a key preliminary question in a lawsuit over the Environmental Protection Agency’s power to let California tackle climate change through limits on auto emissions. 

At issue is whether the entities pressing the suit — including an oil industry trade group and Valero Energy Corp. units that produce biofuels — are sufficiently affected by the regulations to go to court. A federal appeals court tossed out the suit.

Supreme Court intervention creates a new complication for California’s auto rules, which were already in danger because of Donald Trump’s presidential election victory. The companies and trade groups ultimately are seeking a ruling that would outlast Trump’s four-year term and bar California from trying to stifle greenhouse gases without clearer authorization from Congress.

The court will rule only on the standing of the companies and trade groups to sue, not on the legality of the 2013 EPA waiver at the center of the fight. 

The 1967 Clean Air Act lets California set more stringent rules than the federal government as long as the state gets an EPA waiver. Other states have opted to follow California’s emissions standards, effectively extending the reach of some of them to nearly half the US new car market and spurring nationwide changes by automakers and other companies.

The disputed waiver let California impose its Advanced Clean Car program, which requires manufacturers to produce an increasing percentage of zero-emission vehicles through the 2025 model year. The EPA withdrew the disputed waiver in Trump’s first term, then reinstated it after Joe Biden took the White House.

Zero-Emission Vehicles

The EPA is edging closer to an expected approval of a new waiver for a subsequent California program that would further ramp up requirements for selling zero-emission vehicles, beginning with model year 2026 and reaching 100% by model year 2035. Trump campaigned on promises to end EV mandates, and his administration is expected to seek to withdraw the waiver.

The Biden administration backed the current waiver at the Supreme Court. The Trump administration will now inherit the case and could shift the EPA’s position, adding yet another wrinkle to the legal fight. 

In siding with the EPA, a federal appeals court in Washington said the companies and groups lacked standing because they hadn’t shown they would benefit from a ruling in their favor.

The challengers failed to present evidence showing that the ending the waiver would be “likely to result in any change to automobile manufacturers’ vehicle fleets by model year 2025,” the panel said.

The Supreme Court took no action on a separate appeal by 17 Republican-run states that say Congress violated the Constitution when it gave special powers to California through the Clean Air Act. The Ohio-led group argues that California’s unique status violates the constitutional principle of “equal sovereignty” among the states. 

The case is Diamond Alternative Energy v. EPA, 24-7.

(Adds more about case starting in third paragraph.)

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