The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One National Program, 51310-51363 [2019-20672]
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Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations
ENVIRONMENTAL PROTECTION
AGENCY
40 CFR Parts 85 and 86
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety
Administration
49 CFR Parts 531 and 533
[NHTSA–2018–0067; EPA–HQ–OAR–2018–
0283; FRL 10000–45–OAR]
RIN 2127–AL76; 2060–AU09
The Safer Affordable Fuel-Efficient
(SAFE) Vehicles Rule Part One: One
National Program
Environmental Protection
Agency and National Highway Traffic
Safety Administration, Department of
Transportation.
ACTION: Withdrawal of waiver; final
rule.
AGENCY:
On August 24, 2018, the
Environmental Protection Agency (EPA)
and the Department of Transportation’s
National Highway Traffic Safety
Administration (NHTSA) jointly
published in the Federal Register a
notice of proposed rulemaking entitled,
‘‘The Safer Affordable Fuel-Efficient
(SAFE) Vehicles Rule for Model Years
2021–2026 Passenger Cars and Light
Trucks.’’ In the NPRM, the agencies
proposed new and amended greenhouse
gas (GHG) and Corporate Average Fuel
Economy (CAFE) standards for model
year 2021 to 2026 light duty vehicles.
EPA also proposed to withdraw the
waiver it had previously provided to
California for that State’s GHG and ZEV
programs under section 209 of the Clean
Air Act. NHTSA also proposed
regulatory text implementing its
statutory authority to set nationally
applicable fuel economy standards that
made explicit that those State programs
would also be preempted under
NHTSA’s authorities. In this action, the
agencies finalize the two actions related
to the waiver and preemption.
Accordingly, in this document: EPA
announces its decision to withdraw the
waiver; and NHTSA finalizes regulatory
text related to preemption. The agencies
anticipate issuing a final rule on
standards proposed in the NPRM in the
near future.
DATES: This joint action is effective
November 26, 2019.
Judicial Review: Pursuant to Clean Air
Act section 307(b), any petitions for
judicial review of this action must be
filed in the United States Court of
Appeals for the D.C. Circuit by
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SUMMARY:
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November 26, 2019. Given the inherent
relationship between the agencies’
actions, any challenges to NHTSA’s
regulation should also be filed in the
United States Court of Appeals for the
D.C. Circuit. See also Sections III.G and
IV.Q of this preamble.
ADDRESSES: EPA and NHTSA have
established dockets for this action under
Docket ID No. EPA–HQ–OAR–2018–
0283 and NHTSA 2018–0067,
respectively. All documents in the
docket are listed in the https://
www.regulations.gov index. Although
listed in the index, some information is
not publicly available, e.g., confidential
business information (CBI) or other
information whose disclosure is
restricted by statute. Certain other
material, such as copyrighted material,
will be publicly available in hard copy
in EPA’s docket, and electronically in
NHTSA’s online docket. Publicly
available docket materials can be found
either electronically in
www.regulations.gov by searching for
the dockets using the Docket ID
numbers above, or in hard copy at the
following locations: EPA: EPA Docket
Center, EPA/DC, EPA West, Room 3334,
1301 Constitution Ave. NW,
Washington, DC. The Public Reading
Room is open from 8:30 a.m. to 4:30
p.m., Monday through Friday, excluding
legal holidays. The telephone number
for the Public Reading Room is (202)
566–1744. NHTSA: Docket Management
Facility, M–30, U.S. Department of
Transportation (DOT), West Building,
Ground Floor, Rm. W12–140, 1200 New
Jersey Avenue SE, Washington, DC
20590. The DOT Docket Management
Facility is open between 9 a.m. and 5
p.m. Eastern Time, Monday through
Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT:
EPA: Christopher Lieske, Office of
Transportation and Air Quality,
Assessment and Standards Division,
Environmental Protection Agency, 2000
Traverwood Drive, Ann Arbor, MI
48105; telephone number: (734) 214–
4584; fax number: (734) 214–4816;
email address: lieske.christopher@
epa.gov, or contact the Assessment and
Standards Division, email address:
otaqpublicweb@epa.gov.
NHTSA: James Tamm, Office of
Rulemaking, Fuel Economy Division,
National Highway Traffic Safety
Administration, 1200 New Jersey
Avenue SE, Washington, DC 20590;
telephone number: (202) 493–0515.
SUPPLEMENTARY INFORMATION:
I. Overview
II. Preemption Under the Energy Policy and
Conservation Act
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III. EPA’s Withdrawal of Aspects of the
January 2013 Waiver of CAA section
209(b) Preemption of the State of
California’s Advanced Clean Car
Program
IV. Regulatory Notices and Analyses
I. Overview
On August 24, 2018, the
Environmental Protection Agency (EPA)
and the Department of Transportation’s
National Highway Traffic Safety
Administration (NHTSA) (collectively,
‘‘the agencies’’) jointly published in the
Federal Register a notice of proposed
rulemaking entitled, ‘‘The Safer
Affordable Fuel-Efficient (SAFE)
Vehicles Rule for Model Years 2021–
2026 Passenger Cars and Light Trucks’’
(the SAFE Vehicles rule).1 In the NPRM,
EPA proposed new greenhouse gas
(GHG) standards and NHTSA proposed
new Corporate Average Fuel Economy
(CAFE) standards for model years (MY)
2021 to 2026 light duty vehicles. The
agencies also proposed to take two
actions, separate from the proposed
standards, needed to ensure the
existence of one Federal program for
light vehicles. First, EPA proposed to
withdraw the waiver it had previously
provided to California for that State’s
GHG program and Zero Emissions
Vehicle (ZEV) mandate. Second,
NHTSA proposed regulatory text that
made explicit that State programs to
limit or prohibit tailpipe GHG emissions
or establish ZEV mandates are
preempted, to carry out its statutory
authority to set nationally applicable
fuel economy standards and consistent
with the express preemption provisions
of the Energy Policy and Conservation
Act (EPCA).
The SAFE Vehicles Rule received
several hundred thousand public
comments, which discussed in great
detail all aspects of the proposal. The
nature of the comments received related
to the proposed standards and the
proposed actions on preemption,
though, were considerably different.
That is, the vast majority of comments,
whether one considers the number of
commenters, the number of issues
raised by commenters, or the length and
level of detail of those comments,
focused primarily on the agencies’
proposed standards. In contrast, the
comments to the preemption issues,
though substantive and thorough, were
fewer in number and length, and raised
primarily legal issues, rather than the
technical or economic issues that were
the focus of many comments to the
standards. Both the proposed waiver
withdrawal and discussion of EPCA
1 83
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preemption are legal matters that are
independent of the technical details of
the proposed standards and, as such,
took up a relatively small part of the
NPRM.
Recent actions by the State of
California taken after the publication of
the NPRM have confirmed the need for
final decision from the agencies that
States do not have the authority to set
GHG standards or establish ZEV
mandates. First, on December 12, 2018,
California unilaterally amended its
‘‘deemed to comply’’ provision, such
that CARB’s GHG standards can be
satisfied only by complying with EPA’s
standards as those standards were
promulgated in 2012.2 More recently, on
July 25, 2019, California announced a
so-called ‘‘voluntary framework’’ with
four automakers, which purported,
without analysis of the terms of the
existing waiver, California law, or how
this ‘‘framework’’ is permissible under
Federal law, to allow those automakers
to meet reduced standards on a national
basis if they promise not to challenge
California’s authority to establish GHG
standards or the ZEV mandate.3 These
two actions, both of which conflict with
the maintenance of a harmonized
national fuel economy and tailpipe GHG
emissions program and the terms of the
agreement reached in 2012 and 2013,
confirm that the only way to create one
actual, durable national program is for
GHG and fuel economy standards to be
set by the Federal government, as was
intended by Congress in including
express preemption provisions in both
the Clean Air Act (for new motor
vehicle emissions standards) and EPCA
(for fuel economy).4
In light of the divergence in the type
of comments received to the proposal
(i.e., between the standards-related
proposal and the waiver and
2 See In re: Air Resources Board, Notice of
Approval of Regulatory Action, No. 2018–1114–03
(State of California, Office of Administrative Law
Dec. 12, 2018), available at https://ww3.arb.ca.gov/
regact/2018/leviii2018/form400dtc.pdf?_
ga=2.183723951.866759811.1568583699–
1441462912.1552677736 (last visited Sept. 15,
2019).
3 See California and Major Automakers Reach
Groundbreaking Framework Agreement on Clean
Emission Standards, Office of Gov. Gavin Newsome
(July 25, 2019), available at https://www.gov.ca.gov/
2019/07/25/california-and-major-automakersreach-groundbreaking-framework-agreement-onclean-emission-standards/ (last visited Sept. 14,
2019); Terms for Light-Duty Greenhouse Gas
Emissions Standards, available at https://
ww2.arb.ca.gov/sites/default/files/2019–07/Auto
%20Terms%20Signed.pdf (last visited Sept. 14,
2019).
4 At the time this joint action was signed,
California had not submitted or demonstrated any
intention to submit an application for a waiver for
either its December 2018 amendment to its
regulations or its July 2019 ‘‘framework.’’
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preemption proposals), and in light of
the recent actions taken by California,
the agencies have determined it is
appropriate to move forward with the
two actions related to preemption now,
while continuing work on a final rule to
establish the CAFE and GHG standards
that were within the scope of the NPRM.
This decision is appropriate, as agencies
have authority to finalize different parts
of proposed actions at different times.
Further, the agencies previewed this
possibility in the NPRM by emphasizing
the severability of the standards from
the actions being finalized in this
document. EPA’s action in this
document does not add or amend
regulatory text pursuant to the Clean Air
Act and, thus, issuing this decision on
the waiver and the later rulemaking on
the standard makes clear the difference
between EPA’s two actions and their
independence from one another.
NHTSA’s action in this document is not
to set standards for particular model
years, but rather is an exercise of its
authority under 49 U.S.C. 32901
through 32903, necessary to maintain
the integrity of the corporate average
fuel economy program and compliance
regime established by Congress as a
nationwide program, and consistent
with Congress’ statement of express
preemption in 49 U.S.C. 32919. These
two general aspects of the SAFE
Vehicles Rule are independent of the
CAFE and GHG standards for Model
Years 2021–2026.5 For that reason, the
decision in this document to finalize the
waiver and preemption issues does not
require the agencies to reopen the
comment period for the standards, as it
does not have any effect on either
agency’s standards.
The agencies note that several
comments claimed that the comment
period of 63 days was inadequate or that
the agencies did not hold a sufficient
number of public meetings. Although
the agencies will address this comment
more directly in the forthcoming final
rulemaking to establish standards, for
purposes of this action, it is clear to the
agencies that commenters had adequate
time to respond to the issue of the
waiver and EPCA preemption. Courts
give broad discretion to agencies in
determining whether the length of a
comment period is reasonable and, in
assessing the sufficiency of a comment
5 The agencies note that the South Coast Air
Quality Management District commented that EPA
should not take an action on the waiver in the same
notice as a rule that would change EPA’s GHG
standards. See South Coast Air Quality
Management District, Docket No. NHTSA–2018–
0067–11813. Although the agencies do not
acknowledge the validity of this argument, any such
concern is rendered moot by this action.
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period, look to whether the public had
a meaningful opportunity to comment
on a proposed action. See, e.g., Rural
Cellular Ass’n v. FCC, 588 F.3d 1095,
1101 (D.C. Cir. 2009); Connecticut Light
& Power Co. v. Nuclear Regulatory
Comm’n, 673 F.2d 525, 534 (D.C. Cir.
1982). There was unquestionably a
meaningful opportunity to comment
here. The agencies received several
hundred thousand comments, which
included highly detailed and technical
comments on all aspects of the proposal
from seemingly all relevant
stakeholders, including numerous
comments related to EPA’s action on the
waiver and NHTSA’s proposal on
preemption. The agencies also note that
the NPRM was initially issued and
made public on August 2, 2018, over
three weeks prior to publication in the
Federal Register, and received extensive
media coverage immediately thereafter,
and giving a total of 86 days to review
and comment. Furthermore, the
agencies held three public hearings
during the comment period, including
one in Fresno, California on September
24, 2018, where the agencies heard from
several hundred commenters in person.
II. Preemption Under the Energy Policy
and Conservation Act
A. NHTSA Is Finalizing Its Preemption
Proposal
NHTSA is finalizing its proposal
concerning preemption of State and
local laws and regulations related to fuel
economy standards. Congress passed
EPCA to help achieve the important
national objective of protecting the
United States against petroleum price
shocks through improvements in fuel
efficiency for the light duty vehicle
fleet. But Congress did not seek to do so
at any cost—instead directing the
Secretary of Transportation to balance
statutory factors, such as the need of the
nation to conserve energy, technological
feasibility, and economic practicability,
to arrive at stringent, but feasible,
standards on a Federal basis.
Increasing fuel economy is an
expensive undertaking for automakers,
the costs of which are necessarily
passed on to consumers, thereby
discouraging new vehicle purchases and
slowing the renewal of the nation’s light
duty fleet. That is why fuel economy
standards must be set considering other
critical factors.
This is also why the notion of
national applicability and preemption of
State or local laws or regulations related
to fuel economy standards is so critical.
Allowing State or local governments to
establish their own fuel economy
standards, or standards related to fuel
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economy, would provide for a universe
in which automakers are placed in the
untenable situation of having to expend
resources to comply not only with
Federal standards, but also meet
separate State requirements. If State or
local governments are allowed to
require—directly or indirectly—
automakers to develop and implement
additional technologies to improve fuel
economy (or reduce or eliminate
tailpipe greenhouse gas emissions for all
or a portion of a fleet), the fuel
economy-related expenses of
automakers increase beyond those
considered in establishing federal
standards. This would render the
critical balancing required by EPCA
devoid of meaning.
Uniform national fuel economy
standards are essential to accomplishing
the goals of EPCA. To ensure that the
fuel economy standards NHTSA adopts
constitute the uniform national
requirements that Congress intended,
NHTSA must address the extent to
which State and local laws and
regulations are preempted by EPCA.
Furthermore, EPCA states: ‘‘When an
average fuel economy standard
prescribed under this chapter is in
effect, a State or a political subdivision
of a State may not adopt or enforce a
law or regulation related to fuel
economy standards or average fuel
economy standards for automobiles
covered by an average fuel economy
standard under this chapter.’’ 49 U.S.C.
32919(a). As a limited exception, a State
or local government ‘‘may prescribe
requirements for fuel economy for
automobiles obtained for its own use.’’
49 U.S.C. 32919(c). In addition, when a
Federal fuel economy labeling or
information requirement is in effect,
pursuant to 49 U.S.C. 32908, a State or
local government may adopt or enforce
an identical requirement on ‘‘disclosure
of fuel economy or fuel operating costs.’’
49 U.S.C. 32919(b). Absent this limited
circumstance, a State or local
government cannot even have laws in
place that are identical to the Federal
standards.
NHTSA will first summarize its
discussion of preemption in the
proposal before turning to discussion of
issues raised by the comments. In this
final rule, NHTSA fully reaffirms the
discussion of preemption set forth in the
proposal, which provides additional
detail regarding NHTSA’s views.6
In the proposal, NHTSA described its
preemption discussions in prior
rulemakings, which are consistent with
the views on preemption that NHTSA is
6 See
83 FR 42986, 43232–39 (Aug. 24, 2018).
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finalizing in this document.7 NHTSA
has asserted preemption of certain State
emissions standards under EPCA on
multiple occasions since 2002. The
United States explained in a 2002
amicus brief that EPCA preempted
California’s then-existing zero-emissions
vehicle (ZEV) regulations.8 NHTSA
continued the discussion of preemption
later that year in a notice of proposed
rulemaking setting CAFE standards for
model year 2005 through 2007 light
trucks, and reiterated its position in the
2003 final rule.9 NHTSA’s 2005 notice
of proposed rulemaking setting
standards for model year 2008 through
2011 light trucks also discussed
preemption and the 2006 final rule
elaborated on the issue at length,
including in a specific discussion
finding California’s then-existing
tailpipe greenhouse gas emissions
regulations were preempted.10 NHTSA’s
2008 proposed rule for model year 2011
through 2015 passenger cars and light
trucks also addressed preemption and
proposed adding a summary of
NHTSA’s position on the issue to the
Code of Federal Regulations.11 That
proposed rule also addressed recent
developments, specifically the Supreme
Court’s decision in Massachusetts v.
EPA, the enactment of EISA, and two
district court decisions finding that
State tailpipe greenhouse gas emissions
standards were not preempted by
7 Id. at 43232. As NHTSA noted in the proposal,
it had not previously directly addressed preemption
of California’s ZEV program. Id. at 43233.
8 Brief for the United States as Amicus Curiae in
Support of Affirmance, Cent. Valley ChryslerPlymouth Inc., et al, v. Kenny, No. 02–16395 (9th
Cir. 2002).
9 68 FR 16868, 16895 (Apr. 7, 2003); 67 FR 77015,
77025 (Dec. 16, 2002). In the notice of proposed
rulemaking, NHTSA specifically rejected the
argument made by California in litigation that
NHTSA had not treated EPCA as preempting State
efforts to engage in CAFE-related regulation,
explaining that States may not ‘‘issue a regulation
that relates to fuel economy and which addresses
the same public policy concern as the CAFE statute.
Our statute contains a broad preemption provision
making clear the need for a uniform, federal
system. . . . The fact that NHTSA had not
expressly addressed this particular aspect of
California’s requirements should not have been
interpreted as tacit acceptance.’’ 67 FR 77015,
77025 (Dec. 16, 2002).
10 71 FR 17566, 17654–70 (Apr. 6, 2006); 70 FR
51414, 51457 (Aug. 30, 2005).
11 73 FR 24352, 24478–79 (May 2, 2008). NHTSA
finalized only standards for model year 2011
through that rulemaking action, and subsequently
began a new rulemaking for model year 2012 and
later passenger cars and light trucks. In the final
rule for model year 2011, NHTSA stated: ‘‘NHTSA
has decided not to include any provisions
addressing preemption in the Code of Federal
Regulations at this time. The agency will reexamine the issue of preemption in the content of
its forthcoming rulemaking to establish Corporate
Average Fuel Economy standards for 2012 and later
model years.’’ 74 FR 14196, 14200 (Mar. 30, 2009).
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EPCA.12 NHTSA explained that those
developments did not change its view of
preemption and it reaffirmed the
detailed analysis and conclusions from
the 2006 final rule.13 Subsequent CAFE
rulemaking documents, prior to the
August 2018 proposal, did not discuss
EPCA preemption.14 Thus, this final
rule is consistent with NHTSA’s
longstanding position on EPCA
preemption over the course of nearly
two decades.
In the proposal, NHTSA also
described certain developments,
including the Supreme Court’s decision
in Massachusetts v. EPA, that preceded
EPA’s regulation of tailpipe greenhouse
gas emissions through joint rulemaking
with NHTSA.15 In addition, NHTSA
described the Obama Administration’s
creation of a framework that was
intended to allow a manufacturer to
‘‘meet all standards with a single
national fleet.’’ 16 Appeals of the two
district court decisions holding that the
California regulation and Federal
regulation could co-exist were
withdrawn as part of the negotiated
agreement for the National Program.17
The announcement of the framework
was followed by EPA’s decision less
than two months later to grant a waiver
to California for its own greenhouse gas
emissions standards, without taking any
substantive position on EPCA
preemption.18 The national framework
was a negotiated agreement between the
Federal government, California, and the
automotive industry.19
NHTSA confirms its view, stated in
the proposal on preemption, that the
agencies’ consideration in 2012 of
California’s ‘‘deemed to comply’’
12 73
FR 24352, 24478 (May 2, 2008).
13 Id.
14 As noted above, in NHTSA’s final rule for
model year 2011, it stated that ‘‘[t]he agency will
re-examine the issue of preemption in the content
of its forthcoming rulemaking to establish Corporate
Average Fuel Economy standards for 2012 and later
model years.’’ 74 FR 14196, 14200 (Mar. 30, 2009).
However, in the NHTSA’s 2009 proposal and 2010
final rule setting standards for model year 2012
through 2016 automobiles, NHTSA stated that is
was ‘‘deferring further consideration of the
preemption issue.’’ 75 FR 25324, 25546 (May 7,
2010); 74 FR 49454, 49635 (Sept. 28, 2009).
15 83 FR 42986, 43232–33 (Aug. 24, 2018).
16 Id. at 43233; 76 FR 74854, 74863 (Dec. 1, 2011).
17 See 83 FR 42986, 43233 (Aug. 24, 2018);
Association of Global Automakers, Docket No.
NHTSA–2018–0067–12032.
18 In other words, the National Program included
State requirements not nationally applicable. 83 FR
42986, 43233 (Aug. 24, 2018); see also 74 FR 32744,
32783 (July 8, 2009) (‘‘EPA takes no position
regarding whether or not California’s GHG
standards are preempted under EPCA.’’).
19 After President Obama announced the
agreement, NHTSA and EPA subsequently adopted
CAFE and greenhouse gas emissions standards
through rulemaking. See 75 FR 25324 (May 7,
2010).
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regulatory provision as obviating
NHTSA’s consideration of preemption
was erroneous.20 This, too, was part of
the negotiated agreement described
above.21 Under California’s regulatory
provision, California deemed
manufacturers to be in compliance with
certain of California’s requirements if
they complied with EPA’s standards.22
However, EPCA explicitly provides that
all State requirements ‘‘related to’’ fuel
economy standards, even those that may
be identical or equivalent to Federal
requirements are preempted by EPCA.23
Moreover, as discussed in additional
detail below, California recently
changed its regulations so that it has no
such ‘‘deemed to comply’’ provision
should the forthcoming SAFE final rule
adopt any regulatory alternative other
than the no action alternative.24 This
change sets up a direct conflict between
Federal and State requirements,
exacerbating the conflict that exists even
now.
Congress’s intent to provide for
uniform national fuel economy
standards is frustrated when State and
local actors regulate in this area. In the
proposal, NHTSA explained that the
need for regulatory certainty, along with
the clear prospect of disharmony,
required it to address preemption.25
NHTSA also explained its desire to seek
comments on this important issue from
State and local officials, along with
other interested members of the
public.26 NHTSA in fact received many
comments from State and local
governments, NGOs, industry, and
others concerning preemption.27 This
comment process helped ensure that the
agency considered all facets of this
significant issue before reaching a final
determination in this rule.
NHTSA also discussed the broad and
clear text of EPCA’s express preemption
provision.28 As NHTSA explained in the
20 See
id.; 77 FR 62624, 62637 (Oct. 15, 2012).
75 FR 25324, 25328 (May 7, 2010).
22 83 FR 42986, 43233 (Aug. 24, 2018).
23 See id. at 43233–34.
24 See 83 FR 42986, 42990 tbl. I–4 (Aug. 24,
2018); Cal. Code Regs. tit. 13, sec. 1961.3(c).
California changed its regulation following issuance
of NHTSA and EPA’s proposed rule. See State of
Cal., Office of Admin. Law, Notice of Approval of
Regulatory Action (Dec. 12, 2018), https://
www.arb.ca.gov/regact/2018/leviii2018/
form400dtc.pdf. NHTSA recognized the potential
for such a change in the proposal. 83 FR 42986,
43233 n.495 (Aug. 24, 2018).
25 83 FR 42986, 43233 (Aug. 24, 2018).
26 Id.
27 See, e.g., California Air Resources Board
(CARB), Docket No. NHTSA–2018–0067–11873;
Alliance of Automobile Manufacturers, Docket No.
NHTSA–2018–0067–12073; Joint Submission from
the States of California et al. and the Cities of
Oakland et al., Docket No. NHTSA–2018–0067–
11735.
28 83 FR 42986, 43233–34 (Aug. 24, 2018).
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21 See
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proposal, unlike the Clean Air Act, there
is no set of circumstances under EPCA
in which it would be appropriate or
permissible for NHTSA to waive
preemption or allow States or local
governments to adopt or enforce
identical or equivalent requirements.29
EPCA does not provide NHTSA with
any waiver authority whatsoever. To
ensure Federal primacy over this area,
EPCA broadly preempts all State and
local laws ‘‘related to’’ fuel economy
standards or average fuel economy
standards.30 NHTSA reiterates,
consistent with the proposal, that in this
rulemaking NHTSA is concluding that
State and local requirements that relate
to fuel economy standards by directly or
substantially affecting corporate average
fuel economy levels are preempted.31
NHTSA also described Supreme Court
precedent interpreting the meaning of
‘‘related to.’’ 32 In addition to the plain
language of the statute, NHTSA applied
to EPCA the guidance from Supreme
Court case law to consider both the
objectives of the statute and the effect of
the State laws on the Federal
standards.33 As NHTSA explained, the
primacy of a single national fuel
economy standard, set by the Federal
government, was an important objective
of Congress in enacting EPCA.
In adopting EISA, Congress did not
repeal or amend EPCA’s express
preemption provision.34 While Congress
included in EISA a savings provision
preventing EISA from limiting
preexisting authority or responsibility
conferred by any law, or from
authorizing violation of any law,35 the
savings clause did not purport to
expand either EPA’s or NHTSA’s
preexisting authority or responsibility.36
NHTSA recognized that during debate
on the floor, some Members of Congress
made statements about the savings
provision’s impact on California’s
ability to set tailpipe greenhouse gas
emissions standards.37 NHTSA affirms
its view, consistent with Supreme Court
precedent, that such legislative history
does not alter the plain text of the
statute.38 In the end, Congress did not
29 Id.
at 43233.
U.S.C. 32919(a).
31 83 FR 42986, 43233 (Aug. 24, 2018).
32 Id.
33 Id. at 43233–34.
34 See EISA, Public Law 110–140 (2007).
35 42 U.S.C. 17002.
36 See id.
37 83 FR 42986, 43234 (Aug. 24, 2018).
38 See Food Mktg. Inst. v. Argus Leader Media,
139 S. Ct. 2356, 2364 (2019) (‘‘In statutory
interpretation disputes, a court’s proper starting
point lies in a careful examination of the ordinary
meaning and structure of the law itself. Where, as
here, that examination yields a clear answer, judges
must stop. Even those of us who sometimes consult
30 49
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change EPCA’s preemption provision
when it adopted EISA, despite clearly
having the opportunity to do so.39
Because States lacked preexisting
authority to set tailpipe greenhouse gas
emissions standards, as a result of
EPCA’s preemption provision, EISA’s
savings clause did not give them that
authority.
In the proposal, NHTSA also
described in detail the reasons that
tailpipe carbon dioxide emissions
regulations or prohibitions are ‘‘related
to’’ fuel economy standards.40 NHTSA
explained that carbon dioxide emissions
are a necessary and inevitable
byproduct of burning gasoline: The
more fuel a vehicle burns or consumes,
the more carbon dioxide it emits.41
Based on the physical and
mathematically measurable relationship
between carbon dioxide emissions and
fuel economy, EPCA has always
specified that compliance with fuel
economy standards is determined
through tests and calculation
procedures established by EPA.42
Specifically, compliance with fuel
economy standards is based almost
entirely on carbon dioxide emission
rates.43 As NHTSA noted, it is
significant that in enacting EPCA,
Congress both adopted test procedures
reliant on the direct relationship
between carbon dioxide emissions and
fuel economy, and preempted State and
local governments from adopting
requirements related to fuel economy
standards in the same law.44
NHTSA affirms in this final rule that
a State or local requirement limiting
tailpipe carbon dioxide emissions from
automobiles has the direct and
substantial effect of regulating fuel
consumption and, thus, is ‘‘related to’’
fuel economy standards. Likewise, since
carbon dioxide emissions constitute the
overwhelming majority of tailpipe
carbon emissions, a State regulation of
all tailpipe greenhouse gas emissions
from automobiles or prohibiting all
tailpipe emissions is also ‘‘related to’’
fuel economy standards and preempted
by EPCA.
NHTSA is also finalizing its
conclusion that EPCA does not preempt
all potential State or local regulation of
greenhouse gas emissions from vehicles.
As NHTSA explained in the proposal,
legislative history will never allow it to be used to
‘muddy’ the meaning of ‘clear statutory language.’ ’’)
(internal citations omitted).
39 See EISA, Public Law 110–140 (2007); 83 FR
42986, 43234 (Aug. 24, 2018).
40 83 FR 42986, 43234 (Aug. 24, 2018).
41 Id.
42 49 U.S.C. 32904(c).
43 See 83 FR 42986, 43234 (Aug. 24, 2018).
44 Id.
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some greenhouse gas emissions from
vehicles are not related to fuel economy
because they have either no effect on
fuel economy, or only an insignificant
effect on fuel economy.45 NHTSA
provided an example of a requirement
with no bearing on fuel economy: a
State regulation of vehicular refrigerant
leakage.46 NHTSA also explained that
State safety requirements that have only
an incidental impact on fuel economy,
such as a requirement to use child seats,
is not preempted because it does not
sufficiently relate to fuel economy
standards.47 NHTSA also confirms its
view that, if preempted requirements
are combined with requirements not
related to fuel economy, ECPA would
void only the preempted portion of the
law.
In addition, NHTSA and EPA are
confirming their determination, in this
joint final action, that a Clean Air Act
waiver does not waive EPCA
preemption. As explained in the
proposal, a State or local law or
regulation related to automobile fuel
economy standards is void ab initio
under the preemptive force of EPCA.48
As support, the proposal cited
longstanding Supreme Court case law
concerning the Supremacy Clause and
action in violation of a statutory
prohibition.49 In sum, ‘‘[i]t is basic to
this constitutional command [in the
Supremacy Clause] that all conflicting
state provisions be without effect.’’ 50
As explained in the proposal,
avoiding preemption under one Federal
law has no necessary bearing on another
Federal law’s preemptive effect.51 For
purposes of the present rule, this
conclusion is confirmed by Section 209
of the Clean Air Act, which explicitly
states that a waiver of preemption
pursuant to that provision of the Clean
Air Act only relieves ‘‘application of
this section.’’ 52 NHTSA also confirms
its view that a Clean Air Act waiver
does not ‘‘federalize’’ State or local
requirements preempted by EPCA.
NHTSA and EPA also explained in
the proposal their disagreement with
decisions from district courts in
California and Vermont that held that
EPCA did not preempt State tailpipe
greenhouse gas emissions standards.53
45 Id.
46 Id.
at 43234–35.
at 43235.
47 Id.
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48 Id.
The agencies particularly disagree with
those district courts’ characterization of
the ‘‘related to’’ language in EPCA’s
preemption provision as narrow, their
reliance on California’s application for a
Clean Air Act waiver, and the courts’
implied preemption analyses.54 As the
proposal explained, these decisions are
legally flawed, and NHTSA is not barred
from proceeding with its preemption
determination here.55
NHTSA also reaffirms its views on
implied preemption, as described in the
proposal.56 State or local limitations or
prohibitions on tailpipe carbon dioxide
emissions from automobiles directly
conflict with the objectives of EPCA.
NHTSA balances statutory factors in
setting CAFE standards at ‘‘the
maximum feasible average fuel economy
level that the Secretary decides the
manufacturers can achieve in that
model year’’ (49 U.S.C. 32902(a)).57
State requirements, made based on
State-specific determinations unbound
by the considerations in EPCA, frustrate
NHTSA’s statutory role. If one or more
States may issue competing or
overlapping requirements affecting fuel
economy standards, industry must also
apply resources and effort at meeting
standards applicable only to discrete
parts of the country in addition to those
spent to comply with the Federal
standards. In accordance with EPCA,
manufacturers’ ‘‘average fuel economy’’
is calculated based on specific statutory
requirements. 49 U.S.C. 32901(a)(5),
32904. Manufacturers earn credits for
exceeding average fuel economy
standards. 49 U.S.C. 32903. This
statutory compliance structure is
impeded when States or local
governments attempt to set or enforce
their own requirements, which
necessarily apply to manufacturers at a
State or local level. This interferes with
the national ‘‘average fuel economy’’
program. The broad preemption
provision adopted by Congress in EPCA
clearly demonstrates the intention for a
single national set of standards that
consider, among other things, economic
feasibility and consumer choice. Indeed,
the entire purpose of a balanced
standard is defeated if a State can place
its thumb on the scale. Likewise,
separate State or local requirements
interfere with the compliance regime
under EPCA of performance determined
based on nationwide fleet averages,
49 Id.
50 Maryland v. Louisiana, 451 U.S. 725, 746
(1981) (citing McCulloch v. Maryland, 4 Wheat. 316,
427 (1819)).
51 83 FR 42986, 43235 (Aug. 24, 2018).
52 42 U.S.C. 7543(b)(1).
53 83 FR 42986, 43232–38 (Aug. 24, 2018); see
Green Mountain Chrysler v. Crombie, 508 F. Supp.
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2d 295 (D. Vt. 2007); Cent. Valley Chrysler-Jeep, Inc.
v. Goldstene, 529 F. Supp. 2d 1151 (E.D. Cal. 2007),
as corrected (Mar. 26, 2008).
54 83 FR 42986, 43232–38 (Aug. 24, 2018).
55 See id. at 43235.
56 See id. at 43237–38.
57 49 U.S.C. 32902(f).
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which determine manufacturers’ credits
or shortfalls. See 49 U.S.C. 32903.
NHTSA also finalizes the view, as
discussed in the proposal, that ZEV
mandates are preempted by EPCA.58
Such laws, which require that a certain
number or percentage of vehicles sold or
delivered in a State by a manufacturer
meet ZEV requirements, directly and
substantially affect fuel economy
standards by requiring manufacturers to
eliminate fossil fuel use in a portion of
their fleet. Like State or local tailpipe
GHG emissions standards, ZEV
mandates require the application of
additional efforts and resources beyond
those needed to comply with Federal
standards. ZEV mandates also directly
conflict with the goals of EPCA as they
apply irrespective of the Federal
statutory factors the Secretary of
Transportation (through NHTSA) is
required to consider in setting fuel
economy standards, including
technological feasibility and economic
practicability. In the proposal, NHTSA
described, as an example, California’s
ZEV mandate, which manufacturers
must comply with individually for each
State adopting California’s mandate.59
This regime of State mandates forces
manufacturers to expend scarce
resources on specific technology
regardless of consumer demand, and
regardless of what the Secretary has
determined in her judgment to be the
appropriate expenditure of resources
necessary to comply with fuel economy
standards set in accordance with the
balancing required by EPCA.
NHTSA also confirms its view that
the preemption portion of this joint final
action is a statement of what Federal
law requires and is effective without
regard to any particular model year of
vehicles and without regard to the
details of the fuel economy and
greenhouse gas emissions standards the
agencies have set previously or set in
the future.60 In other words, NHTSA’s
regulation concerning EPCA preemption
is independent of and severable from
the specific standards it ultimately
adopts for model year 2021 through
2026 automobiles. Given the need for
clarity on this issue, NHTSA has
decided to issue this as a separate final
rule and will later finalize the standards
for model year 2021 through 2026
automobiles. NHTSA’s preemption
regulation formalizes its longstanding
position on preemption and
incorporates that position into the Code
of Federal Regulations provisions
concerning passenger automobile
58 See
id. at 43238–39.
59 Id.
60 See
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average fuel economy standards at 49
CFR 531.7 and 49 CFR part 531,
appendix B, and light truck fuel
economy standards at 49 CFR 533.7 and
49 CFR part 533, appendix B. These
portions of the regulations are operable
without regard to any specific Federal
standards and requirements in 49 CFR
parts 531 and 533 or other parts of the
Code of Federal Regulations. Likewise,
NHTSA’s determination that a State or
local law or regulation of tailpipe
greenhouse gas emissions from
automobiles is related to fuel economy
standards is severable from NHTSA’s
determination that State or local ZEV
mandates are related to fuel economy
standards.
B. Scientific Relationship Between
Tailpipe Carbon Dioxide Emissions and
Fuel Economy Standards
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NHTSA is finalizing its conclusion
that State requirements regulating
tailpipe carbon dioxide emissions from
automobiles are related to fuel economy
standards. The relationship between
fuel economy standards and regulations
that limit or prohibit tailpipe carbon
dioxide emissions from automobiles is a
matter of science and mathematics.
Commenters did not and cannot dispute
the direct scientific link between
tailpipe carbon dioxide emissions from
automobiles and fuel economy. Thus,
State and local laws and regulations that
regulate such tailpipe emissions are
preempted under EPCA.
The relationship between carbon
dioxide and fuel economy is described
in several statements in an appendix to
parts 531 and 533 that NHTSA is
finalizing in this document.
First, ‘‘[a]utomobile fuel economy is
directly and substantially related to
automobile tailpipe emissions of carbon
dioxide.’’ 49 CFR part 531, appx. B,
section (a)(1)(A); 49 CFR part 533, appx.
B, section (a)(1)(A).61 No commenters
disputed or otherwise specifically
commented on this statement.
Second, ‘‘[c]arbon dioxide is the
natural byproduct of automobile fuel
consumption.’’ 49 CFR part 531, appx.
B, section (a)(1)(B); 49 CFR part 533,
appx. B, section (a)(1)(B).62 One
comment identified this as a correct
statement,63 and another highlighted
this fact in noting NHTSA’s
longstanding and consistent view on
preemption.64 No commenters disagreed
with this factual statement.
61 83
FR 42986, 43489 (Aug. 24, 2018).
62 Id.
63 Walter Kreucher, Docket No. NHTSA–2018–
0067–0444.
64 Association of Global Automakers, Docket No.
NHTSA–2018–0067–12032.
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Third, ‘‘[t]he most significant and
controlling factor in making the
measurements necessary to determine
the compliance of automobiles with the
fuel economy standards in this part [531
and 533] is their rate of tailpipe carbon
dioxide emissions.’’ 49 CFR part 531,
appx. B, section (a)(1)(C); 49 CFR part
533, appx. B, section (a)(1)(C).65 The
Alliance of Automobile Manufacturers
similarly stated that the measurements
for CAFE compliance involved ‘‘the
same tests, vehicles, sales data, and
emissions measurements that the EPA
uses to measure carbon dioxide and
tailpipe GHG emissions.’’ 66 Fiat
Chrysler Automobiles (FCA) also
reiterated this point from the Alliance’s
comments,67 and the Competitive
Enterprise Institute highlighted
NHTSA’s discussion of compliance
measurement in agreeing that fuel
economy standards and greenhouse gas
emissions standards are inherently
related.68 CARB did not dispute this
factual statement, but pointed out that
carbon dioxide emissions are only one
part of the compliance testing regime
Congress approved—a fact that NHTSA
had already recognized in its proposal.69
As NHTSA explained in the proposal, as
specified by EPCA, compliance with the
CAFE standards is and has always been
based on the rates of emission of carbon
dioxide, carbon monoxide, and
hydrocarbons from covered vehicles,
but primarily on the emission rates of
carbon dioxide.70 The role of carbon
dioxide is approximately 100 times
greater than the combined role of the
other two relevant carbon exhaust
gases.71
Fourth, ‘‘[a]lmost all technologically
feasible reduction of tailpipe emissions
of carbon dioxide is achievable through
improving fuel economy, thereby
reducing both the consumption of fuel
and the creation and emission of carbon
dioxide.’’ 49 CFR part 531, appx. B,
section (a)(1)(D); 49 CFR part 533, appx.
B, section (a)(1)(D).72 The South Coast
Air Quality Management District (South
Coast) commented that NHTSA
previously proposed, in 2008, adopting
similar regulatory text that used the
65 83
FR 42986, 43489 (Aug. 24, 2018).
of Automobile Manufacturers, Docket
No. NHTSA–2018–0067–12073.
67 Fiat Chrysler Automobiles (FCA), Docket No.
NHTSA–2018–0067–11943.
68 Competitive Enterprise Institute, Docket No.
NHTSA–2018–0067–12015.
69 See California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873; 83 FR
42986, 43234 (Aug. 24, 2018).
70 See 83 FR 42986, 43234 (Aug. 24, 2018).
71 71 FR 17566, 17655–56 (Apr. 6, 2006); 83 FR
42986, 43234 (Aug. 24, 2018).
72 83 FR 42986, 43489 (Aug. 24, 2018).
66 Alliance
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51315
word ‘‘most’’ instead of ‘‘almost all.’’ 73
South Coast asserts that the 2008
proposal shows that NHTSA ‘‘strains to
exaggerate’’ the overlap between
greenhouse gas emissions standards and
fuel economy standards.74 NHTSA
disagrees. While South Coast points to
hybrid electric vehicles and ZEVs, it
offers no evidence to refute the fact that
almost all technologically feasible
reduction of tailpipe emissions of
carbon dioxide is achievable through
improving the fuel economy levels of
the vehicles in question.
Fifth, ‘‘as a practical matter,
regulating fuel economy controls the
amount of tailpipe emissions of carbon
dioxide, and regulating the tailpipe
emissions of carbon dioxide controls
fuel economy.’’ 49 CFR part 531, appx.
B, section (a)(1)(E); 49 CFR part 533,
appx. B, section (a)(1)(E).75 No
commenter disputed this statement. The
National Automobile Dealers
Association agreed, putting it this way:
‘‘the physics and chemistry involved
with fuel economy and GHG emissions
standards are such that controlling fuel
economy controls GHGs and controlling
GHGs controls fuel economy.’’ 76 It is
also worth noting that technology
cannot reduce the amount of carbon
dioxide produced by combusting one
gallon of gas. Instead, only technology
that reduces the amount of gas needed
to drive one mile (fuel economy) will
reduce the amount of carbon dioxide
generated per mile.
These statements in the regulatory
appendix concerning the scientific
relationship between automobile carbon
dioxide emissions and fuel economy
provide the foundation for NHTSA’s
preemption analysis. Due to this
scientific relationship, which no
commenter refuted, a regulation of
tailpipe carbon dioxide emissions from
automobiles that does not explicitly
state that it is regulating fuel economy
nevertheless has the effect of doing so.
The label a State chooses to put on its
regulations certainly is not dispositive
in a preemption analysis. See, e.g., Nat’l
Meat Ass’n. v. Harris, 565 U.S. 452, 464
(2012). One comment, from the
Northeast States for Coordinated Air
Use Management (NESCAUM), asserted
that ‘‘California’s GHG standards do not
mention fuel economy or attempt to
73 South Coast Air Quality Management District,
Docket No. NHTSA–2018–0067–11813.
74 Id.
75 83 FR 42986, 43489 (Aug. 24, 2018).
76 National Automobile Dealers Association,
Docket No. NHTSA–2018–0067–12064.
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Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations
regulate fuel economy.’’ 77 To such
comments, the agencies must ask
ourselves the age-old question: ‘‘What’s
in a name?’’ and conclude ‘‘[t]hat which
we call a rose by any other name would
smell as sweet.’’ 78 Arguments focused
on form, or worse—labels—over
substance are not persuasive. Moreover,
it is indisputable that EPCA preemption
reaches beyond explicit regulations of
fuel economy and into regulations
‘‘related to’’ fuel economy. The words
‘‘related to’’ cannot be read out of the
statute or narrowed in a way that
undermines Congress’s broad
preemption intent.
It is a matter of undisputed fact that
the more fuel a vehicle burns or
consumes, the more carbon dioxide it
emits. There is a necessary relation
between the regulation of one side of
this equation and the regulation of the
other. In other words, improving fuel
economy has two inherently related
benefits: Reducing fuel consumption
and reducing carbon dioxide emissions.
State and local governments cannot
evade the preemptive sweep of EPCA by
emphasizing only one side of these
benefits and downplaying or ignoring
the other when describing their
regulations.
To further illustrate the situation,
consider types of regulations for a
swimming pool. If the pool has a hose
on one side that is filling the pool and
a hose on the other side that is draining
the pool, you can regulate the water
level in the pool by controlling either
hose. Limiting the amount of water
released by the inflow hose, is not itself
a regulation of the outflow hose. But it
is nonsensical to say that regulating the
pool’s inflow is not related to regulating
its outflow. A regulation of either hose
necessarily affects the level of water in
the same pool. The Supreme Court has
recognized preemption should
appropriately apply in such contexts.
See Rowe v. N.H. Motor Transp. Ass’n,
552 U.S. 364, 368, 72 (2008) (looking at
effect of regulation to determine it was
preempted even though ‘‘it tells
shippers what to choose rather than
carriers what to do’’ where Federal law
preempted State laws ‘‘related to a
price, route, or service of any motor
carrier . . . with respect to the
transportation of property’’); Engine
Mfrs. Ass’n. v. South Coast Air Quality
Mgmt. Dist., 541 U.S. 246, 255 (2004)
(explaining that it ‘‘would make no
sense’’ to allow a State regulation to
77 Northeast States for Coordinated Air Use
Management (NESCAUM), Docket No. NHTSA–
2018–0067–11691.
78 W. Shakespeare, Romeo & Juliet, II, ii (47–48)
(1597).
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evade preemption simply because it
addressed the purchase, rather than
manufacture, of a federally regulated
product).
Massachusetts v. EPA, 549 U.S. 497, 532
(2007).
Recent developments in California
provide good examples of the need for
a national standard and the problem
C. Importance of One National Standard that Congress sought to address in
enacting EPCA’s preemption provision.
To ensure uniform national fuel
After the agencies published the
economy standards, Congress
proposal, California amended its
determined that it was appropriate to
regulations such that manufacturers are
preempt States and local governments
bound to comply with requirements
from adopting or enforcing laws or
consistent with the no action alternative
regulations related to the Federal
for model years 2021 through 2026,80
standards. Effectuating Congress’s goal
requires NHTSA to address preemption. regardless of what the Federal standards
are ultimately adopted. Moreover, even
Preemption is necessary to the
as to the existing Federal standard,
effectiveness of NHTSA’s existing and
California’s regulations are
forthcoming fuel economy standards
impermissible under EPCA because
and regulatory certainty into the future,
only a Federal standard can apply
specifically, one set of national
standards. Congress made clear, through nationally. State or local standards
necessarily apply at the State and local
the required comprehensive balancing
level, and therefore are inherently
of factors and underlined by its
inconsistent with the nationwide
inclusion of an express preemption
average standards pursuant to EPCA.
provision, that State and local
See 49 U.S.C. 32901(a)(5)–(6), (13).
requirements impede the national fuel
Likewise, State and local compliance
economy program. Thus, NHTSA is
regimes interfere with the national
exercising its authority in this
program of credits and shortfalls for
document, under 49 U.S.C. 32901
nationwide fleet performance by making
through 32903, to promulgate
regulations to protect the integrity of the compliance across the country
inordinately complicated, inefficient,
national program. This confirms the
and expensive. See id. 32903.
clear preemptive nature of NHTSA’s
Despite a widespread shared belief in
standards, as stated in 49 U.S.C. 329219
the importance of one national standard,
and provides additional clarity on the
NHTSA’s proposal on preemption
scope of preemption, to carry out
received a mix of support and
NHTSA’s statutory authority to set
opposition in comments. Some
nationally applicable standards.
A consistent refrain throughout many commenters weighed in on preemption
of the comments NHTSA received on its largely only to emphasize the
importance of having a national
preemption proposal was the need for
standard.81 Other commenters that
one national standard.79 Preemption
supported the substance of the proposal
provides for just that uniformity.
agreed with NHTSA’s analysis of both
Indeed, that was the very purpose for
express and implied preemption, as
Congress’s including the express
well as the conclusion that both State
preemption provision in EPCA.
laws that limit and State laws that
In enacting EPCA’s preemption
prohibit carbon dioxide tailpipe
provision, Congress explicitly
emissions from automobiles, or have the
recognized the need to avoid a
direct or substantial effect of doing so,
patchwork of requirements related to
are preempted.82 On the other hand,
fuel economy standards, and gave
those commenters that opposed the
NHTSA the exclusive authority to set
substance of the proposal asked NHTSA
and enforce fuel economy standards
to withdraw and not finalize any
with discrete and limited exceptions as
regulatory text concerning
set forth in 49 U.S.C. 32919. NHTSA’s
exclusive authority is exercised through preemption.83 Doing so would ignore
the very purpose of EPCA’s fuel
joint rulemaking with EPA for the very
economy provisions and NHTSA’s
reason that tailpipe carbon dioxide
statutory obligation under EPCA: To
emissions standards are directly and
balance statutory factors in order to
substantially related to fuel economy
standards and apply concurrently to the
80 83 FR 42986, 42990 tbl. I–4 (Aug. 24, 2018).
same fleet of vehicles. This joint action
81 See, e.g., Toyota Motor North America, Docket
enables the Federal government to
No. NHTSA–2018–0067–12150.
administer its overlapping obligations
82 See, e.g., Alliance of Automobile
while avoiding inconsistency. See
Manufacturers, Docket No. NHTSA–2018–0067–
79 See,
e.g., Alliance of Automobile
Manufacturers, Docket No. NHTSA–2018–0067–
12073; Association of Global Automakers, Docket
No. NHTSA–2018–0067–12032.
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12073; Competitive Enterprise Institute, Docket No.
NHTSA–2018–0067–12015.
83 See, e.g., Joint Submission from the States of
California et al. and the Cities of Oakland et al.,
Docket No. NHTSA–2018–0067–11735.
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Federal Register / Vol. 84, No. 188 / Friday, September 27, 2019 / Rules and Regulations
establish standards that are ‘‘the
maximum feasible average fuel economy
level that the Secretary decides the
manufacturers can achieve in that
model year.’’ 84 NHTSA disagrees with
the comments that ask it to withdraw its
proposal and not finalize any regulatory
text on preemption. Given the present
circumstances, failing to address this
issue amounts to ignoring the existence
of EPCA’s preemption provision, and
allowing for State and local
requirements that interfere with
NHTSA’s statutory duty to set
nationally consistent fuel economy
standards.
The rule NHTSA is adopting in this
document, under its authority to
implement a national automobile fuel
economy program in 49 U.S.C. 32901
through 32903, will ultimately provide
needed certainty concerning preemption
into the future. While EPCA’s
preemption provision has been in place
for decades, the present circumstances
demonstrate the need for greater clarity
on this issue.
NHTSA’s statutory role is to set
nationwide standards based on a
reasoned balancing of statutory factors.
State and local requirements—unbound
by these considerations—undermine
NHTSA’s ability to set standards
applicable across the entire country.
NHTSA is obliged to set standards at
‘‘the maximum feasible average fuel
economy level that the Secretary
decides the manufacturers can achieve
in that model year.’’ 49 U.S.C. 32902(a).
The regulation NHTSA is finalizing in
this document implements that
authority in 49 U.S.C. 32902 by
clarifying the State requirements that
impermissibly interfere with its
statutory role to set nationally
applicable standards. As explained in
the proposal, as a practical matter, State
and local actors would generally only
set requirements that have the effect of
requiring a higher level of average fuel
economy (lest their standards lack
impact).85 That supposition has now
been demonstrated by California’s
preemptive action to effectively set
higher standards than the Federal
standards, should the forthcoming final
SAFE rule finalize anything lower than
the no action alternative described in
the NPRM for model years 2021 through
2026. This state of regulatory
inconsistency—and even the potential
for such inconsistency—is anathema to
the express terms and purposes of
EPCA, which does not even permit
States to set fuel economy standards
identical to those set by NHTSA in
84 49
85 83
U.S.C. 32902(a), (f).
FR 42986, 43238 (Aug. 24, 2018).
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accordance with the statutory
requirements.86 Even identical
standards interfere with the national
program by imposing requirements not
applicable to nationwide fleets and
impose compliance regimes inconsistent
with EPCA. See, e.g., 49 U.S.C. 32903
(establishing specific requirements for
earning and using credits based on
nationwide average fuel economy
performance).
California’s recent action also
demonstrates disregard for NHTSA’s
mandate to set standards in no more
than 5 model year increments.87 To
avoid inconsistent State standards,
California’s regulatory change would
require NHTSA to adopt the most
stringent of nine regulatory alternatives
it considered in the proposal.88 NHTSA
did not bind itself in any way to that
regulatory alternative in its 2012 final
rule, and to do so would have been
contrary to law.89
Automakers must comply with the
Federal fuel economy and GHG
emissions requirements, and do so at
significant cost. States like California
that do not abide by the constraints of
Federal law, and instead set
inconsistent or even duplicative
requirements related to fuel economy
standards unjustifiably increase
manufacturers’ compliance costs, which
must be either passed along to
consumers or absorbed by the industry.
Clarity on preemption is therefore
essential to ensure the industry has the
ability to efficiently expend its
resources to comply with the nationally
applicable standards determined by the
Federal government in light of the
Federal statutory factors that must be
balanced, without the need to separately
account for or comply with State or
local requirements.
While it is of course ideal for States
to independently abide by the
constraints of Federal law, this does not
reflect the current state of affairs.
NHTSA’s awareness of laws and
regulations already in place, as well as
the public comments it received in
response to its proposal, confirm the
need for additional clarity on the
boundaries of EPCA preemption.
Wrongly decided decisions by district
courts in California and Vermont
(appeals of which were abandoned as a
condition of the negotiated agreement
86 See
49 U.S.C. 32902(a), 32919(a).
id. 32902(a), (b)(3)(B).
88 See Cal. Code Regs. tit. 13, section 1961.3(c);
see 83 FR 42986, 42990 tbl. I–4 (Aug. 24, 2018)
(listing augural standards as baseline/no action
alternative, and eight other alternatives under
consideration).
89 See 49 U.S.C. 32902(b)(3)(B); 77 FR 62624,
62627 (Oct. 15, 2012).
87 See
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51317
prior to the 2012 rulemaking), as well as
NHTSA’s own silence on this issue in
recent years, are sowing confusion,
emphasizing the need for the clarity
provided by this final rule affirmatively
establishing One National Program.90
D. NHTSA’s Final Rule Provides Clarity
and Certainty on EPCA Preemption
This final rule provides needed clarity
on the scope of EPCA preemption.
NHTSA is adopting regulatory text,
including a detailed appendix, in
addition to discussing this issue in the
preamble to the rule, specifically to
provide clarity on EPCA’s preemption
provision.
NHTSA rejects the assertion advanced
in one comment that NHTSA did not
provide notice and a fair opportunity to
comment on its interpretation of EPCA
preemption.91 Any such suggestion is
negated by the host of commenters that
addressed the issue of preemption in
response to the proposal. NHTSA
proposed codifying its preemption
interpretation in parts 531 and 533, and
all commenters were explicitly asked to
comment on the specific proposed
regulatory text as well as on the
explanation of NHTSA’s interpretation
set out in the preamble to the NPRM.
NHTSA also disagrees with a
comment from the California Air
Resources Board (CARB) that asserted
the proposal was not clear on the scope
of preemption.92 The regulatory text
articulates the boundaries of both
express and implied preemption, with
appropriate limitation to State or local
laws or regulations that: (1) Regulate or
prohibit tailpipe carbon dioxide
emissions from automobiles, or (2) have
the direct or substantial effect of
regulating or prohibiting tailpipe carbon
90 As described in the proposal, NHTSA’s views
on preemption are longstanding. However, NHTSA
has not directly addressed preemption in its most
recent CAFE rulemakings. South Coast disputes that
NHTSA’s views on preemption are longstanding,
pointing to legal and factual developments since.
South Coast Air Quality Management District,
Docket No. NHTSA–2018–0067–11813. That
NHTSA has not opined on developments does not
mean that its views have changed. South Coast also
points to some wording changes to argue that
NHTSA has shifted positions. NHTSA disagrees. It
has consistently held the position that State
regulation of tailpipe greenhouse gas emissions
from automobiles is preempted, and South Coast
has not identified any statements to the contrary.
In any event, the fact that NHTSA has not
addressed EPCA preemption in its most recent
rulemakings highlights the need to address the
issue without further delay.
91 Joint Submission from the States of California
et al. and the Cities of Oakland et al., Docket No.
NHTSA–2018–0067–11735.
92 California Air Resources Board (CARB), Docket
No. NHTSA–2018–0067–11873; Joint Submission
from the States of California et al. and the Cities of
Oakland et al., Docket No. NHTSA–2018–0067–
11735.
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dioxide emissions from automobiles or
automobile fuel economy. In the
proposal, NHTSA provided examples of
laws that would not be preempted.93
CARB did not identify any examples of
laws where additional clarity was
needed.
It should not be difficult for States or
local governments to ascertain whether
their laws or regulations regulate or
prohibit tailpipe carbon dioxide
emissions. As NHTSA explained in the
proposal and reiterates in this
document, both requirements specific to
tailpipe carbon dioxide emissions from
automobiles and those that address all
tailpipe greenhouse gas emissions from
automobiles are preempted, given that
carbon dioxide emissions constitute the
overwhelming majority of those
emissions.94 Likewise, ZEV mandates
are also preempted.95
NHTSA also does not believe it
should be difficult for States or local
governments to determine if their laws
or regulations have the direct or
substantial effect of regulating or
prohibiting tailpipe carbon dioxide
emissions from automobiles or
automobile fuel economy.96 To aid in
this effort, in the proposal, NHTSA
described requirements that would not
be preempted because they have only
incidental impact on fuel economy or
carbon dioxide emissions.97 The
examples NHTSA provided were child
seat mandates and laws governing
vehicular refrigerant leakage.98
Moreover, contrary to assertions in
some comments, NHTSA’s adoption of
regulatory text does provide a limiting
principle 99 and is not overbroad.100
Congress set the extraordinarily broad
boundaries of preemption in EPCA,
where it specified that State and local
laws ‘‘related to fuel economy
93 83
FR 42986, 43235 (Aug. 24, 2018).
at 43234.
95 See id. at 43238–39.
96 South Coast argued that EPCA preemption
would not reach possible State and local
requirements concerning lease arrangements or
requirements for used vehicles. South Coast Air
Quality Management District, Docket No. NHTSA–
2018–0067–11813. NHTSA does not agree. EPCA
preempts requirements related to fuel economy
standards or average fuel economy standards for
automobiles covered by an average fuel economy
standard under EPCA. If a State requirement falls
within this scope, it is preempted. For example, a
State could not prohibit dealers from leasing
automobiles or selling used automobiles unless they
meet a fuel economy standard.
97 83 FR 42986, 43235 (Aug. 24, 2018).
98 Id.
99 Joint Submission from the States of California
et al. and the Cities of Oakland et al., Docket No.
NHTSA–2018–0067–11735.
100 Id.; California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873; South Coast
Air Quality Management District, Docket No.
NHTSA–2018–0067–11813.
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94 Id.
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standards’’ are preempted. The words
‘‘related to’’ have meaning and cannot
be read out of the statute. To the extent
that questions of interpretation remain
about the scope of preemption, that is a
consequence of the statute, and is far
from unique—particularly with respect
to the ‘‘related to’’ language, which
Congress has used in multiple
contexts.101 The Supreme Court has
opined on the meaning of similar terms.
However, NHTSA recognizes the
concerns about the appropriate
limitations of preemption.
Notwithstanding the broad sweep of
EPCA preemption, NHTSA intends to
assert preemption only over State or
local requirements that directly or
substantially affect corporate average
fuel economy standards.
Through its adoption of specific
regulatory text in this document,
NHTSA is providing guidance on the
boundary set by Congress, as well as
under principles of implied preemption.
Notably, NHTSA has not concluded that
implied preemption broadens the scope
of preemption established by Congress.
As NHTSA recognized in its proposal,
some greenhouse gas emissions from
automobiles have no relation to fuel
economy and therefore may be regulated
by States or local governments without
running afoul of EPCA preemption.
NHTSA provided examples of State or
local requirements that are not
preempted. It also specifically invited
comment on the extent to which State
or local requirements can have some
incidental impact on fuel economy or
carbon dioxide emissions without being
related to fuel economy standards, and
thus are not preempted. NHTSA did not
receive any directly responsive
comments regarding this issue,
including from State and local
government commenters, suggesting
that they do not currently have
questions about how preemption would
apply to their laws or regulations.102
As an additional limiting principle,
NHTSA reiterates the statement in its
101 See Rowe v. N.H. Motor Transp. Ass’n, 552
U.S. 364, 370–73 (2008); Am. Airlines v. Wolens,
513 U.S. 219, 226–27 (1995); Shaw v. Delta Airlines,
Inc., 463 U.S. 85, 97 (1983).
102 Some commenters did assert that California’s
greenhouse gas emissions standards or ZEV
mandates have only an incidental impact on fuel
economy, or that NHTSA was not clear why those
requirements have more than an incidental impact
on fuel economy. California Air Resources Board
(CARB), Docket No. NHTSA–2018–0067–11873;
Northeast States for Coordinated Air Use
Management (NESCAUM), Docket No. NHTSA–
2018–0067–11691; South Coast Air Quality
Management District, Docket No. NHTSA–2018–
0067–11813. NHTSA disagrees. It discussed these
issues in detail in parts b, f, and g of the preemption
discussion of the proposed rule and incorporates
those discussions here. 83 FR 42986, 43234, 37–39
(Aug. 24, 2018).
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proposal that only a portion of a law or
regulation would be preempted, where
possible. This would be the case if the
law or regulation combined multiple
severable elements that were allowable
and not allowable, such as with a
regulation of both vehicular refrigerant
leakage and tailpipe carbon dioxide
emissions—refrigerant leakage
requirements could remain in place
while tailpipe carbon dioxide emissions
regulations would necessarily be
preempted.
NHTSA rejects the argument made by
certain commenters that the
presumption against preemption applies
in this context.103 The presumption is
not appropriate given EPCA’s express
statutory preemption provision. See
Puerto Rico v. Franklin Cal. Tax-Free
Trust, 136 S. Ct. 1938, 1946 (2016)
(explaining that ‘‘because the statute
‘contains an express pre-emption
clause,’ we do not invoke any
presumption against pre-emption but
instead ‘focus on the plain wording of
the clause, which necessarily contains
the best evidence of Congress’ preemptive intent.’ ’’) (quoting Chamber of
Commerce of United States of Am. v.
Whiting, 563 U.S. 582, 594 (2011)).
NHTSA reaffirms the view that
EPCA’s express preemption provision is
broad and clear. NHTSA’s review and
assessment of comments has not
changed its view. Some comments
noted that the statute specifically
preempts laws or regulations related to
fuel economy standards.104 They assert
that States and local governments are
unconstrained by EPCA preemption in
regulating future model year vehicles,
before they are covered by a fuel
economy standard issued by NHTSA.
NHTSA disagrees.
EPCA preempts State and local laws
and regulations that relate to: (1) Fuel
economy standards, or (2) average fuel
economy standards for automobiles
covered by an average fuel economy
standard under 49 U.S.C. Chapter 329.
Currently, automobiles through model
year 2021 are covered by an average fuel
economy standard under Chapter
329.105 NHTSA will continue setting
standards for future model years,
pursuant to the mandate in 49 U.S.C.
32902(a) that ‘‘[a]t least 18 months
103 See California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873; Center for
Biological Diversity et al., Docket No. NHTSA–
2018–0067–12000; South Coast Air Quality
Management District, Docket No. NHTSA–2018–
0067–11813.
104 South Coast Air Quality Management District,
Docket No. NHTSA–2018–0067–11813; see also
Joint Submission from the States of California et al.
and the Cities of Oakland et al., Docket No.
NHTSA–2018–0067–11735.
105 See 77 FR 62624, 62637 (Oct. 15, 2012).
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before the beginning of each model year,
the Secretary of Transportation shall
prescribe by regulation average fuel
economy standards for automobiles
manufactured by a manufacturer in that
model year.’’ 106 NHTSA prescribes
‘‘average fuel economy standards for at
least 1, but not more than 5, model
years.’’ 49 U.S.C. 32902(b)(3)(B). State
and local requirements that address
automobiles beyond model year 2026
are therefore preempted if they relate to
‘‘fuel economy standards’’ that NHTSA
is required to establish in the future. To
conclude otherwise would be to make
the impermissible assumption that
NHTSA will not carry out Congress’s
command.
The regulation NHTSA is finalizing in
this document implements that
authority in 49 U.S.C. 32902 by making
clear that State and local requirements
that relate to fuel economy standards for
future model year vehicles conflict with
NHTSA’s ability to set nationally
applicable standards for those vehicles
in the future and thus are impliedly
preempted. Manufacturers make design
decisions well in advance of
production, as Congress recognized by
adding ‘‘lead time’’ provisions to the
statute. State and local requirements for
automobiles not yet covered by a
NHTSA standard could force
manufacturers into plans that are not
economically practical or otherwise
inconsistent with EPCA’s statutory
factors—since States and local
governments are not bound by those
considerations. By the time future
model year vehicles are produced, they
will be covered by a NHTSA standard.
If States or local governments were
permitted to issue regulations related to
fuel economy for future model year
vehicles, manufacturers would at least
act at risk of running afoul of those nonFederal regulations. At least some
manufacturers would undoubtedly feel
compelled to conform with such nonFederal regulations until the Federal
government sets its own standards. Even
if non-Federal regulations are not
ultimately enforceable as to produced
vehicles (since a Federal fuel economy
standard will be adopted, in time), they
clearly conflict with the congressionally
imposed constraint of issuing standards
for not more than 5 model years. Such
far-reaching regulations are based on
predictions about the future that are
inevitably less reliable the further in
time they reach. Manufacturers are
therefore put in an untenable position of
either planning towards State and local
regulations based on potentially
outdated or unrealistic expectations
106 49
U.S.C. 32902(a) (emphasis added).
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about the future, or ignoring them before
knowing the Federal standards that will
eventually apply and acting at risk of
enforcement by non-Federal actors.
Moreover, different States could impose
different and conflicting fuel economy
requirements on manufacturers for
future model years, a result directly at
odds with the single national standard
established by EPCA. Any of these
scenarios demonstrates that the position
that EPCA preemption does not reach
regulation of model year vehicles not
currently covered by a NHTSA standard
is flawed. State or local requirements
related to fuel economy standards for
any model year automobiles are
preempted.
The regulatory text and preamble
discussion clearly articulates NHTSA’s
views on the meaning of ‘‘related to’’ in
EPCA’s express preemption provision,
which are confirmed following
NHTSA’s review and assessment of
comments. As discussed in the
proposal, EPCA is not unique in using
the phrase ‘‘related to’’ to set the scope
of preemption.107 NHTSA described
prior Supreme Court case law
interpreting this phrase as broad and
including such conceptual relationships
as having an ‘‘association with’’ or
‘‘connection to.’’ In its comments, South
Coast asserted that NHTSA’s discussion
was ‘‘legally erroneous’’ because it did
not include ‘‘discussion and analysis’’
of a line of Supreme Court cases that
began with New York State Conference
of Blue Cross v. Travelers Ins. Co., 514
U.S. 645 (1995).108 South Coast’s
criticism is unfounded; NHTSA directly
recognized the Travelers line of cases
which look to the objectives of the
statute as a guide to the scope of
preemption. See Travelers, 514 U.S. at
656. In the proposal, NHTSA
specifically applied this analysis to the
CAFE context and cited a 1997 case
quoting Travelers.109 The Travelers line
of cases supports NHTSA’s position on
preemption. As NHTSA explained in
the proposal, EPCA’s preemption
provision demonstrates that one of
Congress’s objectives was to create a
single set of national fuel economy
standards. The language Congress
enacted preempts all State and local
laws and regulations that relate to fuel
economy standards, and does not
exempt even State requirements that are
identical to Federal requirements.
Moreover, NHTSA’s proposal was not
intended as a comprehensive recitation
of all case law addressing the use of
107 83
FR 42986, 43233 (Aug. 24, 2018).
Coast Air Quality Management District,
Docket No. NHTSA–2018–0067–11813.
109 83 FR 42986, 43233 (Aug. 24, 2018).
108 South
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51319
‘‘related to’’ in statutory preemption
provisions. There are many Supreme
Court decisions that support the breadth
of that language beyond those
specifically cited in the proposal.110 For
example, in Rowe, the Court recognized
that a State statute that forbid certain
retailers from employing a delivery
service unless it followed certain
delivery procedures was preempted by
the Federal Aviation Administration
Authorization Act, which preempted
States from enacting or enforcing laws
‘‘related to a price, route, or service of
any motor carrier.’’ Rowe, 552 U.S. at
368, 71–73. The Court recognized that
the State law was directed at shippers
rather than carriers, but found that the
effect of the requirements impacted
carriers. Id. at 372. The Court explained
that State laws ‘‘whose ‘effect’ is
‘forbidden’ under federal law are those
with a ‘significant impact’ on carrier
rates, routes or services.’’ Id. at 375
(emphasis in original). Likewise, here,
regulation of tailpipe carbon dioxide
emissions has a direct and undeniably
substantial effect on fuel economy.
However, NHTSA, of course, agrees
that ‘‘related to’’ is not unlimited.111
NHTSA specifically discussed the
limitations of preemption in its
proposal, which only seeks to preempt
State or local requirements that directly
or substantially affect corporate average
fuel economy. NHTSA also provided
specific examples of State laws and
regulations that would not be
preempted, as well as clearly
articulating some that are preempted. As
discussed above, the regulatory text
NHTSA is adopting in this document is
appropriately limited and consistent
with the scope of preemption
established by Congress.
With respect to implied preemption,
NHTSA agrees with comments that
assert it is a fact-driven analysis.112
However, NHTSA disagrees that there
was an insufficient factual record for it
to evaluate the conflict either at the time
of the proposal or now.113 NHTSA is
well aware of State regulations of
tailpipe greenhouse gas emissions
(including carbon dioxide) and ZEV
mandates, and described several of
these in the proposal. The foundational
110 See, e.g., Rowe v. N.H. Motor Transp. Ass’n,
552 U.S. 364, 367–72 (2008).
111 As the Supreme Court has stated, ‘‘the breadth
of the words ‘related to’ does not mean the sky is
the limit.’’ Dan’s City Used Cars, Inc. v. Pelkey, 569
U.S. 251, 260 (2013).
112 California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873; Joint
Submission from the States of California et al. and
the Cities of Oakland et al., Docket No. NHTSA–
2018–0067–11735.
113 California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873.
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factual analysis involves the scientific
relationship between automobile fuel
economy and automobile tailpipe
emissions of carbon dioxide. NHTSA
discussed this scientific relationship in
detail. No commenter contested the
scientific and mathematical relationship
between them.
Contrary to CARB’s contention in its
comments, the fact that NHTSA
acknowledged that some State
requirements that incidentally affect
greenhouse gas emissions are not
preempted does not demonstrate that
there is an insufficient record for
finding that other laws do pose a
conflict to NHTSA’s statutory role to set
nationwide fuel economy standards for
automobiles.114 To the contrary, NHTSA
carefully considered and acknowledged
the limitations of EPCA preemption by
discussing a variety of types of laws,
and providing specific examples.
NHTSA also disagrees with the claim
made in some comments that it does not
have delegated authority to issue a
regulation on this topic, and is not owed
deference or weight for its regulation
implementing EPCA’s express
preemption provision or the conflict
resulting from State or local laws or
regulations.115 Congress gave the
Secretary of Transportation express
authorization to prescribe regulations to
carry out her duties and powers. 49
U.S.C. 322(a).116 NHTSA has delegated
authority to carry out the Secretary’s
authority under Chapter 329 of Title 49,
which encompasses EPCA’s preemption
provision, as well as EISA.117 NHTSA
therefore has clear authority to issue
this regulation under 49 U.S.C. 32901
through 32903 to effectuate a national
automobile fuel economy program
unimpeded by prohibited State and
local requirements. As explained here,
the statute is clear on the question of
preemption, and NHTSA must carry it
out. See Coventry Health Care of
Missouri, Inc. v. Nevils, 137 S. Ct. 1190,
1193 n.3 (2017) (holding that
preemption applies and ‘‘the statute
alone resolves this dispute’’). However,
to the extent there is any ambiguity,
NHTSA is the expert agency and its
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114 Id.
115 Id.; Center for Biological Diversity et al.,
Docket No. NHTSA–2018–0067–12000; Joint
Submission from the States of California et al. and
the Cities of Oakland et al., Docket No. NHTSA–
2018–0067–11735; South Coast Air Quality
Management District, Docket No. NHTSA–2018–
0067–11813.
116 49 U.S.C. 322(a) specifically states: ‘‘The
Secretary of Transportation may prescribe
regulations to carry out the duties and powers of the
Secretary. An officer of the Department of
Transportation may prescribe regulations to carry
out the duties and powers of the officer.’’
117 49 CFR 1.95(a), (j).
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regulation adopted in this document is
entitled to deference.118 As explained in
the proposal, NHTSA is the expert
agency given authority to administer the
Federal fuel economy program and has
expert authority to interpret and apply
the requirements of EPCA, including
preemption. See Medtronic, Inc. v. Lohr,
518 U.S. 470 (1996) (‘‘Because the FDA
is the federal agency to which Congress
has delegated its authority to implement
the provisions of the Act, the agency is
uniquely qualified to determine whether
a particular form of state law ‘stands as
an obstacle to the accomplishment and
execution of the full purposes and
objectives of Congress,’ Hines v.
Davidowitz, 312 U.S. 52, 67, 61 S. Ct.
399, 404, 85 L. Ed. 581 (1941), and,
therefore, whether it should be preempted.’’); see also Nat’l Rifle Ass’n v.
Reno, 216 F.3d 122 (D.C. Cir. 2000)
(rejecting argument that Attorney
General lacked authority to issue
regulation that she described as
clarifying that certain State
requirements were not preempted by
Federal law). This is particularly true
given the scientific nature of the
relationship between fuel economy and
greenhouse gas emissions. See Geier v.
Am. Honda Motor Co., Inc., 529 U.S.
861 (2000) (‘‘Congress has delegated to
DOT authority to implement the statute;
the subject matter is technical; and the
relevant history and background are
complex and extensive. The agency is
likely to have a thorough understanding
of its own regulation and its objectives
and is ‘uniquely qualified’ to
comprehend the likely impact of state
requirements.’’).
NHTSA is also finalizing its view that
its regulation concerning EPCA
preemption is independent and
severable from any particular CAFE
standards adopted by NHTSA. NHTSA’s
implementation of its authority to set
nationally applicable fuel economy
standards under 49 U.S.C. 32902, by
clarifying the scope of preemption, is
separate from its decision on the
appropriate standards for any given
model years. No commenter disagreed
that this portion of the proposed rule is
severable. The Alliance of Automobile
Manufacturers agreed, noting case law
stating that whether a regulation is
severable depends on the agency’s
intent and whether the remainder of the
regulation may still function
sensibly.119 Both these considerations
support severability here. Given the lack
of any comments to the contrary,
118 See, e.g., Chevron USA, Inc. v. Nat’l Res.
Defense Council, Inc., 467 U.S. 837, 843–45 (1984).
119 Alliance of Automobile Manufacturers, Docket
No. NHTSA–2018–0067–12073.
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NHTSA is finalizing its conclusion that
the standards for model year 2021
through 2026 automobiles are
independent of and severable from the
decision NHTSA is finalizing in this
document on EPCA preemption.
Moreover, given the need for clarity on
preemption, and in order to give effect
to existing standards established
pursuant to 49 U.S.C. 32902, NHTSA is
issuing this final rule now before
making a final determination on the
standards portion of the proposal.
E. Direct and Substantial Relationship
Between ZEV Mandates and Fuel
Economy Standards
NHTSA is also finalizing its
conclusion that a State law or regulation
that either explicitly prohibits tailpipe
carbon dioxide emissions from
automobiles or has the direct or
substantial effect of doing so is
preempted, both pursuant to the express
preemption provision in 49 U.S.C.
32919 and implied preemption, as an
obstacle to NHTSA’s national program
pursuant to 49 U.S.C. 32901–32903.
As explained in greater detail in the
proposal, carbon dioxide emissions
constitute the overwhelming majority of
tailpipe carbon emissions.120 The only
feasible way of eliminating tailpipe
carbon dioxide emissions altogether is
to eliminate the use of fossil fuel. Thus,
regulations that require a certain
number or percentage of a
manufacturer’s fleet of vehicles sold in
a State to be ZEVs that produce no
carbon dioxide tailpipe emissions
necessarily affect the fuel economy
achieved by the manufacturer’s fleet as
well as the manufacturer’s strategy to
comply with applicable standards, and
are therefore preempted under EPCA.
These regulations therefore have just as
a direct and substantial impact on
corporate average fuel economy as
regulations that explicitly eliminate
carbon dioxide emissions, and are
therefore preempted. NHTSA described
types of ZEV mandates in detail in its
proposal, including California’s ZEV
mandate, which has been adopted by
ten other States.121
ZEV mandates force the development
and commercial deployment of ZEVs,
irrespective of the technological
feasibility or economic practicability of
doing so. The Alliance of Automobile
Manufacturers commented that this
interference with NHTSA’s balancing of
120 83
FR 42986, 43234 (Aug. 24, 2018).
id. at 43239. At the time of the proposal,
nine States had adopted California’s ZEV mandate.
Since that time, a tenth State—Colorado—has also
done so. https://www.colorado.gov/pacific/cdphe/
aqcc (indicating that ZEV standards were adopted
on August 16, 2019).
121 See
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statutory factors and forced adoption of
specific design approaches are grounds
for finding ZEV mandates preempted.122
NHTSA agrees.
In setting fuel economy standards,
among the factors that NHTSA must
consider are technological feasibility
and economic practicability. 49 U.S.C.
32902(f). NHTSA is also required to set
performance-based standards, and not
design mandates.123 See 49 U.S.C.
32902(b)(2). These considerations are at
odds with ZEV mandates.
NHTSA disagrees with comments that
expressed the view that ZEV mandates
are not related to fuel economy
standards because ZEVs emit no criteria
pollutants or greenhouse gases.124 Just
as a State may not require a specific
level of tailpipe carbon dioxide
emissions from automobiles, since
doing so effectively sets a specific level
of fuel economy, a State may not
prohibit tailpipe carbon dioxide
emissions from automobiles. That is the
equivalent of setting a specific
emissions level—zero, which also
prohibits the use of fossil fuel. In fuel
economy terms, that is akin to requiring
a vehicle to having the maximum
conceivable level of fuel economy. A
prohibition on ozone-forming emissions
has the same effect, since the only
vehicles capable of emitting no ozoneforming emissions are vehicles that do
not use fossil fuels. As NHTSA
explained, this type of regulation poses
a direct conflict with EPCA, particularly
as it relates to requiring a percentage of
technological fleet penetration—
represented by credits or actual
vehicles—that an automaker must
distribute into a State. ZEV mandates
force investment in specific technology
(battery electric and fuel cell
technology) rather than allowing
manufacturers to improve fuel economy
by whatever technological path they
choose, allowing them to pursue more
cost-effective technologies that better
reflect consumer demand, as is the case
under the CAFE program. ZEV
mandates also create an even more
fractured regulatory regime. As NHTSA
explained in the proposal,
122 Alliance of Automobile Manufacturers, Docket
No. NHTSA–2018–0067–12073.
123 South Coast asserts that ZEV mandates are
performance based because any vehicle meeting the
requirements can be certified as a ZEV. South Coast
Air Quality Management District, Docket No.
NHTSA–2018–0067–11813. But, it is inherent that
the requirements—ZEV means zero-emissions
vehicle—dictate a particular design. In any event,
for the reasons described above, ZEV mandates are
related to fuel economy standards however framed.
124 South Coast Air Quality Management District,
Docket No. NHTSA–2018–0067–11813.
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manufacturers must satisfy ZEV
mandates in each State individually.125
NHTSA also disagrees with a
comment that argued ZEV mandates are
not preempted because the definition of
fuel economy in EPCA is in reference to
gasoline or equivalent fuel.126 EPCA
preempts State and local requirements
related to fuel economy standards. That
ZEV mandates are not themselves
expressed as mile-per-gallon standards
for fossil-fuel powered vehicles is not
dispositive. NHTSA explained the
relationship between ZEV mandates and
fuel economy standards in detail in the
proposal and reiterates that discussion
here.127
Many commenters expressed support
for ZEV mandates as matter of policy.128
NHTSA does not take issue with those
policy objectives to the extent they do
not conflict with EPCA or otherwise
impermissibly interfere with the Federal
regulation of fuel economy. NHTSA
notes that States and local governments
are able to continue to encourage ZEVs
in many different ways, such as through
investments in infrastructure and
appropriately tailored incentives.129
States and local governments cannot
adopt or enforce regulations related to
fuel economy standards, which include
ZEV mandates, but they are able to
pursue their policy preferences, as long
as the manner in which they do so does
not conflict with Federal law.
F. EISA Did Not Narrow or Otherwise
Alter EPCA Preemption
NHTSA reiterates, as it discussed in
the proposal, that EISA did not narrow
the express preemption clause in 49
U.S.C. 32919. In fact, EISA did not alter
EPCA’s express preemption clause in
any way. As a factual matter, Congress
neither amended or nor repealed
EPCA’s preemption clause with the
enactment of EISA. EISA’s savings
clause did not amend EPCA. The
savings clause, codified at 42 U.S.C.
17002, states: ‘‘Except to the extent
expressly provided in this Act or an
125 83 FR 42986, 43239 (Aug. 24, 2018); see
Competitive Enterprise Institute, Docket No.
NHTSA–2018–0067–12015.
126 California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873.
127 See 83 FR 42986, 43238–39 (Aug. 24, 2018).
128 National Coalition for Advanced
Transportation (NCAT), Docket No. NHTSA–2018–
0067–11969; Union of Concerned Scientists, Docket
No. NHTSA–2018–0067–12039.
129 Certain incentives are preempted by EPCA.
See Metro. Taxicab Bd. of Trade v. City of New
York, 615 F.3d 152 (2d Cir. 2010) (holding that New
York City rule that incentivized hybrid taxis by
allowing taxi owners to charge more for the lease
of hybrid vehicles were ‘‘based expressly on the
fuel economy of a leased vehicle, [and] plainly fall
within the scope of the EPCA preemption
provision.’’).
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amendment made by this Act, nothing
in this Act or an amendment made by
this Act supersedes, limits the authority
provided or responsibility conferred by,
or authorizes any violation of any
provision of law (including a
regulation), including any energy or
environmental law or regulation.’’ 130
As described in the proposal, EISA’s
savings clause does not expand any preexisting authority. Instead, the clause
expressly states that it did not impose
a new limitation on such authority. By
its plain text, EISA also does not
authorize any violation of any provision
of law. This includes EPCA’s express
preemption clause. Thus, activities
prohibited by the express preemption
clause before EISA, such as State laws
related to fuel economy standards,
continued to be prohibited after EISA.
The text of the savings clause is what
controls its meaning, not statements by
individual Members of Congress. South
Coast claims that NHTSA did not
discuss such statements in detail,
including statements by Senator
Feinstein.131 NHTSA did recognize in
the proposal that the Congressional
Record contains statements by certain
Members of Congress about their
individual views, but explained that
such statements lack authority. As
NHTSA explained in the proposal, such
statements cannot expand the scope of
the savings clause or clarify it.
Individual Members, even those who
may have played a lead role in drafting
a particular bill, cannot speak for the
body of Congress as a whole.132 NHTSA
interprets the statutory language based
on the words actually adopted by both
Houses and signed by the President.
NHTSA likewise does not find
persuasive the argument that Congress
did not enact additional statutory
language in EISA preempting California
from regulating tailpipe greenhouse gas
130 One commenter pointed out that the proposal
did not include the clause before the first comma
when it quoted the language of the savings
provision. South Coast Air Quality Management
District, Docket No. NHTSA–2018–0067–11813.
However, NHTSA disagrees with the commenter
that the introductory clause has a substantive
impact on this issue. That clause states: ‘‘Except to
the extent expressly provided in this Act or an
amendment made by this Act . . .’’ But, EISA did
not expressly authorize States to regulate or
prohibit tailpipe greenhouse gas emissions from
automobiles.
131 South Coast Air Quality Management District,
Docket No. NHTSA–2018–0067–11813.
132 N.L.R.B. v. SW Gen., Inc., 137 S. Ct. 929, 942–
43 (2017) (‘‘Passing a law often requires
compromise, where even the most firm public
demands bend to competing interests. What
Congress ultimately agrees on is the text that it
enacts, not the preferences expressed by certain
legislators. . . .[F]loor statements by individual
legislators rank among the least illuminating forms
of legislative history.’’ (citations omitted)).
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emissions from automobiles. A
comment from three Senators provides
documents related to potential
proposals to do so.133 There are many
reasons for Congress not to adopt
proposals set forward by one interest
group or another, including, of course,
because they were unnecessary. That is
the case here where EPCA’s preemption
provision already prevented States from
adopting and enforcing requirements
related to fuel economy standards.
Given the words of the savings clause,
NHTSA rejects the argument made by
South Coast that the ‘‘EISA saving
provision designedly narrows EPCA’s
express preemption provision, and
Congress intended this result.’’ 134 The
savings clause did not amend the
preemption provision in EPCA.
Moreover, what the savings clause
actually says is that it does not limit
authority. If a regulation is preempted
by EPCA, a State has no authority to
enforce it, and EISA did not change that
status quo. If Congress wanted to amend
the broad and clear express preemption
provision in EPCA, it could have and
would have done so. It did not.
Because NHTSA disagrees that States
could permissibly regulate tailpipe
greenhouse gas emissions from
automobiles prior to EISA, it also
disagrees with comments that argue that
Congress ‘‘preserved’’ the ability of
States to do so through the savings
clause (or, alternatively, that efforts to
‘‘revoke’’ such preexisting authority
failed).135
NHTSA also disagrees with a
comment by South Coast that argues
that EISA’s savings provision forecloses
implied preemption.136 The specific
words that South Coast points to are the
opening clause: ‘‘Except to the extent
expressly provided in this Act or an
amendment made by this Act.’’ This
language does not address preemption
under EPCA. That introductory clause
merely modifies the remainder of the
savings provision, which goes on to say
that ‘‘nothing in this Act or an
amendment made by this Act . . . limits
the authority provided . . . or
authorizes any violation of any
provision of law . . . .’’ This statutory
language prevents EISA from limiting
preexisting authority or responsibility
conferred by any law or from
133 U.S. Senators Tom Carper, Diane Feinstein
and Edward J. Markey, Docket No. NHTSA–2018–
0067–11938
134 South Coast Air Quality Management District,
Docket No. NHTSA–2018–0067–11813.
135 Joint Submission from the States of California
et al. and the Cities of Oakland et al., Docket No.
NHTSA–2018–0067–11735.
136 South Coast Air Quality Management District,
Docket No. NHTSA–2018–0067–11813.
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authorizing violation of any law. States
and local governments had no
preexisting authority or responsibility to
set requirements related to fuel
economy standards. Such requirements
are void ab initio. The savings provision
also does not purport to expand preexisting authority or responsibility, nor
did Congress amend in any way the
broad express preemption provision in
EPCA when it enacted EISA. Moreover,
implied preemption as applied here is
not a limitation based in EISA or the
Clean Air Act. Implied preemption is
instead based on the Secretary of
Transportation’s preexisting
responsibility under EPCA to balance
statutory factors in setting nationwide
fuel economy standards for automobiles.
The provision in EISA concerning
minimum requirements for Federal
government vehicles also does not
change NHTSA’s view. Several
comments referenced this provision,
which states that the EPA
‘‘Administrator shall take into account
the most stringent standards for vehicle
greenhouse gas emissions applicable to
and enforceable against motor vehicle
manufacturers for vehicles sold
anywhere in the United States’’ in
identifying vehicles for the Federal
government fleet. 42 U.S.C.
13212(f)(3)(B).137 Commenters argued
that the phrase ‘‘the most stringent
standards’’ would be superfluous if only
EPA were allowed to set standards and,
in addition, if EPA had not set any such
standards at the time EISA was enacted.
On the contrary, this provision is fully
consistent with NHTSA’s view of
preemption, based on the plain text of
EPCA’s express preemption provision.
The language in the EISA provision
specifically indicates that it applies only
to ‘‘the most stringent standards . . .
enforceable against motor vehicle
manufacturers.’’ 138 This means that
EPA could consider only otherwise
lawful standards. States and local
governments are not permitted to
enforce standards preempted by EPCA.
49 U.S.C. 32919(a).
However, EPCA does specifically
permit a State or local government to
‘‘prescribe requirements for fuel
economy for automobiles obtained for
its own use.’’ 49 U.S.C. 32919(c). It is
logical that the Federal government
would consider the requirements for
States and local government vehicle
fleets in evaluating vehicles for its own
Federal government fleet. Such
137 California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873; Joint
Submission from the States of California et al. and
the Cities of Oakland et al., Docket No. NHTSA–
2018–0067–11735.
138 42 U.S.C. 13212(f)(3)(B) (emphasis added).
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requirements would be applicable to
and could be enforced against
manufacturers in contractual
procurement relationships with States
or local governments. In any event, this
provision concerning a limited set of
vehicles (Federal government vehicles)
is not grounds for undoing the uniform
national fuel economy standards
applicable to all light vehicles as
prescribed by Congress in EPCA.
In enacting this provision in EISA,
Congress required the EPA
Administrator to ‘‘issue guidance
identifying the makes and model
number of vehicles that are low
greenhouse gas emitting vehicles’’ to aid
in identifying vehicles for the Federal
government’s own fleet. 42 U.S.C.
13212(f)(3)(A). The provision requiring
the Administrator to ‘‘take into account
the most stringent standards for vehicles
greenhouse gas emissions’’ provides a
consideration for that guidance. Id.
13212(f)(3)(B). It is not plausible that
Congress intended this limited
provision concerning guidance on
Federal government procurement to
disrupt the longstanding express
preemption provision in EPCA.
Further, to read this procurementrelated provision as somehow showing
that Congress intended to allow
California to establish laws related to
fuel economy standards is unreasonable,
as doing so would put California in an
unequal setting vis-a-vis other states,
and that would not make sense in this
context. ‘‘The Act also differentiates
between the States, despite our historic
tradition that all the States enjoy ‘equal
sovereignty.’ ’’ Northwest Austin
Municipal Utility District Number One
v. Holder, 557 U.S. 193, 203 (2009). A
‘‘departure from the fundamental
principal of equal sovereignty requires a
showing that a statute’s disparate
geographic coverage is sufficiently
related to the problem that it targets.’’
Id. Congress rejected any such prospect
in the area of fuel economy by adding
an unwaivable preemption clause in
EPCA. NHTSA does not presume that
Congress, when adopting EISA,
impliedly discarded the equal
application of EPCA to the States
without a clear statement of intent to do
so and a recitation of the ‘‘extraordinary
conditions’’ permitting California
special authority related to fuel
economy. Id. at 211. ‘‘Congress . . .
does not alter the fundamental details of
a regulatory scheme in vague terms or
ancillary provisions—it does not, one
might say, hide elephants in
mouseholes.’’ 139
139 Whitman v. Am. Trucking Ass’ns, 531 U.S.
457, 468 (2001).
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G. Prior Case Law Does Not Preclude
Preemption
Certain comments opposed to
NHTSA’s proposal rely upon the
Supreme Court’s decision in
Massachusetts v. EPA to argue that
regulation of tailpipe emissions is
separate and distinct from regulation of
fuel economy.140 NHTSA disagrees with
attempts to stretch the holding of this
decision well beyond the issues
addressed by the Court. The Court did
not address EPCA preemption in
Massachusetts v. EPA, or State
regulations pursuant to a Clean Air Act
waiver. The Court addressed only EPA’s
own statutory obligations, which have
no bearing on EPCA preemption.
Moreover, as discussed above,
NHTSA and EPA conduct joint
rulemaking consistent with the Supreme
Court’s decision. The Court
acknowledged that NHTSA and EPA’s
statutory obligations may overlap, but
that the agencies may both administer
those obligations while avoiding
inconsistency.141 NHTSA therefore
disagrees with the comment’s assertion
that regulations of tailpipe greenhouse
gas emissions and fuel economy are
truly separate and distinct. The agencies
issue joint rules precisely because of the
unavoidable scientific relationship
between the two.
A number of comments also rely on
the prior district court decisions in
California and Vermont in opposing
NHTSA’s proposal on preemption.142
As NHTSA discussed in the proposal,
those courts previously concluded that
State tailpipe greenhouse gas emissions
standards were not preempted by
EPCA.143 NHTSA continues to disagree
with both of these district court
decisions, as described in detail in the
proposal.144 This includes the California
district court’s erroneous view of the
requirement in EPCA for NHTSA to
consider ‘‘other standards’’ in setting
fuel economy standards.145 In reaching
its conclusion, the court misconstrued a
separate provision of EPCA that, by its
explicit terms, has had no effect for
decades. Importantly, neither district
court considered NHTSA’s views on
140 California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873; see
Northeast States for Coordinated Air Use
Management (NESCAUM), Docket No. NHTSA–
2018–0067–11691.
141 Massachusetts v. EPA, 549 U.S. 497, 532
(2007).
142 Joint Submission from the States of California
et al. and the Cities of Oakland et al., Docket No.
NHTSA–2018–0067–11735; South Coast Air
Quality Management District, Docket No. NHTSA–
2018–0067–11813.
143 83 FR 42986, 43235 (Aug. 24, 2018).
144 Id. at 43235–38.
145 Id. at 43236–37.
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preemption in construing the statute
NHTSA administers.146 Although the
United States filed an amicus brief
opposing the Vermont court’s decision
in the Second Circuit, that appeal was
not decided on the merits due to the
automotive industry’s withdrawal of the
appeal as a part of a negotiated
agreement connected to the national
framework. In its brief, the United States
specifically raised the district court’s
failure to consider NHTSA’s views
concerning preemption, let alone give
them weight.147 Withdrawal of appeals
was expressly part of the agreement to
establish the national framework.
The Vermont district court also
attempted to reconcile EPCA and the
Clean Air Act by asserting that a Clean
Air Act waiver converts State
requirements to ‘‘other motor vehicle
standards’’ that NHTSA must consider
in setting fuel economy standards. As
NHTSA noted in the proposal, even the
California district court found that there
was no legal foundation for the view
that a State regulation pursuant to a
Clean Air Act waiver becomes the
equivalent of a Federal regulation.148
This is an erroneous finding not based
on precedent and is unsupported by
applicable law.
As described in the proposal, NHTSA
also disagrees with the California and
Vermont district courts’ implied
preemption analyses.149 NHTSA does
not believe those courts fully considered
the conflict posed by State regulations
and, in one case, even went so far as to
assert erroneously that NHTSA could
simply defer to California in revising its
standards.150 Those decisions are not
binding on NHTSA.
Given NHTSA’s previously stated
views on those decisions, arguments
that rely on the decisions are not
146 Id. at 43236; Proof Brief for the United States
as Amicus Curiae, 07–4342–cv (2d Cir. filed Apr.
16, 2008).
147 See Proof Brief for the United States as
Amicus Curiae, 07–4342–cv (2d Cir. filed Apr. 16,
2008). NHTSA also was not a litigant in the district
court cases and, therefore, did not have a full
opportunity to raise its views.
148 83 FR 42986, 43236 (Aug. 24, 2018).
149 Id. at 43238.
150 Cent. Valley Chrysler-Jeep, Inc., 529 F. Supp.
2d at 1179. NHTSA has a statutory obligation to set
standards at ‘‘the maximum feasible average fuel
economy level that the Secretary decides the
manufacturers can achieve in that model year,’’ in
accordance with the statutory considerations. 49
U.S.C. 32902(a), (f). Thus, NHTSA cannot simply
defer to a State. For example, the only standards
that California would permit to satisfy California
requirements for model years 2021 through 2025 are
the augural standards. See Cal. Code Regs. tit. 13,
§ 1961.3(c). If NHTSA finalizes a determination that
the augural standards are not ‘‘maximum feasible,’’
as discussed in the proposal, then it would be
contrary to law for NHTSA to nevertheless adopt
them in deference to California.
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persuasive. Commenters did not provide
any new information or analysis of
those district court decisions that
caused the agency to change its view on
the decisions.151 NHTSA incorporates
the prior discussion of those decisions
from the proposal here.
While NHTSA need not belabor its
views again here, it is worth
emphasizing, as did commenters, that
both district courts ignored NHTSA’s
published prior statements on
preemption in rendering their
decisions.152 Some comments seem to
suggest that this failure to address
NHTSA’s views represents a substantive
rejection of those views.153 NHTSA
disagrees. The district courts simply
entirely failed to consider the agency’s
views; they did not consider and reject
them or even find that they were not
due any weight. This is among the
reasons that NHTSA is formalizing its
views in a regulation. As the expert
agency charged with administering
EPCA, NHTSA is tasked with balancing
the four statutory factors in determining
the ‘‘maximum feasible average fuel
economy standards’’ for each model
year.154 In doing so, NHTSA has the
unique ability to determine whether
State or local regulations would
undermine this balancing.155 NHTSA’s
views on preemption certainly should
be considered by any court evaluating
this issue. This is particularly true given
that the relationship between fuel
economy standards and greenhouse gas
emissions is a matter of science.
One commenter also erroneously
asserts that collateral estoppel will bar
the Department of Justice from
defending a final rule that asserts State
greenhouse gas emissions regulations
are preempted by EPCA.156 Nonmutual
offensive collateral estoppel does not
apply to the United States. United States
v. Mendoza, 464 U.S. 154, 162 (1984).
Moreover, the Federal government was
not even a party to the prior litigation
involving EPCA preemption. The
assertion that the Department of Justice
would be barred from defending this
final rule lacks merit.
151 As noted by a commenter, the appeals were
dismissed before decision as a practical matter, and
despite strong arguments on the merits. Fiat
Chrysler Automobiles (FCA), Docket No. NHTSA–
2018–0067–11943.
152 83 FR 42986, 43236 (Aug. 24, 2018).
153 See California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873.
154 49 U.S.C. 32902(f).
155 See id.
156 See South Coast Air Quality Management
District, Docket No. NHTSA–2018–0067–11813.
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H. A Clean Air Act Waiver and SIP
Approvals Do Not Foreclose EPCA
Preemption
Both agencies are finalizing their
tentative conclusion from the proposal
that a Clean Air Act waiver does not
also foreclose EPCA preemption. EPCA
does not provide for a waiver of
preemption, either by NHTSA or by
another Federal agency. EPA, like
NHTSA, does not have the authority to
waive EPCA preemption. Therefore, its
grant of a Clean Air Act waiver cannot
operate to waive EPCA preemption.
NHTSA discussed the basis for its view
that a Clean Air Act waiver does not
‘‘federalize’’ EPCA-preempted State
requirements in detail in its proposal.
NHTSA reaffirms that discussion.
Several comments recited the district
court’s holding in Green Mountain
Chrysler that it need not consider EPCA
preemption due to the EPA waiver.157
NHTSA discussed in detail in the
proposal its reasons for disagreeing with
that decision and commenters did not
identify any new information that
caused NHTSA to change its view.
NHTSA agrees with commenters that
reject the flawed reasoning of the
district court.158 As one commenter
explained, the argument that an EPA
waiver federalizes State requirements
renders the EPCA preemption provision
a nullity.159 As the commenter noted,
this incorrect interpretation would
enable States to even issue explicit fuel
economy requirements so long as they
were under cover of a waiver from EPA.
EPA does not have authority to waive
any aspect of EPCA preemption, nor
does NHTSA.
NHTSA also finalizes its view that
preempted standards are void ab initio.
No commenters presented information
that altered NHTSA’s view, which is
based on longstanding Supreme Court
case law, as cited by the proposal.
NHTSA agrees with South Coast,
which suggested in its comments that
EPCA does not outweigh the Clean Air
Act.160 Likewise, the Clean Air Act does
not outweigh EPCA. Just as
manufacturers must comply with
requirements under both statutes, both
statutes apply to State and local
157 See, e.g., California Air Resources Board
(CARB), Docket No. NHTSA–2018–0067–11873;
Class of 85 Regulatory Response Group, Docket No.
NHTSA–2018–0067–12070; Joint Submission from
the States of California et al. and the Cities of
Oakland et al., Docket No. NHTSA–2018–0067–
11735.
158 See, e.g., American Fuel & Petrochemical
Manufacturers, Docket No. NHTSA–2018–0067–
12078.
159 Competitive Enterprise Institute, Docket No.
NHTSA–2018–0067–12015.
160 See South Coast Air Quality Management
District, Docket No. NHTSA–2018–0067–11813.
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governments as well. Moreover, EPCA’s
preemption provision is fully consistent
with the Clean Air Act. EPCA’s
preemption provision does not
implicitly repeal parts of Section 209(b),
contrary to the assertion in one
comment.161 States must simply act in
accordance with both statutes. Cf.
Massachusetts v. EPA, 549 U.S. 497, 532
(2007) (finding no inconsistency
between obligations of EPA under Clean
Air Act and NHTSA under EPCA).
NHTSA has rejected the argument
that a Clean Air Act waiver renders
EPCA preemption inapplicable, and
likewise rejects the even more
attenuated argument concerning EPA’s
approval of preempted State
requirements as a part of a State
Implementation Plan (SIP) submission
for areas that do not meet National
Ambient Air Quality Standards
(NAAQS). A State has no authority to
adopt or enforce a requirement that falls
within the scope of EPCA preemption.
49 U.S.C. 32919(a). This is true even if
adopting the unlawfully enacted
requirement would assist the State in
coming into compliance with the
NAAQS. The inclusion of an invalid
fuel economy requirement in an air
quality SIP does not render the
requirement suddenly valid.162 NHTSA
therefore disagrees with comments that
suggest that EPCA preemption no longer
applies simply because an unauthorized
requirement is included in a SIP that is
subsequently approved.163 It is
inappropriate for a State to take action
unauthorized and rendered void by one
statutory scheme to meet the
requirements of a different statutory
scheme.
Moreover, EPCA preemption applies
directly to States and local governments
which are obliged to adhere to the
constraints of the Supremacy Clause.
EPCA explicitly prohibits States and
local governments from adopting or
enforcing a law or regulation related to
fuel economy standards. It is
unreasonable for States to expect a
Federal agency (EPA) acting under one
statutory scheme (the Clean Air Act) to
analyze whether the State has adopted
preempted regulations in contravention
of an entirely separate statute (EPCA)
administered by a different Federal
agency (NHTSA). In fact, as noted
above, historically EPA has declined to
161 Joint Submission from the States of California
et al. and the Cities of Oakland et al., Docket No.
NHTSA–2018–0067–11735.
162 SIPs must include ‘‘enforceable emission
limitations.’’ 42 U.S.C. 7410(a)(2)(A). An EPCA
preempted requirement is not enforceable. 49
U.S.C. 32919(a).
163 See South Coast Air Quality Management
District, Docket No. NHTSA–2018–0067–11813.
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address questions unrelated to CAA
section 209, such as preemption
analysis, in its waiver decisions.
NHTSA strongly disagrees with the
assertion that EPA’s approval of a SIP
silently acts as an implied waiver of
EPCA preemption. This suggestion is
particularly hollow given that neither
EPA nor NHTSA has the authority to
waive EPCA preemption.
NHTSA agrees with the general
principle that an approved SIP is
enforceable as a matter of Federal
law.164 However, the case law does not
support the argument made by CARB
and South Coast’s comments. The case
law explains that a SIP approved by
EPA creates binding obligations,
pursuant to the Clean Air Act.165 There
is no indication that Congress intended
to permit one agency to legitimize an
otherwise EPCA-preempted State
provision by ‘‘federalizing’’ it. As an
analogy, the IRS requires individuals to
report and pay taxes on money earned
from illegal activity, such as dealing
drugs.166 A drug dealer who complies
with Federal tax law is not relieved of
the prohibitions on possessing and
selling drugs that apply under other
Federal laws.
Since SIPs are binding on States, the
agencies recognize that certain States
may need to work with EPA to revise
their SIPs in light of this final action.167
As stated in the proposal, EPA may
subsequently consider whether to
employ the appropriate provisions of
the Clean Air Act to identify provisions
of States’ SIPs that may need review
because they include preempted ZEV
mandates or greenhouse gas emissions
standards.168 However, this practical
consideration is not grounds for
ignoring EPCA’s limitations on State
action. SIPs are not written in stone.
They are subject to revision, including
based on changed circumstances. The
Clean Air Act allows SIPs to be revised
for various reasons, including that part
of the plan was approved in error, that
the plan is ‘‘substantially inadequate,’’
or that the State is suspending or
164 See California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873; South Coast
Air Quality Management District, Docket No.
NHTSA–2018–0067–11813.
165 See, e.g., Safe Air for Everyone v. United
States Envt’l Prot. Agency, 488 F.3d 1088, 1091 (9th
Cir. 2007).
166 Internal Revenue Service, Publication 525:
Taxable and Nontaxable Income 32 (Mar. 8, 2019),
https://www.irs.gov/pub/irs-pdf/p525.pdf.
167 EPA explains below that it will consider
whether and how to address SIP implications of
this action, to the extent that they exist, in separate
actions; EPA believes that it is not necessary to
resolve those implications in the course of this
action.
168 83 FR 42986, 43244 (Aug. 24, 2018).
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revoking a program included in a plan.
42 U.S.C. 7410(a)(5)(iii), (k)(5)–(6).
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I. NHTSA Has Appropriately
Considered the Views of States and
Local Governments Consistent With Law
NHTSA considers the views of all
interested stakeholders—including
States and local governments—in
carrying out its statutory obligation to
set nationally applicable fuel economy
standards. However, EPCA does not
permit States or local governments to
act as co-regulators with NHTSA in the
process of setting fuel economy
standards. Indeed, EPCA precludes
them from doing so, with the sole
exception of information disclosure
requirements identical to Federal
requirements, and for requirements for
fuel economy for automobiles obtained
for a State or local governments’ own
use. A number of commenters urged
NHTSA to work cooperatively with
California, and to negotiate with and
reach a compromise with California.169
NHTSA appreciates such comments,
and seeks to foster a collaborative
regulatory approach to the extent
possible. That said, California is not
permitted by Federal law to have its
own separate laws or regulations
relating to fuel economy standards. 49
U.S.C. 32902 makes clear that NHTSA
sets nationally applicable fuel economy
standards, and NHTSA is implementing
its authority to do so through this
regulation clarifying the preemptive
effect of its standards consistent with
the express preemption provision in 49
U.S.C. 32919.
The very limited exceptions to
preemption set forth in EPCA—covering
vehicles for a government’s own use,
and for disclosure requirements that are
identical to Federal requirements—only
confirm the breadth of preemption. See
49 U.S.C. 32919(b)–(c). States or
localities cannot adopt or enforce
requirements related to fuel economy
standards unless they fall into one of
these two discrete exceptions. This
means requirements related to fuel
economy standards for automobiles for
use by a State’s citizens, and not merely
the State itself, are not permitted. Since
States are not permitted to adopt or
enforce requirements related to fuel
169 See, e.g., American Honda Motor Company,
Inc., Docket No. NHTSA–2018–0067–11818; Sen. T.
Carper, United States Senate, Docket No. NHTSA–
2018–0067–11910; Maryland Department of the
Environment, Docket No. NHTSA–2018–0067–
12044; Joint Submission from the States of
California et al. and the Cities of Oakland et al.,
Docket No. NHTSA–2018–0067–11735;
Manufacturers of Emission Controls Association,
Docket No. NHTSA–2018–0067–11994; North
Carolina Department of Environmental Quality,
Docket No. NHTSA–2018–0067–12025.
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economy standards for vehicles sold or
delivered to the public, Federal law
does not allow California (or any other
State or local government) to regulate in
this area.
For California, or any other State or
local government, to regulate in this
area would require NHTSA to waive
EPCA preemption, but commenters did
not and cannot identify any statutory
authorization for NHTSA to do so and
no such authority exists, either
expressly or impliedly. The Clean Air
Act requires EPA to waive Clean Air Act
preemption under a specific section of
that statute unless it makes certain
findings. But because EPCA does not
enable NHTSA to issue a waiver of
preemption, it also does not set forth
terms upon which a waiver would be
appropriate.170 Thus, NHTSA lacks a
legal basis for approving of or
consenting to State or local
requirements related to fuel economy
standards.
Absent the affirmative authority to
approve of or consent to State or
locality’s requirements related to fuel
economy standards, commenters appear
to ask NHTSA to simply to look aside.
That is inconsistent with NHTSA’s legal
responsibility to set nationally
applicable standards. It is also
inconsistent with the self-executing
nature of EPCA preemption, meaning
that State or local requirements related
to fuel economy standards are void ab
initio. Even if NHTSA wanted to do so,
it cannot breathe life into an expressly
preempted State law. And doing so
would effectively result in NHTSA’s
purporting to rewrite a statute, which is
beyond the power of a regulatory
agency.
NHTSA also disagrees that it is
appropriate to ignore EPCA preemption
as a strategy to avoid litigation over this
issue, a strategy strongly suggested by a
large number of commenters. NHTSA
understands the concerns of such
commenters who hope to avoid
prolonged litigation.171 However,
NHTSA believes that long-term
certainty is best achieved by applying
the law as written. NHTSA agrees with
commenters who acknowledge the
disruption to the automotive
marketplace that would come if
preempted standards remained in
place.172 Addressing preemption
directly, as NHTSA has done through its
170 EPA also does not have authority to waive
EPCA preemption, under the Clean Air Act or
otherwise.
171 American Honda Motor Company, Inc., Docket
No. NHTSA–2018–0067–11818; Ford Motor
Company, Docket No. NHTSA–2018–0067–11928.
172 Fiat Chrysler Automobiles (FCA), Docket No.
NHTSA–2018–0067–11943.
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51325
adoption of regulatory text in this
document, will ultimately provide the
needed regulatory certainty into the
future.
Those commenters that ask NHTSA to
negotiate with California demonstrate
the nature of the problem.173 The
underlying reason commenters are
concerned about the absence of a
compromise resolution is because of the
conflict that will result if States proceed
with regulations that are inconsistent
with Federal requirements.174 Such
commenters, appropriately, have
recognized the disruptive effect of
continuing to tolerate multiple
regulators in this area. Moreover, as
discussed in additional detail below, a
negotiated resolution is inconsistent
with the APA’s notice and comment
rulemaking process. NHTSA has no
basis in law to ignore the substantive
comments received on its proposal from
many stakeholders and instead
determine an outcome through
negotiation with a regulatory agency in
California. NHTSA is a safety agency
with different priorities than CARB,
with a different set of factors to balance,
including safety implications.
As discussed above, many comments
emphasized a desire for maintaining a
National Program. Neither California
nor any other State, of course, has the
authority to set national standards in
any area. If California were to adopt and
enforce requirements related to fuel
economy standards, there could only be
uniform standards applicable
throughout the country if California
agrees with the standards set by NHTSA
or vice versa. But EPCA requires that
‘‘[e]ach standard shall be the maximum
feasible average fuel economy level that
the Secretary’’—not a regulatory agency
in the State of California—‘‘decides that
the manufacturers can achieve in that
model year.’’ 175 49 U.S.C. 32902(a).
173 See, e.g., American Honda Motor Company,
Inc., Docket No. NHTSA–2018–0067–11818; Sen. T.
Carper, United States Senate, Docket No. NHTSA–
2018–0067–11910; Manufacturers of Emission
Controls Association, Docket No. NHTSA–2018–
0067–11994.
174 See Cal. Code Regs. tit. 13, section 1961.3(c).
175 As NHTSA explained in the proposal, it
disagrees with the implication of the district court’s
statement in Central Valley that ‘‘NHTSA is
empowered to revise its standards’’ to take into
account California’s regulations. 83 FR 42986,
43238 (Aug. 24, 2018); see Cent. Valley ChryslerJeep, Inc., 529 F. Supp. 2d at 1179. NHTSA’s duty
under EPCA is to balance the statutory factors, not
to acquiesce to the views of one State (which by its
own assertion is attempting to address Statespecific concerns, including the geography of its
population centers). See, e.g., California Air
Resources Board (CARB), Docket No. NHTSA–
2018–0067–11873 (stating that California’s
‘‘population continues to live predominantly in
basins bounded by mountains, in which air quality
is poor’’).
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Moreover, a faithful application of
EPCA requires more than just avoiding
inconsistency. For that reason, it is
unavailing that CARB has previously
implemented its program purportedly
consistent with the Federal
government.176 EPCA requires NHTSA
to set nationally applicably standards.
EPCA does not permit States or local
governments to adopt or enforce even
identical or equivalent standards.177
EPCA allows for only a single
regulator—NHTSA—to set fuel economy
standards. Moreover, it is now clear it
does not intend to do so for model year
2021 through 2026 vehicles, should the
forthcoming final SAFE rule finalize
standards other than the no action
alternative as described in the NPRM.178
And even consistent programs subject
manufacturers to duplicative
enforcement regimes, in conflict with
EPCA.179 State standards that are
identical or equivalent standards to the
Federal standards manufacturers
nevertheless obligate manufacturers to
meet more onerous requirements. That
is because States, of course, lack
authority to set nationwide
requirements. Therefore, manufacturers
must meet State standards within each
State that has adopted them. Since fuel
economy standards are fleetwide
average standards, it is more difficult to
achieve a standard in a particular State,
averaged across a smaller pool of
vehicles, than it is to achieve the
Federal standard, averaged across the
pool of vehicles for all States.
In addition, there is no legal basis in
EPCA or the APA for California or any
other State to receive preferential
treatment for their views in this
statutory scheme or rulemaking
process.180 Nor is California, or any
other State, entitled to negotiate the
176 California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873.
177 EPCA does allow States or local governments
to adopt identical requirements for disclosure of
fuel economy or fuel operating costs, but did not
allow identical requirements in other areas related
to fuel economy. See 49 U.S.C. 32919(b).
178 See Cal. Code Regs. tit. 13, section 1961.3(c).
179 EPCA has an unusual civil penalty provision
for violations of fuel economy standards that
enables various compliance flexibilities, including
use of banked credits, credit plans, credit transfers,
and credit trades. See 49 U.S.C. 32912. EPCA also
requires specific procedures and findings before the
Secretary of Transportation may increase the civil
penalty rate applicable to violations of fuel
economy standards. 49 U.S.C. 32912(c). State and
local enforcement of even identical or equivalent
requirements interferes with this enforcement
structure.
180 See Nw. Austin Mun. Util. Dist. No. One v.
Holder, 557 U.S. 193, 203 (2009) (stating that ‘‘a
departure from the fundamental principle of equal
sovereignty requires a showing that a statute’s
disparate geographic coverage is sufficiently related
to the problem that it targets’’).
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appropriate standards with NHTSA.
Commenters appear to suggest closeddoor negotiations, and not an alternative
rulemaking process (such as negotiated
rulemaking), that would ensure
procedural fairness.181 NHTSA
disagrees that negotiation is the
appropriate mechanism to set nationally
applicable policy with billions of
dollars of impacts. The notice-andcomment rulemaking process used by
the agencies is the appropriate
mechanism for setting standards under
EPCA and the Clean Air Act, with due
consideration to the views of all
interested parties and transparency.
NHTSA certainly would prefer a result
that is satisfactory to all interested
stakeholders, but it may not set aside its
own considered views on the
appropriate standards to reach a
negotiated resolution, nor may it set
aside Congress’s commands in EPCA.
While States or local governments
may not adopt or enforce requirements
related to fuel economy standards,
NHTSA, of course, is considering their
views in setting appropriate standards.
Many State and local governments
commented at great length on both the
preemption and standard setting
portions of NHTSA’s proposal.182
NHTSA has taken their views into
account in finalizing this rule, along
with those of other commenters. States
and local governments have had and
will continue to have a say in the
adoption of fuel economy standards,
consistent with the APA. Indeed, many
of the technical comments provided by
California and other State and local
governments and agencies are being
considered to improve the analysis
regarding the appropriate standards. In
an area with express preemption, this
APA process is the appropriate means
by which the Federal government
181 One comment noted that prior negotiations
were ‘‘closed-door, ‘put nothing in writing, ever’
negotiations.’’ Competitive Enterprise Institute,
Docket No. NHTSA–2018–0067–12015; see also
Sen. Phil Berger & Rep. Tim Moore, North Carolina
General Assembly, Docket No. NHTSA–2018–0067–
11961.
182 See, e.g., California Air Resources Board
(CARB), Docket No. NHTSA–2018–0067–11873;
Joint Submission from Governors of Texas, et al.,
Docket No. NHTSA–2018–0067–11935; Joint
Submission from the States of California et al. and
the Cities of Oakland et al., Docket No. NHTSA–
2018–0067–11735; Maryland Department of the
Environment, Docket No. NHTSA–2018–0067–
12044; Minnesota Pollution Control Agency
(MPCA), the Minnesota Department of
Transportation (MnDOT), and the Minnesota
Department of Health (MDH), Docket No. NHTSA–
2018–0067–11706; North Carolina Department of
Environmental Quality, Docket No. NHTSA–2018–
0067–12025; Pennsylvania Department of
Environmental Protection, Docket No. NHTSA–
2018–0067–11956; Washington State Department of
Ecology, Docket No. NHTSA–2018–0067–11926.
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should consider the views of States and
local governments.
NHTSA also disagrees with the view
expressed by some commenters that
there is not a direct conflict between
State regulation of tailpipe carbon
dioxide emissions from automobiles
issued pursuant to a Clean Air Act
waiver and NHTSA’s ability to set fuel
economy standards under EPCA. South
Coast argues that when there are
inconsistent standards, automakers can
avoid a conflict by complying with the
more stringent standard.183
NHTSA disagrees that this situation
does not pose a conflict. Higher
standards than those NHTSA has
determined are ‘‘maximum feasible’’
after balancing the statutory factors
negates the agency’s judgment in setting
national standards, including traffic
safety. NHTSA addressed this conflict
in detail in the proposal and reiterates
that discussion here.184 NHTSA also
disagrees that all manufacturers should
simply comply with a higher standard
than the standards set by the Federal
government based on statutory
considerations. It may not be technically
feasible for manufacturers to comply
with higher standards or the higher
standards may not be economically
practicable. These are factors that
NHTSA must carefully assess and
balance in setting standards under
EPCA, and the notion that a State has
the unilateral ability to veto or
undermine NHTSA’s determination by
setting higher standards directly
conflicts with EPCA.
South Coast also asserted in its
comments that there is no direct conflict
between the purpose of EPCA to reduce
fuel consumption by increasing fuel
economy and the purpose of the Clean
Air Act to protect public health from air
pollution, including by allowing
California to establish motor vehicle
standards if it meets the criteria for a
waiver.185 While it is true that there
need not be a conflict between EPCA
and the Clean Air Act, this statement is
irrelevant to the determination of
whether State standards are preempted
by EPCA. NHTSA and EPA conduct
joint rulemaking in this area because
EPA’s greenhouse gas emissions
standards are inherently related to
NHTSA’s fuel economy standards. This
inherent linkage was recognized by the
Supreme Court in Massachusetts v.
183 South Coast Air Quality Management District,
Docket No. NHTSA–2018–0067–11813.
184 See section f of the proposal’s preemption
discussion. 83 FR 42986, 43237–38 (Aug. 24, 2018).
185 South Coast Air Quality Management District,
Docket No. NHTSA–2018–0067–11813.
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EPA.186 California and other States
have, for many years, regulated ozoneforming emissions from vehicles
pursuant to a Clean Air Act waiver
without posing a conflict with NHTSA’s
regulation of fuel economy. It is when
States regulate the emission of
greenhouse gases, especially carbon
dioxide, that the conflict arises because
of the direct and substantial relationship
between tailpipe emissions of carbon
dioxide and fuel economy. Regulation
in this area is related to NHTSA’s fuel
economy standards and impedes
NHTSA’s ability to set nationally
applicable fuel economy standards.
NHTSA also disagrees with comments
that assert it did not properly consider
federalism concerns. Specifically, South
Coast claimed that NHTSA violated the
executive order on federalism,
Executive Order 13132, although South
Coast acknowledges the Executive Order
does not create an enforceable right or
benefit.187 Setting aside the Executive
Order’s non-justiciability for the
moment, NHTSA’s action complies with
Executive Order 13132. Contrary to
South Coast’s assertion, the executive
order recognizes both express
preemption and conflict preemption,
and it does not bar the application of
conflict preemption where a statute
contains an express preemption
provision.188 The provisions concerning
express preemption and conflict
preemption are in separate paragraphs,
which are not mutually exclusive. See
E.O. 13132 section 4(a)–(b).
Moreover, the executive order
supports NHTSA’s action in construing
preemption through rulemaking. See id.
The executive order explicitly supports
the process NHTSA used here to
consider the views of States and local
governments, stating that: ‘‘When an
agency proposes to act through
adjudication or rulemaking to preempt
State law, the agency shall provide all
affected State and local officials notice
and an opportunity for appropriate
participation in the proceedings.’’ E.O.
13132 section 4(e). NHTSA cited to
Executive Order 13132 in the
preemption portion of its proposal,189
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186 See
Massachusetts v. EPA, 549 U.S. 497, 532
(2007).
187 E.O. 13132 section 11; South Coast Air Quality
Management District, Docket No. NHTSA–2018–
0067–11813. South Coast also states that NHTSA
did not mention the Tenth Amendment in its
proposal. South Coast Air Quality Management
District, Docket No. NHTSA–2018–0067–11813.
However, South Coast does not assert that this
action violates the Tenth Amendment, which is
fully consistent with Federal preemption. See
Constitution, Article VI.
188 South Coast Air Quality Management District,
Docket No. NHTSA–2018–0067–11813.
189 83 FR 42986, 43233 n.496 (Aug. 24, 2018).
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and specifically solicited comments
from State and local officials, as well as
other members of the public. As
discussed above, NHTSA has
considered the extensive comments
from State and local governments.
EPCA preemption also does not
improperly impinge on the rights of
States. Several commenters argued for
allowing States to regulate in this area
due to asserted benefits of State
regulation.190 CARB’s comments went
into extensive detail on its history of
regulating vehicles.191 It also asserted
that there is industry support for its
regulation in this area,192 and argued
that it has reliance interests in its
regulations.193 CARB also argued that
NHTSA’s proposal would adversely
impact its police power and ability to
protect its citizens.194 In addition, it
claimed that NHTSA’s proposal would
impact its State-imposed mandate for
emissions reductions by 2030, given the
transportation sector’s contributions to
California’s greenhouse gas
emissions.195
Notwithstanding these asserted
interests of policy, Congress determined
that NHTSA should have exclusive
authority to set fuel economy standards
and that States are not authorized to
adopt or enforce regulations related to
those standards, with limited exceptions
described above. No commenter argued
that EPCA’s preemption provision is
unconstitutional. Some commenters,
however, have argued that special
treatment afforded to the California is
problematic.196 Just as States have no
valid police power to set fuel economy
standards directly, neither are they
permitted under EPCA and the
Supremacy Clause to set standards
related to fuel economy standards.
States do have input into the Federal
fuel economy standards established by
NHTSA (as well as EPA’s related
greenhouse gas emissions standards)
through the notice-and-comment
process, and the interests of California’s
citizens as well as the citizens of the
190 See, e.g., California Air Resources Board
(CARB), Docket No. NHTSA–2018–0067–11873.
191 California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873.
192 Id.
193 Id.
194 Id.; see also Joint Submission from the States
of California et al. and the Cities of Oakland et al.,
Docket No. NHTSA–2018–0067–11735.
195 California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873.
196 E.g., Sen. Phil Berger & Rep. Tim Moore, North
Carolina General Assembly, Docket No. NHTSA–
2018–0067–11961; Rep. M. Turzai, Pennsylvania
House of Representatives, Docket No. NHTSA–
2018–0067–11839.
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other 49 States are protected by the
standards set by the Federal agencies.
NHTSA recognizes that California
may have different policy views, as do
many interested parties, including both
those who expressed views in favor of
and in opposition to the proposal.
However, Congress gave NHTSA the
duty to balance competing
considerations. NHTSA also rejects the
notion that California has valid reliance
interests in regulations that are void ab
initio. Indeed, even in the run-up to the
2012 rulemaking, California itself
reserved its rights to go in a different
direction and recognized that the
Federal Government may assert
preemption at a later date.197 The extent
to which all or part of industry does or
does not support California’s ability to
regulate in this area is also not a
relevant consideration to whether
California is legally authorized to do so.
NHTSA also notes that industry has
expressed a strong preference for one
national standard, which is the purpose
of EPCA’s preemption provision.198
California has now made clear that it
will not accept manufacturers’
compliance with Federal standards,
unless the agencies adopt the no action
alternative from the proposal.199 EPCA
preemption ensures that such State
regulations are unenforceable and that
one set of national standards (the
Federal standards) will control. Not
even identical standards are
permissible.
J. Clarifying Changes to Final Rule Text
No commenter offered alternative
regulatory text for consideration by the
197 See Letter from M. Nichols, CARB to R.
LaHood, DOT & L. Jackson, EPA (July 28, 2011),
available at https://www.epa.gov/sites/production/
files/2016-10/documents/carb-commitment-ltr.pdf
(last visited Sept. 15, 2019) (making certain
commitments for a National Program, conditioned
on certain events including EPA’s grant of a waiver
of Clean Air Act preemption, vehicle manufacturers
not challenging California’s standards on the basis
of EPCA preemption, and indicating that
‘‘California reserves all rights to contest final
actions taken or not taken by EPA or NHTSA as part
of or in response to the mid-term evaluation’’).
198 See Alliance of Automobile Manufacturers,
Docket No. NHTSA–2018–0067–12073; American
Honda Motor Company, Inc., Docket No. NHTSA–
2018–0067–11818; Association of Global
Automakers, Docket No. NHTSA–2018–0067–
12032; Fiat Chrysler Automobiles (FCA), Docket
No. NHTSA–2018–0067–11943; Ford Motor
Company, Docket No. NHTSA–2018–0067–11928;
General Motors LLC, Docket No. NHTSA–2018–
0067–11858; Jaguar Land Rover, Docket No.
NHTSA–2018–0067–11916; Mazda Motor
Company, Docket No. NHTSA–2018–0067–11727;
Mitsubishi Motors RD of America, Inc. (MRDA),
Docket No. NHTSA–2018–0067–12056; Subaru,
Docket No. NHTSA–2018–0067–12020; Toyota
Motor North America, Docket No. NHTSA–2018–
0067–12150; Volkswagen Group of America, Docket
No. NHTSA–2017–0069–0583.
199 See Cal. Code Regs. tit. 13, section 1961.3(c).
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agency on preemption. Because NHTSA
is finalizing its views on preemption, it
is adopting the proposed regulatory text,
including an appendix. However, based
on its review of comments, NHTSA is
adopting a few minor, clarifying
changes.
While not advocating for a change to
the regulatory text, comments from
South Coast and CARB persuaded us to
make changes to ensure consistency
with EPCA’s express preemption
provision, as was NHTSA’s intention.200
South Coast specifically pointed out
that two provisions of the proposed
regulatory text (appendix B, sections
(a)(3) and (b)(3)) did not include the
word ‘‘automobiles.’’ 201 Contrary to
South Coast’s suggestion, NHTSA’s
intention was not to reach beyond the
statutory text. Most of the proposed
regulatory text explicitly addressed
automobiles. In the two provisions
identified by South Coast as omitting
that term, NHTSA addressed tailpipe
carbon dioxide emissions and fuel
economy. In context, these references
address automobile emissions and
automobile fuel economy. However, for
clarity and consistency, NHTSA has
added explicit reference to automobiles
to these two provisions.
CARB also pointed out in its
comments that the statute preempts
laws or regulations ‘‘related to fuel
economy standards,’’ not simply those
related to fuel economy.202 While other
provisions of the proposed rule used the
phrases ‘‘relates to fuel economy
standards’’ or ‘‘related to fuel economy
standards,’’ the word ‘‘standards’’ was
inadvertently omitted from section (a)(3)
of the appendix. In the final rule,
NHTSA has added that word for clarity.
In addition, to ensure consistency
throughout the regulatory text and with
the preamble discussion, NHTSA is
clarifying that a State law or regulations
having either a direct or substantial
effect of regulating or prohibiting
tailpipe carbon dioxide emissions or
fuel economy is a law or regulation
related to fuel economy. The proposal
included this statement in the proposed
regulatory text: ‘‘Automobile fuel
200 South Coast and CARB asked NHTSA to
withdraw its proposal on preemption, rather than
to change the text of the proposed rule. California
Air Resources Board (CARB), Docket No. NHTSA–
2018–0067–11873; South Coast Air Quality
Management District, Docket No. NHTSA–2018–
0067–11813. NHTSA declines to do so for the
reasons discussed in this final rule.
201 South Coast Air Quality Management District,
Docket No. NHTSA–2018–0067–11813.
202 California Air Resources Board (CARB),
Docket No. NHTSA–2018–0067–11873; see also
Joint Submission from the States of California et al.
and the Cities of Oakland et al., Docket No.
NHTSA–2018–0067–11735.
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economy is directly and substantially
related to automobile tailpipe emissions
of carbon dioxide.’’ This provides the
foundation for NHTSA’s express and
implied preemption analysis. NHTSA is
therefore clarifying that requirements
directly or substantially related to fuel
economy are preempted by adding ‘‘or
substantially’’ to two places in the
regulatory text. This is consistent with
the proposal, which explained that
requirements with no bearing on fuel
economy or those with only an
incidental impact on fuel economy are
not preempted.203 Requirements with
more than an incidental impact, i.e.
those requirements that directly or
substantially affect fuel economy are
related to fuel economy and thus
preempted. Therefore, this change in the
regulatory text of the final rule provides
additional clarity on the scope of
preemption.
In addition, several references
throughout the proposed regulatory text
addressed a ‘‘state law or regulation.’’
Consistent with EPCA and the
discussion in the notice of proposed
rulemaking, NHTSA intended to
address laws and regulations of States
and their political subdivisions. For
clarity, NHTSA revised all references in
its regulatory text to cover States and
their political subdivisions.
Specifically, in the rule NHTSA is
finalizing in this document, appendix B,
section (a)(3) reads: ‘‘A law or regulation
of a State or political subdivision of a
State having the direct or substantial
effect of regulating or prohibiting
tailpipe carbon dioxide emissions from
automobiles or automobile fuel
economy is a law or regulation related
to fuel economy standards and
expressly preempted under 49 U.S.C.
32919.’’ 204 Appendix B, section (b)(3)
reads: ‘‘A law or regulation of a State or
political subdivision of a State having
the direct or substantial effect of
regulating or prohibiting tailpipe carbon
dioxide emissions from automobiles or
automobile fuel economy is impliedly
preempted under 49 U.S.C. Chapter
329.’’ 205
Finally, NHTSA also added clarifying
language to 49 CFR 531.7(b) and
533.7(b) to indicate that the references
to ‘‘section 32908’’ are to section 32908
of title 49 of the United States Code.
These clarifying changes are
consistent with the discussion in the
preamble to NHTSA’s proposed rule.
203 83 FR 42986, 43235 (Aug. 24, 2018). It is also
consistent with the Supreme Court case law
interpreting ‘‘related to’’ in preemption provisions,
as discussed both in the proposal and this final
rule. See, e.g., Rowe, 552 U.S. at 375.
204 Emphases added.
205 Emphases added.
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III. EPA’s Withdrawal of Aspects of the
January 2013 Waiver of CAA section
209(b) Preemption of the State of
California’s Advanced Clean Car
Program
In this section of this joint action,
EPA is finalizing its August 2018
proposal to withdraw aspects of its
January 2013 waiver of Clean Air Act
(CAA) section 209 preemption of the
State of California’s Advanced Clean Car
(ACC) program. First, subsection A
provides background regarding the ACC
program. Second, subsection B finalizes
EPA’s proposed determination that it
has the authority to reconsider and
withdraw previously granted waivers.
Third, subsection C finalizes EPA’s
proposed determination that, in light of
NHTSA’s determinations finalized
elsewhere in this joint action regarding
the preemptive effect of EPCA on state
GHG and ZEV programs, EPA’s January
2013 grant of a waiver of CAA
preemption for those provisions of
California’s program was invalid, null,
and void; that waiver is hereby
withdrawn on that basis, effective on
the effective date of this joint action.
Fourth, subsection D, separate and apart
from the determinations in subsection C
with regard to the effect of EPCA
preemption on the January 2013 waiver,
finalizes EPA’s reconsideration of, and
its proposed determination that it is
appropriate to withdraw, its January
2013 grant of a waiver of CAA
preemption for the GHG and ZEV
standards in California’s ACC program
for model years 2021 through 2025,
based on a determination that California
‘‘does not need [those] standards to
meet compelling and extraordinary
conditions’’ within the meaning of CAA
section 209(b)(1)(B). Fifth, subsection E
sets forth and specifies the terms of the
waiver withdrawal. Sixth, subsection F
finalizes EPA’s proposed determination
that, separate and apart from the
findings and determinations described
above, states other than California
cannot use CAA section 177 to adopt
California’s GHG standards. Seventh
and finally, subsection G sets forth
EPA’s understanding and intention with
regard to severability of, and the
appropriate venue for judicial review of,
this action.
A. Background
On January 9, 2013, EPA granted
California’s request for a waiver of
preemption to enforce its Advanced
Clean Car (ACC) program regulations
under CAA section 209(b)(1).206 78 FR
206 As in the proposal, this final action uses
‘‘California’’ and ‘‘California Air Resources Board’’
(or ‘‘CARB’’) interchangeably.
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2112. On August 24, 2018, EPA
proposed to withdraw this waiver of
preemption with regard to the GHG and
ZEV standards of its Advanced Clean
Car (ACC) program for MY 2021–2025.
83 FR 43240. In the SAFE proposal, EPA
provided extensive background on the
history of CAA section 209 and waivers
granted thereunder, as well as on the
specific waiver which California sought
for the ACC program which is at issue
here, in the SAFE proposal.207 83 FR
43240–43242.
Since publication of the SAFE
proposal, California has clarified its
‘‘deemed to comply’’ provision, under
which manufacturers are afforded the
option of complying with CARB’s GHG
standards by showing that they comply
with the applicable federal GHG
standards. As amended, CARB’s
‘‘deemed to comply’’ provision now
provides that compliance with CARB’s
GHG standards can be satisfied only by
complying with the federal standards as
those standards were promulgated in
2012. In other words, while the content
of CARB’s GHG standards has never
been identical to the corresponding
Federal standards, the ‘‘deemed to
comply’’ provision as originally
designed, and as it existed when EPA
issued the January 2013 waiver, would
have shielded automobile
manufacturers from having to comply
with two conflicting sets of standards
unless they chose to do so. After the
December 2018 amendment, however,
CARB’s regulations now contain within
them a mechanism which will
automatically impose that state of affairs
the moment that the Federal
government should exercise its
authority to revise its standards.
California has further recently
announced a ‘‘voluntary agreement’’
with four automobile manufacturers
that, among other things, requires the
automobile manufacturers to refrain
from challenging California’s GHG and
ZEV programs. This ‘‘voluntary
agreement’’ further provides that
California will accept automobile
manufacturer compliance with a less
stringent standard (and one that extends
the phase-in of the GHG standard from
2025 to 2026) than either the California
program that was the subject of the 2013
waiver or the Federal standards as
promulgated in 2012. Neither
California’s amendment of its ‘‘deemed
to comply’’ provision, nor its more
recent announcement of the new
207 A complete description of the ACC program,
as it existed at the time that CARB applied for the
2013 waiver, can be found in CARB’s waiver
request, located in the docket for the January 2013
waiver action, Docket No. EPA–HQ–OAR– 2012–
0562.
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‘‘voluntary agreement,’’ constitute a
necessary part of the basis for the waiver
withdrawal and other actions that EPA
finalizes in this document, and EPA
would be taking the same actions that it
takes in this document even in their
absence. Nevertheless, EPA does not
believe it appropriate to ignore these
recent actions and announcements on
the State’s part, and, as discussed
below, believes that they confirm that
this action is appropriate.208
On January 9, 2013, EPA granted
CARB’s request for a waiver of
preemption to enforce its ACC program
regulations pursuant to CAA section
209(b). 78 FR 2112. The ACC program
comprises regulations for ZEV, tailpipe
GHG emissions standards, and lowemission vehicles (LEV) regulations 209
for new passenger cars, light-duty
trucks, medium-duty passenger
vehicles, and certain heavy-duty
vehicles, for MY 2015 through 2025.
Thus, in terms of the scope of coverage
of the respective state and federal
programs, the ACC program is
comparable to the combined Federal
Tier 3 Motor Vehicle Emissions
Standards and the 2017 and later MY
Light-duty Vehicle GHG Standards, with
an additional mandate to force the
development and deployment of noninternal-combustion-engine technology.
According to CARB, the ACC program
was intended to address California’s
near and long-term ozone issues as well
as certain specific GHG emission
reduction goals.210 78 FR 2114. See also
78 FR 2122, 2130–2131. The ACC
208 EPA does not take any position at this point
on what effect California’s December 2018
amendment to its ‘‘deemed to comply’’ provision,
or its July 2019 ‘‘framework’’ announcement, may
of their own force have had on the continued
validity of the January 2013 waiver. EPA may
address that issue in a separate, future action.
209 The LEV regulations in question include
standards for both GHG and criteria pollutants
(including ozone and PM).
210 ‘‘The Advanced Clean Cars program . . . will
reduce criteria pollutants . . . and . . . help
achieve attainment of air quality standards; The
Advanced Clean Cars Program will also reduce
greenhouse gases emissions as follows: by 2025,
CO2 equivalent emissions will be reduced by 13
million metric tons (MMT) per year, which is 12
percent from base line levels; the reduction
increases in 2035 to 31 MMT/year, a 27 percent
reduction from baseline levels; by 2050, the
proposed regulation would reduce emissions by
more than 40 MMT/year, a reduction of 33 percent
from baseline levels; and viewed cumulatively over
the life of the regulation (2017–2050), the proposed
Advanced Clean Cars regulation will reduce by
more than 850 MMT CO2-equivalent, which will
help achieve the State’s climate change goals to
reduce the threat that climate change poses to
California’s public health, water resources,
agriculture industry, ecology and economy.’’ 78 FR
2114. CARB Resolution 12–11, at 19, (January 26,
2012), available in the docket for the January 2013
waiver action, Document No. EPA–HQ–OAR–2012–
0562, the docket for the ACC program waiver.
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51329
program regulations impose multiple
and varying complex compliance
obligations that have simultaneous, and
sometimes overlapping, deadlines with
each standard. These deadlines began in
2015 and are scheduled to be phased in
through 2025. For example, compliance
with the GHG requirements began in
2017 and will be phased in through
2025.211 The implementation schedule
and the interrelationship of regulatory
provisions with each of the three
standards together demonstrates that
CARB intended that at least the GHG
and ZEV standards, if not also the LEV
standards, would be implemented as a
cohesive program. For example, in its
ACC waiver request, CARB stated that
the ‘‘ZEV regulation must be considered
in conjunction with the proposed LEV
III amendments. Vehicles produced as a
result of the ZEV regulation are part of
a manufacturer’s light-duty fleet and are
therefore included when calculating
fleet averages for compliance with the
LEV III GHG amendments.’’ CARB’s
Initial Statement of Reasons at 62–63.212
CARB also noted ‘‘[b]ecause the ZEVs
have ultra-low GHG emission levels that
are far lower than non-ZEV technology,
they are a critical component of
automakers’ LEV III GHG standard
compliance strategies.’’ Id. CARB
further explained that ‘‘the ultra-low
GHG ZEV technology is a major
component of compliance with the LEV
III GHG fleet standards for the overall
light duty fleet.’’ Id. CARB’s request also
repeatedly touted the GHG emissions
benefits of the ACC program. Up until
the ACC program waiver request, CARB
had relied on the ZEV requirements as
a compliance option for reducing
criteria pollutants. Specifically,
California first included the ZEV
requirement as part of its first LEV
program, which was then known as LEV
I, that mandated a ZEV sales
requirement that phased-in starting with
the 1998 MY through 2003 MY. EPA
issued a waiver of preemption for these
regulations on January 13, 1993 (58 FR
4166 (January 13, 1993). Since this
initial waiver of preemption, California
has amended the ZEV requirements
multiple times and EPA has
211 As discussed above, California has further
entered into a voluntary agreement with four
automobile manufacturers that amongst other
things, purports to allow compliance with a less
stringent program than either the program that was
the subject of the 2013 waiver or the Federal
standards promulgated in 2012. See https://
www.gov.ca.gov/2019/07/25/california-and-majorautomakers-reach-groundbreaking-frameworkagreement-on-clean-emission-standards/ (last
visited Aug. 30, 2019).
212 Available in the docket for the January 2013
waiver decision, Docket No. EPA–HQ–OAR–2012–
0562.
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subsequently granted waivers for those
amendments. Notably, however, in the
ACC program waiver request, California
also included a waiver of preemption
request for ZEV amendments that
related to 2012 MY through 2017 MY
and new requirements for 2018 MY
through 2025 MY (78 FR 2118–9).
Regarding the ACC program ZEV
requirements, CARB’s waiver request
noted that there was no criteria
emissions benefit in terms of vehicle
(tank-to-wheel—TTW) emissions
because its LEV III criteria pollutant
fleet standard was responsible for those
emission reductions.213 CARB further
noted that its ZEV regulation was
intended to focus primarily on zero
emission drive—that is, battery electric
(BEVs), plug-in hybrid electric vehicles
(PHEVs), and hydrogen fuel cell
vehicles (FCVs)—in order to move
advanced, low GHG vehicles from
demonstration phase to
commercialization (78 FR 2122, 2130–
31). Specifically, for 2018 MY through
2025 MY, the ACC program ZEV
requirements mandate use of
technologies such as BEVs, PHEVs and
FCVs, in up to 15% of a manufacturer’s
California fleet by MY 2025 (78 FR
2114). Additionally, the ACC program
regulations provide various compliance
flexibilities allowing for substitution of
compliance with one program
requirement for another. For instance,
manufacturers may opt to over-comply
with the GHG fleet standard in order to
offset a portion of their ZEV compliance
requirement for MY 2018 through 2021.
Further, until MY 2018, sales of BEVs
(since MY 2018, limited to FCVs) 214 in
California count toward a
manufacturer’s ZEV credit requirement
in CAA section 177 States. This is
known as the ‘‘travel provision’’ (78 FR
2120).215 For their part, the GHG
213 ‘‘There is no criteria emissions benefit from
including the ZEV proposal in terms of vehicle
(tank-to-wheel or TTW) emissions.’’ CARB ACC
waiver request at 15 (May 2012), EPA–HQ–OAR–
2012–0562–0004.
214 This kind of ZEV technology continues to
present technological challenges and in 2006, for
instance, EPA granted California a waiver of its ZEV
standards through the 2011MY but due to feasibility
challenges declined to grant a waiver for MY 2012
and subsequent model years. See 71 FR 78190; EPA,
EPA ZEV Waiver Decision Document, EPA–HQ–
OAR–2004–0437 (Dec. 21, 2006).
215 On March 11, 2013, the Association of Global
Automakers and Alliance of Automobile
Manufacturers filed a petition for reconsideration of
the January 2013 waiver grant, requesting that EPA
reconsider the decision to grant a waiver for MYs
2018 through 2025 ZEV standards on technological
feasibility grounds. Petitioners also asked for
consideration of the impact of the travel provision,
which they argue raise technological feasibility
issues in CAA section 177 States, as part of the
agency’s review under the third waiver prong, CAA
section 209(b)(1)(C). EPA continues to evaluate the
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emission regulations include an
optional compliance provision that
allows manufacturers to demonstrate
compliance with CARB’s GHG
standards by complying with applicable
Federal GHG standards. This is known
as the ‘‘deemed to comply’’ provision.
Since proposal, California has amended
its regulations to provide that the
‘‘deemed to comply’’ provision only
applies to the standards originally
agreed to by California, the federal
government, and automakers in 2012. In
other words, automobile manufacturers
would not be able to rely on the
‘‘deemed to comply’’ provision for any
revision to those 2012 standards.
California has further entered into a
voluntary agreement with four
automobile manufacturers that amongst
other things, requires the automobile
manufacturers to refrain from
challenging California’s GHG and ZEV
programs, and provides that California
will accept automobile manufacturer
compliance with a less stringent
standard than either the California
program that was the subject of the 2013
waiver or the Federal standards as
promulgated in 2012.
As explained in the SAFE proposal
(83 FR 83 FR 23245–46), up until the
2008 GHG waiver denial, EPA had
interpreted CAA section 209(b)(1)(B) as
requiring a consideration of California’s
need for a separate motor vehicle
program designed to address local or
regional air pollution problems and not
whether the specific standard that is the
subject of the waiver request is
necessary to meet such conditions (73
FR 12156; March 6, 2008). We also
explained that California would
typically seek a waiver of particular
aspects of its new motor vehicle
program up until the ACC program
waiver request. We further explained
that in the 2008 GHG waiver denial,
which was a waiver request for only
GHG emissions standards, EPA had
determined that its interpretation of
CAA section 209(b)(1)(B) as calling for
a consideration of California’s need for
a separate motor vehicle program was
not appropriate for GHG standards
because such standards are designed to
address global air pollution problems in
contrast to local or regional air pollution
problems specific to and caused by
conditions specific to California (73 FR
12156–60). In the 2008 GHG waiver
petition. As explained below, in this action EPA is
not taking final action with regard to the proposed
determinations under the third waiver prong.
Whether and how EPA will respond to the March
2013 petition will be considered in connection with
a potential future final action with respect to the
proposed third prong determinations set forth in the
SAFE proposal.
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denial, EPA further explained that its
previous reviews of California’s waiver
request under CAA section 209(b)(1)(B)
had usually been cursory and
undisputed, as the fundamental factors
leading to California’s air pollution
problems—geography, local climate
conditions (like thermal inversions),
significance of the motor vehicle
population—had not changed over time
and over different local and regional air
pollutants. These fundamental factors
applied similarly for all of California’s
air pollution problems that are local or
regional in nature. In the 2008 GHG
waiver denial, EPA noted that
atmospheric concentrations of GHG are
substantially uniform across the globe,
based on their long atmospheric life and
the resulting mixing in the atmosphere.
EPA therefore posited that with regard
to atmospheric GHG concentrations and
their environmental effects, the
California specific causal factors that
EPA had considered when reviewing
previous waiver applications under
CAA section 209(b)(1)(B)—the
geography and climate of California, and
the large motor vehicle population in
California, which were considered the
fundamental causes of the air pollution
in California—do not have the same
relevance to the question at hand. EPA
explained that the atmospheric
concentration of GHG in California is
not affected by the geography and
climate of California. The long duration
of these gases in the atmosphere means
they are well-mixed throughout the
global atmosphere, such that their
concentrations over California and the
U.S. are substantially the same as the
global average. The number of motor
vehicles in California, while still a
notable percentage of the national total
and still a notable source of GHG
emissions in the State, is not a
significant percentage of the global
vehicle fleet and bears no closer relation
to the levels of GHG in the atmosphere
over California than any other
comparable source or group of sources
of GHG anywhere in the world.
Emissions of greenhouse gases from
California cars do not generally remain
confined within California’s local
environment but instead become one
part of the global pool of GHG
emissions, with this global pool of
emissions leading to a relatively
homogenous concentration of GHG over
the globe. Thus, the emissions of motor
vehicles in California do not affect
California’s air pollution problem in any
way that is different from how
emissions from vehicles and other
pollution sources all around the U.S.
(and, for that matter, the world) do.
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Similarly, the emissions from
California’s cars do not only affect the
atmosphere in California but in fact
become one part of the global pool of
GHG emissions that affect the
atmosphere globally and are distributed
throughout the world, resulting in
basically a uniform global atmospheric
concentration. EPA then applied this
reasoning to the GHG standards at issue
in the 2008 GHG waiver denial. Having
limited the meaning of this provision to
situations where the air pollution
problem was local or regional in nature,
EPA found that California’s GHG
standards did not meet this criterion.
Additionally, in the 2008 GHG waiver
denial, EPA also applied an alternative
interpretation where EPA would
consider effects of the global air
pollution problem in California in
comparison to the effects on the rest of
the country and again addressed the
GHG standards separately from the rest
of California’s motor vehicle program.
Under this alternative interpretation,
EPA considered whether impacts of
global climate change in California were
sufficiently different from impacts on
the rest of the country such that
California could be considered to need
its GHG standards to meet compelling
and extraordinary conditions. EPA
determined that the waiver should be
denied under this alternative
interpretation as well. 83 FR 23245–46.
In 2009, EPA reversed its previous
denial and granted California’s
preemption waiver request for its GHG
emission standards ‘‘for 2009 and later
model years.’’ 74 FR 32744. EPA
announced that it was returning to what
it styled as the traditional interpretation
of CAA section 209(b)(1)(B), under
which it would only consider whether
California had a ‘‘need for its new motor
vehicle emissions program as a whole,’’
id. at 32761. It determined that
California did, based on ongoing
NAAQS attainment issues. Id. at 32762–
32763. In the alternative, while not
adopting either of the 2008 waiver
denial’s alternative approaches, EPA
also determined that California needed
its GHG standards as part of its NAAQS
attainment strategy due to the indirect
effects of climate change on groundlevel ozone formation, id. at 32763, and
that waiver opponents had not met their
burden of proof to demonstrate that
California climate impacts ‘‘are not
sufficiently different’’ to nationwide
impacts, id. at 32765. EPA also
determined that there were no grounds
to deny the waiver under CAA section
209(b)(1)(A) (whether the State’s
determination that its standards in the
aggregate are at least as protective as
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federal standards) or CAA section
209(b)(1)(C) (whether ‘‘such state
standards’’ and accompanying
enforcement procedures are inconsistent
with CAA section 202(a)). Id. at 32759,
32780.
B. EPA’s Authority To Reconsider and
Withdraw a Previously Granted Waiver
Under CAA Section 209(b)
In this action, EPA finalizes its
proposed determination that it has the
authority to withdraw a waiver in
appropriate circumstances. EPA
explains below (in this subsection, III.B)
the basis for its conclusions that it has
authority to withdraw a waiver in
appropriate circumstances, and (in
subsections III.C and III.D) that it is
appropriate for EPA to exercise that
authority at this time.216
Agencies generally have inherent
authority to reconsider their prior
actions. Nothing in CAA section 209(b)
indicates Congressional intent to
remove that authority with respect to
waivers that it has previously granted.
The text, structure, and context of CAA
section 209(b) support EPA’s
interpretation that it has this authority.
And no cognizable reliance interests
have accrued sufficient to foreclose
EPA’s ability to exercise this authority
here.
In considering EPA’s authority to
withdraw a waiver, it is clear that EPA
has authority to review and grant
California’s applications for a waiver
based on its evaluation of the
enumerated criteria in CAA section
209(b). In this action, we affirm the
Agency’s proposed view that the
absence of explicit language with regard
to withdrawal of a waiver does not
foreclose agency reconsideration and
withdrawal of a waiver.
As explained at proposal, California’s
ability to obtain a waiver under CAA
section 209(b)(1) in the first instance is
not unlimited. Specifically, CAA section
216 As a general matter, for purposes of
determining if withdrawal is appropriate, EPA may
initiate reconsideration sua sponte where CARB
amends either a previously waived standard or
accompanying enforcement procedure. 47 FR 7306,
7309 (Feb. 18, 1982). See also 43 FR 998 (January
5, 1978) (Grant of reconsideration to address
portions of waived California’s motorcycle program
that California substantially amended).
Additionally, if California acts to amend either a
previously waived standard or accompanying
enforcement procedure, the amendment may be
considered to be within-the-scope of a previously
granted waiver provided that it does not undermine
California’s determination that its standards, in the
aggregate, are as at least as protective of public
health and welfare as applicable Federal standards,
does not affect its consistency with section 202(a)
of the Act, and raises no new issues affecting EPA’s
previous waiver decisions. See, e.g., 51 FR 12391
(April 10, 1986) and 65 FR 69673, 69674 (November
20, 2000).
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209(b)(1) provides that ‘‘no such waiver
will be granted’’ if the Administrator
finds any of the following: ‘‘(A)
[California’s] determination [that its
standards in the aggregate will be at
least as protective] is arbitrary and
capricious, (B) [California] does not
need such State standards to meet
compelling and extraordinary
conditions, or (C) such State standards
and accompanying enforcement
procedures are not consistent with
section [202(a)].’’ CAA section
209(b)(1)(A)–(C), 42 U.S.C.
7543(b)(1)(A)–(C) (emphasis added).
CAA Section 209(b)(1) is therefore,
premised on EPA review and grant of a
waiver prior to California’s enforcement
of vehicle and engine standards unless
certain enumerated criteria are met.
Congress could have simply carved
out an exemption from preemption
under CAA section 209(b)(1), similar to
the exemption it created in CAA section
211(c)(4)(B) for California fuel controls
and prohibitions. Under CAA section
211(c)(4)(A), states and political
subdivisions are preempted from
prescribing or attempting ‘‘to enforce,
for purposes of motor vehicle emission
control, any control or prohibition,
respecting any characteristic or
component of a fuel or fuel additive in
a motor vehicle or motor vehicle
engine’’ if EPA has prescribed a control
or prohibition applicable to such
characteristic or component of the fuel
or fuel additive under CAA section
211(c)(1). EPA may waive preemption
for states other than California to
prescribe and enforce nonidentical fuel
controls or prohibitions subject to
certain conditions. Further, waivers are
not required where states adopt state
fuel controls or prohibitions that are
identical to federal controls or for
California to adopt fuel controls and
prohibitions. CAA sections
211(c)(4)(A)(ii) and 211(c)(4)(B). This
stands in stark contrast to CAA section
209(b), which requires EPA to make a
judgment about California’s request for
a waiver of preemption.217 Notably,
CAA section 211(c)(4)(B) also crossreferences CAA section 209(b)(1): ‘‘(B)
Any State for which application of
section 7543(a) of this title has at any
time been waived under section
7543(b) 218 of this title may at any time
217 ‘‘Noteworthy is the fact that under the terms
of the Act, EPA approval of California fuel
regulations is not required. See Act section
211(c)(4)(B), 42 U.S.C. 7545(c)(4)(B).’’ (Emphasis in
original.) Motor Vehicle Mfrs. Ass’n v. NYS Dep. of
Envt’l Conservation, 17 F.3d 521, 527 (2d Cir. 1994).
218 CAA section 211(c)(4)(B), 42 U.S.C.
7545(c)(4)(B). This provision does not identify
California by name. Rather, it references CAA
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prescribe and enforce, for the purpose of
motor vehicle emission control, a
control or prohibition respecting any
fuel or fuel additive.’’ CAA section
211(c)(4)(B).
Under the third waiver prong, CAA
section 209(b)(1)(C), for example, EPA is
to review the consistency of California’s
standards with CAA section 202(a), a
provision of the Clean Air Act that EPA
solely implements.219 CAA Section
202(a) provides in relevant part that
standards promulgated under this
section ‘‘shall take effect after such
period as the Administrator finds
necessary to permit the development
and application of the requisite
technology, giving appropriate
consideration to the cost of compliance
within such period.’’
In tying the third waiver prong to
CAA section 202(a), Congress gave a
clear indication that, in determining
whether to grant a waiver request, EPA
is to engage in a review that involves a
considerable degree of future prediction,
due to the expressly future-oriented
terms and function of CAA section
202(a).220 In turn, where circumstances
section 209(b), which applies on its face to ‘‘any
State which has adopted standards (other than
crankcase emission standards) for the control of
emissions from new motor vehicles or new motor
vehicle engines prior to March 30, 1966.’’ California
is the only State that meets this requirement. See
S. Rep. No. 90–403 at 632 (1967).
219 EPA has explained that California’s standards
are not consistent with CAA section 202(a) if there
is inadequate lead time to permit the development
of technology necessary to meet those requirements,
given appropriate consideration to the cost of
compliance within that time. California’s
accompanying enforcement procedures would also
be inconsistent with CAA section 202(a) if the
Federal and California test procedures were
inconsistent. Legislative history indicates that
under CAA section 209(b)(1)(C), EPA is not to grant
a waiver if it finds that there is: ‘‘Inadequate time
to permit the development of the necessary
technology given the cost of compliance within that
time period.’’ H. Rep. No. 728, 90th Cong., 1st Sess.
21 (1967); ‘‘That California standards are not
consistent with the intent of section 202(a) of the
Act, including economic practicability and
technological feasibility.’’ S. Rep. No. 403, 90th
Cong. 1st Sess. 32 (1967).
220 There is another textual indication that EPA’s
grant of a waiver is not limited to a snapshot in
time, with the Agency having no authority to ever
revisit, reconsider, and, where appropriate, modify
or withdraw waivers that it has previously granted.
CAA section 209(b) provides authority to waive the
preemptive provision of CAA section 209(a). CAA
section 209(a) forbids states from ‘‘adop[ting] or
attempt[ing] to enforce’’ vehicle emission standards;
so states cannot do so without or beyond the scope
of a waiver. EPA must presume that ‘‘attempt to
enforce’’ is not surplusage; it must mean something,
and its potential meanings all suggest some ability
on EPA’s part to consider actions on the state’s part
separate from the state’s ‘‘adopt[ion]’’ of statutory
or regulatory provisions and submission to EPA of
a waiver request for those provisions. An ‘‘attempt
to enforce’’ could potentially mean either a state’s
attempt to de facto control emissions without
having de jure codified emissions control
requirements, or it could refer to a state’s
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arise that suggest that such predictions
may have been inaccurate, it necessarily
follows that EPA has authority to revisit
those predictions with regard to rules
promulgated under CAA section 202(a),
the requirements of that section, and
their relation to the California standards
at issue in a waiver request, and, on
review, withdraw a previously granted
waiver where those predictions proved
to be inaccurate.
Under CAA section 202(a), standards
are often technology-forcing and thus
involve predictions on the part of EPA
with regard to future trends in
technological and economic factors.
This calls for ‘‘substantial room for
deference to the EPA’s expertise in
projecting the likely course of
development.’’ Natural Resources
Defense Council v. EPA (NRDC), 655
F.2d 318, 331 (D.C. Cir. 1981)
(upholding EPA’s lead time projections
for emerging technologies as
reasonable). The D.C. Circuit has
recognized that EPA might modify
standards ‘‘if the actual future course of
technology diverges from expectation.’’
Id. at 329. It cannot be that EPA has the
inherent authority to revisit and revise
its own determinations under CAA
section 202(a), but it lacks authority to
revisit those same determinations under
CAA section 209(b).221
Thus, the structure of the statute—
where State standards may only be
granted a waiver under CAA section
209(b) to the extent that they are
consistent with CAA section 202(a)—
confirms that EPA has inherent
authority to reconsider its prior
determination that a request for a waiver
for California standards met the criteria
of CAA section 209(b). This renders
untenable the stance taken by some
commenters that EPA is somehow
precluded from conducting a
subsequent review and withdrawing a
waiver even when it becomes aware that
its initial predictions in this regard have
proven inaccurate.
enforcement actions under a program that it has
already ‘‘adopt[ed].’’ Under either scenario, the
prohibition on ‘‘attempt[ing] to enforce’’ envisions
state activity outside the scope of what can be
determined by EPA from the face of a waiver
submission. The prohibited activity is not limited
to that which can be subject to a snapshot, onetime-only waiver application, which is further
support for the conclusion that EPA has authority
to reconsider its action on such applications in light
of activity later in time than or outside the
authorized scope of a waiver once granted.
221 According to one commenter, ‘‘it would be
very odd if § 209(b) waivers were a one-way ratchet
that could be granted but never rescinded. . . . For
example, it would run contrary to the statutory
scheme to require EPA to leave a waiver in place
even after the compelling and extraordinary
conditions that justified the waiver are fully
addressed.’’ Comments of the Alliance of
Automobile Manufacturers at 182. EPA agrees.
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Further, as discussed in the SAFE
proposal, the legislative history of CAA
section 209(b) confirms that Congress
intended EPA’s authority under CAA
section 209(b) to include the authority
to withdraw a previously granted waiver
under appropriate circumstances. 83 FR
43242–43243. See S. Rep. No. 50–403, at
34 (1967) (‘‘Implicit in this provision is
the right of the [Administrator] to
withdraw the waiver at any time [if]
after notice and an opportunity for
public hearing he finds that the State of
California no longer complies with the
conditions of the waiver.’’).
Some commenters that oppose the
proposed withdrawal of the waiver
concede that the agency may review
California’s waiver applications under
the third waiver prong but then argue
that such agency review is a ‘‘narrow
one.’’ 222 Under CAA Section 209, they
contend, grants California ‘‘maximum
authority’’ to set engine and vehicle
standards. Commenters’ objection to the
instant withdrawal therefore appears to
be grounded in some belief that CAA
section 209(b) calls for complete
deference to California. This view is
erroneous. EPA has in fact previously
initiated reconsideration under the third
waiver prong, CAA section 209(b)(1)(C),
in order to ‘‘vacate that portion of the
waiver previously granted under section
209(b)’’ in response to CARB’s post
waiver modification for previously
waived standards. 47 FR 7309. In that
reconsideration action, EPA affirmed
the grant of a waiver in the absence of
‘‘findings necessary to revoke
California’s waiver of Federal
preemption for its motorcycle fill-pipe
and fuel tank opening regulations.’’ 43
FR 7310. Additionally, EPA has
explained that reconsideration will be
initiated where leadtime concerns arise
after the grant of an initial waiver. ‘‘If
California’s leadtime projections later
prove to have been overly optimistic,
the manufacturer can ask that California
reconsider its standard, if they are
unsuccessful in securing such relief, the
222 According to several commenters, CAA
section 209(b) contains no express delegation of
authority to EPA to withdraw a waiver, and in
proposing to revoke a previous waiver ‘‘EPA has
arrogated to itself power only Congress can
exercise.’’ Comments of the Center for Biological
Diversity, Conservation Law Foundation,
EarthJustice, Environmental Defense Fund,
Environmental Law and Policy Center, Natural
Resources Defense Council, Public Citizen, Inc.,
Sierra Club, and Union of Concerned Scientists at
68. One commenter also argued that either EPA
lacks authority to revoke a previously granted
waiver or that any authority to do so is ‘‘limited.’’
‘‘The unique text and structure of this section limits
EPA’s authority, contrary to EPA’s assertion of
open-ended revocation authority in the proposal.’’
Comments of the California Air Resources Board at
340.
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manufacturers could petition EPA to
reconsider the waiver.’’ 49 FR 18895,
18896 n.104. Further, EPA has in the
past repeatedly denied portions of
several waiver requests.223 EPA has also
historically deferred or limited the
terms of its grant of aspects of some
waiver requests as a means of ensuring
consistency with CAA section 202(a).224
It is precisely these kinds of EPA actions
that have forestalled withdrawal of any
waiver to date—not any lack of
authority on EPA’s part to withdraw.
None of the commenters, however,
provided explanations as to why their
apparent view of maximum deference to
California is not implicated by EPA’s
authority to either deny a waiver request
or to modify the terms of a waiver
request in the course of granting one.
And EPA’s 2009 reversal of its 2008
denial supports, and demonstrates the
long-held nature of, its position that
EPA has authority to reconsider and
reverse its actions on waiver
applications.225
At least one commenter argued that
this legislative history did not support
the position that EPA has authority to
withdraw a previously granted waiver
because the legislative history relates to
the original creation of the waiver
provision in the Air Quality Act of 1967,
whereas the Clean Air Act Amendments
of 1977 revised language in the root text
of CAA section 209(b)(1). Specifically,
Congress in 1977 amended CAA section
209(b)(1) to establish as a prerequisite
for the grant of a waiver that the State
determine that its standards ‘‘will be, in
the aggregate, at least as protective of
public health and welfare as applicable
Federal standards’’ for EPA to issue a
waiver, rather than the original
requirement that State standards be
‘‘more stringent’’ than corresponding
federal standards.226 EPA disagrees that
223 38 FR 30136 (November 1, 1973) (denial of
waiver for MY 1975 HC and CO standards ‘‘because
costs of compliance within the lead time remaining
is excessive.’’); 43 FR 998 (January 5, 1978) (denial
of waiver for MY 1978 test procedures due to
insufficient lead time); 40 FR 30311 (July 18, 1975)
(denial of waiver due to insufficient lead time for
MY 1977).
224 58 FR 4166 (January 13, 1993) (deferring
consideration of portions of waiver request); 67 FR
54180, 81 n.1 (August 21, 2002) (granting waiver
with certain exceptions).
225 In seeking reconsideration of the March 8,
2008 waiver denial, CARB also noted that ‘‘EPA has
the inherent authority to reconsider its previous
waiver denial’’ 74 FR 32747.
226 The intent of the 1977 amendment was to
accommodate California’s particular concern with
NOX, which the State regarded as a more serious
threat to public health and welfare than carbon
monoxide. California was eager to establish oxides
of nitrogen standards considerably more stringent
than applicable Federal standards, but
technological developments posed the possibility
that emission control devices could not be
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this amendment was either intended to
deprive EPA of authority to withdraw a
previously granted waiver when the
Administrator finds applicable one or
more of the three criteria in CAA section
209(b)(1) under which a waiver is
inappropriate, or that the amendment
can be reasonably construed to have had
such effect. There is no indication that
the amendment was intended to alter
EPA’s authority under the original
provision. Nor did the amendment alter
the language of the criteria enumerated
in CAA section 209(b). In any event, as
previously discussed above, EPA has
initiated reconsideration for purposes of
revoking a waiver since the 1977 CAA
amendments. See for example, 47 FR
7306 (Feb. 18, 1982) (Agency
reconsideration of grant of waiver for
purposes of withdrawal in response to
CARB’s post waiver modification for
previously waived standards).
Some commenters question whether
EPA has any authority at all to
reconsider a previously granted waiver.
It is well-settled, however, that EPA has
inherent authority to reconsider, revise,
or repeal past decisions to the extent
permitted by law. At proposal, EPA
explained that, although CAA section
209(b)(1) may not expressly
communicate that EPA has authority to
reconsider and withdraw a waiver, both
the legislative history of the waiver
provision and fundamental principles of
administrative law establish that EPA
necessarily possesses that authority. The
authority to reconsider prior agency
decisions need not be rooted in any
particular ‘‘magic words’’ in statutory
text. Subject to certain limitations,
administrative agencies possess
inherent authority to reconsider their
decisions. See ConocoPhillips Co. v.
EPA, 612 F.3d 822, 832 (5th Cir. 2010)
(‘‘Embedded in an agency’s power to
make a decision is its power to
reconsider that decision.’’); Dun &
Bradstreet Corp. Found. v. U.S. Postal
Serv., 946 F.2d 189, 193 (2d Cir. 1991)
(‘‘It is widely accepted that an agency
may, on its own initiative, reconsider its
interim or even its final decisions,
regardless of whether the applicable
statute and agency regulations expressly
constructed to meet both the stringent California
oxides of nitrogen standard and the stringent
federal carbon monoxide standard. Motor & Equip.
Mfrs. Ass’n, Inc. v. EPA, 627 F.2d at 1110 n.32. EPA
has explained that the phrase ‘‘in the aggregate’’
was specifically aimed at allowing California to
adopt CO standards less stringent than the
corresponding federal standards, while at the same
time adopting more stringent NOX standards, as
part of California’s strategy to address ozone
problems. California reasoned that a relaxed CO
standard would facilitate the technological
feasibility of more stringent NOX standards. 78 FR
43247.
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51333
provide for such review.’’); Mazaleski v.
Treusdell, 562 F.2d 701, 720 (D.C. Cir.
1977) (‘‘[A]n agency has the inherent
power to reconsider and change a
decision if it does so within a
reasonable period of time.’’); Belville
Min. Co. v. United States, 999 F.2d 989,
997 (6th Cir. 1993) (‘‘Even where there
is no express reconsideration authority
for an agency, however, the general rule
is that an agency has inherent authority
to reconsider its decision, provided that
reconsideration occurs within a
reasonable time after the first
decision.’’).
The commenters’ position that EPA
does not have any authority to
reconsider either a grant or a denial of
a waiver founders in light of these
principles. As explained in the SAFE
proposal, 83 FR 43242–43243, EPA does
have that authority, in part because its
interpretations of the statutes it
administers ‘‘are not carved in stone.’’
Chevron U.S.A. v. NRDC, 467 U.S. 837,
863 (1984). An agency ‘‘must consider
varying interpretations and the wisdom
of its policy on a continuing basis.’’ Id.
at 863–64. Notably, in response to
CARB’s request, EPA has previously
reconsidered and reversed a previous
waiver denial.227 Similarly, in keeping
with agency CAA section 209(b)(1)
practice, EPA has reconsidered its
previous decision to grant a waiver for
portions of California’s motorcycle
program in response to a petition for
reconsideration from the motorcycle
industry.228
Other commenters assert that EPA’s
proposal to withdraw the waiver is
solely based on a change in Presidential
administration. There is no basis for this
claim. While EPA noted in the SAFE
proposal that the agency can review and
reconsider a prior decision ‘‘in response
to . . . a change in administration,’’
National Cable & Telecommunications
Ass’n v. Brand X Internet Services, 545
U.S. 967, 981 (2005), we further
acknowledged that ‘‘the EPA must also
be cognizant where it is changing a prior
position and articulate a reasoned basis
for the change.’’ FCC v. Fox Television
Stations, Inc., 556 U.S. 502, 515 (2009).
83 FR 43242–43243, 43248. In keeping
with the proposed waiver withdrawal,
under the second waiver prong, CAA
section 209(b)(1)(B), as discussed below,
EPA in this document finalizes a
determination that California does not
227 EPA reconsidered the 2008 GHG waiver denial
in response to CARB’s request and granted it upon
reconsideration. 72 FR 32744 (July 9, 2009). See
also 43 FR 998 (January 5, 1978) (Grant of
reconsideration to address portions of waived
California’s motorcycle program that California
substantially amended).
228 43 FR 998 (January 5, 1978).
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need its GHG and ZEV standards to
meet compelling and extraordinary
conditions, within the meaning of those
terms as they are used in the statute,
that differs from its determination on
the same question made in the course of
granting the ACC program waiver.
Additionally, the agency, in response to
a request by automobile manufacturers,
who have consistently expressed
reservations over their ability to comply
with MY 2022–2025 GHG standards, is
reconsidering standards that are the
compliance mechanism for CARB’s MY
2022–2025 GHG standards. This is the
compliance mechanism that California
had provided in response to automobile
manufacturers request and support for
the waiver of preemption.
At proposal, EPA noted that
California had given public notice that
it was considering amending its
‘‘deemed to comply’’ provision to
provide that that provision would be
applicable only to vehicles that meet the
standards originally agreed to by
California, the federal government, and
automakers in 2012. See 83 FR 43252
n.589. California finalized that
amendment to its regulations after the
close of the SAFE comment period, in
late 2018. California more recently, in
July 2019, announced a ‘‘framework’’
agreement with certain automakers that
purported to establish a ‘‘nationwide’’
standards program different from both
the 2012 Federal standards and from the
California program for which EPA
granted the January 2013 waiver. These
actions on California’s part, while not
proposed as bases for waiver
withdrawal in the August 2018 SAFE
proposal, as those actions had not yet
transpired at the time of proposal, and
while not necessary for the finalization
of this action, do provide further
support for this action (although EPA
does not view them as necessary
predicates for this action and would be
taking this action even in their absence).
Thus, contrary to some commenters’
assertions, reconsideration of the grant
of the waiver, and EPA’s proposal to
withdraw the waiver, was not solely
motivated by a change in Presidential
administration. The policy, technical,
and legal considerations discussed in
the proposal and in this final action
provide the rationale for EPA’s actions
here. It is therefore distinguishable from
the instance where, for example, an
agency undertook reconsideration
subsequent to a change in
administration because ‘‘the withdrawn
decision was doubtful in light of
changing policies.’’ Coteau Properties
Co. v. DOI, 53 F.3d 1466, 1479 (8th Cir.
1995).
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Further, as earlier noted, California
has now entered into a voluntary
agreement with at least four automobile
manufacturers that amongst other
things, requires the automobile
manufacturers to refrain from
challenging California’s GHG and ZEV
programs, and provides that California
will accept automobile manufacturer
compliance with a less stringent
standard than either the California
program that was the subject of the 2013
waiver or the Federal standards as
promulgated in 2012.229 This agreement
appears to materially depart from the
existing grant of waiver for MY 2021–
2025 GHG standards, is in tension with
California’s above-mentioned
amendment of the ‘‘deemed to comply’’
provision, and raises an additional
reason to question whether California
‘‘needs’’ their existing standards within
the meaning of CAA section
209(b)(1)(B), given that California has
announced it is proceeding to create a
new ‘‘voluntary’’ program that would
relax the stringency of some aspects of
those standards. That is to say,
California’s apparent weakening of its
program as it was originally submitted
for waiver calls into question whether it
needs that program. EPA believes that
this provides additional support for its
conclusion, as set forth in subsections
III.B and III.D, both that it has authority
to withdraw its grant of the waiver and
that California does not in fact need
these waived standards to meet
‘‘compelling and extraordinary
conditions,’’ CAA section 209(b)(1)(B),
if the State is itself already proceeding
to allow departures from those waived
standards.230 EPA further believes that
California cannot claim reliance
interests when it is undertaking steps to
alter the status quo.
In short, the text, structure, and
history of CAA section 209(b)(1) support
EPA’s authority to withdraw previously
granted waivers.231 At the same time,
nothing in CAA section 209(b)(1) can
reasonably be read to preclude the
agency from withdrawing a previously
issued waiver under appropriate
229 https://www.gov.ca.gov/2019/07/25/californiaand-major-automakers-reach-groundbreakingframework-agreement-on-clean-emissionstandards/.
230 Again, neither California’s late 2018
amendment to its ‘‘deemed to comply’’ provision,
nor its July 2019 announcement of a new
‘‘framework,’’ are necessary bases for the action
EPA takes in this document; instead, they provide
further support for that action.
231 In 2009, EPA reconsidered the 2008 GHG
waiver denial at CARB’s request and granted it
upon reconsideration. 74 FR 32744. EPA noted the
authority to ‘‘withdraw a waiver in the future if
circumstances make such action appropriate.’’ See
74 FR 32780 n.222; see also id. at 32752–32753 n.50
(citing 50 S. Rep. No. 403, at 33–34).
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circumstances. EPA is not persuaded by
commenters’ assertions to the contrary.
In this action, EPA affirms the position
that the scope of review for California
waivers under CAA section 209(b)(1)
includes both a pre-grant review and,
where appropriate, post-grant review of
an approved waiver; that post-grant
review may, in appropriate
circumstances, result in a withdrawal of
a prior waiver. A withdrawal action
could be premised on any one of the
three findings in CAA section
209(b)(1)(A)–(C) that render a waiver
unavailable.
EPA also disagrees with some
commenters’ assertions that ostensible
reliance interests foreclose withdrawal
of the waiver for MY 2021–2025 GHG
and ZEV standards. According to these
commenters, ‘‘California, and the
section 177 states that have elected to
adopt those standards as their own have
incurred reliance interests ultimately
flowing from those standards. For
instance, California has incurred
reliance interests because it is mandated
to achieve an aggressive GHG emissions
reduction target for 2030.’’ 232 They
further state: ‘‘[b]ut EPA provides no
justification for applying that change in
policy retroactively to upend a five-yearold decision to which substantial
reliance interests have attached.’’
(Emphasis in original).233
The federal GHG standards that EPA
promulgated in 2012 included a
commitment to conduct and complete a
Mid-Term Evaluation (MTE) of the GHG
standards for MY 2022–2025, given the
lengthy phase-in compliance period,
EPA projections of control technology
availability or feasibility for MY 2021–
2025, and the fact that EPA promulgated
those standards in a joint action with
NHTSA, where NHTSA was acting
under a statute which limited its
promulgation of fuel economy standards
to periods of five years.234 See NRDC,
232 Comments
of CARB at 83.
of States of California, Connecticut,
Delaware, Hawaii, Iowa, Illinois, Maine, Maryland,
Minnesota, New Jersey, New Mexico, New York,
North Carolina, Oregon, Rhode Island, Vermont and
Washington, the Commonwealth of Massachusetts,
Pennsylvania and Virginia, the District of Columbia,
and the Cities of Los Angeles, New York, Oakland,
San Francisco and San Jose at 123; Comments of
CARB at 352.
234 40 CFR 86.1818–12(h). 77 FR 62624 (October
15, 2012). EPA notes in this regard that the
Supreme Court in Massachusetts v. EPA, in
rejecting the position that greenhouse gases are not
air pollutants under the general definition of that
term in CAA section 302 because, if they were,
EPA’s regulations of GHG emissions from the motor
vehicle fleet could intrude on DOT’s fuel economy
authority, opined that ‘‘[t]he two obligations may
overlap, but there is no reason to think the two
agencies cannot both administer their obligations
and yet avoid inconsistency.’’ 549 U.S. 497, 532
(2007). In order for the two agencies to do so, they
233 Comments
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655 F.2d at 329 (upholding EPA’s lead
time projections for emerging
technologies as reasonable, noting a
longer lead time tends to ‘‘give[ ] the
agency greater leeway to modify its
standards if the actual future course of
technology diverges from expectation.’’).
The 2012 rulemaking also established
the GHG standards for MY 2021–2025
that are the subject of the ‘‘deemed to
comply’’ provision. (i.e., California
allowed automobile manufacturers to
demonstrate compliance with
California’s GHG standards by
complying with EPA’s GHG standards).
The MTE construct required EPA to
issue a Final Determination by April 1,
2018 regarding whether the GHG
standards for MY 2022–2025 remained
appropriate under CAA section
202(a).235 Specifically, the MTE would,
amongst other things, assess the relevant
factors pertinent to setting standards
under CAA section 202(a), such as the
feasibility and practicability of the
standards, costs to vehicle
manufacturers and consumers, impacts
on the automobile industry, emissions
impacts, and safety impacts. In
comments during the 2012 national
GHG rulemaking, automakers supported
the MTE, and several expressly
predicated their support of the GHG
standards for MY 2022–2025 on the
MTE.236 In the waiver action, EPA
reiterated its commitment to the MTE in
light of these considerations.237
In these circumstances, where GHG
standards were being set far into the
future with an explicit commitment to
revisit them, where California agreed to
deem compliance with certain federal
GHG standards to constitute compliance
with California standards, and where all
parties were provided ample notice that
needed to take account of the fact that DOT’s fueleconomy authority faces temporal constraints that
EPA’s emissions authority does not. They did so
through the MTE, and the MTE mechanism
provided notice to all interested parties that EPA’s
2012 federal standards under CAA section 202(a),
and EPA’s January 2013 waiver grounded in part on
a finding that the State provisions subject to the
waiver were compatible with CAA section 202(a),
would be subject to review and possibly revision
within a few years of the waiver grant. Under these
circumstances, no reliance interests accrued
sufficient to foreclose EPA’s authority to reconsider
and withdraw the waiver.
235 The MTE process also called for a ‘‘draft
Technical Assessment Report’’ (to be prepared no
later than November 15, 2017), public comments on
that draft report, and public comments on whether
the model year 2022–2025 standards are
‘‘appropriate’’ under CAA section 202(a).
236 77 FR at 62636, 62652, 62785.
237 ‘‘EPA is committed to conducting a mid-term
evaluation for MYs 2022–2025 in close
coordination with NHTSA and CARB given the
long-time frame in implementing standards out to
MY 2025 and given NHTSA’s obligation to conduct
a separate rulemaking in order to establish final
standards for vehicles for those years.’’ 78 FR 2137.
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EPA would be revisiting federal
standards and, accordingly, the waiver
granted for a program that acceded to
those standards through the ‘‘deemed to
comply’’ provision, neither the State of
California nor other parties (such as
automakers) have reasonable reliance
interests sufficient to foreclose the
extension of federal standards to
California. Likewise, under CAA section
177, even though States other than
California, under certain circumstances
and conditions, may ‘‘adopt and
enforce’’ standards that are ‘‘identical to
the California standards for which EPA
has granted a waiver for such model
year,’’ given that Title I 238 does not call
for NAAQs attainment planning as it
relates to GHG standards, those States
that may have adopted California’s GHG
standards and ZEV standards for certain
MYs would also not have any reliance
interests as a result of the grant of the
ACC program waiver. As previously
noted, CAA section 177 States also lack
reliance interests sufficient to preclude
reconsideration and withdrawal of the
waiver both because they were on notice
of the commitment to review the federal
standards, as discussed above.239
Relatedly, with the revocation of these
standards in this action there will be no
‘‘standards identical to the California
standards for which a waiver has been
granted’’ that any state may adopt and
enforce, under CAA section 177(1).240
(States may not ‘‘tak[e] any action that
has the effect of creating a car different
from those produced to meet either
federal or California emission standards,
a so-called ‘third vehicle.’ ’’ Motor
Vehicle Mfrs. Ass’n of U.S., Inc. v. New
York State Dep’t of Envtl. Conservation,
17 F.3d 521, 528 (2d Cir. 1994)).
California also did not seek approval for
MY 2021–2025 GHG standards in its
2016 SIP approval request. 81 FR 39424,
27–28 (June 16, 2016).
As a general matter, ‘‘[w]henever a
question concerning administrative, or
judicial, reconsideration arises, two
opposing policies immediately demand
recognition: The desirability of finality,
on the one hand, and the public interest
238 Under title I of the Clean Air Act, EPA
establishes national ambient air quality standards
(NAAQS) to protect public health and welfare, and
has established such ambient standards for ozone,
carbon monoxide, nitrogen dioxide, sulfur dioxide,
lead, and particulate matter.
239 ‘‘This new State authority should not place an
undue burden on vehicle manufacturers who will
be required, in any event, to produce vehicles
meeting the California standards for sale in
California.’’ H.R. Conf. Rep. No. 95–294, 95th Cong.,
1st Sess. 337 (1977).
240 A State may not ‘‘make attempt[s] to enforce’’
California standards for which EPA has not waived
preemption. Motor Vehicle Mfrs. Ass’n v. NYS Dep.
of Envtl Conservation, 17 F.3d 521, 534 (2d Cir.
1994).
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in reaching what, ultimately, appears to
be the right result on the other.’’ Civil
Aeronautics Bd. v. Delta Air Lines, Inc.,
367 U.S. 316, 321–22 (1961). See also
ConocoPhillips, 612 F.3d at 832 (5th Cir.
2010) (‘‘Furthermore, reconsideration
also must occur within a reasonable
time after the decision being
reconsidered was made, and notice of
the agency’s intent to reconsider must
be given to the parties.’’); Belville Min.
Co. v. United States, 999 F.2d 989, 997
(6th Cir. 1993) (‘‘Even where there is no
express reconsideration authority for an
agency, however, the general rule is that
an agency has inherent authority to
reconsider its decision, provided that
reconsideration occurs within a
reasonable time after the first
decision.’’); Bookman v. United States,
453 F.2d 1263, 1265 (Fed. Cir. 1972)
(‘‘[A]bsent contrary legislative intent or
other affirmative evidence, this court
will sustain the reconsidered decision of
an agency, as long as the administrative
action is conducted within a short and
reasonable time period.’’).
For the reasons stated above, there
was no ‘‘finality’’ in the federal MY
2021–2025 GHG standards that EPA
promulgated in 2012 in the sense
required for cognizable reliance to
accrue sufficient to foreclose EPA’s
exercise of authority to reconsider and,
if appropriate, withdraw the waiver. Nor
is such ‘‘finality’’ to be found in the
January 2013 grant of the waiver for
California’s MY 2021–2025 GHG and
ZEV standards. As explained at
proposal, in granting the waiver for the
ACC program GHG and ZEV standards,
EPA had evaluated certain compliance
flexibilities allowed by California under
the third waiver prong, CAA section
209(b)(1)(C) (consistency with CAA
section 202(a)). Specifically, EPA
evaluated California regulations that
included an optional compliance
provision (the ‘‘deemed to comply’’
provision) that would allow automobile
and engine manufacturers to
demonstrate compliance with CARB’s
GHG standards for MY 2017–2025 by
complying with applicable national or
federal GHG standards. 78 FR 2136.
During the waiver proceedings, most
automobile manufacturers either
opposed the grant of the waiver for MY
2021–2025 GHG and ZEV standards as
not consistent with CAA section
202(a) 241 or premised their support for
241 78 FR 2132 (manufacturers suggested that EPA
should grant California’s waiver request after CARB
finalized its regulatory amendments to allow for a
national compliance option; manufacturers oppose
granting the waiver for the ZEV program past the
2017 MY, asserting that those standards will not be
feasible either in California or in the individual
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those standards on California’s
permitting compliance through the
‘‘deemed to comply’’ provision.242 In
comments on the proposed withdrawal,
California did not contest this aspect of
the waiver proceedings. For example,
California in its comments on the SAFE
proposal, at page 57, states ‘‘[b]ecause
the federal program was expected to
achieve GHG emission reductions that
are equivalent to the California program,
CARB modified its LEV III GHG
regulation to continue to allow the
‘deemed to comply’ option beyond
model year 2016, by accepting federal
compliance with the EPA standards as
sufficient to demonstrate compliance
with California’s standards for the 2017
through 2025 model years.’’
Additionally, most automobile
manufacturers indicated that they
would comply with California’s GHG
standards through the ‘‘deemed to
comply’’ provision. Both California and
some automobile manufacturers also
alluded to their expectations that
standards would be revised in the future
in light of technological feasibility and
cost considerations surrounding MY
2022–2025 GHG standards.243 244
CAA section 177 States given the status of the
infrastructure and the level of consumer demand for
ZEVs; dealers suggest that EPA should not grant
California a waiver for its ZEV and GHG emission
standards past MY 2018 and 2021, respectively,
asserting that technical capabilities after that time
are uncertain.).
242 ‘‘[T]his national compliance option is integral
to the commitment letters the industry and
California signed in July 2011 and to the single
national GHG/fuel economy program all
stakeholders sought to achieve.’’ 78 FR 2138.
243 78 FR 2128. A waiver ‘‘will remain an
important backstop in the event the national
program is weakened or terminated;’’ manufacturers
note that both the federal and the California GHG
emission standards provide for a comprehensive
mid-term evaluation of the MYs 2022–2025;
manufacturers clearly state that ‘‘[a]ny amendments
to California’s GHG emission standards made as a
result of the mid-term evaluation will require
analysis to determine whether the amendments fall
within the scope of this waiver, or, if not, whether
they qualify for a separate waiver under Section
209(b) of the Clean Air Act.’’ 78 FR 2132. See also,
e.g., comments of the National Automobile Dealers
Association, n.43. On March 11, 2013, the
Association of Global Automakers and Alliance of
Automobile Manufacturers filed a petition for
reconsideration of the January 2013 waiver grant,
requesting that EPA reconsider the decision to grant
a waiver for MYs 2018 through 2025 ZEV standards
on technological feasibility grounds. Petitioners
also asked for consideration of the impact of the
travel provision, which they argue raise
technological feasibility issues in CAA section 177
States, as part of the agency’s review under the
third waiver prong, CAA section 209(b)(1)(C). EPA
continues to evaluate the petition. As explained
below, in this action EPA is not taking final action
with regard to the proposed determinations under
the third waiver prong. Whether and how EPA will
respond to the March 2013 petition will be
considered in connection with a potential future
final action with respect to the proposed third
prong determinations set forth in the SAFE
proposal.
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Regarding whether EPA is foreclosed
from reconsidering its January 2013
waver grant due to the passage of time,
on January 12, 2017, well in advance of
the April 2018 deadline that it had set
for itself, EPA completed the Mid-Term
Evaluation called for under the 2012
national GHG standards, determining
that the MY 2017–2025 GHG standards
promulgated in that rulemaking were
appropriate. Automobile manufacturers,
however, petitioned EPA for
reconsideration of that January 2017
determination. In March 2017, EPA
granted this petition for reconsideration.
82 FR 14671 (Mar. 22, 2017). In March
2017 California completed its own MidTerm Evaluation review, in which it
arrived at different conclusions on
technological feasibility and costs for
these standards than those that EPA
would later reach. Subsequently, in
April 2018, consistent with the timing
specified in its regulations, EPA revised
its finding on the appropriateness of the
federal MY 2022–2025 GHG standards,
concluding that those standards ‘‘are not
appropriate and, therefore, should be
revised.’’ 245 This finding provided
notice of a reasonable possibility that
these federal GHG standards would
likely be changing.246 In the April 2018
action, EPA also withdrew the January
2017 finding. 83 FR at 16077. Since then
California has challenged this revised
finding; that challenge is pending in the
United States Court of Appeals for the
District of Columbia. California v. EPA,
No. 18–1114 (D.C. Cir. argued Sept. 6,
2019). Moreover, California in December
2018 amended the ‘‘deemed to comply’’
provision in its regulations after the
publication of the SAFE proposal, and
in July 2019 announced a putative
nationwide framework for vehicle
standards, as discussed above.
These procedural aspects of the
federal GHG standards and the grant of
a waiver for California’s ACC program
are indicative of the absence of the
possibility of reasonable reliance in the
‘‘finality’’ of the waiver, contrary to
commenters’ assertion of reliance
interests. For instance, as shown above,
the engine and vehicle manufacturers
have not only complained about the
stringency of MY 2021–2025 GHG and
ZEV standards, but also requested
reconsideration of both the waiver as it
relates to the ZEV standards, and the
2017 Mid-Term Evaluation that
addresses the ‘‘deemed to comply’’
provision, which California provided in
response to their request. EPA has also
initiated joint rulemaking with NHTSA
that proposes amended EPA GHG
standards and fuel economy standards
for MY 2021–2026. See, the Safer
Affordable Fuel-Efficient (SAFE)
Vehicles Rule for Model Years 2021–
2026 Passenger Cars and Light Trucks.
83 FR 42986 (Aug. 24, 2018). As also
previously noted, automobile and
engine manufacturers operated under
the assumption that both California and
national standards would, or at least
could, be revised.247 These
circumstances are sufficient to put
California and others on notice that
standards were in flux such that they
could not give rise to reasonable
reliance interests. Further, CAA section
177 States do not have any reliance
interests that are engendered by the
withdrawal of the waiver for the MY
2021–2025 GHG and ZEV standards. As
previously explained, although CAA
section 177 allows States other than
California to adopt standards that are
promulgated by California and for
which a waiver of preemption is granted
by EPA pursuant to CAA section 209,
CAA section 177 States may do so only
subject to certain conditions and
circumstances. None of these conditions
and circumstances, however, are at
issue in this waiver decision, in light of
EPA’s determination that CAA section
177 does not apply to states seeking to
adopt and enforce CARB’s GHG
standards. As also previously noted,
with the revocation of these standards
in this action, there will be no
‘‘standards identical to the California
standards for which a waiver has been
granted’’ that any state may adopt and
enforce, under CAA section 177(1).248
States may not ‘‘tak[e] any action that
has the effect of creating a car different
from those produced to meet either
federal or California emission standards,
a so-called ‘third vehicle.’ ’’ Motor
244 Since the grant of the ACC waiver program,
engine and vehicle manufacturers who voiced
concerns about the stringency of MY 2021–2025
GHG and ZEV standards during the waiver
proceedings have requested both reconsideration of
the grant of the waiver for the ZEV standards
(which is a compliance mechanism for the GHG
standards) and aspects of the national GHG
program.
245 Mid-Term Evaluation of Greenhouse Gas
Emissions Standards for Model Year 2022–2025
Light-Duty Vehicles: Notice; Withdrawal. 83 FR
16077 (Apr. 13, 2018).
246 82 FR 14671 (Mar. 22, 2017).
247 ‘‘The manufacture of automobiles is a complex
matter, requiring decisions to be made far in
advance of their actual execution. The ability of
those engaged in the manufacture of automobiles to
obtain clear and consistent answers concerning
emission controls and standards is of considerable
importance so as to permit economies in
production.’’ S. Rep. No. 403, 90th Cong., at 730 1st
Sess. (1967).
248 A State may not ‘‘make attempt[s] to enforce’’
California standards for which EPA has not waived
preemption. Motor Vehicle Mfrs. Ass’n v. NYS Dep.
of Envtl Conservation, 17 F.3d 521, 534 (2d Cir.
1994).
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Vehicle Mfrs. Ass’n of U.S., Inc. v. New
York State Dep’t of Envt’l Conservation,
17 F.3d 521, 528 (2d Cir. 1994).
California’s comments argue that EPA
cannot revisit its waiver with respect to
the ZEV standards in particular because
EPA, in a SIP approval action, approved
ZEV provisions into the State’s SIP.
Final CARB Detailed Comments, at 351.
But in so doing, EPA noted that
California’s GHG provisions were not
part of California’s SIP submission.249
At the time, EPA explained that ‘‘CARB
has expressly excluded from the August
14, 2015 SIP submittal certain sections
or subsections of California code that
have been authorized or waived by EPA
under CAA section 209.’’ 250 Further, in
the SAFE proposal, EPA explained that
the proposed withdrawal of the waiver
for MY 2021–2025 ZEV standards was
premised in part on California’s explicit
indications that compliance with those
standards formed part of the compliance
mechanism for MY 2021–2025 GHG
standards. For instance, at proposal, we
explained ‘‘because the ZEV and GHG
standards are closely interrelated, as
demonstrated by the description above
of their complex, overlapping
compliance regimes, EPA is proposing
to withdraw the waiver of preemption
for ZEV standards under the second and
third prongs of section 209(b)(1).’’ 83 FR
43243. California’s responses to the
SAFE proposal do not rebut the
Agency’s views that the ZEV standards
for MY 2021–2025 are inextricably
interconnected with the design and
purpose of California’s overall GHG
reduction strategy.251 According to
California, for example, CARB’s GHG
standards for the 2017 through 2025
MYs are designed to respond to
California’s identified goals of reducing
GHG emissions to 80 percent below
1990 levels by 2050 and in the near term
249 81
FR 39424, 27–28 (June 16, 2016).
FR 29427–28. ‘‘The excluded provisions
pertain to: Greenhouse Gas (GHG) exhaust emission
standards 2009 through 2016 Model Passenger Cars,
Light-Duty Trucks, and Medium-Duty Vehicles, and
2017 and subsequent Model Passenger Cars, LightDuty Trucks, and Medium Duty Vehicles.’’
251 Analysis in support of comments of the
California Air Resources Board on the SAFE
proposal, at 342. ‘‘For example, and relevant here,
California’s Legislature has established an
aggressive GHG emissions reduction target for
2030.’’ ‘‘The ZEV mandate is a crucial part of this
strategy; it ‘act[s] as the technology forcing piece of
the 2016 Draft TAR program’ which is necessary
because ‘the new vehicle fleet [in California] will
need to be primarily composed of advanced
technology vehicles . . . by 2035’ in order to meet
the State’s 2050 GHG goal.’’ Id. at 369–70 (Internal
citations omitted). ‘‘This increasing ZEV
deployment is critical to achieving the statewide
2030 and 2045 GHG requirements and 2031 South
Coast SIP commitments (the 2016 State SIP Strategy
identified the need for light-duty vehicles to reduce
NOX emissions by over 85 percent by 2031 to meet
federal standards).’’ Id. at 373.
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to reduce GHG levels to 1990 levels by
2020;’’ ‘‘In 2009, CARB staff analyzed
pathways to meeting California’s longterm 2050 GHG reduction goals in the
light duty vehicle subsector and
determined that ZEVs would need to
comprise nearly 100 percent of new
vehicle sales between 2040 and 2050,
and commercial markets for ZEVs
would need to launch in the 2015 to
2020 time frame.’’ Analysis in support
of comments of the California Air
Resources Board on the SAFE proposal,
pg. 54, 59 & 83. EPA reviewed
California’s SIP submission, including
ZEV measures, as a matter of NAAQS
compliance strategy. But in the 2012–
2013 CAA section 209(b) waiver
proceeding, CARB presented its ZEV
program to EPA solely as a GHG
compliance strategy—indeed, CARB
expressly stated that the ZEV program
did not confer NAAQS pollutant
benefits. ‘‘There is no criteria emissions
benefit from including the ZEV proposal
in terms of vehicle (tank-to-wheel or
TTW) emissions.’’ CARB ACC waiver
request at 15, EPA–HQ–OAR– 2012–
0562–0004.252
Similarly, some commenters argued
that EPA reconsideration would
constitute impermissible retroactive
action, citing Bowen v. Georgetown
Univ. Hosp., 488 U.S. 204 (1988).
However, the rulemaking which the
Supreme Court held was impermissibly
retroactive in that case had been
proposed in February 1984 and had
purported to establish reimbursement
rates effective July 1, 1981. By contrast,
here EPA is reconsidering a previous
grant of a waiver of preemption for
future model years 2021–2025.253
252 CARB in its SAFE proposal comments refers
to this as an ‘‘alleged[ ]’’ statement, Final Carb
Detailed Comments at 351. The SAFE proposal
cited the Waiver Support Document in which CARB
made this statement, 83 FR at 43248 n.580. The
statement is directly quoted above. California’s
comments on the SAFE proposal do not contest that
California’s ACC waiver request expressly
disclaimed criteria pollutant benefits from the ZEV
program, nor do they establish that EPA is
foreclosed from revisiting the grant of the waiver in
light of the interpretation of 209(b)(1)(B) adopted
below. EPA notes in this regard that California’s
approach in its ACC waiver request differed from
the state’s approach in its waiver request for MY
2011 and subsequent heavy-duty tractor-trailer GHG
standards, where California quantified NOX
emissions reductions attributed to GHG standards
and explained that they would contribute to PM
and ozone NAAQS attainment. 79 FR 46256, 46257
n.15, 46261, 46262 n.75 (August 7, 2014).
253 As explained above, to the extent that
NHTSA’s final determination that EPCA preempts
State GHG and ZEV programs, the implications of
that determination for prior EPA waivers of such
programs are effective upon the effective date of
this joint action. Separate and apart from that
analysis, to the extent that EPA is withdrawing the
waiver based on its determination that the waiver
does not meet the CAA section 209(b)(1)(B)
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Reconsideration of aspects of a prior
adjudication whose effects have not yet
ripened is not barred by Bowen’s
proscription on retroactive
rulemaking—otherwise any
reconsideration of agency action would
likewise be barred.
For all these reasons, EPA concludes
it has authority under CAA section 209
to reconsider its prior grant of the ACC
waiver and to withdraw the waiver for
MY 2021–2025 GHG and ZEV
standards, consistent with the SAFE
proposal.
C. The Effect of Preemption Under the
Energy Policy and Conservation Act
(EPCA) on EPA’s Previously Granted
Waiver Under CAA Section 209(b) With
Regard to California’s GHG and ZEV
Standards
In the SAFE proposal, EPA explained
its historical practice of reviewing
waiver requests under the prism of CAA
section 209. Specifically, EPA has
‘‘historically declined to consider as
part of the waiver process whether
California standards are constitutional
or otherwise legal under other Federal
statutes apart from the Clean Air Act.’’
83 FR 42340. See also Motor & Equip.
Mfrs. Ass’n, Inc. v. EPA, 627 F.2d 1095,
1115 (D.C. Cir. 1979) (MEMA I) ‘‘[T]he
Administrator operates in a narrowly
circumscribed proceeding requiring no
broad policy judgments on
constitutionally sensitive matters.
Nothing in CAA section 209 requires
him to consider the constitutional
ramifications of the regulations for
which California requests a waiver.’’).
This historic position was reflected in
granting the initial ACC program waiver
where EPA explained: ‘‘Evaluation of
whether California’s GHG standards are
preempted, either explicitly or
implicitly, under [the Energy Policy and
Conservation Act] EPCA, is not among
the criteria listed under section 209(b).
EPA may only deny waiver requests
based on the criteria in section 209(b),
and inconsistency with EPCA is not one
of those criteria.’’ 78 FR 2145. But EPA,
in the past, has also solicited comments
on ‘‘whether the Energy Policy and
Conservation Act (EPCA) fuel economy
provisions are relevant to EPA’s
consideration of the request and to
California’s authority to implement its
vehicle GHG regulations’’ and in
response to comments opted to ‘‘take[ ]
no position regarding whether or not
California’s GHG standards are
preempted under EPCA.’’ 74 FR 32744,
32782–83 (July 8, 2008).
criterion, that withdrawal is for model years 2021–
2025, as proposed in the SAFE proposal.
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In the January 2013 waiver, EPA
stated: ‘‘Evaluation of whether
California’s GHG standards are
preempted, either explicitly or
implicitly, under EPCA, is not among
the criteria listed under section 209(b).
EPA may only deny waiver requests
based on the criteria in section 209(b),
and inconsistency with EPCA is not one
of those criteria. In considering
California’s request for a waiver, [EPA]
therefore [has] not considered whether
California’s standards are preempted
under EPCA.’’ 78 FR at 2145.
EPA believes that this January 2013
statement was inappropriately broad, to
the extent it suggested that EPA is
categorically forbidden from ever
determining that a waiver is
inappropriate due to consideration of
anything other than the ‘‘criteria’’ or
‘‘prongs’’ at CAA section
209(b)(1)(B)(A)–(C). The statements
quoted above, and EPA’s historical
practice of disregarding issues of
‘‘[c]onsistency with EPCA’’ in the
context of evaluating California’s waiver
applications, were made in the context
of EPA acting on its own to administer
CAA section 209(b) in considering such
applications. The context here is
different: EPA is undertaking a joint
action with NHTSA. In the SAFE
proposal, EPA noted that NHTSA had
proposed and could well finalize a
determination that California’s GHG and
ZEV standards are both explicitly and
implicitly preempted under EPCA.254
EPA explained that such a
determination would present a
threshold question as to California’s
ability to enforce these standards and
proposed to conclude that standards
preempted under EPCA cannot be
afforded a waiver of preemption under
CAA section 209(b). Unlike the Clean
Air Act, EPCA does not allow for any
waiver of its express preemption
provision. EPCA contains no language
that can be read to allow States to either
prescribe or enforce regulations related
to fuel economy standards. Consistent
with this view, at SAFE proposal,
NHTSA explained that, ‘‘when a State
establishes a standard related to fuel
economy, it does so in violation of
EPCA’s preemption statute(sic) and the
standard is therefore void ab initio.’’ 83
FR 43235. At the same time, NHTSA
explained that certain other GHG
requirements that do not relate to fuel
economy, such as regulations
addressing leaking refrigerants, would
likely not be preempted under EPCA. 83
FR 4324–35.
EPA does not intend in future waiver
proceedings concerning submissions of
254 49
U.S.C. 32919(a). See 83 FR 43233.
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California programs in other subject
areas to consider factors outside the
statutory criteria in CAA section
209(b)(1)(A)–(C). But the unique
situation in which EPA and NHTSA,
coordinating their actions to avoid
inconsistency between their
administration of their respective
statutory tasks, address in a joint
administrative action the issues of the
preemptive effect of EPCA and its
implications for EPA’s waivers, has no
readily evident analogue.255 EPA will
not dodge this question here.
Consistent with the SAFE proposal,
NHTSA is finalizing a determination
that EPCA preempts State GHG and ZEV
standards. EPA agrees with commenters
that EPA is not the agency that Congress
has tasked with administering and
interpreting EPCA. This is especially so
because ‘‘[t]he waiver proceeding
produces a forum ill-suited to the
resolution of constitutional claims.’’
MEMA I, 627 F.2d at 1115. In the SAFE
proposal, EPA took the position that it
is, at a minimum, reasonable to consider
NHTSA’s conclusions about the
preemptive effect of EPCA. To the
extent that NHTSA has determined that
these standards are void ab initio
because EPCA preempts standards that
relate to fuel economy, that
determination presents an independent
basis for EPA to consider the validity of
the initial grant of a waiver for these
standards, separate and apart from
EPA’s analysis under the criteria that
invalidate a waiver request. In the
context of a joint action in which our
sister agency is determining, and
codifying regulatory text to reflect, that
a statute Congress has entrusted it to
administer preempts certain State law,
EPA will not disregard that conclusion,
which would place the United States
Government in the untenable position of
arguing that one federal agency can
resurrect a State provision that, as
another federal agency has concluded
and codified, Congress has expressly
preempted and therefore rendered void
ab initio.
This conclusion is consistent with the
Supreme Court’s holding in
Massachusetts v. EPA, 549 U.S. 497
(2007). While this case did not address
EPCA preemption, the Supreme Court
anticipated that EPA and NHTSA would
administer their respective authorities
in a consistent manner. (‘‘The two
obligations [for NHTSA to set fuel
economy standards under EPCA and for
EPA to regulate motor vehicle GHG
emissions under CAA section 202] may
overlap, but there is no reason to think
the two agencies cannot both administer
255 See
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their obligations and yet avoid
inconsistency.’’ Id. at 532.) Considering
that California cannot enforce standards
that are void ab initio, even assuming
arguendo that there existed a valid grant
of waiver under CAA section 209(b),
NHTSA’s determination renders EPA’s
prior grant of a waiver for those aspects
of California’s regulations that EPCA
preempts invalid, null, and void, and, to
the extent that administrative action is
necessary on EPA’s part to reflect that
state of affairs, EPA hereby withdraws
that prior grant of a waiver on this basis.
EPA’s finding that California’s GHG
and ZEV standards are preempted as a
result of NHTSA’s finalized
determinations, issued in this joint
action, with respect to EPCA’s
preemptive effect on State GHG and
ZEV standards, is effective upon the
effective date of this joint action. This
finding is separate and apart from
findings with respect to EPA’s 2013
waiver for CARB’s Advanced Clean Car
Program as it pertains to its 2021
through 2025 MY relating to GHG and
ZEV standards and accompanying
withdrawal of the waiver, pursuant to
CAA section 209(b)(1), as set forth in
subsection D below; as a matter of EPA’s
administration of CAA section 209(b),
without reference to EPCA’s preemptive
effect as determined by NHTSA, that
withdrawal applies to 2021 through
2025 MY GHG and ZEV standards, as
proposed in the SAFE proposal.256 257
256 EPA acknowledges that its action in this
document may have implications for certain prior
and potential future EPA reviews of and actions on
state SIPs that may incorporate certain aspects of
California’s state program, either California’s own
SIPs or SIPs from states that have adopted one or
more aspects of California’s state program pursuant
to CAA section 177. EPA will consider whether and
how to address those implications, to the extent
that they exist, in separate actions. But EPA
believes that it is not necessary to resolve those
implications in the course of this action because the
effects of EPCA preemption, as set forth in
subsection III.C, and the proper interpretation and
application of CAA section 209(b)(1)(B) to
California’s GHG and ZEV program, as set forth in
subsection III.D, provide sufficient reason to take
this final action and that the potential implications
for prior and future SIP actions are not a sufficient
basis to alter the rationale for or terms of this final
action. The questions of what EPCA means and
what its preemptive effect on certain state
regulations is, and what CAA section 209(b)(1)(B)
means and what its limitations on California’s
ability to obtain a waiver for its state programs are,
do not depend on whether one or more SIP actions
pertaining to NAAQS attainment and maintenance
strategies may directly or indirectly be affected by
the agencies’ resolution of those questions.
257 In the August 2018 SAFE proposal, EPA
solicited comment on whether one or more of the
grounds supporting the proposed withdrawal of this
waiver would also support withdrawing other
waivers that it has previously granted. 83 FR at
43240 n.550. At this time, EPA does not intend to
take action with respect to any prior waiver grants
other than those specified above.
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D. Reconsideration of January 2013
Waiver and Determination That It Is
Appropriate To Withdraw EPA’s
January 2013 Waiver of CAA Section
209 Preemption for California’s GHG
and ZEV Standards for Model Years
2021–2025, Pursuant to CAA Section
209(b)(1)(B)
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1. Interpretation of CAA Section
209(b)(1)(B)
Under CAA section 209(b)(1)(B), EPA
cannot grant a waiver request if EPA
finds that California ‘‘does not need
such State standards to meet compelling
and extraordinary conditions.’’ 258 In the
August 2018 SAFE Proposal, EPA
proposed to determine: (1) That it was
reasonable and appropriate to interpret
the scope of ‘‘such State standards’’ to
authorize a consideration of whether
California needs to have its own GHG
vehicle emissions program specifically,
rather than whether California needs
any separate vehicle emissions program
at all; and (2) that California did not
‘‘need’’ its own GHG and ZEV programs
‘‘to meet compelling and extraordinary
conditions’’ within the meaning of the
statute. EPA finalizes those
determinations in this document.
EPA notes in this regard that
regulation of emissions from new motor
vehicles and new motor vehicle engines
under CAA section 202(a) is triggered by
a determination that ‘‘the emission of
any air pollutant from any class or
classes of new motor vehicles or new
motor vehicle engines . . . cause, or
contribute to, air pollution which may
reasonably be anticipated to endanger
public health or welfare.’’ This
‘‘endangerment finding,’’ which triggers
EPA’s ability to use the CAA section
202(a) regulatory authority which CAA
section 209(a) preempts the states from
exercising (subject to the availability of
a CAA section 209(b) preemption
waiver), links (1) emission of pollutants
from sources; to (2) air pollution; and (3)
resulting endangerment to health and
welfare.259
Congress enacted waiver authority for
California under CAA section 209(b)
258 EPA notes that Congress provided no
definition of the phrase ‘‘compelling and
extraordinary conditions,’’ and that the phrase
appears to be entirely unique, not found anywhere
else in the United States Code.
259 We therefore, also disagree with CARB’s
argument that EPA’s reading of CAA section
209(b)(1)(B) ‘‘ignores the statutory structure—
improperly reading Section 209(b) without
consideration of the relationship between Sections
202(a), 209(a) and 209(b). Specifically, EPA
proposes to read Section 209(b) as excluding GHGs
at the same time that it proposes to continue
regulating GHGs under Section 202(a) and
presumes, albeit implicitly, that Section 209(a)
preempts other States from regulating GHGs.’’
CARB comments at 359.
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against the backdrop of traditional,
criteria pollutant environmental
problems, under which all three links in
this chain bear a particularized nexus to
specific local California features: (1)
Criteria pollutants are emitted from the
tailpipes of the California motor vehicle
fleet; (2) those emissions of criteria
pollutants contribute to air pollution by
concentrating locally in elevated
ambient levels, which concentration, in
turn; (3) results in health and welfare
effects (e.g., from ozone) that are
extraordinarily aggravated in California
as compared to other parts of the
country, with this extraordinary
situation being attributable to a
confluence of California’s peculiar
characteristics, e.g., population density,
transportation patterns, wind and ocean
currents, temperature inversions, and
topography. In the case of GHG
emissions from motor vehicles,
however, this particularized nexus to
California’s specific characteristics is
missing: (1) The GHG emissions from
California cars are no more relevant to
the pollution problem at issue (i.e.,
climate change) as it impacts California
than are the GHG emissions from cars
being driven in New York, London,
Johannesburg, or Tokyo; (2) the
resulting air pollution, i.e., elevated
concentrations of GHG in the upper
atmosphere, is globally mixed; (3) the
health and welfare effects of climate
change impacts on California are not
extraordinary to that state and to its
particular characteristics. Although EPA
concludes that all three of these aspects
are lacking in the case of GHG, EPA
further concludes that it is the
connection between all the three which
is the original motivation for Congress’s
creation of the waiver. It is that original
motivation that informs the proper
understanding of what CAA section
209(b)(1)(B) requires.
It is important to note that, while this
interpretation of CAA section
209(b)(1)(B) departs in major respects
from the interpretation applied in the
2009 waiver denial reversal (74 FR
32744) and the 2013 waiver grant (78 FR
2112), it does not simply constitute a readoption of the interpretation applied in
the 2008 waiver denial (73 FR 12156).
The 2008 waiver denial applied what it
styled as two alternative approaches to
determining whether California
‘‘need[ed]’’ its own vehicle GHG
emissions program to address global
climate change ‘‘to meet compelling and
extraordinary conditions’’: One that
looked at the causal link between
California emissions and elevated GHG
concentrations, 73 FR at 12160 (styled
as ‘‘the distinct nature of global
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pollution as it relates to section
209(b)(1)(B)’’), and an ‘‘alternative’’
approach that looked at the magnitude
of California climate effects compared to
the rest of the nation, 73 FR at 12163–
12164 (‘‘whether the potential impact of
climate change resulting from these
emissions and concentrations will differ
across geographic areas and if so
whether the likely effects in California
amount to compelling and extraordinary
conditions’’). The 2009 waiver denial
reversal, and the 2013 waiver grant, in
contrast, applied an interpretation
which EPA styled as a return to the
‘‘traditional’’ interpretation. Under that
approach, EPA determined that
California ‘‘needs’’ its own vehicle GHG
emissions program ‘‘to meet compelling
and extraordinary conditions,’’ a
determination that was predicated on
what was then EPA’s view that, in the
case of such later-adopted programs,
satisfaction of the ‘‘need’’ criterion of
CAA section 209(b)(1)(B) was effectively
automatic, being derivative as it were of
the State’s having long ago established
a ‘‘need’’ to have some form of its own
vehicle emissions program (i.e., its
criteria pollutant program for which it
had already received many waivers). In
conjunction with this, EPA also pointed
to the effects of climate change on
certain criteria pollutant impacts. See 74
FR at 32746; 78 FR at 2125 et seq.
In this action, EPA adopts an
interpretation of CAA section
209(b)(1)(B) that it concludes is more in
accord with the text, structure, purpose,
and legislative history of that provision
than were either the position in the
2008 denial (because it does not
separate causal issues and effects issues
into alternatives) or the position the
2009 and 2013 grants (because it
considers application of CAA section
209(b)(1)(B) to California’s need for a
GHG/climate program, rather than
subordinating that consideration to
California’s need for a criteria pollutant
program). Under this interpretation,
EPA begins by noting that only one
state, California, is entitled to apply
under CAA section 209(b) for a waiver
of the preemptive effect of CAA section
209(a). CAA section 209(a), in turn,
provides that (unless a waiver is issued)
no state may regulate new motor vehicle
or new motor vehicle engine emissions.
That authority instead is conferred on
EPA under CAA section 202(a), subject
to an ‘‘endangerment finding.’’ That
finding requires EPA to consider the
relationship between [1] sources and
their emissions of pollutants; [2] the
pollution to which those emissions
contribute; and [3] resulting impacts on
health and welfare. Congress has
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therefore, in the elements of the
endangerment finding, laid out the
terms of what constitutes a pollution
problem to provide the appropriate and
requisite predicate for federal
regulation. Because CAA section 209(a)
expresses Congress’s judgment that
vehicle emission pollution problems are
presumptively appropriate only for
federal regulation, with one state
afforded the extraordinary treatment
under CAA section 209(b) of being able
to apply for a waiver from that
preemption, the best, if not the only,
reading of the waiver criterion under
CAA section 209(b)(1)(B) is that it
requires a pollution problem at the local
level that corresponds in a state-specific
particularized manner to the type of
pollution problem that Congress
required as the predicate for federal
regulation.
It is against this backdrop that EPA
believes the text of CAA section
209(b)(1)(B) is best interpreted.
Informed by the criteria-pollutant
context in which California’s pre-1970
program was enacted, the legislative
history, and the principle, as discussed
elsewhere in this action, that differential
treatment of the states by Congress in a
geographically disparate way is
extraordinary and is justified only by a
sufficient link between that differential
treatment and particularized local facts,
EPA interprets Congress’s command in
CAA section 209(b)(1)(B), that it may
not grant a preemption waiver for a
California state vehicle emissions
program if California does not ‘‘need’’
that program ‘‘to meet compelling and
extraordinary conditions,’’ to condition
the issuance of a waiver on a statespecific pollution problem that maps on
to the elements as laid out in CAA
section 202(a): [1] Emissions of
pollutants; [2] resulting air pollution; [3]
health and welfare effects from that
resulting air pollution. EPA concludes
that the interpretation of CAA section
209(b)(1)(B) it adopts in this document
is the best, if not the only, reading of
that provision.
The Supreme Court’s opinion in
UARG, 134 S. Ct. 2427 (2014), instructs
that Clean Air Act provisions cannot
necessarily rationally be applied
identically to GHG as they are to
traditional pollutants.260 For the reasons
260 CARB is wrong to suggest in its comments that
EPA’s interpretation in this action of CAA section
209(b)(1)(B) is inconsistent with the Supreme
Court’s opinion in Massachusetts v. EPA. CARB
comments at 360. Massachusetts held that the
general, CAA-wide definition of ‘‘air pollutant’’ at
CAA section 302(g) encompasses carbon dioxide,
and that the text of CAA section 202(a)(1), which
provides that EPA shall regulate standards for
emissions of ‘‘any air pollutant’’ from new motor
vehicles if EPA makes certain predicate findings
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set forth in this subsection, it is
appropriate to consider the application
of the second waiver prong, CAA
section 209(b)(1)(B), to California’s
‘‘need’’ vel non for its own GHG and
ZEV programs, separate and apart from
its ‘‘need’’ for its own criteria pollutant
program. EPA determines, based on the
application of the second waiver prong,
that California does not ‘‘need’’ its own
GHG and ZEV programs ‘‘to meet
compelling and extraordinary
conditions,’’ notwithstanding EPA’s
historical determinations that California
does so ‘‘need’’ its own criteria
pollutant programs.
Furthermore, the fact that GHG
emissions may affect criteria pollutant
concentrations (e.g., increases in
ambient temperature are conducive to
ground-level ozone formation) does not
satisfy this requirement for a
particularized nexus, because to allow
such attenuated effects to fill in the gaps
would eliminate the function of
requiring such a nexus in the first place
and would elide the distinction between
national and local pollution problems
which EPA discerns as underlying the
text, structure, and purpose of the
waiver provision. EPA departs in this
regard from the position it took in the
2009 reversal of the 2008 waiver denial,
74 FR at 32763, where it determined
that ‘‘[t]here is a logical link between
the local air pollution problem of ozone
(referred to colloquially as ‘‘endangerment
findings’’), also encompasses carbon dioxide. 549
U.S. at 528. But CAA section 209, as a whole, in
its preemption provision in 209(a), in the waiver
provision in 209(b), and most specifically in the
second waiver prong under CAA 209(b)(1)(B), does
not contain the term ‘‘pollutant,’’ and EPA does not
in this document interpret section 209 as simply
establishing a distinction between criteria and GHG
pollutants. Rather, for the reasons stated in this
document, EPA interprets CAA section 209(b), and
its extraordinary treatment afforded to one state, as
requiring, in its provision in CAA section
209(b)(1)(B) that no waiver shall issue where a state
does not need its own standards ‘‘to meet
compelling and extraordinary conditions,’’ as
requiring a state-specific, particularized nexus
between the elements of a pollution problem—i.e.,
pollutants, pollution, and impacts—as set forth in
CAA section 202(a). CARB asserts that ‘‘[t]here is
no reason Section 209(b)(1)(B) should be
interpreted more narrowly than Section 202(a),’’
CARB comments at 360. One such reason is
perfectly evident: They have different text. Another,
as discussed in this action, is that CAA 209(b)(1)(B)
must be read against the principle that
extraordinary treatment afforded one state must be
justified by ‘‘extraordinary conditions’’ in that state.
Here, CARB misses the mark when it invokes
Massachusetts’s observation that ‘‘without
regulatory flexibility, changing circumstances and
scientific developments would soon render the
Clean Air Act obsolete,’’ quoting 549 U.S. at 532.
CARB comments at 360. The Supreme Court there
was discussing evolution of scientific
understanding of what pollutants may pose harm.
Nothing in Massachusetts suggests that scientific
developments can alter the fundamental
relationship between the States among themselves
and vis-a`-vis the federal government.
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and California’s desire to reduce GHGs
as one way to address the adverse
impact that climate change may have on
local ozone conditions.’’
EPA further notes that elsewhere in
the 2009 waiver denial reversal, EPA
took the position that Massachusetts v.
EPA supports the view that, because
‘‘every small reduction is helpful in
reducing [climate] concerns. . . . [A]
reduction in domestic automobile
emissions would slow the pace of global
emissions increase no matter what
happens with regard to other
emissions,’’ and therefore ‘‘opponents
[of the waiver] have not met their
burden of demonstrating that
California’s motor vehicle program, or
its GHG standards, does not have a
rational relationship to contributing to
amelioration of the air pollution
problems in California.’’ Id. at 32766
(emphasis added). EPA now departs
from this prior position in several
important respects.
First, to the extent that its 2009 waiver
denial reversal was guided by an
interpretation of the teachings of
Massachusetts under which any
reduction in GHG gives warrant for
regulatory action (to include EPA’s
waiver approvals), that must now be
weighed against the Supreme Court’s
subsequent 2014 UARG opinion, which
stands for the proposition that particular
CAA provisions will not necessarily
apply identically in the case of GHG
emissions as they do to criteria
pollutant emissions.
Second, to the extent that EPA’s 2009
waiver denial reversal framed the
question under CAA section
209(b)(1)(B) as whether there is a
‘‘rational relationship’’ between
California’s programs and California’s
air pollution problems, that conflated
the ‘‘arbitrary and capricious’’ test in
CAA section 209(b)(1)(A) with the
unique and distinct term ‘‘need[ed] to
meet compelling and extraordinary
conditions’’ in CAA section
209(b)(1)(B); EPA’s position in this
document gives that term a distinct and
appropriate meaning and application.
Third, whereas the 2009 waiver
denial reversal also noted in this
passage that ‘‘there is some evidence in
the record that proffers a specific level
of reduction in temperature resulting
from California’s regulations,’’ this
action notes elsewhere that the 2012
joint rule record reflected that even
standards much more stringent than
either the 2012 Federal standards or
California’s ACC program would only
reduce global temperature by 0.02
degrees Celsius in 2100. As discussed
elsewhere in this action, EPA concludes
that this does not constitute a showing
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that California ‘‘needs’’ its standards to
‘‘meet’’ climate change, separate from
the question whether climate change
and its impacts on California constitute
‘‘compelling and extraordinary
conditions’’ within the meaning of the
statute. Further, the claim by some
commenters that ‘‘incremental progress
is progress nonetheless’’ does not
meaningfully address the reality that the
waiver would result in an
indistinguishable change in global
temperatures and, based on geographic
variability and measurement sensitivity,
likely no change in temperatures or
physical impacts resulting from
anthropogenic climate change in
California.
EPA proposed to determine that the
balance of textual, contextual,
structural, and legislative history
evidence supports the conclusion that
the statute is ambiguous in one
particular respect: Whether CAA section
209(b)(1)(B) refers to an individual
standard or the California standards as
a whole when referring to the
Administrator’s review of state
standards submitted for a waiver, to
determine whether the state ‘‘needs
such State standards to meet compelling
and extraordinary conditions.’’ We
explained that ‘‘such State standards’’ in
CAA section 209(b)(1)(B) is ambiguous
with respect to the scope of EPA’s
analysis. For example, it is unclear
whether EPA is meant to evaluate either
the standard or standards at issue in the
waiver request or all of California’s
standards in the aggregate. We also
explained that CAA section 209(b)(1)(B)
does not specifically employ terms that
could only be construed as calling for a
standard-by-standard analysis or each
individual standard. For example, it
does not contain phrases such as ‘‘each
State standard’’ or ‘‘the State standard.’’
Nor does the use of the plural term
‘‘standards’’ definitively answer the
question of the proper scope of EPA’s
analysis, given that the variation in the
use of singular and plural form of a
word in the same law is often
insignificant and a given waiver request
typically encompasses multiple
‘‘standards.’’ Thus, we explained that
while it is clear that ‘‘such State
standards’’ refers at least to all of the
standards that are the subject of the
particular waiver request before the
Administrator, that phrase could
reasonably be considered as referring
either to the standards in the entire
California program, the program for
similar vehicles, or the particular
standards for which California is
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requesting a waiver under the pending
request.261
We did explain, however, that there
are reasons to doubt that ‘‘such State
standards’’ is intended to refer to all
standards in California’s program,
including all standards that it has
previously adopted and obtained
waivers for, because this would limit
EPA’s ability to consider and act on
standards that are the subject of
particular waiver applications, even
where that individualized consideration
is reasonable or the only rational
approach. Specifically, given that the
term ‘‘extraordinary’’ should refer to
circumstances that are specific to
California, such as thermal inversions
resulting from local geography and wind
patterns, and primarily responsible for
causing the air pollution problems that
the standards are designed to address,
standards which address pollution
problems that lack that type of
particularized nexus to California are
particularly appropriate candidates for
an individualized consideration. EPA
affirms this view as it relates to the
review of GHG standards, given that
GHG emissions from in California cars,
and their consequences for California,
bear no particular relation to these
California-specific circumstances—i.e.,
global GHG emissions in the aggregate
are what present problems for
California, not California-specific ones.
The waiver under CAA section 209(b)
is a waiver of, and is logically
261 California suggests in its comments that EPA
is ‘‘logically inconsistent’’ in that it said at
proposal, 83 FR at 43246, that the CAA section
209(b)(1)(B) phrase ‘‘such State standards’’ ‘‘refers
at least to all of the standards that are the subject
of the particular waiver request before the
Administrator,’’ while at the same time proposing
to reconsider and withdraw the January 2013 grant
of a waiver with respect to some, but not all, of the
components of the ACC program (i.e., with respect
to GHG and ZEV, but not LEV). EPA disagrees that
this is inconsistent. The question of how to
interpret ‘‘such state standards’’ refers to the
determination of what the total set of standards is
with regard to which EPA will consider whether
California ‘‘needs’’ those standards ‘‘to meet
compelling and extraordinary conditions.’’ It is
reasonable to assign that total set at the level of the
waiver-request package before the Agency, rather
than all the state-specific emission standards that
California has ever adopted. If the consideration
reveals that, within that set, California does not
need particular subsets ‘‘to meet compelling and
extraordinary conditions’’—here, because the GHG
and ZEV programs lack a particularized, Californiaspecific nexus between pollutant, pollution, and
impacts, a rationale that does not apply to the LEV
program, for which EPA did not propose to
withdraw the waiver and is not in this document
withdrawing the waiver—that is nothing unusual.
And it is consistent with EPA’s prior practice, as
discussed in subsection III.B, of only partially
granting aspects of, in combination with denial or
deferral of action on other aspects of, some previous
waivers. The ultimate analysis whether a waiver is
appropriate is not limited to a binary, all-or-nothing
determination.
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dependent on and presupposes the
existence of, the prohibition under CAA
section 209(a), which forbids (absent a
waiver) any State to ‘‘adopt or attempt
to enforce any standard [singular]
relating to the control of emissions from
new motor vehicles or new motor
vehicle engines subject to this part.’’
States are forbidden from adopting a
standard, singular; California requests
waivers seriatim by submitting a
standard or package of standards to
EPA; it follows that EPA considers those
submissions as it receives them,
individually, not in the aggregate with
all standards for which it has previously
granted waivers. Further, reading the
phrase ‘‘such State standards’’ as
requiring EPA always and only to
consider California’s entire program in
the aggregate would limit the
application of this waiver prong in a
way that EPA does not believe Congress
intended. We explained that, under the
interpretation where EPA is constrained
to the aggregate approach, once EPA had
determined that California needed its
very first set of submitted standards to
meet extraordinary and compelling
conditions, EPA would never have the
discretion to determine that California
did not need any subsequent standards
for which it sought a successive
waiver—unless EPA is authorized to
consider a later submission separate
from its earlier finding. Moreover, as
also explained at proposal, up until the
ACC program waiver request,
California’s waiver request involved
individual standards or particular
aspects of California’s new motor
vehicle program. For example, only
GHG standards were at issue in the 2008
GHG waiver request denial.262 263
Several commenters disagreed with
our view of ambiguity and the proposal
to construe ‘‘such state standards,’’ in
the context of our reconsideration and
proposal to withdraw the January 2013
waiver for California’s GHG and ZEV
provisions, as applying to those
provisions themselves, rather than
California’s entire, aggregate program
consisting of all California’s motor
vehicle emission standards, when
considering whether California needs its
262 73
FR 12156 (March 6, 2008).
determines in this document that GHG
emissions, with regard to the lack of a nexus
between their State-specific sources and their Statespecific impacts, and California’s GHG standard
program, are sufficiently distinct from criteria
pollutants and traditional, criteria pollutant
standards, that it is appropriate for EPA to consider
whether California needs its own GHG vehicle
emissions program. EPA does not determine in this
document and does not need to determine today
how this determination may affect subsequent
reviews of waiver applications with regard to
criteria pollutant control programs.
263 EPA
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GHG and ZEV provisions to meet
compelling and extraordinary
conditions within the meaning of CAA
section 209(b)(1)(B). One commenter
argued that this reading would require
EPA to consider the protectiveness of
California’s standards by looking at
them in the aggregate while also
allowing EPA to consider California’s
‘‘need’’ on an individual, standard-bystandard basis. Commenters also argued
that EPA’s historical or traditional
interpretation was correct. They argued
that EPA could not apply a different
interpretation of ‘‘such State standards’’
given that ‘‘such State standards’’ in
CAA section 209(b)(1)(B) does not relate
back to the singular ‘‘any standard’’ in
CAA section 209(a). They cast this
reading as ‘‘implausible,’’ given that
under the rule of last antecedent ‘‘such’’
should properly refer to standards in
(b)(1) and not 209(a). We disagree. As
explained earlier above, reading the
phrase ‘‘such State standards’’ as
requiring EPA always and only to
consider California’s entire program in
the aggregate would limit the
application of this waiver criterion.
Specifically, it would mean that once
EPA determines that California needed
its very first set of submitted standards
to meet extraordinary and compelling
conditions, EPA would never have the
discretion to determine that California
did not need any subsequent standards
for which it sought a successive
waiver—unless EPA is authorized to
consider a later submission separate
from its earlier finding. Instead, it is
reasonable to read CAA section 209(b)
as articulating, first, that EPA shall
consider the standards in the aggregate
to determine if the State’s determination
that they are sufficiently protective is
arbitrary and capricious (CAA section
209(b)(1)(A)). But, even if this first
criterion for denying a waiver is not
triggered, nevertheless, such a waiver
shall not be granted as to such standards
that are not needed to meet compelling
and extraordinary conditions, under the
second waiver denial criterion (CAA
section 209(b)(1)(B)). Commenters’
argument, in effect, inserts the word
‘‘every’’ (or ‘‘all’’) into CAA section
209(b)(1)(B) in between the words
‘‘need’’ and ‘‘such.’’
Additionally, as shown in further
detail in section D.2., below, the term
‘‘extraordinary’’ refers to circumstances
that are specific to California, such as
thermal inversions resulting from local
geography and wind patterns, and that
are primarily responsible for causing the
air pollution problems that the standard
under waiver review is designed to
address. EPA affirms the view that the
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term ‘‘extraordinary’’ refers primarily to
factors that tend to produce higher
levels of pollution: Geographical and
climatic conditions (like thermal
inversions) that in combination with
large numbers and high concentrations
of automobiles, create serious air
pollution problems in California (73 FR
12156, 12159–60).
The text, context, and structure of
CAA section 209(b) support EPA’s
reasoning that the relevant ‘‘conditions’’
are those conditions present in a
particular state and that have a
particularized nexus to emissions in
that state. The statute calls for an
examination of whether the ‘‘State’’
needs such ‘‘state standards’’ in the
context of a prohibition in CAA section
209(a) of a ‘‘state or other political
subdivision’’ adopting or attempting to
enforce alternative standards. It would
be inconsistent with the overall
structure for a state’s own preferred
policy approach to addressing national
or global—rather than local and statespecific—‘‘conditions’’ to permit a
waiver from a scheme that otherwise
establishes a uniform, national
policy.264
Notably, pertinent legislative history
supports this view of the text and
structure of 209(b), insofar as it refers to
California’s ‘‘peculiar local conditions’’
and ‘‘unique problems.’’ S. Rep. No.
403, 90th Cong. 1st Sess., at 32 (1967).
This legislative history also indicates
that California is to demonstrate
‘‘compelling and extraordinary
circumstances sufficiently different
from the nation as a whole to justify
standards on automobile emissions
which may, from time to time, need to
be more stringent than national
standards.’’ Id. EPA views this as
evidence of Congressional intent that
separate standards in California are to
be justified by a showing of
circumstances in California that are
different from circumstances in the
country at large. Additionally, EPA
views this legislative history as
demonstrating that Congress did not
intend for CAA section 209(b)(1)(B) to
be based on the need for California to
264 Cf. Ford Motor Co. v. EPA, 606 F.2d 1293,
1301–02 (D.C. Cir. 1979) (‘‘Ford is asking this court
to declare that Congress intended to make standards
adopted by California for its own particular
problems, and never substantively reviewed for
stringency or national protectiveness by federal
officials, an option which auto manufacturers can
choose in the rest of the country as an alternative
to compliance with the federal standards which
Congress determined are in the best interests of the
nation. We find this reading to be wholly
implausible.’’). See also id. at 1303 (‘‘It was clearly
the intent of the Act that that determination focus
on local air quality problems . . . that may differ
substantially from those in other parts of the
nation.’’).
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enact separate standards that address
pollution problems of a more national or
global nature. Relevant legislative
history also ‘‘indicates that Congress
allowed waivers of preemption for
California motor vehicle standards
based on the particular effects of local
conditions in California on the air
pollution problems in California.’’
Congress discussed ‘‘the unique
problems faced in California as a result
of its climate and topography.’’ H.R.
Rep. No. 728, 90th Cong. 1st Sess., at 21
(1967). See also Statement of Cong.
Holifield (CA), 113 Cong. Rec. 30942–43
(1967). Congress also noted the large
effect of local vehicle pollution on such
local problems. See, e.g., Statement of
Cong. Bell (CA) 113 Cong. Rec. 30946.
As explained at proposal, Congress
focus was on California’s ozone
problem, which is especially affected by
local conditions and local pollution. See
Statement of Cong. Smith (CA) 113
Cong. Rec. 30940–41 (1967); Statement
of Cong. Holifield (CA), id., at 30942.
See also, MEMA I, 627 F.2d at 1109
(noting the discussion of California’s
‘‘peculiar local conditions’’ in the
legislative history). In sum and as
explained at proposal, conditions that
are similar on a global scale are not
‘‘extraordinary,’’ especially where
‘‘extraordinary’’ conditions are a
predicate for a local deviation from
national standards, under CAA section
209(b). 83 FR 43247.
As further explained in section D2.,
below, GHG is a globally distributed
pollutant with environmental effects
that are different from emissions of
criteria pollutants. For example, GHG
emissions from the California vehicle
fleet bear no more relation to GHG
emissions in California than fleet in
other parts of the country. As also
explained in the SAFE proposal, EPA
believes that the GHG and ZEV
standards are standards that would not
meaningfully address global air
pollution problems posed by GHG
emissions, in contrast to local or
regional air pollution problem with
causal ties to conditions in California.
Additionally, the impacts of California
vehicles’ GHG emissions on California
are mediated through the context of the
global mixture of elevated levels of GHG
in the upper atmosphere. As also shown
below, EPA finds that while potential
conditions in California related to global
climate change could be substantial,
they are not sufficiently different from
the potential conditions in the nation as
a whole to justify separate state
standards under CAA section
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209(b)(1)(B).265 In this action, EPA is
reviewing a waiver for motor vehicle
standards designed to address a global
air pollution problem and its effects, as
compared to a local or regional air
pollution problem that has causal ties to
conditions in California. EPA must
therefore, review California’s GHG
standards in light of the fact that GHG
emissions impacts are different from
criteria pollutants themselves, and
California must address their need for
them as it relates to conditions in
California. In sum, as explained at
proposal, under our reading of ‘‘such
state standards’’ and ‘‘extraordinary and
compelling conditions,’’ EPA will
examine California’s need for GHG
standards by considering levels of GHG
emissions emitted from motor vehicles
in California to determine if they are
specific to California and contribute
primarily to environmental effects that
are specific to California. This review,
which calls for a showing of a
particularized causal link between the
standards under review, emissions in
California, and conditions in California,
is similar to agency review of
California’s need for standards designed
to address criteria pollutants and is
further discussed in section D.2.d,
below.266
CARB argues that what it
characterizes as EPA’s reading of
‘‘compelling and extraordinary’’ as
equivalent to ‘‘unique’’ or ‘‘sufficiently
different from’’ the rest of the country
‘‘is inconsistent with Section
209(b)(1)(B), other provisions of the
Clean Air Act, and the legislative
history.’’ CARB also asserts that EPA
‘‘cites no case’’ to support this reading.
At the same time, CARB claims that
EPA has either interpreted legislative
history incorrectly or relies entirely on
legislative history for the 1967 CAA,
which does note California’s ‘‘unique
problems,’’ instead of legislative history
for the 1977 amendments; CARB asserts
that the latter legislative history is more
relevant, given that the addition of
section 177 in the 1977 CAA meant that
Congress did not intend that Section
265 See Fourth National Climate Assessment,
Chapter 25: Southwest, available at https://
nca2018.globalchange.gov/chapter/25/. See also
Intergovernmental Panel on Climate Change (IPCC)
Observed Climate Change Impacts Database,
available at https://sedac.ipcc- data.org/ddc/
observed_ar5/.
266 California argues in its comments that EPA has
inappropriately reduced the scope of waiver ability
under CAA section 209(b) to be narrower than the
scope of express preemption under CAA section
209(a). EPA disagrees. To the extent that CAA
section 209(b)(1)(B), as interpreted and applied
here, precludes a waiver for California’s GHG
vehicle emissions and ZEV programs, that effect
flows from the text and structure of this statutory
section.
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209(b)(1)(B) be construed as requiring
‘‘California’s problems to be entirely
unique or sufficiently different from
those in other States.’’ CARB also
contends that EPA is limiting
application of CAA section 209(b)(1)(B)
to smog, even though EPA has granted
waivers for pollutants that do not
contribute to smog, such as particulate
matter. In addition, CARB maintains
that what it characterizes as EPA’s
reading ‘‘compelling and extraordinary
conditions’’ as restricted to ‘‘local’’ or
‘‘regional’’ pollutants would weaken
Congress’s intent that California retain
its own regulatory program and
continue to lead the nation as a
‘‘laboratory of innovation.’’ CARB
further argues that EPA provides no
support for this ‘‘geographic
distinction,’’ while also casting the
reading as ‘‘illusory.’’ According to
CARB, both local and global pollution
cause compelling and extraordinary
conditions, as evidenced by provisions
of the CAA that address long-range
transport of emissions (beyond the state
level). In sum, CARB argues that
‘‘compelling and extraordinary
conditions’’ is expansive enough to be
read as including GHG emissions and
that EPA’s ‘‘exacting and unrealistic’’
reading can only be met by ‘‘a rare air
pollution problem.’’ CARB comments at
360–365.
EPA disagrees. First, as explained at
proposal, the 1977 Amendments revised
CAA section 209(b)(1) in only one
material aspect. Specifically, California
is required to determine that standards
it seeks a waiver for will be ‘‘in the
aggregate, at least as protective of public
health and welfare than applicable
Federal standards,’’ rather than the
‘‘more stringent’’ standard under 1967
Clean Air Act. 83 FR 43247 n.579.
Second, there is relevant legislative
history from the 1977 amendments,
which describes EPA’s role in reviewing
California’s protectiveness
determination, under CAA section
209(b)(1)(A), as whether ‘‘the State acted
unreasonably in evaluating the relative
risks of various pollutants in light of air
quality, topography, photochemistry
and climate in that State.’’ This 1977
legislative history further supports a
reading requiring a particularized
nexus. H. Rep. No. 294, 95th Cong., 1st
Sess. 302 (1977), U.S. C.C.A.N. 1977, p.
1381. Third, in support of the proposed
reading, EPA cited MEMA I as noting
the Senate Committee discussion of
California’s ‘‘peculiar local conditions’’
in 1967 legislative history for this
provision in upholding the grant of a
waiver subsequent to the 1977 CAA
amendments. . 627 F.2d at 1109, citing
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51343
S.Rep. No. 403, 90th Cong., 1st Sess. 33
(1967); see also Ford Motor Co. v. EPA,
606 F.2d 1293,1303 (D.C. Cir. 1979) (‘‘It
was clearly the intent of the Act that
that determination focus on local air
quality problems . . . that may differ
substantially from those in other parts of
the nation.’’). Fourth, EPA’s reading of
CAA section 209(b)(1)(B) has never been
and is not limited to ‘‘smog’’-causing
pollutants. Here, CARB’s comment
glosses over extensive discussion in the
SAFE proposal of the phrase
‘‘compelling and extraordinary’’
including, for example, legislative
history indicating that California is to
demonstrate ‘‘compelling and
extraordinary circumstances sufficiently
different from the nation as a whole to
justify standards on automobile
emissions which may, from time to
time, need to be more stringent than
national standards.’’ 83 FR 23427, citing
S. Rep. No. 403, 90th Cong. 1st Sess., at
32 (1967). Fifth, as shown in greater
detail in section III.D, the phrase
‘‘compelling and extraordinary
conditions’’ qualifies the ‘‘need’’ for
California’s standards. And in a statute
designed to address public health and
welfare, it certainly cannot mean
standards that allow a state to be ‘‘a
laboratory for innovation’’ in the
abstract, without any connection to a
need to address pollution problems.
Most notably, legislative history
explains that CAA section 209(b)(1) was
is intended to recognize California’s
‘‘unique problems.’’ For example, in
originally adopting the provision, the
Senate Committee on Public Works
explained that ‘‘California’s unique
problems and pioneering efforts
justified a waiver of the preemption
section to the State of California.’’ S.
Rep. No. 403, 90th Cong., 1st Sess. 33
(1967) (emphasis added); see also 113
Cong. Rec. 30948 (bound ed. Nov.
2,1967), Statement of Representative
Harley Staggers, chairman of the House
Interstate and Foreign Commerce
Committee (explaining that ‘‘overall
national interest required
administration of controls on motor
vehicle emissions, with special
recognition given by the Secretary to the
unique problems facing California as a
result of numerous thermal inversions
that occur within that state because of
its geography and prevailing wind
patterns), ; id. at 30950, Remarks of Rep.
Corman (‘‘The uniqueness and the
seriousness of California’s problem is
evident–more than 90 percent of the
smog in our urban area is caused by
automobiles, and in the next 15 years
the number of automobiles in the state
will almost double.’’). Sixth, while it is
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true that local and regional pollutants
can be transported at greater geographic
scales than the state level, the Clean Air
Act sets out a comprehensive scheme
for addressing air pollution transported
to other regions; see, e.g., CAA sections
126 and 110(a)(2)(D)(i). The fact that the
Act addresses pollutant transport
elsewhere does not expand the scope of
the waiver provision. In contrast, in
CAA section 209(b), Congress set out a
waiver of preemption for California to
address automotive pollution that give
rise to local and regional air quality
problems. Finally, to the extent CARB
casts EPA reading as ‘‘exacting and
unrealistic,’’ it mischaracterizes CAA
section 209(a) and (b), which preempts
states from adopting and enforcing
standards for new motor vehicles and
engines, with CAA section 209(b)
allowing for a waiver of the preemption
in 209(a) only if certain enumerated
conditions are met. It is not ‘‘a rare air
pollution problem’’ that satisfies the
particularized nexus interpretation of
CAA section 209(b)(1)(B) that EPA
adopts in this document. Rather, it is
the all-too-well understood and
longstanding air pollution problem that
California continues to face: Aggravated
criteria pollution at the state and local
level.
2. It Is Appropriate To Apply This
Criterion to California’s GHG Standards
Separately, Rather Than to California’s
Motor Vehicle Program as a Whole
Under CAA section 209(b)(1)(B) of the
Clean Air Act, the Administrator may
not grant a waiver if he finds that the
‘‘State does not need such State
standards to meet compelling and
extraordinary conditions.’’ EPA
proposed to find that CARB does not
need its own GHG and ZEV standards
to meet compelling and extraordinary
conditions in California, on the grounds
that ‘‘compelling and extraordinary
conditions’’ mean environmental
conditions with causes and effects
particular or unique to, California
whereas GHG emissions present global
air pollution problems. Specifically,
EPA proposed to determine that the
GHG-related standards are designed to
address global air pollution and its
consequences, in contrast to local or
regional air pollution problems with
causal ties to conditions in California.
EPA also proposed to find that, while
effects related to climate change in
California could be substantial, they are
not sufficiently different from the
conditions in the nation as a whole to
justify separate State standards under
CAA section 209(b)(1)(B). 83 FR 43248–
43250. Lastly, EPA proposed to find that
the State’s GHG-related standards would
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not have a meaningful impact on the
potential conditions related to global
climate change. Because EPA has
traditionally interpreted and applied
CAA section 209(b)(1)(B) in a manner
that examines whether the conditions
that Congress identified (e.g.,
topography number of vehicles, etc.) 267
still give rise to serious air quality
problems in California, and thus a need
for California’s own motor vehicle
emission control program, EPA
concludes that this causal-link test is
the appropriate basis on which to
evaluate California’s GHG emission
standards under the second waiver
prong, CAA section 209(b)(1)(B).268
In general, EPA has in the past
recognized California’s unique
267 See, e.g., 49 FR 18887, 18890 (May 3, 1984)
(waiver decision discussing legislative history of
CAA section 209).
268 It is not appropriate for EPA to defer to
California and other outside parties when EPA is
interpreting its own statute. By contrast, EPA does
defer to California’s policy choices when it comes
to choosing emissions standards that will best
address the serious air quality problems and
impacts on public health and welfare in
California—to the extent that the State standards at
issue will actually address pollution and its
consequences that are particular to California. But
the question whether the State regulations at issue
actually do meet the statutory criterion of being
necessary ‘‘to meet compelling and extraordinary
conditions’’ in the meaning of the statute, CAA
section 209(b)(1)(B), is one which EPA must
answer. In this regard, EPA notes that it has
previously taken the position that ‘‘the burden of
proof [lies] on the party opposing a waiver,’’ and
that ‘‘the burden [is] on those who allege, in effect,
that EPA’s GHG emission standards are adequate to
California’s needs.’’ 78 FR at 2117 (Jan. 2013 waiver
grant). EPA notes that this previous discussion is
distinguishable from the current context in two key
regards. First, EPA was in 2013 analyzing third
parties’ opposition to a waiver, rather than
conducting its own analysis of whether a previously
granted waiver was appropriately granted. Second,
EPA’s change in position in this document does not
constitute an assertion that ‘‘EPA’s GHG emission
standards are [or are not] adequate to California’s
needs’’ as a matter of policy. Rather, EPA is
adopting an interpretation of CAA section
209(b)(1)(B), specifically its provision that no
waiver is appropriate if California does not need
standards ‘‘to meet compelling and extraordinary
conditions,’’ similar to the interpretation that it
adopted in the 2008 waiver denial but abandoned
in the 2009 and 2013 waiver grants, and applying
that interpretation to determine to withdraw the
January 2013 waiver for California’s GHG and ZEV
program for model years 2021 through 2025. Under
that interpretation, the question is not whether
existing federal standards are ‘‘adequate to
California’s needs,’’ but whether California’s
standards are needed under the meaning of CAA
section 209(b)(1)(B), which, as set forth in this
document, requires a particularized nexus between
California-specific pollutant sources, Californiaspecific pollution contributed to thereby, and
California-specific pollutants impacts caused
thereby. Furthermore, we took comment on burden
of proof in the proposal, see 83 FR at 43244 n.567.
EPA believes it is not necessary to resolve that issue
in this action as regardless of whether a
preponderance of the evidence or clear and
compelling evidence standard is applied, the
Agency concludes that withdrawal of the waiver is
appropriate.
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underlying conditions and serious air
pollution problems when reviewing
waiver requests.269 California, and
others that oppose the withdrawal of the
waiver, assert that the relevant inquiry
is merely whether California needs to
have some form of a separate State
motor vehicle emissions control
program to meet compelling and
extraordinary conditions, not whether
any given standard is needed to meet
compelling and extraordinary
conditions related to that air pollution
problem. On the other hand, several
commenters that support a withdrawal
of the waiver suggest EPA’s
determination should be based on
whether California needs greenhouse
gas standards in particular to meet
compelling and extraordinary
conditions, asserting that a proposed set
of standards must be linked to
compelling and extraordinary
conditions. These commenters suggest
that the Act requires EPA to look at the
particular ‘‘standards’’ at issue, not the
entire State program.
EPA determines that it in this context
it is appropriate to review whether
California needs its GHG standards to
meet compelling and extraordinary
conditions separately from the need for
the remainder of California’s new motor
vehicle program, which has historically
addressed criteria pollutants with a
particular causal link to local and
regional conditions both in the nature
and quantity of emissions and in the
particularized local and regional
impacts of the pollution to which those
emissions contribute. EPA bases this
decision on the fact that California’s
GHG standards are designed to address
global climate change problems that are
different from the local pollution
conditions and problems that California
has addressed previously in its new
motor vehicle program. The climate
change problems are different in terms
of the distribution of the pollutants and
the effect of local California factors,
including the local effect of motor
vehicle emissions as differentiated from
other GHG emissions worldwide on the
GHG concentrations in California. In
269 See American Trucking Associations, Inc. v.
Environmental Protection Agency, 600 F.3d 624,
627 (D.C. Cir. 2010) (‘‘With respect to the statutory
language, EPA concluded that ‘compelling and
extraordinary conditions’ refers to the factors that
tend to cause pollution—the ‘geographical and
climate conditions that, when combined with large
numbers and high concentrations of automobiles,
create serious air pollution problems.’ The
expansive and statutory language gives California
(and in turn EPA) a good deal of flexibility in
assessing California’s regulatory needs. We
therefore find no basis to disturb EPA’s reasonable
interpretation of the second criterion. See Chevron,
USA Inc v. Natural Res. Def. Council, 467 U.S. 837,
842–43.’’) (citation omitted).
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addition, EPA notes that under its
traditional interpretation of CAA section
209(b)(1)(B), where EPA evaluates the
need for a separate California new motor
vehicle program, conditions such as the
nature of the air quality problem may
change whereby a particular motor
vehicle regulation designed for a
specific criteria pollutant is no longer
needed to address a serious air quality
problem (e.g., the underlying air quality
problem no longer exists). Therefore,
EPA concludes that it is appropriate to
examine the need for GHG standards
within California’s mobile source
program to ensure that such standard is
linked to local conditions that giving
rise to the air pollution problem, that
the air pollution problem is serious and
of a local nature, and that the State
standards at issue will meaningfully
redress that local problem.270
This waiver decision falls within the
context of a few instances of EPA
applying the CAA section 209(b)(1)(B)
criterion to a California waiver request
for a fundamentally global air pollution
problem.271 Although EPA’s review of
270 EPA notes in this regard that the position that
GHG and climate are no different from criteria
pollutants and criteria air pollution in terms of
applicability of the CAA section 209(b) waiver
regime, and specifically that no particularized
nexus between in-state emissions and in-state
impacts is necessary in order to meet the CAA
section 209(b)(1)(B) ‘‘need[ed] . . . to meet
compelling and extraordinary conditions,’’ would
effectively read the term ‘‘extraordinary’’ out of the
statute, or reduce it to surplusage with the term
‘‘compelling.’’ Whether GHG emissions and
attendant climate impacts are, in the colloquial
sense, compelling or not is not the relevant
question. It is whether they are ‘‘compelling and
extraordinary’’ within the reasonably interpreted
meaning of that term in its context here. Inasmuch
as that term in its context requires a particularized
nexus between California emissions, California
pollution, and California impacts, they are not.
271 See generally California State Motor Vehicle
Pollution Control Standards; Advanced Clean Car
Program; Notice of Decision, January 9, 2013
Volume 78, Number 6 pp. 2211—2145; California
State Motor Vehicle Pollution Control Standards;
Greenhouse Gas Emissions from 2014 and
Subsequent Model Year Medium- and Heavy-Duty
Engines and Vehicles; Notice of Decision; December
29, 2016 Volume 81, Number 250, pp. 95982–
95987; California State Motor Vehicle Pollution
Control Standards; Heavy-Duty Tractor-Trailer
Greenhouse Gas Regulations; Notice of Decision;
August 7, 2014 Volume 79, Number 152 pp. 46256–
46265; California State Motor Vehicle Pollution
Control Standards; Within-the-Scope Determination
for Amendments to California’s Motor Vehicle
Greenhouse Gas Regulations; Notice of Decision;
June 14, 2011 Volume 76, Number 114 pp. 34693–
34700; California State Motor Vehicle Pollution
Control Standards; Notice of Decision Granting a
Waiver of Clean Air Act Preemption for California’s
2009 and Subsequent Model Year Greenhouse Gas
Emission Standards for New Motor Vehicles; July
8, 2009 Volume 74, Number 129 pp. 32744–32784;
California State Motor Vehicle Pollution Control
Standards; Notice of Decision Denying a Waiver of
Clean Air Act Preemption for California’s 2009 and
Subsequent Model Year Greenhouse Gas Emission
Standards for New Motor Vehicles; March 6, 2008
Volume 73, Number 45 pp. 12156–12169.
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this criterion has typically been cursory
due to California needing its motor
vehicle emission program due to
fundamental factors leading to local and
regional air pollution problems that
were well established at the time of
creation of the waiver provision (as
discussed below), it is appropriate in
this case to carefully review the purpose
of CAA section 209(b)(1)(B) when
applying it to the unique circumstance
of California’s regulation of greenhouse
gases. By doing so, EPA gives meaning
to Congress’s decision to include this
provision in CAA section 209(b).272
Moreover, because both CAA sections
209(b)(B) and (C) employ the term ‘‘such
state standards,’’ it is appropriate for
EPA to read the term consistently
between prongs (B) and (C). Under CAA
section 209(b)(1)(C) EPA conducts
review of standards California has
submitted to EPA for the grant of a
waiver to determine if they are
consistent with CAA section 202(a).273
It follows then that EPA must read
‘‘such state standards’’ in CAA section
209(b)(1)(B) as a reference to the same
standards in subsection (C).274
a. EPA Practice in Previous Waivers
In past waivers that addressed local or
regional air pollution, EPA has
interpreted CAA section 209(b)(1)(B) as
requiring it to consider whether
California needs a separate motor
vehicle program to meet compelling and
extraordinary conditions. Under this
approach, EPA does not consider
whether the specific standards at issue
are needed to meet compelling and
extraordinary conditions related to that
air pollutant. For example, EPA
reviewed this issue in detail with regard
272 See United States v. Menashe, 348 US 528,
538–39 (1955) (courts must give effect to every
word, clause, and sentence of a statute).
273 ‘‘Technology exists with which to achieve
California’s proposed standards for HC and CO,
however, the standards are inconsistent with
Section 202(a) of the Clean Air Act because the cost
of compliance within the lead time remaining is
excessive.’’ 38 FR 30136 (November 1, 1973). See
also 40 FR 30311 (July 18, 1975); 43 FR 998, 1001
(Jan. 5, 1978).
274 Under CAA section 177 states may adopt and
enforce motor vehicle emissions standards if ‘‘such
standards are identical to the California standards
for which a waiver has been granted.’’ See, e.g.,
Motor Vehicle Mfrs. Ass’n v. NYS Dep. of Envt’l
Conservation, 17 F.3d 521, 532 (2d Cir. 1994).
‘‘Section 177 refers to ‘standards relating to control
of emissions ... for which a waiver has been
granted.’ Id. In enacting § 209(b), which establishes
California’s preemption exception, Congress uses
the same words as it did when it allowed California
to set its own ‘standards . . . for the control of
emissions,’ provided the EPA approves a waiver
application. Id. § 7543(b)(1). Hence, the most logical
reading of § 177 is that New York may adopt only
those standards that, pursuant to § 209(b),
California included in its waiver application to the
EPA.’’ (Emphasis in original).
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to particulate matter in a 1984 waiver
decision.275 In that waiver proceeding,
California argued that EPA is restricted
to considering whether California needs
to have its own motor vehicle program
to meet compelling and extraordinary
conditions, and does not consider
whether any given standard is necessary
to meet such conditions. Opponents of
the waiver in that proceeding argued
that EPA was to consider whether
California needed these PM standards to
meet compelling and extraordinary
conditions related to PM air pollution.
The Administrator agreed with
California that it was appropriate to look
at the program as a whole in
determining compliance with CAA
section 209(b)(1)(B). One justification of
the Administrator was that many of the
concerns with regard to having separate
State standards were based on the
manufacturers’ worries about having to
meet more than one motor vehicle
program in the country, but that once a
separate California program was
permitted, it should not be a greater
administrative hindrance to have to
meet further standards in California.
The Administrator also justified this
decision by noting that the language of
the statute referred to ‘‘such state
standards,’’ which referred back to the
use of the same phrase in the criterion
looking at the protectiveness of the
standards in the aggregate. He also
noted that the phrase referred to
standards in the plural, not individual
standards. He considered this
interpretation to be consistent with the
ability of California to have some
standards that are less stringent than the
federal standards, as long as, under CAA
section 209(b)(1)(A), in the aggregate its
standards were at least as protective as
the federal standards.
The Administrator further stated that
in the legislative history of CAA section
209, the phrase ‘‘compelling and
extraordinary circumstances’’ refers to
‘‘certain general circumstances, unique
to California, primarily responsible for
causing its air pollution problem,’’ like
the numerous thermal inversions caused
by its local geography and wind
patterns. The Administrator also noted
that Congress recognized ‘‘the presence
and growth of California’s vehicle
population, whose emissions were
thought to be responsible for ninety
percent of the air pollution in certain
parts of California.’’ 276 EPA reasoned
that the term compelling and
extraordinary conditions ‘‘does not refer
to the levels of pollution directly.’’
Instead, the term refers primarily to the
275 See
276 Id.
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confluence of factors that tend to
produce higher levels of pollution of the
type particular to California:
‘‘geographical and climatic conditions
(like thermal inversions) that, when
combined with large numbers and high
concentrations of automobiles, create
serious air pollution problems.’’
The Administrator summarized that
the question to be addressed in the
second criterion is whether these
‘‘fundamental conditions’’ (i.e., the
geographical and climate conditions and
large motor vehicle population) that
cause air pollution continued to exist,
not whether the air pollution levels for
PM were ‘‘compelling and
extraordinary,’’ nor the extent to which
these specific PM standards will address
the PM air pollution problem.
From this it can be seen that EPA’s
interpretation in the context of
reviewing standards designed to address
local or regional air pollution has
looked at the local causes of the air
pollution problems: Geographic and
climatic conditions that turn local
emissions into air pollution problems,
such as thermal inversions, combined
with a large number of motor vehicles
in California emitting in the aggregate
large quantities of emissions. Under the
interpretation EPA adopts in this
document, it is the particularized nexus
between the emissions from California
vehicles, their contribution to local
pollution, and the extraordinary impacts
that that pollution has on California due
to California’s specific characteristics,
that set California apart from other areas
when Congress adopted this provision.
EPA’s review of this criterion has
usually been cursory and not in dispute,
as the fundamental factors leading to
these traditional criteria air pollution
problems—geography, local climate
conditions (like thermal inversions),
significance of the motor vehicle
population—have not changed over
time and over different local and
regional air pollutants. These
fundamental factors have applied
similarly for all of California’s air
pollution problems that are local or
regional in nature. California’s
circumstances of geography, climate,
and motor vehicle population continue
to show that it has compelling and
extraordinary conditions leading to such
local air pollution problems related to
traditional pollutants.
California’s motor vehicle program
has historically addressed air pollution
problems that are generally local or
regional in nature. The emission
standards have been designed to reduce
emissions coming from local vehicles,
in circumstances where these local
emissions lead to air pollution in
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California that will affect directly the
local population and environment in
California. The narrow question in this
waiver proceeding is whether this
interpretation is appropriate when
considering motor vehicle standards
designed to address a global air
pollution problem and its effects, as
compared to a local or regional air
pollution problem that has particular
causal ties to conditions in California.
As EPA observed in the SAFE
proposal, the agency has articulated
differing interpretations of CAA section
209(b)(1)(B). Historically, EPA has
interpreted this provision to require that
California needs to have its own
separate new motor vehicle program in
the aggregate to meet compelling and
extraordinary conditions in California,
not whether the state needs the specific
standards under consideration. In 2008,
in contrast, when EPA first considered
whether State GHG emission regulations
meet the requirements for a CAA section
209(b) waiver, EPA determined that the
better reading of CAA section
209(b)(1)(B) would be to consider
whether California ‘‘need[s]’’ the
particular standards at issue ‘‘to meet
compelling and extraordinary
conditions,’’ and the agency denied the
waiver on these grounds. Then, when
EPA reconsidered that denial in 2009,
the agency reverted to the interpretation
that it had previously applied for
criteria pollutants and granted the
waiver.
EPA concludes that the long and
contentious history of this question, and
the recent measures that California has
taken even during the pendency of this
administrative action to amend its State
regulations beyond the form in which
they were granted the waiver in 2013
and, even more recently, to purport to
establish ‘‘voluntary’’ programs creating
yet a third program distinct both from
that for which CAA preemption was
waived in 2013 and the Federal
standards promulgated in 2012 and
currently under review by the Federal
government, confirm that extension of
CAA section 209(b) waivers to State
GHG and ZEV programs was
inappropriate. Such waivers have led to
actions by California increasingly at
odds with the clear Congressional
design and intent that national
standards would be set by the federal
government with California having an
ability to apply for targeted waivers of
preemption to address its own
particular problems. EPA therefore
views this interpretation and
application of CAA section 209(b)(1)(B)
set forth here as, at minimum, a
reasonable one that gives appropriate
meaning and effect to this provision and
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does not second-guess California’s
policy judgment notwithstanding
assertions to the contrary.
b. The Distinct Nature of Global GHG
Pollution as It Relates to CAA Section
209(b)(1)(B)
The air pollution problem at issue
here is elevated atmospheric
concentrations of greenhouse gases, and
the concern is the impact these
concentrations have on global climate
change and the effect of global climate
change on California. In contrast to local
or regional air pollution problems, the
atmospheric concentrations of these
greenhouse gases are substantially
uniform across the globe, based on their
long atmospheric life and the resulting
mixing in the atmosphere. The factors
looked at in the past when considering
waiver requests for State standards
addressing criteria pollutants—the
geography and climate of California, and
the large motor vehicle population in
California, which were considered the
fundamental causes of the air pollution
levels found in California—cannot form
the basis of a meaningful analysis of the
causal link between California vehicles’
GHG emissions and climate effects felt
in California. The concentration of
greenhouse gases in the upper
atmosphere may affect California, but
that concentration is not affected in any
particular way by the geography and
climate of California. The long duration
of these gases in the atmosphere means
they are well-mixed throughout the
global atmosphere, such that their
concentrations over California and the
U.S. are, for all practical purposes, the
same as the global average. The number
of motor vehicles in California, while
still a notable percentage of the national
total and still a notable source of GHG
emissions in the State, bears no more
relation to the levels of greenhouse
gases in the atmosphere over California
than any other comparable source or
group of sources of greenhouse gases
anywhere in the world. Emissions of
greenhouses gases from California cars
do not generally remain confined within
California’s local environment (and,
indeed, were they to do so, rather than
rise to the upper atmosphere to become
well-mixed with other GHG emissions,
those locally located emissions would
not, by definition, contribute to the
‘‘pollution’’ that is at issue here).
Instead, those GHG emissions from
vehicles operating in California become
one part of the global pool of GHG
emissions, with this global pool of
emissions leading to a relatively
homogenous concentration of
greenhouse gases over the globe. Thus,
the emissions of motor vehicles in
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California do not affect California’s air
pollution problem in any way different
from emissions from vehicles and other
pollution sources all around the world.
Similarly, the emissions from
California’s cars do not just affect the
atmosphere in California, but in fact
become one part of the global pool of
GHG emissions that affect the
atmosphere globally and are distributed
throughout the world, resulting in
basically a uniform global atmospheric
concentration.
Given the different, and global, nature
of the pollution at issue, EPA
determines that the conceptual basis
underlying the practice of considering
California’s motor vehicle program as a
whole (in the context of criteria
emission regulations) does not
meaningfully apply with respect to
elevated atmospheric concentrations of
GHGs. Therefore, EPA has considered
whether it is appropriate to apply this
criterion in a different manner for this
kind of air pollution problem; that is, a
global air pollution problem.
As previously explained, the text and
relevant legislative history of CAA
section 209 also supports EPA’s
decision to examine the application of
the second waiver denial criterion (CAA
section 209(b)(1)(B)) with regard to
California’s GHG and ZEV standards
specifically in the context of global
climate change. It indicates that
Congress was moved to allow waivers of
preemption for California motor vehicle
standards based on the particular effects
of local conditions in California on the
air pollution problems in California.
Congress discussed ‘‘the unique
problems faced in California as a result
of its climate and topography.’’ H.R.
Rep. No. 728, 90th Cong. 1st Sess., at 21
(1967). See also Statement of Cong.
Holifield (CA), 113 Cong. Rec. 30942–43
(1967). Congress also noted the large
effect of local vehicle pollution on such
local problems. See, e.g., Statement of
Rep. Bell (CA), 113 Cong. Rec. 30946. In
particular, Congress focused on
California’s ozone problem, which is
especially affected by local conditions
and local pollution. See Statement of
Rep. Smith (CA), 113 Cong. Rec. 30940–
41 (1967); Statement of Rep. Holifield
(CA), id. at 30942. See also Motor &
Equip. Mfrs. Ass’n, Inc. v. EPA (MEMA),
627 F. 2d 1095, 1109 (D.C. Cir., 1979)
(noting the discussion of California’s
‘‘peculiar local conditions’’ in the
legislative history). Congress clearly did
not have in view pollution problems of
a more national or global nature in
justifying this provision.277 Moreover,
277 In reference to another argument made in the
1984 waiver, while the administrative costs of a
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‘‘the [Clean Air] Act also differentiates
between the states, despite our historic
tradition that all the States enjoy equal
sovereignty. Distinctions can be justified
in some cases. ‘The doctrine of the
equality of States . . . does not bar . . .
remedies for local evils which have
subsequently appeared.’ But a departure
from the fundamental principle of equal
sovereignty requires a showing that a
statute’s disparate geographic coverage
is sufficiently related to the problem
that it targets.’’ Nw. Austin Mun. Util.
Dist. No. One. v. Holder, 557 U.S. 193,
203 (2009) (some citations and internal
quotation marks omitted) (quoting
South Carolina v. Katzenbach, 383 U.S.
301, 328–29 (1966)) (ellipses and
emphasis added by Northwest Austin
Court); see also Katzenbach, 383 U.S. at
334 (‘‘exceptional conditions can justify
legislative measures not otherwise
appropriate’’) (emphasis added); cf. 42
U.S.C. 7543(b)(1)(B) (‘‘No such waiver
shall be granted if the Administrator
finds that . . . . such State does not
need such State standards to meet
compelling and extraordinary
conditions.’’) (emphasis added). These
principles support our conclusion that
Congress did not intend the waiver
provision in CAA section 209(b) to be
applied to California measures that
address pollution problems of a national
or global nature, as opposed to
conditions that are ‘‘extraordinary’’ with
respect to California in particular—i.e.,
those with a particularized nexus to
emissions in California and to
topographical or other features peculiar
to California.’’
c. It Is Appropriate To Apply CAA
Section 209(b)(1)(B) Separately to GHG
Standards
EPA concludes that in the context of
reviewing California GHG related
standards designed to address global
climate change, it is appropriate to
apply the second criterion separately for
GHG standards.
The intent of Congress, in enacting
CAA section 209(b) and in particular
Congress’s decision to have a separate
CAA section 209(b)(1)(B), was to require
EPA to specifically review whether
California continues to have compelling
and extraordinary conditions and the
need for State standards to address
those conditions. Thus, EPA concludes
that it is appropriate to review
program may not increase significantly based on the
addition of new standards, there is still cost in the
implementation of new standards, particularly in
terms of changes in design necessitated by the new
standards. In any case, this issue does not appear
to be relevant to the issue of whether California
needs its standards to meet compelling and
extraordinary conditions.
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California’s GHG standards separately
from the remainder of the State’s motor
vehicle emission control program for
purposes of CAA section 209(b)(1)(B).
In this context it is appropriate to give
meaning to this criterion by looking at
whether the emissions from California
motor vehicles, as well as the local
climate and topography in California,
are the fundamental causal factors for
the air pollution problem—elevated
concentrations of greenhouse gases—
apart from the other parts of California’s
motor vehicle program, which are
intended to remediate different air
pollution concerns.
The appropriate criteria to apply
therefore is whether the emissions of
California motor vehicles, as well as
California’s local climate and
topography, are the fundamental causal
factors for the air pollution problem of
elevated concentrations of greenhouse
gases.
d. Relationship of California Motor
Vehicles, Climate, and Topography to
Elevated Concentrations of Greenhouse
Gases in California
Under CAA section 209(b)(1)(B), EPA
proposed to withdraw the waiver of
preemption of the ACC program GHG
and ZEV standards for MY 2021–2025
on two alternative grounds. Specifically,
(1) California ‘‘does not need’’ these
standards ‘‘to meet compelling and
extraordinary conditions;’’ and (2) even
if California does have compelling and
extraordinary conditions in the context
of global climate change, California does
not ‘‘need’’ these standards because they
will not meaningfully address global air
pollution problems of the sort
associated with GHG emissions. 83 FR
43248.
As previously explained, EPA
proposed to determine that the balance
of textual, contextual, structural, and
legislative history evidence provide
reasonable support for the conclusion
that the statute is ambiguous in one
particular respect: Whether section
209(b)(1)(B) refers to an individual
standard or the California standards as
a whole when referring to the
Administrator’s review of state
standards submitted for a waiver, to
determine whether the state ‘‘needs
such State standards to meet compelling
and extraordinary conditions,’’ and that
the approach of examining the need for
GHG-related standards separate from the
other, traditional aspects of California’s
program is reasonable given, among
other factors, the unique nature of the
global pollutant. EPA recognizes that
Congress’s purpose in establishing the
prohibition in CAA section 209(a) and
the waiver in CAA section 209(b) was to
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balance the benefit of allowing
California significant discretion in
deciding how to protect the health and
welfare of its population with the
burden imposed on the manufacturers
of being subject to two separate motor
vehicle programs and the overarching
policy judgment that uniform national
standards are appropriate. S. Rep. No.
403, 90th Cong. 1st Sess., at 32–33
(1967). It is clear that Congress intended
this balance to be premised on a
situation where California needs the
State standards to meet compelling and
extraordinary conditions. Thus, if EPA
determines that California does not need
its State GHG standards to meet
compelling and extraordinary
conditions, a waiver of preemption for
those State standards is not permitted
under the statute.
Commenters supportive of EPA’s
proposal to withdraw the waiver
commented that California should not
continue to enjoy a waiver for separate
State GHG standards because those State
standards are not needed to meet
compelling and extraordinary
conditions because there is no link
between California-based motor vehicle
GHG emissions and any alleged
extraordinary conditions in California.
These commenters state that while
California spends a great deal of time
discussing the effects of climate change
in California, California does not link its
GHG standards to those effects. They
note that GHGs are not localized
pollutants that can affect California’s
local climate, or that are problematic
due to California’s specific topography.
Instead, emissions from vehicles in
California become mixed with the global
emissions of GHG and affect global
climate (including California’s climate)
in the same way that any GHG from
around the world affect global (and
California) climate conditions. They
claim that Congress authorized EPA to
grant a waiver of preemption only in
cases where California standards were
necessary to address peculiar local air
quality problems. They claim that there
can be no need for separate California
standards if the standards are not aimed
at, and do not redress, a Californiaspecific problem.
In previous waiver decisions, EPA
was asked to waive preemption of
standards regulating emissions that
were local or regional in effect. Local air
pollution problems are affected directly
by local conditions in California, largely
the emissions from motor vehicles in
California in the context of the local
climate and topography. As a result,
State standards regulating such local
motor vehicle emissions will have a
direct effect on the concentration of
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pollutants directly affecting California’s
environment. They are effective
mechanisms to reduce the levels of local
air pollution in California because local
conditions are the primary cause of that
kind of air pollution problem. In
addition, reductions in emissions from
motor vehicles that occur elsewhere in
the United States will not have the same
impact, and often will have no impact,
on reducing the levels of local air
pollution in California.
By contrast, GHGs emitted by
California motor vehicles become part of
the global pool of GHG emissions that
affect concentrations of GHGs on a
uniform basis throughout the world.
The local climate and topography in
California have no significant impact on
the long-term atmospheric
concentrations of greenhouse gases in
California. Greenhouse gas emissions
from vehicles or other pollution sources
in other parts of the country and the
world will have as much effect on
California’s environment as emissions
from California vehicles. As a result,
reducing emissions of GHGs from motor
vehicles in California has the same
impact or effect on atmospheric
concentrations of GHGs as reducing
emissions of GHGs from motor vehicles
or other sources elsewhere in the U.S.,
or reducing emissions of GHGs from
other sources anywhere in the world.
California’s motor vehicle standards for
GHG emissions do not affect only
California’s concentration of GHGs, but
affect such concentrations globally, in
ways unrelated to the particular
topography in California. Similarly,
emissions from other parts of the world
affect the global concentrations of
GHGs, and therefore concentrations in
California, in exactly the same manner
as emissions from California’s motor
vehicles.
Further, as explained in the SAFE
proposal, California’s claims that it is
uniquely susceptible to certain risks
because it is a coastal State does not
differentiate California from other
coastal States such as Massachusetts,
Florida, and Louisiana, much less that
conditions in California are any more
‘‘extraordinary’’ as compared to any
other coastal States, particularly those
coastal States that may possess a greater
percentage of low-lying territory than
California. Any effects of global climate
change (e.g. water supply issues,
increases in wildfires, effects on
agriculture) could certainly affect
California. But those effects would also
affect other parts of the United States.278
278 Some commenters made this same point. See,
e.g., Fiat Chrysler Automobiles, Docket No. EPA–
HQ–OAR–2018–0283–4406 at 89; American Fuel &
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Many parts of the United States,
especially western States, may have
issues related to drinking water (e.g.,
increased salinity) and wildfires, and
effects on agriculture; these occurrences
are by no means limited to California.
These are among the types of climate
change effects that EPA considered in
the 2009 CAA section 202(a)
endangerment finding which is the
predicate for its authority to issue
national motor vehicle GHG standards.
But EPA’s evaluation of whether
California’s standards are ‘‘need[ed] to
meet compelling and extraordinary
conditions’’ is not identical to its prior
determination, pursuant to CAA section
202(a) whether GHG emissions from the
national motor vehicle fleet contribute
to pollution that may reasonably be
anticipated to endanger public health or
welfare. In order for a waiver request to
pass muster under CAA section
209(b)(1)(B), as set forth in this
document, a particularized, statespecific nexus must exist between
sources of pollutants, resulting
pollution, and impacts of that pollution.
This is analogous to but distinct from
the more abstract or general predicate
finding for regulation under CAA
section 202(a); if it were not distinct,
then California would, under CAA
section 209(b)(1)(B), always ‘‘need’’ a
waiver for a state-specific program to
‘‘meet’’ any pollution problem that it
experienced once EPA had found under
CAA section 202(a) that motor vehicle
emissions contribute to that pollution
problem (without particular reference to
that pollution problem’s impact on
California). This would effectively
nullify the second waiver denial prong,
CAA section 209(b)(1)(B).279 California
Petrochemical Manufacturers, Docket No. E_A–HQ–
OAR–2018–0283–5648 at 34, 36. At least one recent
analysis, cited by a number of commenters, has
produced estimates of climate change damage that
project that with respect to such matters as coastal
damage, agricultural yields, energy expenditures,
and mortality, California is not worse-positioned in
relation to certain other areas of the U.S., and
indeed is estimated to be better-positioned,
particularly as regards the Southeast region of the
country. See S. Hsiang, et al. ‘‘Estimating Economic
Damage from Climate Change in the United States,’’
356 Science 1362 (2017).
279 Cf. Ford, 606 F.2d at 1303 n.68 (affirming
EPA’s refusal to allow nationwide sale of cars that
meet California standards that, due to the waiver
predicate that California’s standards only need be
as stringent as federal standards in the aggregate,
were not certified as meeting national standards
with respect to all pollutants) (‘‘[Appellants]
suggest to varying degrees that California is a
microcosm of the entire nation and, as such, has no
particularized problems the resolution of which
would require emission control standards
inappropriate to the rest of the country. This may
or may not be completely true. The fact remains,
however, that Congress expected California to be
putting its interests first and there is no guarantee
that those interests are congruent with the interests
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would have it that the 2009 CAA section
202(a) GHG endangerment finding
necessarily means California ‘‘needs’’ its
own GHG program ‘‘to meet compelling
and extraordinary conditions.’’ That
does not follow.280 Cf. Utility Air
Regulatory Group v. EPA, 134 S. Ct.
2427 (2014) (partially reversing the GHG
‘‘Tailoring’’ Rule on grounds that the
CAA section 202(a) endangerment
finding for GHG emissions from motor
vehicles did not compel regulation of all
sources of GHG emissions under the
Prevention of Significant Deterioration
and Title V permit programs). 83 FR
43249.
EPA has discussed the reasons for
concluding that it is appropriate to
consider California’s GHGs standards
separately in determining whether the
State needs those standards to meet
compelling and extraordinary
conditions, as compared to looking at its
need for a motor vehicle program in
general. These reasons also lead to the
conclusion that California does not need
these GHG standards to meet
compelling and extraordinary
conditions. The text, structure, and
legislative history indicates that
Congress’s intent in the second waiver
criterion, CAA section 209(b)(1)(B), was
to allow California to adopt new motor
vehicle standards because of compelling
of the nation as a whole.’’). Here, California offers
an inverse reflection of appellants’ argument in
Ford, but it is no more valid: Because it can marshal
a list of climate impacts that it is experiencing,
California insists it is entitled to a waiver for a statespecific program to address those impacts. All of
California’s problems and corresponding programs,
under this logic, are ‘‘particularized.’’ If this were
the case, no waiver request could ever be denied
under CAA section 209(b)(1)(B), and Congress
would much more likely have simply afforded
California a blanket and automatic waiver. Congress
did not do so, its choice not to do so should be
respected and given meaning, and EPA in this
document sets forth an interpretation and
application of CAA section 209(b)(1)(B) that does so
by articulating a required particularized nexus to
State-specific facts which is present in the case of
California’s criteria vehicle emissions programs but
lacking in the case of its GHG and ZEV ones.
280 EPA notes in this regard that, even in the 2009
reversal of the 2008 waiver denial, the Agency was
careful to distinguish its consideration of the waiver
application from ‘‘the issues pending before EPA
under section 202(a) of the Act,’’ i.e., the thenpending endangerment finding. 74 FR at 32765.
While EPA maintains the position that the CAA
section 202(a) ‘‘endangerment finding’’ inquiry and
the CAA section 209(b)(1)(B) inquiry are distinct,
EPA notes that the 2009 waiver denial reversal (and
the 2008 waiver denial itself) took pains to
distinguish the two primarily because the Agency
was at that time still considering whether to issue
the endangerment finding. As EPA explains in this
document, the two provisions are distinct, but the
CAA section 202(a) predicate criteria for federal
regulation do support the Agency’s position that the
CAA section 209(b)(1)(B) waiver prong is best
interpreted as calling for a consideration whether
the pollution problem at issue has a State-specific,
particularized nexus between emissions, pollution,
and impacts.
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and extraordinary conditions in
California that were causally related to
local or regional air pollution levels in
California. These factors—including
topography and large population of
motor vehicles—cause these kinds of
local or regional air pollution levels in
California and because of this causal
link, California’s motor vehicle
standards can be effective mechanisms
to address these local problems.
Reductions outside California would
lack that causal link to local or regional
air quality conditions inside California.
Congress did not indicate any intent
to allow California to promulgate local
standards to deal with global air
pollution like atmospheric
concentrations of GHGs. In California’s
comments on the SAFE proposal, it
asserted that it has a need for reductions
in GHG atmospheric concentrations and
therefore emissions, but the issue is not
whether such reductions are needed as
a matter of general policy, but whether
Congress intended them to be
effectuated on a State-specific basis by
California through EPA granting a
waiver for the GHG aspects of the State’s
new motor vehicle program. This type
of pollution seems ill-fitted to
Congress’s intent to provide California
with a method of handling its local air
pollution concentrations and related
problems with local emission control
measures. EPA determines that
standards regulating emissions of global
pollutants like greenhouse gases were
not part of the compromise envisioned
by Congress in passing CAA section
209(b).281 Moreover, even if California
does have compelling and extraordinary
conditions in the context of global
climate change, California does not
‘‘need’’ these standards under CAA
section 209(b)(1)(B) because they will
not meaningfully address global air
pollution problems of the sort
associated with GHG emissions. As
noted in the SAFE proposal, the most
stringent of the regulatory alternatives
considered in the 2012 final rule and
FRIA (under much more optimistic
assumptions about technology
effectiveness), which would have
required a seven percent average annual
fleetwide increase in fuel economy for
MYs 2017–2025 compared to MY 2016
standards, was forecast to decrease
global temperatures only by 0.02 °C in
2100.282 This conclusion was further
281 Moreover, EPA is mindful that principles of
equal sovereignty between the states ordinarily
require ‘‘ ‘exceptional conditions’ prevailing in
certain parts of the country [to] justif[y]
extraordinary legislation otherwise unfamiliar to
our federal system.’’ Northwest Austin, 557 U.S. at
211.
282 83 FR 42986, 43216–43217.
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51349
bolstered by multiple commenters.283
EPA therefore concludes that
California’s GHG and ZEV regulations
do not fulfil the requirement within
CAA section 209(b)(1)(B) that such
regulations are ‘‘needed’’ to ‘‘meet’’ the
impacts of global climate change in
California, even assuming arguendo that
those impacts do constitute ‘‘compelling
and extraordinary conditions’’ within
the meaning of that statutory phrase
(although, to be clear, EPA is
determining that those impacts do not
in fact fall within that phrase’s
meaning). Given that Congress enacted
CAA section 209(b) to provide
California with a unique ability to
receive a waiver of preemption, which
provides California with authority that
it would not otherwise have under CAA
section 209, and given the specific
language in CAA section 209(b)(2)
pointing out the need for extraordinary
and compelling conditions as a
condition for the waiver, EPA
determines that it is not appropriate to
waive preemption for California’s
standards that regulate GHGs.
Atmospheric concentrations of
greenhouse gases are an air pollution
problem that is global in nature, and
this air pollution problem does not bear
the same causal link to factors local to
California as do local or regional air
pollution problems. EPA determines
that globally elevated atmospheric
concentrations of GHGs and their
environmental effects are not the kind of
local or regional air pollution problem
that fall within the scope of the
‘‘compelling and extraordinary
conditions’’ encompassed by the terms
of CAA section 209(b)(1)(B). As such,
EPA finds that California does not need
its 2021 through 2025 MY GHG-related
standards to meet compelling and
extraordinary conditions.284
283 The George Washington University Regulatory
Studies Center, Docket No. EPA–HQ–OAR–2018–
0283–4028; Competitive Enterprise Institute, Docket
No. NHTSA–2018–0067–12015.
284 EPA disagrees with comments that suggest
that California ‘‘needs’’ its GHG and ZEV programs
‘‘to meet compelling and extraordinary conditions’’
in the meaning of CAA section 209(b)(1)(B) because
those programs are intended to reduce criteria
pollutants emissions, separate and apart from their
status as programs designed to address climate
change. To take this position would not be in
keeping with historical agency practice in
reviewing California’s waiver requests. Specifically,
EPA practice is not to scrutinize California’s criteria
pollutant emissions reductions projections or air
emissions benefits. Rather, EPA’s view has been
that these are matters left for California’s judgments,
especially given that Title I of the Clean Air Act
imposes the obligation of NAAQS attainment
planning on states. See, e.g., 36 FR 17458; 78 FR
2134; 79 FR 46256, 46261 (Aug. 7, 2014). EPA’s
withdrawal action is premised on CARB’s 2012
ACC program waiver request, which, as previously
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e. No Findings Under CAA Section
209(b)(1)(C) Are Finalized at This Time
In the SAFE proposal, EPA proposed
to determine, as an additional basis for
the waiver withdrawal, that California’s
ZEV and GHG standards for new MY
2021 through 2025 are not consistent
with section 202(a) of the Clean Air Act.
That proposed determination was
intertwined with the SAFE proposal’s
assessment with regard to the
technological feasibility of the Federal
GHG standards for MY 2021 through
2025 and the proposed revisions
thereto. Because EPA and NHTSA are
not at this time finalizing that
assessment or taking final action on the
proposal to revise the Federal standards,
and because the finalized
determinations under CAA section
209(b)(1)(B) and the discussion of the
implications of EPCA preemption with
regard to the waiver previously granted
with respect to those standards set forth
above are each independent and
adequate grounds for the waiver
withdrawal, EPA at this time is not
finalizing any determination with
respect to CAA section 209(b)(1)(C).
EPA may do so in connection with
potential future final action with regard
to the Federal standards.
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E. Withdrawal of Waiver
In this final action, EPA determines
that the California Air Resources
Board’s (CARB’s) regulations pertaining
to greenhouse gases-related (GHG)
emission standards for 2021 through
2025 model year (MY) passenger cars,
light-duty trucks, and medium-duty
vehicles are not needed to meet
compelling and extraordinary
conditions. EPA concludes that CAA
section 209(b) was intended to allow
California to promulgate State standards
applicable to emissions from new motor
vehicles to address pollution problems
that are local or regional, and that have
a particular nexus to emissions from
vehicles in California.285 EPA does not
believe CAA section 209(b)(1)(B) was
intended to allow California to
discussed, only discussed the potential GHG
benefits or attributes of CARB’s GHG and ZEV
standards program (78 FR 2114, 2130–2131). If EPA
does not even scrutinize a California program’s
criteria pollutant emission and benefits projections
when California applies for a waiver for that
program presenting it as a criteria program, then a
fortiori commenters’ retrospective attempt to claim
criteria benefits to maintain a waiver for programs
that were originally presented to EPA in a waiver
request that disclaimed any such benefits is not
appropriate.
285 As noted in the SAFE proposal, ‘‘Attempting
to solve climate change, even in part, through the
Section 209 waiver provision is fundamentally
different from that section’s original purpose of
addressing smog-related air quality problems.’’ 83
FR 42999.
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promulgate State standards for
emissions from new motor vehicles
designed to address global climate
change problems.
EPA’s 2013 waiver for CARB’s
Advanced Clean Car Program (as it
pertains to its 2021 through 2025 MY
relating to greenhouse gas emissions
and the ZEV mandate) is withdrawn.
This is separate and apart from EPA’s
determination that it cannot and did not
validly grant a waiver with respect to
those California State measures which
are preempted under NHTSA’s
determination in this document that
EPCA preempts State GHG and ZEV
programs, which, as explained above, is
effective on the effective date of this
joint action.
F. States Cannot Adopt California’s
GHG Standards Under CAA Section 177
At proposal, EPA explained that CAA
section 177 provides that other States,
under certain circumstances and with
certain conditions, may ‘‘adopt and
enforce’’ standards that are ‘‘identical to
the California standards for which a
waiver has been granted for [a given]
model year.’’ 42 U.S.C. 7507. As a
result, EPA proposed to determine that
this section does not apply to CARB’s
GHG standards given that they are
intended to address global air pollution.
We also noted that the section is titled
‘‘New motor vehicle emission standards
in nonattainment areas’ and that its
application is limited to ‘‘any State
which has [state implementation] plan
provisions approved under this part’’—
i.e., under CAA title I part D, which
governs ‘‘Plan requirements for
nonattainment areas.’’
We received comments in support of
and against our proposal. Commenters
opposing our interpretation argued that
CAA section 177 does not contain any
text that could be read as limiting its
applicability to certain pollutants only.
They also argued that EPA has
inappropriately relied on the heading
for CAA section 177 to construe a
statutory provision as well as arrogated
authority to implement an otherwise
self-implementing provision. We
disagree with these commenters,
conclude that the text (including both
the title and main text), structural
location, and purpose of the provision
confirm that it does not apply to GHG
standards, and are finalizing this
determination as proposed.
Under the Clean Air Act, EPA
establishes national ambient air quality
standards (NAAQS) to protect public
health and welfare and has established
such ambient standards for the
following criteria pollutants: ozone,
carbon monoxide, nitrogen dioxide,
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sulfur dioxide, lead, and particulate
matter. As also explained at proposal,
areas are only designated nonattainment
with respect to criteria pollutants for
which EPA has issued a NAAQS, and
nonattainment State Implementation
Plan (SIPs) are intended to assure that
those areas attain the NAAQS.
Congress added CAA section 177 in
the 1977 Clean Air Act amendments
cognizant that states might need to
address air pollution within their
boundaries similar to California but
were otherwise preempted under CAA
section 209(a) from setting new motor
vehicle and engine standards. See, e.g.,
H.R. Rep. No. 294, 95th Cong., 1st Sess.
309 (1977), 1977 U.S.C.C.A.N. 1077,
1388 (explaining that the Committee
‘‘was concerned that this preemption
(section 209(a) of the Act) now
interferes with legitimate police powers
of States’’); Motor Vehicle Mfrs. Ass’n of
U.S., Inc. v. New York State Dep’t of
Envtl. Conservation, 17 F.3d 521, 527
(2d Cir. 1994) (‘‘It was in an effort to
assist those states struggling to meet
federal pollution standards that
Congress, . . . directed in 1977 that
other states could promulgate
regulations requiring vehicles sold in
their state to be in compliance with
California’s emission standards or to
‘piggyback’ onto California’s preemption
exemption.’’), citing H.R. Rep. No. 294,
95th Cong., 1st Sess. 309–10 (1977); id.
at 531 ((‘‘[Section] 177 was inserted into
the Act in 1977 so that states attempting
to combat their own pollution problems
could adopt California’s more stringent
emission controls.’’). Relevant
legislative history further identifies
CAA section 177 as a means of
addressing the NAAQS attainment
planning requirements of CAA section
172, including the specific SIPs content
and approvals criteria for EPA.286 H.R.
286 The version of CAA section 172 adopted in
1977 set forth the general requirements for state
plans for nonattainment areas and CAA section
172(b) set forth the ‘‘requisite provisions’’ of those
plans. In drafting the provisions that would become
CAA section 172(b), Congress explained that they
required the Administrator, after notice and
opportunity for a public hearing, to approve ‘‘a
State plan which meets the following criteria: It
must identify all nonattainment areas for each
pollutant. Next it must assure attainment of the
national ambient air quality standard in those areas
as expeditiously as practicable, but not later than
December 31, 1982, for all pollutants other than
photochemical oxidants. In respect to
photochemical oxidants, the standard must be met
as expeditiously as practicable, but not later than
December 31, 1987. The plan must include a
comprehensive, accurate, up-to-date inventory of
actual emissions from all sources of pollutants in
the area. This inventory must be revised and
resubmitted every 2 years to substantiate that
reasonable further progress has been achieved as a
condition for permitting additional sources of
pollution. Finally, the plan must identify and
quantify the actual emissions which must be taken
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Rep. No. 294, 95th Cong., 1st Sess. 213
(1977), 1977 U.S.C.C.A.N 1077, 1292
(‘‘Still another element of flexibility for
States that is afforded in this section is
the authority for States with
nonattainment areas for automotive
pollutants (other than California) to
adopt and enforce California new-car
emission standards if adequate notice is
given.’’).
Contrary to commenters’ assertions,
therefore, the text, placement in Title I,
and relevant legislative history are all
indicative that CAA section 177 is in
fact intended for NAAQS attainment
planning and not to address global air
pollution. As further explained in
section D.2, GHG is a globally
distributed pollutant with
environmental effects that are different
enough from emissions of criteria
pollutants. For example, GHG emissions
from fleet in California bear no more
relation to GHG emissions in California
than fleet in other parts of the country.
Where states are now adopting
standards for intents and purposes far
removed from NAAQS attainment
planning or more specifically directed at
global air pollution, EPA as the agency
charged with implementing the Clean
Air Act is acting well within that role
in setting out an interpretation that
aligns with Congressional intent. See
Chevron U.S.A. v. NRDC, 467 U.S. 837,
843 (1984) (‘‘The power of an
administrative agency to administer a
congressionally created . . . program
necessarily requires the formulation of
policy and the making of rules to fill
any gap left, implicitly or explicitly, by
Congress.’’). This construct also
comports with our reading of CAA
section 209(b)(1)(B) as limiting
applicability of CAA section 209(b)
waiver authority to state programs that
address pollutants that affect local or
regional air quality and not those
into account by the State for purposes of deciding
how to achieve reasonable further progress and
assure timely attainment. Thus, the plan must
consider the following factors among others: The
actual emissions increases which will be allowed to
result from the construction and operation of major
new or modified stationary sources in the area; the
actual emissions of such pollutant from unregulated
sources, fugitive emissions and other uncontrolled
sources; actual emissions of the pollutant from
modified and existing indirect sources; actual
emissions resulting from extension or elimination
of transportation control measures; actual emissions
of such pollutant resulting from in-use motor
vehicles and emissions of such pollutant resulting
from stationary sources to which delayed
compliance orders or enforcement orders (pursuant
to sec. 121 (pursuant to sec. 121 or sec 113(b)) and
compliance date extension (pursuant to sec. 119)
have been issued; and actual transported
emissions.’’ H.R. Rep. No. 294, 95th Cong., 1st Sess.
212 (1977), 1977 U.S.C.C.A.N. 1077, 1291, 1977 WL
16034 (emphasis added).
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relating to global air pollution like
GHGs.
G. Severability and Judicial Review
EPA intends that its withdrawal of the
January 2013 waiver for California’s
GHG and ZEV programs on the basis of
EPCA preemption, to take effect upon
the effective date of this joint action, as
set forth in subsection III.C, on the one
hand, is separate and severable from its
withdrawal of the January 2013 waiver
for those programs on the basis of an
interpretation and application of CAA
section 209(b)(1)(B), beginning in model
year 2021, as set forth in subsection
III.D, on the other. EPA further intends
that its withdrawal of the waiver with
regard to California’s GHG program is
severable from its withdrawal of the
waiver with regard to California’s ZEV
program. The basis for this distinction
(i.e., that EPA intends that its
withdrawal of the waiver for California’s
GHG program and for its ZEV program
should be severable from one another)
is, as follows, twofold: (1) While EPA
concludes for the reasons set forth in
subsection III.D above that the ZEV
program, as subjected to the January
2013 waiver and as presented to EPA by
CARB in CARB’s waiver application and
supporting documents, is a GHGtargeting program and as such is
susceptible to the interpretation and
application of CAA 209(b)(1)(B) set forth
above, EPA acknowledges that there are
aspects to the analysis as it affects the
state’s ZEV program that are not
applicable with respect to the state’s
GHG program; (2) in this final action,
NHTSA expresses in section II above its
intent that its determination that a State
or local law or regulation of tailpipe
greenhouse gas emissions from
automobiles is related to fuel economy
standards is severable from its
determination that State or local ZEV
mandates are related to fuel economy
standards. EPA further intends that its
determination with regard to the scope
of CAA section 177 as set forth in
subsection III.F above be severable from
all other aspects of this joint action.
Pursuant to CAA section 307(b)(1),
judicial review of this final action may
be sought only in the United States
Court of Appeals for the District of
Columbia Circuit. For the reasons
explained in this section, this final
waiver withdrawal action is nationally
applicable for purposes of CAA section
307(b)(1). To the extent a court finds
this action to be locally or regionally
applicable, for the reasons explained in
this section, EPA determines and finds
for purposes of CAA section 307(b)(1)
that this final waiver withdrawal action
is based on a determination of
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51351
nationwide scope or effect. As also
explained at proposal, CAA Section
307(b)(1) of the CAA provides in which
Federal courts of appeal petitions of
review of final actions by EPA must be
filed. This section provides, in part, that
petitions for review must be filed in the
Court of Appeals for the District of
Columbia Circuit if: (i) The Agency
action consists of ‘‘nationally applicable
regulations promulgated, or final action
taken, by the Administrator,’’ or (ii)
such action is locally or regionally
applicable, but ‘‘such action is based on
a determination of nationwide scope or
effect and if in taking such action the
Administrator finds and publishes that
such action is based on such a
determination.’’ Additionally, we
proposed to find that any final action
resulting from the August 2018 SAFE
proposal is based on a determination of
‘‘nationwide scope or effect’’ within the
meaning of CAA section 307(b)(1). We
explained that the withdrawal, when
finalized, would affect persons in
California and those manufacturers and/
or owners/operators of new motor
vehicles nationwide who must comply
with California’s new motor vehicle
requirements. For instance, California’s
program provides that manufacturers
may generate credits in CAA section 177
States as a means to satisfy those
manufacturers’ obligations to comply
with the mandate that a certain
percentage of their vehicles sold in
California be ZEV (or be credited as
such from sales in CAA section 177
States). In addition, other States have
adopted aspects of California’s ACC
program; this decision would also affect
those States and those persons in such
States, which are in multiple EPA
regions and federal circuits.
This final action is distinguishable
from the situation faced by the D.C.
Circuit in Dalton Trucking Inc., v. EPA,
808 F.3d 875 (D.C. Cir. 2015), where the
Court held that EPA’s action on
California’s waiver request with respect
to its nonroad engine program was not
nationally applicable, and that EPA had
not properly made and published a
finding that its action was based on a
determination of nationwide scope and
effect. First, Dalton Trucking noted that
no other State had ever adopted
California’s nonroad program, id. at 880;
that is not the case here. Second, Dalton
Trucking noted that the nonroad waiver
final action was facially limited to fleets
operating in California, id. at 881; the
nature of the California program at issue
here, with its complex credit system
connected with sales in other States, is
quite different. Third, Dalton Trucking
noted that EPA in the nonroad waiver
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final action did not actually make and
publish a finding that that final action
was based on a determination of
nationwide scope and effect, id. Dalton
Trucking expressly did not hold, and
indeed expressly disclaimed any intent
to even suggest, that EPA could not have
made and published such a finding in
that action. Id. at 882. EPA in this
document does so with regard to this
final action, for the reasons stated
above. For these reasons, this final
waiver withdrawal action is nationally
applicable for purposes of CAA section
307(b)(1), or, in the alternative, EPA
determines and finds for purposes of
CAA section 307(b)(1) that this final
waiver withdrawal action is based on a
determination of nationwide scope or
effect. Thus, pursuant to CAA section
307(b), any petitions for review of this
final action must be filed in the Court
of Appeals for the District of Columbia
Circuit within 60 days from the date
such final action is published in the
Federal Register.
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IV. Regulatory Notices and Analyses
As it is relevant to many of the
following discussions, it is important to
clarify at the outset that this action does
not finalize or otherwise affect either
EPA’s GHG standards or NHTSA’s
CAFE standards and, thus, the various
impacts associated with those standards
have not been considered below.
Further, consistent with its past
practice, EPA’s withdrawal of the
waiver does not add or amend
regulatory text and is, therefore, subject
to considerably fewer of the below
discussions than NHTSA’s final rule
establishing regulatory text on
preemption.
A. Executive Order 12866, Executive
Order 13563
Executive Order 12866, ‘‘Regulatory
Planning and Review’’ (58 FR 51735,
Oct. 4, 1993), as amended by Executive
Order 13563, ‘‘Improving Regulation
and Regulatory Review’’ (76 FR 3821,
Jan. 21, 2011), provides for making
determinations whether a regulatory
action is ‘‘significant’’ and therefore
subject to the Office of Management and
Budget (OMB) review and to the
requirements of the Executive Order.
Under section 3(f) of Executive Order
12866, NHTSA’s final rule has been
determined to be a ‘‘significant
regulatory action,’’ but not an
economically significant action. EPA’s
withdrawal on the waiver, however, is
not a rule under E.O. 12866, as
consistent with the agency’s historical
classification of its notices and
decisions related to the waiver.
However, as part of its commitment to
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working together with NHTSA to
establish a consistent Federal program
for fuel economy and GHG emissions,
EPA has submitted this action to the
OMB for review and any changes made
in response to OMB recommendations
have been documented in the docket for
this action. EPA’s action here, however,
is not a rule as defined by Executive
Order 12866, consistent with its
previous actions on waiver requests,
and is therefore exempt from review by
the Office of Management and Budget as
required for rules and regulations by
Executive Order 12866. See, e.g., 78 FR
at 2145 (Jan. 9, 2013); 74 FR at 32784
(July 8, 2009); 73 FR at 12169 (Mar. 6,
2008).
In determining the economic impact
of this action, it is important to be clear
that the rule establishing new standards
for the Model Years within scope of the
NPRM is expected to continue to be
economically significant and is, thus,
anticipated, to include a full FRIA.
Moreover, as EPA’s action is not a rule
and not subject to E.O. 12866, its
consideration of costs has been limited
to the role costs play under section 209.
Accordingly, the following discussion
only concerns the economic impact
associated with NHTSA’s final
regulatory text clarifying its views on
EPCA preemption.
As a general matter, NHTSA has
determined that there may be some
nonsignificant economic impact arising
out of its clarification, particularly some
reduction in costs, to this final rule, but
the agency has not quantified any such
impact in this rulemaking, which has
been determined to be ‘‘significant’’ but
not ‘‘economically significant’’ under
Executive Order 12866. This rulemaking
merely clarifies the existing statutory
provisions relating to preemption that
have been in effect since EPCA was
enacted and does not modify any
Federal requirement. As such, as in the
NPRM, the agency has provided a
qualitative discussion of the impacts in
response to the comments, which
themselves raised qualitative issues.
In the NPRM, NHTSA mentioned at a
general, qualitative, level that
California’s currently existing GHG
program and ZEV mandate lead to
increased compliance costs, with some
greater discussion of potential increases
in costs due specifically to the ZEV
mandate, which constrains an OEMs
ability to meet their CAFE and GHG
requirements in the most cost-effective
way.
The agencies received many
comments on the economic analysis as
it relates to the CAFE and GHG
standards, but only received a small
number of comments that specifically
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dealt with the issue of the economic
impact of the regulatory text concerning
EPCA preemption. These comments,
similar to how the agency addressed the
issue in the NPRM, generally made
qualitative and general points about the
economic impact.
Many of the comments that addressed
the economic impacts of preemption did
so by stating that one important aspect
of the ‘‘One National Program’’
established beginning in 2009 was that
it would reduce regulatory cost by not
allowing for the creation of different
Federal and California programs, with
different levels of stringency and
different compliance regimes. NHTSA
agrees with this concern, but this is
exactly why Congress provided that any
State or local law ‘‘related to’’ fuel
economy is preempted. This final rule
will provide more certainty on this issue
than the prior approach, which would
always be subject to California removing
itself from the program. This is exactly
what has occurred in recent months, as
the State has taken action to amend the
‘‘deemed to comply’’ provision and then
announced that it entered into an
agreement with several automakers to
apply a different set of standards on a
national basis.
Various other commenters noted that
the GHG program and ZEV mandate
would increase compliance costs. Most
of these comments only made general
statements to this effect and did not
provide specific or detailed information
about potential costs. One commenter
approvingly noted NHTSA’s citation of
a study that found that the ZEV mandate
could potentially lead to increased
costs, though the author of the cited
study also commented that the cited
value did not provide a complete
picture of the economic effect. The
agency agrees that programs such as
these are likely to introduce additional
costs, which, of course, was a significant
part of Congress’s motivation in
providing NHTSA with its broad
preemptive authority over fuel
economy. The agency, though, like
commenters, has found calculation of
these costs to be challenging, as they
constrain the avenues of compliance
with the Federal standards without
actually altering what must be,
ultimately, achieved.
With regard to benefits, some
commenters believed that California’s
GHG program and ZEV mandate could
provide additional benefits, but, as with
costs, these commenters did not provide
detailed information about the benefits
of these programs independent of the
Federal standards. One commenter
argued that a separate State GHG
program is unlikely to have any
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meaningful benefits, because of
‘‘leakage’’ from vehicles in States that
adopt the California standards to
vehicles in States that do not adopt this
standard. Although the comment was in
context of supporting the ‘‘One National
Program,’’ NHTSA believes that the
argument that separate State standards
will have little benefit has merit. The
existence of State or local laws does not
in any way alter an OEM’s obligation
under Federal law. For instance, OEMs
would likely produce more efficient
vehicles for sale in California and the
States that have adopted California’s
standards, but the increased fuel
economy of these vehicles would likely
be offset by less efficient vehicles
produced for sale in the rest of the U.S.,
leading to little to no change in either
fuel use or GHG emissions at a national
level. Some commenters stated that the
decision to preempt programs including
and similar to the ZEV mandate, to the
extent that those programs are related to
fuel economy, would have negative
benefits related to ozone-forming
pollutants, though these commenters
did not quantify these concerns. NHTSA
notes that, as was discussed in the
NPRM, California, in its 2013 waiver
request, noted that the ZEV program did
not provide for ozone-forming
pollutants, acknowledging, ‘‘[t]here is
no criteria emissions benefit from
including the ZEV proposal in terms of
vehicle (tank-to-wheel or TTW)
emissions. The LEV III criteria pollutant
fleet standard is responsible for those
emission reductions in the fleet; the
fleet would become cleaner regardless of
the ZEV regulation because
manufacturers would adjust their
compliance response to the standard by
making less polluting conventional
vehicles.’’ 287 NHTSA continues to
believe that preemption of the programs
such as the ZEV mandate will not have
a significant effect, as California remains
free to revise its LEV program to reduce
ozone-forming emissions and seek a
waiver of Clean Air Act preemption
from EPA, as described above, while not
violating NHTSA’s preemption
authority, and other States and local
governments would continue to be
allowed to take other actions so long as
those are not related to fuel economy
and are consistent with any other
relevant Federal law.
The comments, therefore, reaffirm
NHTSA’s preliminary determination
that State and Local programs including,
and similar to, California’s GHG and
ZEV programs are likely to lead to
increased compliance costs and highly
287 Docket No. EPA–HQ–OAR–2012–0562, PP.
15–16.
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uncertain, if any, benefits because they
constrain the ability of OEMs to meet
the Federal standard without in anyway
altering their obligations under that
standard. Further, the agency’s decision
that State or local laws such as the GHG
program and ZEV mandate should be
preempted is not based on any
evaluation of the policy or other merits
of either program, but simply the fact
that these programs are clearly related to
fuel economy.
B. DOT Regulatory Policies and
Procedures
The final rule is also significant
within the meaning of the Department
of Transportation’s Order 2100.6,
‘‘Policies and Procedures for
Rulemakings.’’ Regulatory Policies and
Procedures.
C. Executive Order 13771 (Reducing
Regulation and Controlling Regulatory
Costs)
NHTSA’s final rule is expected to be
an E.O. 13771 deregulatory action, but
NHTSA has not estimated any
quantifiable cost savings. EPA’s
withdrawal is not a regulatory action
and thus outside the scope of E.O.
13771.
D. Congressional Review Act
Pursuant to the Congressional Review
Act (5 U.S.C. 801 et seq.), the Office of
Information and Regulatory Affairs
designated this action as not a ‘‘major
rule’’, as defined by 5 U.S.C. 804(2). The
EPA and NHTSA will submit a rule
report to each House of the Congress
and to the Comptroller General of the
United States.
E. Executive Order 13211 (Energy
Effects)
Executive Order 13211 applies to any
rule that: (1) Is determined to be
economically significant as defined
under E.O. 12866, and is likely to have
a significant adverse effect on the
supply, distribution, or use of energy; or
(2) that is designated by the
Administrator of the Office of
Information and Regulatory Affairs as a
significant energy action. If the
regulatory action meets either criterion,
the agencies must evaluate the adverse
energy effects of the proposed rule and
explain why the proposed regulation is
preferable to other potentially effective
and reasonably feasible alternatives
considered. NHTSA’s final rule is not
subject to E.O. 13211 because it is not
economically significant and is not a
significant energy action. As discussed
in the E.O. 12866 section, NHTSA’s
final rule merely clarifies the contours
of its existing preemption authority and
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does not in any way change the existing
fuel economy standards. As EPA’s
withdrawal is not within the scope of
E.O. 12866, it is also not within scope
of E.O. 13211.
F. Environmental Considerations
1. National Environmental Policy Act
The National Environmental Policy
Act (NEPA) 288 directs that Federal
agencies proposing ‘‘major Federal
actions significantly affecting the
quality of the human environment’’
must, ‘‘to the fullest extent possible,’’
prepare ‘‘a detailed statement’’ on the
environmental impacts of the proposed
action (including alternatives to the
proposed action).289 Concurrently with
the NPRM, NHTSA released a Draft
Environmental Impact Statement (Draft
EIS) pursuant to NEPA and
implementing regulations issued by the
Council on Environmental Quality
(CEQ), 40 CFR part 1500, and NHTSA,
49 CFR part 520. NHTSA prepared the
Draft EIS to analyze and disclose the
potential environmental impacts of the
proposed CAFE standards and a range of
alternatives (largely varying in terms of
stringency). NHTSA considered the
information contained in the Draft EIS
as part of developing its proposal and
made the Draft EIS available for public
comment. For the final rule on the
standards for model year 2021 through
2026 automobiles proposed in the
NPRM, NHTSA will simultaneously
issue a Final EIS and Record of
Decision, pursuant to 49 U.S.C. 304a(b)
and U.S. Department of Transportation
Guidance on the Use of Combined Final
Environmental Impact Statements/
Records of Decision and Errata Sheets
in National Environmental Policy Act
Reviews (April 25, 2019),290 unless it is
determined that statutory criteria or
practicability considerations preclude
simultaneous issuance.
NHTSA has not prepared a separate
environmental analysis pursuant to
NEPA for this final action on
preemption. This final rule provides
clarity on the scope of EPCA’s
preemption provision. Ultimately, the
determination of whether a particular
State or local law is preempted under
EPCA is not determined based upon its
environmental impact but solely
whether it is ‘‘related to fuel economy
standards or average fuel economy
standards.’’ Any preemptive effect
288 42
U.S.C. 4321–4347.
U.S.C. 4332. EPA is expressly exempted
from the requirements of NEPA for actions under
the Clean Air Act. 15 U.S.C. 793(c)(1).
290 https://www.transportation.gov/sites/dot.gov/
files/docs/mission/transportation-policy/
permittingcenter/337371/feis-rod-guidance-final04302019.pdf.
289 42
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resulting from this final action is not the
result of the exercise of Agency
discretion, but rather reflects the
operation and application of the Federal
statute. NHTSA does not have authority
to waive any aspect of EPCA
preemption no matter the potential
environmental impacts; rather,
preempted standards are void ab initio.
Courts have long held that NEPA does
not apply to nondiscretionary actions by
Federal agencies.291 As NHTSA lacks
discretion over EPCA’s preemptive
effect, the Agency concludes that NEPA
does not apply to this action.
It bears noting that this action only
concerns the question of preemption; it
does not set CAFE standards.
Fundamentally, this action is about
which sovereign entity (i.e., the Federal
government or State governments) can
issue standards that relate to fuel
economy. EPCA is clear that this
authority is restricted to the Federal
government. This action provides
guidance on the boundary set by
Congress, as well as under principles of
implied preemption. NHTSA’s
regulation concerning EPCA preemption
is independent and severable from any
particular CAFE standards adopted by
NHTSA, and this action, in and of itself,
is not expected to have significant
environmental impacts on a national
scale. As described above, OEMs would
likely produce more efficient vehicles
for sale in California and the States that
have adopted California’s standards, but
the increased fuel economy of these
vehicles would likely be offset by less
efficient vehicles produced for sale in
the rest of the U.S., leading to little to
no change in either fuel use or GHG
emissions at a national level. In fact, as
NHTSA has not finalized any action to
amend the fuel economy standards that
were promulgated in 2012, California’s
‘‘deemed to comply’’ provision remains
operative. As OEMs are anticipated to
make use of this compliance
mechanism, CARB’s GHG standards are
functionally identical to Federal
standards, and their preemption would
not result in additional environmental
impacts. Furthermore, as was discussed
in the NPRM, California, in its 2013
waiver request, noted that the ZEV
program did not provide for ozoneforming pollutants, acknowledging,
‘‘[t]here is no criteria emissions benefit
from including the ZEV proposal in
terms of vehicle (tank-to-wheel or TTW)
291 See, e.g., Department of Transp. v. Public
Citizen, 541 U.S. 752 (2004); Milo Cmty. Hosp. v.
Weinberger, 525 F.2d 144 (1st Cir. 1975); State of
South Dakota v. Andrus, 614 F.2d 1190 (8th Cir.
1980); Citizens Against Rails-to-Trails v. Surface
Transp. Bd., 267 F.3d 1144 (D.C. Cir. 2001); Sierra
Club v. Babbitt, 65 F.3d 1502 (9th Cir. 1995).
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emissions. The LEV III criteria pollutant
fleet standard is responsible for those
emission reductions in the fleet; the
fleet would become cleaner regardless of
the ZEV regulation because
manufacturers would adjust their
compliance response to the standard by
making less polluting conventional
vehicles.’’ 292 Ultimately NHTSA will
address potential environmental
impacts of fuel economy standards in its
forthcoming Final EIS that will
accompany the final rule on the
standards for model year 2021 through
2026 automobiles proposed in the
NPRM. This action, however, does not
result in significant environmental
impacts to the quality of the human
environment.
NHTSA intends to fully respond to all
substantive comments received on the
Draft EIS in the forthcoming Final EIS,
consistent with CEQ regulations.
NHTSA received numerous public
comments on the Draft EIS that related
to the revocation of California’s waiver
and EPCA preemption. The following
summarizes and briefly addresses those
comments.
Multiple commenters called NHTSA’s
DEIS inadequate because it did not
analyze an alternative that would keep
the California waiver and regulations (as
well as similar regulations adopted in
the District of Columbia and other States
pursuant to section 177 of the CAA) in
place.293 On the other hand, one
commenter noted its support for the
proposition that NHTSA is not obligated
under NEPA to consider a scenario that
it believes Federal law does not
permit.294 As described above, NHTSA
concludes that NEPA does not apply to
this final rule regarding preemption.
Based on this conclusion, it is
immaterial whether NHTSA analyzed
an alternative that would keep the
California waiver and regulations in
place. NHTSA lacks the discretion and
authority to select such an alternative as
a State or local law or regulation related
to automobile fuel economy standards is
292 Docket No. EPA–HQ–OAR–2012–0562, Pp.
15–16. California’s LEV III criteria pollution
standard would not be preempted under this action.
293 Center for Biological Diversity, Earthjustice,
Environmental Law and Policy Center, Natural
Resources Defense Council, Public Citizen, Inc.,
Safe Climate Campaign, Sierra Club, Southern
Environmental Law Center, and Union of
Concerned Scientists, Docket No. NHTSA–2017–
0069–0550; South Coast Air Quality Management
District, Docket Nos. NHTSA–2017–0069–0532 and
NHTSA–2017–0069–0497; Blanca Luevanos, Docket
No. NHTSA–2017–0069–0508; National Coalition
for Advanced Transportation, Docket No. NHTSA–
2017–0069–0597; California Office of the Attorney
General et al., Docket No. NHTSA–2017–0069–
0625.
294 Alliance of Automobile Manufacturers, Docket
No. NHTSA–2017–0069–0588.
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void ab initio under the preemptive
force of EPCA.
One commenter criticized NHTSA for
failing to consider the criteria pollutant
impacts of alternatives that keep the
waiver in place and that account for
California’s specific electricity grid.295
That commenter also criticized NHTSA
for not fully accounting for the impacts
to NOX emissions in the South Coast Air
Basin as a result of revoking the
waiver.296 Another commenter noted
that the nine areas NHTSA identified as
suffering from ‘‘serious’’ or ‘‘extreme’’
nonattainment conditions for ozone and
PM2.5 are located in California, even
though the agencies proposed to revoke
or declare preempted the State’s Clean
Air Act waiver for GHG emissions and
the State’s ZEV mandate.297 One
commenter wrote that NHTSA should
consider and discuss the local impacts
that preempting the ZEV mandate
would have on localities where ZEV
sales are currently concentrated and
where they will likely concentrate in the
future, and particularly in California
and the other States that have adopted
the ZEV mandate pursuant to section
177 of the CAA.298 While these
comments are more specific about
identifying potential environmental
impacts, these impacts simply do not
bear on the question of whether or how
preemption applies. Preemption relies
solely on whether the State or local law
or regulation is ‘‘related to fuel economy
standards or average fuel economy
standards.’’ Therefore, NHTSA is not
obligated to analyze or consider these
environmental impacts as part of this
final rule.
One commenter noted that if
California’s waiver is revoked, the State
would be unable to address pollution
issues through adoption of California’s
or its own standards, making it difficult
to attain or maintain compliance with
the Clean Air Act.299 Another State
alleged that it depends on the criteria
pollutant and air toxic emission
reduction co-benefits of the State’s use
of section 177 motor vehicle emissions
standards as a control strategy in its
State Implementation Plan to meet its
295 South Coast Air Quality Management District,
Docket No. NHTSA–2017–0069–0497.
296 South Coast Air Quality Management District,
Docket No. NHTSA–2017–0069–0497.
297 Center for Biological Diversity, Earthjustice,
Environmental Law and Policy Center, Natural
Resources Defense Council, Public Citizen, Inc.,
Safe Climate Campaign, Sierra Club, Southern
Environmental Law Center, and Union of
Concerned Scientists, Docket No. NHTSA–2017–
0069–0550.
298 New York State Department of Environmental
Conservation, NHTSA–2017–0069–0608.
299 Boulder County Public Health, Docket No.
NHTSA–2017–0069–0499.
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SIP.300 NHTSA disagrees with the
underlying premise of the comments.
States and local governments are able to
continue to encourage ZEVs in many
different ways, such as through
investments in infrastructure and
appropriately tailored incentives. States
and local governments cannot adopt or
enforce regulations related to fuel
economy standards, which include ZEV
mandates, but they are able to address
pollutants regulated by the Clean Air
Act in numerous ways that are not
preempted by Federal law. Moreover, as
noted above, this action does not impact
in any way the Federal standards in
place for greenhouse gas emissions from
automobiles and fuel economy
standards. Since California and other
section 177 States have ‘‘deemed’’
compliance with the Federal standards
to be compliance with the State
standards, this action does not have
significant environmental impacts to the
quality of the human environment. Any
impacts associated with potential
changes to Federal standards are not a
result of this action and are purely
speculative until the agencies finalize a
change.
2. Clean Air Act Conformity
Requirements as Applied to NHTSA’s
Action
The Clean Air Act (42 U.S.C. 7401 et
seq.) is the primary Federal legislation
that addresses air quality. Under the
authority of the Clean Air Act and
subsequent amendments, EPA has
established NAAQS for six criteria
pollutants, which are relatively
commonplace pollutants that can
accumulate in the atmosphere as a
result of human activity. The air quality
of a geographic region is usually
assessed by comparing the levels of
criteria air pollutants found in the
ambient air to the levels established by
the NAAQS (taking into account, as
well, the other elements of a NAAQS:
Averaging time, form, and indicator).
These ambient concentrations of each
criteria pollutant are compared to the
levels, averaging time, and form
specified by the NAAQS in order to
assess whether the region’s air quality is
in attainment with the NAAQS. When
the measured concentrations of a
criteria pollutant within a geographic
area are below those permitted by the
NAAQS, EPA designates the region as
an attainment area for that pollutant,
while areas where concentrations of
criteria pollutants exceed Federal
standards (or nearby areas that
contribute to such concentrations) are
300 Oregon Department of Environmental Quality,
Docket No. NHTSA–2017–0069–0526.
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designated as nonattainment areas.
Former nonattainment areas that come
into compliance with the NAAQS and
are redesignated as attainment are
known as maintenance areas. When
EPA revises a NAAQS, each State is
required to develop and implement a
State Implementation Plan (SIP) to
address how it plans to attain and
maintain the new standard. Each State
with a nonattainment area is also
required to submit a SIP documenting
how the region will reach attainment
levels within time periods specified in
the Clean Air Act. For maintenance
areas, the SIP must document how the
State intends to maintain compliance
with the NAAQS.
No Federal agency may ‘‘engage in,
support in any way or provide financial
assistance for, license or permit, or
approve’’ any activity in a
nonattainment or maintenance area that
does not ‘‘conform’’ to a SIP or Federal
Implementation Plan after EPA has
approved or promulgated it.301 Further,
no Federal agency may ‘‘approve, accept
or fund’’ any transportation plan,
program, or project developed pursuant
to title 23 or chapter 53 of title 49,
U.S.C., in a nonattainment or
maintenance area unless the plan,
program, or project has been found to
‘‘conform’’ to any applicable
implementation plan in effect.302 The
purpose of these conformity
requirements is to ensure that Federally
sponsored or conducted activities do
not interfere with meeting the emissions
targets in SIPs, do not cause or
contribute to new violations of the
NAAQS, and do not impede the ability
of a State to attain or maintain the
NAAQS or delay any interim
milestones. EPA has issued two sets of
regulations to implement the conformity
requirements:
(1) The Transportation Conformity
Rule 303 applies to transportation plans,
programs, and projects that are
developed, funded, or approved under
title 23 or chapter 53 of title 49, U.S.C.
(2) The General Conformity
Rule 304 applies to all other federal
actions not covered under
transportation conformity. The General
Conformity Rule establishes emissions
thresholds, or de minimis levels, for use
in evaluating the conformity of an
action that results in emissions
increases.305 If the net increases of
direct and indirect emissions are lower
301 42
U.S.C. 7506(c)(1) and (5).
U.S.C. 7506(c)(2) and (5).
303 40 CFR part 51, subpart T, and part 93, subpart
A.
304 40 CFR part 93, subpart B.
305 40 CFR 93.153(b).
302 42
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than these thresholds, then the project
is presumed to conform and no further
conformity evaluation is required. If the
net increases of direct and indirect
emissions exceed any of these
thresholds, and the action is not
otherwise exempt,306 then a conformity
determination is required. The
conformity determination can entail air
quality modeling studies, consultation
with EPA and state air quality agencies,
and commitments to revise the SIP or to
implement measures to mitigate air
quality impacts.
This action is not developed, funded,
or approved under title 23 or chapter 53
of title 49, U.S.C. Accordingly, this
action is not subject to transportation
conformity. Under the General
Conformity Rule, a conformity
determination is required when a
Federal action would result in total
direct and indirect emissions of a
criteria pollutant or precursor
originating in nonattainment or
maintenance areas equaling or
exceeding the rates specified in 40 CFR
93.153(b)(1) and (2), and the action is
not otherwise exempt. As explained
below, NHTSA’s action results in
neither direct nor indirect emissions as
defined in 40 CFR 93.152.
The General Conformity Rule defines
direct emissions as ‘‘those emissions of
a criteria pollutant or its precursors that
are caused or initiated by the Federal
action and originate in a nonattainment
or maintenance area and occur at the
same time and place as the action and
are reasonably foreseeable.’’ 307
NHTSA’s action is to promulgate
regulatory text and a detailed appendix,
in addition to discussing the issue in
this preamble to the rule, specifically to
provide clarity on EPCA’s preemption
provision in order to give already
established standards meaning, and thus
is specifically exempt from general
conformity requirements.308 Moreover,
this action would cause no direct
emissions consistent with the meaning
of the General Conformity Rule.309 Any
changes in emissions that could occur
as a result of preemption would happen
well after and in a different place from
the promulgation of this rule.
Furthermore, any such changes in
emissions—especially those occurring
in specific nonattainment or
maintenance areas—are not reasonably
foreseeable. Any such changes are
306 40
CFR 93.153(c).
CFR 93.152.
308 40 CFR 93.153(c)(2)(iii).
309 Department of Transp. v. Public Citizen, 541
U.S. 752, 772 (2004) (‘‘[T]he emissions from the
Mexican trucks are not ‘direct’ because they will
not occur at the same time or at the same place as
the promulgation of the regulations.’’).
307 40
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unlikely because this action does not
impact in any way the Federal standards
in place for criteria pollutant emissions
from automobiles. Further, this action
does not impact the Federal standards
in place for greenhouse gas emissions
from automobiles or fuel economy
standards. Since California and other
section 177 States have ‘‘deemed’’
compliance with the Federal standards
to be compliance with the State
standards, it is not clear that this action
(as it pertains to the State’s greenhouse
gas emissions standards) would result in
changes to the anticipated fleet of
vehicles in those States and therefore to
criteria pollutant emissions. Any
impacts associated with potential
changes to Federal standards are not a
result of this action and are purely
speculative until the agencies finalize a
change. Additionally, we note
California’s statement in its 2013 waiver
request that ‘‘[t]here is no criteria
emissions benefit from including the
ZEV proposal in terms of vehicle (tankto-wheel or TTW) emissions. The LEV
III criteria pollutant fleet standard is
responsible for those emission
reductions in the fleet . . . .’’ 310 As
discussed previously, this action
clarifies that criteria pollutant standards
are not preempted unless they have a
direct or substantial relationship to fuel
economy standards. California’s LEV III
criteria pollution standard would not be
preempted under this approach.
Indirect emissions under the General
Conformity Rule are ‘‘those emissions of
a criteria pollutant or its precursors: (1)
That are caused or initiated by the
Federal action and originate in the same
nonattainment or maintenance area but
occur at a different time or place as the
action; (2) That are reasonably
foreseeable; (3) That the agency can
practically control; and (4) For which
the agency has continuing program
responsibility.’’ 311 Each element of the
definition must be met to qualify as
indirect emissions. NHTSA finds that
neither of the first two criteria are
satisfied for the same reasons as
presented regarding direct emissions.
Furthermore, NHTSA cannot
practically control, nor does it have
continuing program responsibility for,
any emissions that could occur as a
result of preemption. ‘‘[E]ven if a
Federal licensing, rulemaking, or other
approving action is a required initial
step for a subsequent activity that
causes emissions, such initial steps do
not mean that a Federal agency can
practically control any resulting
310 Docket No. EPA–HQ–OAR–2012–0562, pp.
15–16.
311 40 CFR 93.152.
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emissions.’’ 312 With regard to
preemption, NHTSA lacks the
discretion and authority to keep the
California waiver and regulations in
place, as a State or local law or
regulation related to automobile fuel
economy standards is void ab initio
under the preemptive force of EPCA.
NHTSA cannot be considered to
practically control or have continuing
program responsibility for emissions
that could result from preemption when
that result is required by Federal
statute.313 NHTSA also does not have
continuing program responsibility for
emissions that occur in California and
other section 177 States, are regulated
by the Clean Air Act, and for which the
States and local governments can
continue to address in numerous ways
that do not conflict with Federal law.
For the foregoing reasons, this action
does not cause direct or indirect
emissions under the General Conformity
Rule, and a general conformity
determination is not required. NHTSA
will address any responsibilities under
the General Conformity Rule as it
pertains to potential changes to the fuel
economy standards in the forthcoming
final rule for that action.
3. Endangered Species Act
Under Section 7(a)(2) of the
Endangered Species Act (ESA), Federal
agencies must ensure that actions they
authorize, fund, or carry out are ‘‘not
likely to jeopardize the continued
existence’’ of any Federally listed
threatened or endangered species or
result in the destruction or adverse
modification of the designated critical
habitat of these species. 16 U.S.C.
1536(a)(2). If a Federal agency
determines that an agency action may
affect a listed species or designated
critical habitat, it must initiate
consultation with the appropriate
Service—the U.S. Fish and Wildlife
Service (FWS) of the Department of the
Interior (DOI) and/or the National
Oceanic and Atmospheric
Administration’s National Marine
Fisheries Service of the Department of
Commerce (together, ‘‘the Services’’),
depending on the species involved—in
order to ensure that the action is not
likely to jeopardize the species or
destroy or adversely modify designated
critical habitat. See 50 CFR 402.14.
Under this standard, the Federal agency
taking action evaluates the possible
effects of its action and determines
whether to initiate consultation. See 51
FR 19926, 19949 (June 3, 1986).
312 40
CFR 93.152.
Public Citizen, 541 U.S. at 772–3.
313 See
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Pursuant to Section 7(a)(2) of the ESA,
the agencies have reviewed this action
and have considered applicable ESA
regulations, case law, and guidance to
determine what, if any, obligations the
agencies have under the ESA. The
agencies have considered issues related
to emissions of CO2 and other GHGs and
issues related to non-GHG emissions.
Based on this assessment, the agencies
have determined that their actions
(withdrawal of California’s waiver and
the final rule regarding preemption) do
not require consultation under Section
7(a)(2) of the ESA.
a. The Agencies Lack Discretionary
Authority
NHTSA’s final rule adopts regulatory
text (including a detailed appendix)
regarding EPCA’s preemption provision,
in addition to discussing the issue in
this preamble to the rule, specifically to
provide needed clarity on that
provision. The new regulatory text
provides for why any law or regulation
of a State or a political subdivision of
a State regulating or prohibiting tailpipe
carbon dioxide emissions from
automobiles is expressly and impliedly
preempted by EPCA. Any preemptive
effect resulting from this final action is
not the result of the exercise of Agency
discretion, but rather reflects the
operation and application of the Federal
statute. NHTSA does not have authority
to waive any aspect of EPCA
preemption no matter the potential
impacts; rather, preempted standards
are void ab initio.
EPA’s action is to withdraw the
waiver it had previously provided in
January 2013 to California for that
State’s GHG and ZEV programs under
section 209 of the Clean Air Act. This
action is being undertaken on two
separate and independent grounds.
First, EPA has determined EPCA
preemption renders its prior grant of a
waiver for those aspects of California’s
regulations that EPCA preempts invalid,
null, and void, thereby necessitating
withdrawal of the waiver. Second, EPA
concludes that CAA section
209(b)(1)(B), which provides that EPA
shall not issue a waiver if California
does not ‘‘need’’ separate state standards
‘‘to meet compelling and extraordinary
conditions,’’ was not intended to allow
California to promulgate State standards
for emissions from new motor vehicles
designed to address global climate
change problems. Therefore, California
does not meet the necessary criteria to
receive a waiver for these aspects of its
program. Similar to NHTSA, these
decisions are not discretionary, but
rather reflect EPA’s conclusion that
EPCA preemption and the requirements
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of the Clean Air Act prohibit the
granting of a waiver to California.
The Supreme Court has held that
Section 7(a)(2) of the ESA and its
implementing regulations apply only to
actions in which there is discretionary
Federal authority.314 In National
Association of Home Builders, EPA
considered the requirement of Section
402(b) of the Clean Water Act that EPA
transfer certain permitting powers to
State authorities upon an application
and a showing that nine specified
criteria had been met. The Court
concluded that the ESA did not operate
as a ‘‘tenth criterion.’’ 315 According to
the Court: ‘‘While the EPA may exercise
some judgment in determining whether
a State has demonstrated that it has the
authority to carry out [the] enumerated
statutory criteria, the statute clearly
does not grant it the discretion to add
another entirely separate prerequisite to
that list. Nothing in the text of [the
statute] authorizes the EPA to consider
the protection of threatened or
endangered species as an end in itself
when evaluating a transfer
application.’’ 316
The agencies believe this holding
applies to the instant action as well. As
this action results from
nondiscretionary authorities, the
Section 7(a)(2) implementing
regulations expressly exclude them from
coverage. Neither ECPA nor the Clean
Air Act include the protection of
threatened or endangered species as a
consideration for the application of
preemption (which operates by statute)
or the prohibition on the granting of a
waiver (under the enumerated statutory
criterion in CAA section 209(b)(1)(B)).
Although there is some judgment in
considering the application of EPCA
and the CAA, neither action involves
the type of discretion that would require
a Section 7(a)(2) consultation by the
agencies with the Services.
b. Any Effects Resulting From the
Agencies’ Actions Are too Attenuated
for Consultation To Be Required
In addition, the agencies have
considered the potential effects of this
action to listed threatened or
endangered species or designated
critical habitat of these species and
concludes that any such effects are too
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314 National
Ass’n of Home Builders v. Defenders
of Wildlife, 551 U.S. 644, 673 (2007) (‘‘Applying
Chevron, we defer to the Agency’s reasonable
interpretation of ESA [section] 7(a)(2) as applying
only to ‘actions in which there is discretionary
Federal involvement or control.’ ’’ (quoting 50 CFR
402.03)).
315 National Ass’n of Home Builders, 551 U.S. at
649.
316 Id. at 671.
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attenuated to require Section 7(a)(2)
consultation. The agencies base this
conclusion both on the language of the
Section 7(a)(2) implementing
regulations and on the long history of
actions and guidance provided by DOI.
The Section 7(a)(2) implementing
regulations require consultation if a
Federal agency determines its action
‘‘may affect’’ listed species or critical
habitat.317 The Services’ current
regulations define ‘‘effects of the action’’
in relevant part as ‘‘the direct and
indirect effects of an action on the
species or critical habitat, together with
the effects of other activities that are
interrelated or interdependent with that
action, that will be added to the
environmental baseline.’’ 318 Further,
they define indirect effects as ‘‘those
that are caused by the proposed action
and are later in time, but still are
reasonably certain to occur.’’ 319
The Services’ recently published final
rule revising the definition of ‘‘effects of
the action’’ to be ‘‘all consequences to
listed species or critical habitat that are
caused by the proposed action,
including the consequences of other
activities that are caused by the
proposed action. A consequence is
caused by the proposed action if it
would not occur but for the proposed
action and it is reasonably certain to
occur.’’ 320 In the preamble to the final
rule, the Services emphasized that the
‘‘but for’’ test and ‘‘reasonably certain to
occur’’ are not new or heightened
standards.321 In this context, ‘‘‘but for’
causation means that the consequence
in question would not occur if the
proposed action did not go forward
. . . . In other words, if the agency fails
to take the proposed action and the
activity would still occur, there is no
‘but for’ causation. In that event, the
activity would not be considered an
effect of the action under
consultation.’’ 322 As the Services do not
consider these to be changes in their
317 50 CFR 402.14(a). The Departments of the
Interior and Commerce recently issued a final rule
revising the regulations governing the ESA Section
7 consultation process. 84 FR 44966 (Aug. 27,
2019). The new regulations take effect on
September 26, 2019. As discussed in the text above,
the agencies do not believe that the change in
regulations has any effect on the agencies’ analysis
here.
318 50 CFR 402.02.
319 Id.
320 50 CFR 402.02, as amended by 84 FR 44976,
45016 (Aug. 27, 2019) (effective Sept. 26, 2019).
321 84 FR at 44977 (‘‘As discussed in the proposed
rule, the Services have applied the ‘but for’ test to
determine causation for decades. That is, we have
looked at the consequences of an action and used
the causation standard of ‘but for’ plus an element
of foreseeability (i.e., reasonably certain to occur) to
determine whether the consequence was caused by
the action under consultation.’’).
322 Id.
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51357
longstanding application of the ESA,
these interpretations apply equally
under the existing regulations (which
are effective through September 25,
2019) and the new regulations (which
are effective beginning September 26,
2019).
Any potential effects of this action to
threatened or endangered species or
designated critical habitat would be a
result of changes to GHG or criteria air
pollutant emissions. In the next section,
the agencies discuss why this action is
not anticipated to result in changes to
GHG or criteria air pollutant emissions.
However, even if such changes to
emissions were to occur, the agencies do
not believe resulting impacts to listed
species or critical habitat satisfy the
‘‘but for’’ test or are ‘‘reasonably certain
to occur.’’
GHG emissions are relevant to Section
7(a)(2) consultation because of the
potential impacts of climate change on
listed species or critical habitat. For
example, one comment to the NPRM
documented the potential impacts of
climate change on federally protected
species and included a five-page table of
species listed during 2006 to 2015 for
which the commenters claim climate
change was a listing factor.323 However,
the agencies believe this comment
inappropriately attributes the entire
issue of climate change, including all
GHG emissions no matter which sector
generated them, to NHTSA and EPA’s
actions.324 In fact, the commenter
demonstrates the very issue with doing
so: There is no ‘‘but for’’ causation
associated with EPA’s revocation of
California’s waiver and NHTSA’s final
rule on preemption, as the impacts of
climate change will occur regardless of
this action. Furthermore, even if this
action results in changes to GHG
emissions, such changes would be
extremely small compared to global
GHG emissions. There is no scientific
evidence that sufficiently ‘‘connects the
dots’’ between those changes in
emissions and any particular impact to
a listed species or critical habitat; thus,
any impacts are not ‘‘reasonably certain
to occur.’’ States (such as California)
and local governments may also
continue to encourage ZEVs in
numerous ways that do not conflict with
323 Center for Biological Diversity, Sierra Club,
and Public Citizen, Inc., Docket No. NHTSA–2018–
0067–12378.
324 See, e.g., 78 FR 11766, 11785 (Feb. 20, 2013)
(‘‘Without the requirement of a causal connection
between the action under consultation and effects
to species, literally every agency action that
contributes GHG emissions to the atmosphere
would arguably result in consultation with respect
to every listed species that may be affected by
climate change.’’).
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Federal law, which may also prevent
any alleged impact from these actions.
Similarly, with regard to criteria air
pollutants, States are still subject to the
Clean Air Act, which requires
limitations on emissions of those
pollutants. Furthermore, since
California and other Section 177 States
have ‘‘deemed’’ compliance with the
Federal standards to be compliance with
the State standards, it is not clear that
this action would result in changes to
emissions. Any impacts associated with
potential changes to Federal standards
are not a result of this action and are
purely speculative until the agencies
finalize a change. We again note
California’s statement in its 2013 waiver
request that ‘‘[t]here is no criteria
emissions benefit from including the
ZEV proposal in terms of vehicle (tankto-wheel or TTW) emissions. The LEV
III criteria pollutant fleet standard is
responsible for those emission
reductions in the fleet . . . .’’ 325 As
discussed previously, this action
clarifies that criteria pollutant standards
are not preempted unless they have a
direct or substantial relationship to fuel
economy standards. California’s LEV III
criteria pollution standard would not be
preempted under this approach, and
that program’s benefits are anticipated
to remain in place.
The agencies have also considered the
long history of actions and guidance
provided by DOI. To that point, the
agencies incorporate by reference
Appendix G of the MY 2012–2016 CAFE
standards EIS.326 That analysis relied on
the significant legal and technical
analysis undertaken by FWS and DOI.
Specifically, NHTSA looked at the
history of the Polar Bear Special Rule
and several guidance memoranda
provided by FWS and the U.S.
Geological Survey. Ultimately, FWS
concluded that a causal link could not
be made between GHG emissions
associated with a proposed Federal
action and specific effects on listed
species; therefore, no Section 7(a)(2)
consultation would be required.
Subsequent to the publication of that
Appendix, a court vacated the Polar
Bear Special Rule on NEPA grounds,
though it upheld the ESA analysis as
having a rational basis.327 FWS
subsequently issued a revised Final
325 Docket No. EPA–HQ–OAR–2012–0562, pp.
15–16.
326 Available on NHTSA’s Corporate Average Fuel
Economy website https://one.nhtsa.gov/Laws-&Regulations/CAFE-%E2%80%93-Fuel-Economy/
Final-EIS-for-CAFE-Passenger-Cars-and-LightTrucks,-Model-Years-2012%E2%80%932016.
327 In re: Polar Bear Endangered Species Act
Listing and Section 4(D) Rule Litigation, 818 F.
Supp. 2d 214 (D.D.C. Oct. 17, 2011).
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Special Rule for the Polar Bear.328 In
that final rule, FWS provided that for
ESA section 7, the determination of
whether consultation is triggered is
narrow and focused on the discrete
effect of the proposed agency action.
FWS wrote, ‘‘[T]he consultation
requirement is triggered only if there is
a causal connection between the
proposed action and a discernible effect
to the species or critical habitat that is
reasonably certain to occur. One must
be able to ‘connect the dots’ between an
effect of a proposed action and an
impact to the species and there must be
a reasonable certainty that the effect will
occur.’’ 329 The statement in the revised
Final Special Rule is consistent with the
prior guidance published by FWS and
remains valid today.330 Ultimately, EPA
and NHTSA are not able to make a
causal link for purposes of Section
7(a)(2) that would ‘‘connect the dots’’
between this action, vehicle emissions
from motor vehicles affected by this
action, climate change, and particular
impacts to listed species or critical
habitats. Therefore, no Section 7(a)(2)
consultation is required.
c. The Agencies’ Actions Would Have
No Effect on Listed Species and
Designated Critical Habitat
In addition to the foregoing a Section
7(a)(2) consultation is not required
because this action will have no effect
on a listed species or designated critical
habitat. This notification and final rule
only address the issues of California’s
waiver and preemption; they do not set
CAFE standards. Fundamentally, this
action is about which sovereign entity
(i.e., the Federal government or State
governments) can issue standards that
relate to fuel economy. EPCA is clear
that this authority is restricted to the
Federal government. This action
provides clarity on the boundary set by
Congress, as well as under principles of
implied preemption.
As previously described, absent this
action, OEMs would likely produce
more efficient vehicles for sale in
California and the States that have
adopted California’s standards, but the
increased fuel economy of these
vehicles would likely be offset by less
efficient vehicles produced for sale in
the rest of the U.S., leading to little to
no change in either fuel use or GHG
emissions at a national level. Further, as
EPA and NHTSA have not finalized any
328 78
FR 11766 (Feb. 20, 2013).
FR at 11784–11785.
330 See DOI Solicitor’s Opinion No. M–37017,
‘‘Guidance on the Applicability of the Endangered
Species Act Consultation Requirements to Proposed
Actions Involving the Emissions of Greenhouse
Gases’’ (Oct. 3, 2008).
329 78
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action to amend the Federal GHG and
fuel economy standards that were
promulgated in 2012, California’s
‘‘deemed to comply’’ provision remains
operative. As OEMs are anticipated to
make use of this compliance
mechanism, CARB’s GHG standards are
functionally identical to Federal
standards, and their preemption would
not result in additional environmental
impacts. Any impacts associated with
potential changes to Federal standards
are not a result of this action and are
purely speculative until the agencies
finalize a change.
Finally, we again note California’s
2013 waiver request statement that there
is no criteria emissions benefit
associated with the ZEV program
because the LEV III criteria pollution
standard is responsible for those
emissions reductions. This action
clarifies that criteria pollutant standards
are not preempted unless they have a
direct or substantial relationship to fuel
economy standards. California’s LEV III
criteria pollution standard would not be
preempted under this approach.
Therefore, those benefits are anticipated
to remain in place.
For the foregoing reasons, automobile
emissions are not anticipated to change
as a result of this action. Even if they do,
any change would be so minimal as to
be unlikely to pose any effects on a
listed species or critical habitat. Because
any effect on a listed species or critical
habitat is not reasonably certain to
occur, the agencies conclude that there
will be no effect on listed species or
critical habitat under the Section
(7)(a)(2) implementing regulations, and
no Section 7(a)(2) consultation is
required for this action.
4. National Historic Preservation Act
(NHPA)
The NHPA (54 U.S.C. 300101 et seq.)
sets forth government policy and
procedures regarding ‘‘historic
properties’’—that is, districts, sites,
buildings, structures, and objects
included on or eligible for the National
Register of Historic Places. Section 106
of the NHPA requires federal agencies to
‘‘take into account’’ the effects of their
actions on historic properties.331 The
agencies conclude that the NHPA is not
applicable to this action because a rule
regarding the preemption of State laws
and a decision to revoke California’s
waiver are not the type of activities that
have the potential to cause effects on
historic properties. This conclusion is
supported by the lack of discretion over
331 Section 106 is now codified at 54 U.S.C.
306108. Implementing regulations for the Section
106 process are located at 36 CFR part 800.
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preemption and the underlying
justification for the withdrawal of the
waiver to California, the fact that any
causal relationship between effects on
historic properties as a result of
emissions from the sale and operation of
motor vehicles in California and section
177 States and this action are too
attenuated, and the conclusion that
impacts are not reasonably
foreseeable.332
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5. Fish and Wildlife Conservation Act
(FWCA)
The FWCA (16 U.S.C. 2901 et seq.)
provides financial and technical
assistance to States for the development,
revision, and implementation of
conservation plans and programs for
nongame fish and wildlife. In addition,
the Act encourages all Federal
departments and agencies to utilize
their statutory and administrative
authorities to conserve and to promote
conservation of nongame fish and
wildlife and their habitats. The agencies
conclude that the FWCA is not
applicable to this action because it does
not involve the conservation of
nongame fish and wildlife and their
habitats.
6. Coastal Zone Management Act
(CZMA)
The Coastal Zone Management Act
(16 U.S.C. 1451 et seq.) provides for the
preservation, protection, development,
and (where possible) restoration and
enhancement of the nation’s coastal
zone resources. Under the statute, States
are provided with funds and technical
assistance in developing coastal zone
management programs. Each
participating State must submit its
program to the Secretary of Commerce
for approval. Once the program has been
approved, any activity of a Federal
agency, either within or outside of the
coastal zone, that affects any land or
water use or natural resource of the
coastal zone must be carried out in a
manner that is consistent, to the
maximum extent practicable, with the
enforceable policies of the State’s
program.333
The agencies conclude that the CZMA
is not applicable to this action because
it does not involve an activity within, or
outside of, the nation’s coastal zones
that affects any land or water use or
natural resource of the coastal zone.
This conclusion is supported by the lack
of discretion over preemption and the
underlying justification for the
withdrawal of the waiver to California,
332 See the discussions regarding NEPA, Clean Air
Act Conformity, and the ESA.
333 16 U.S.C. 1456(c)(1)(A).
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the fact that any causal relationship
between effects on coastal zones as a
result of emissions from the sale and
operation of motor vehicles in California
and section 177 States and this action
are too attenuated, and the conclusion
that impacts are not reasonably
foreseeable.334
7. Floodplain Management (Executive
Order 11988 and DOT Order 5650.2)
These Orders require Federal agencies
to avoid the long- and short-term
adverse impacts associated with the
occupancy and modification of
floodplains, and to restore and preserve
the natural and beneficial values served
by floodplains. Executive Order 11988
also directs agencies to minimize the
impact of floods on human safety,
health and welfare, and to restore and
preserve the natural and beneficial
values served by floodplains through
evaluating the potential effects of any
actions the agency may take in a
floodplain and ensuring that its program
planning and budget requests reflect
consideration of flood hazards and
floodplain management. DOT Order
5650.2 sets forth DOT policies and
procedures for implementing Executive
Order 11988. The DOT Order requires
that the agency determine if a proposed
action is within the limits of a base
floodplain, meaning it is encroaching on
the floodplain, and whether this
encroachment is significant. If
significant, the agency is required to
conduct further analysis of the proposed
action and any practicable alternatives.
If a practicable alternative avoids
floodplain encroachment, then the
agency is required to implement it.
In this action, the agencies are not
occupying, modifying and/or
encroaching on floodplains. The
agencies, therefore, conclude that the
Orders are not applicable to this action.
8. Preservation of the Nation’s Wetlands
(Executive Order 11990 and DOT Order
5660.1a)
These Orders require Federal agencies
to avoid, to the extent possible,
undertaking or providing assistance for
new construction located in wetlands
unless the agency head finds that there
is no practicable alternative to such
construction and that the proposed
action includes all practicable measures
to minimize harms to wetlands that may
result from such use. Executive Order
11990 also directs agencies to take
action to minimize the destruction, loss
or degradation of wetlands in
‘‘conducting Federal activities and
334 See the discussions regarding NEPA, Clean Air
Act Conformity, and the ESA.
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51359
programs affecting land use, including
but not limited to water and related land
resources planning, regulating, and
licensing activities.’’ DOT Order 5660.1a
sets forth DOT policy for interpreting
Executive Order 11990 and requires that
transportation projects ‘‘located in or
having an impact on wetlands’’ should
be conducted to assure protection of the
Nation’s wetlands. If a project does have
a significant impact on wetlands, an EIS
must be prepared.
In this action, the agencies are not
undertaking or providing assistance for
new construction located in wetlands
and conclude that these Orders do not
apply to this action.
9. Migratory Bird Treaty Act (MBTA),
Bald and Golden Eagle Protection Act
(BGEPA), Executive Order 13186
The MBTA (16 U.S.C. 703–712)
provides for the protection of certain
migratory birds by making it illegal for
anyone to ‘‘pursue, hunt, take, capture,
kill, attempt to take, capture, or kill,
possess, offer for sale, sell, offer to
barter, barter, offer to purchase,
purchase, deliver for shipment, ship,
export, import, cause to be shipped,
exported, or imported, deliver for
transportation, transport or cause to be
transported, carry or cause to be carried,
or receive for shipment, transportation,
carriage, or export’’ any migratory bird
covered under the statute.335
The BGEPA (16 U.S.C. 668–668d)
makes it illegal to ‘‘take, possess, sell,
purchase, barter, offer to sell, purchase
or barter, transport, export or import’’
any bald or golden eagles.336 Executive
Order 13186, ‘‘Responsibilities of
Federal Agencies to Protect Migratory
Birds,’’ helps to further the purposes of
the MBTA by requiring a Federal agency
to develop a Memorandum of
Understanding (MOU) with the Fish and
Wildlife Service when it is taking an
action that has (or is likely to have) a
measurable negative impact on
migratory bird populations.
The agencies conclude that the
MBTA, BGEPA, and Executive Order
13186 do not apply to this action
because there is no disturbance, take,
measurable negative impact, or other
covered activity involving migratory
birds or bald or golden eagles involved
in this rulemaking. This conclusion is
supported by the lack of discretion over
preemption and the reasons underlying
justification for the withdrawal of the
waiver to California, the fact that any
causal relationship between effects on
migratory birds or bald or golden eagles
as a result of emissions from the sale
335 16
336 16
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and operation of motor vehicles in
California and section 177 States and
this action are too attenuated, and the
conclusion that impacts are not
reasonably foreseeable.337
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10. Department of Transportation Act
(Section 4(f))
Section 4(f) of the Department of
Transportation Act of 1966 (49 U.S.C.
303), as amended, is designed to
preserve publicly owned park and
recreation lands, waterfowl and wildlife
refuges, and historic sites. Specifically,
Section 4(f) provides that DOT agencies
cannot approve a transportation
program or project that requires the use
of any publicly owned land from a
public park, recreation area, or wildlife
or waterfowl refuge of national, State, or
local significance, or any land from a
historic site of national, State, or local
significance, unless a determination is
made that:
(1) There is no feasible and prudent
alternative to the use of land, and
(2) The program or project includes
all possible planning to minimize harm
to the property resulting from the use.
These requirements may be satisfied if
the transportation use of a Section 4(f)
property results in a de minimis impact
on the area.
NHTSA concludes that Section 4(f) is
not applicable to its final rule here
because this rulemaking is not an
approval of a transportation program or
project that requires the use of any
publicly owned land.
11. Executive Order 12898: ‘‘Federal
Actions To Address Environmental
Justice in Minority Populations and
Low-Income Populations’’
Executive Order (E.O.) 12898 (59 FR
7629 (Feb. 16, 1994)) establishes Federal
executive policy on environmental
justice. Its main provision directs
Federal agencies, to the greatest extent
practicable and permitted by law, to
make environmental justice part of their
mission by identifying and addressing,
as appropriate, disproportionately high
and adverse human health or
environmental effects of their programs,
policies, and activities on minority
populations and low-income
populations in the United States.
The agencies have determined that
this action will not have
disproportionately high and adverse
human health or environmental effects
on minority or low-income populations
because it does not change existing
Federal standards. This conclusion is
supported by the lack of discretion over
337 See the discussions regarding NEPA, Clean Air
Act Conformity, and the ESA.
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preemption and the underlying
justification for the withdrawal of the
waiver to California, the fact that any
causal relationship between effects on
minority or low-income populations as
a result of emissions from the sale and
operation of motor vehicles in California
and section 177 States and this action
are too attenuated, and the conclusion
that impacts are not reasonably
foreseeable.338
12. Executive Order 13045: ‘‘Protection
of Children From Environmental Health
Risks and Safety Risks’’
This action is not subject to E.O.
13045 (62 FR 19885, April 23, 1997)
because it is not an economically
significant regulatory action as defined
by E.O. 12866, and the agencies have no
reason to believe that the environmental
health or safety risks related to this
action may have a disproportionate
effect on children because it does not
change existing Federal standards. This
conclusion is supported by the lack of
discretion over preemption and the
underlying justification for the
withdrawal of the waiver to California,
the fact that any causal relationship
between effects on children as a result
of emissions from the sale and operation
of motor vehicles in California and
section 177 States and this action are
too attenuated, and the conclusion that
impacts are not reasonably
foreseeable.339
G. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility
Act (5 U.S.C. 601 et seq., as amended by
the Small Business Regulatory
Enforcement Fairness Act (SBREFA) of
1996), whenever an agency is required
to publish a notice of proposed
rulemaking or final rule, it must prepare
and make available for public comment
a regulatory flexibility analysis that
describes the effect of the rule on small
entities (i.e., small businesses, small
organizations, and small governmental
jurisdictions). No regulatory flexibility
analysis is required if the head of an
agency certifies the proposal will not
have a significant economic impact on
a substantial number of small entities.
SBREFA amended the Regulatory
Flexibility Act to require Federal
agencies to provide a statement of the
factual basis for certifying that a
proposal will not have a significant
economic impact on a substantial
number of small entities.
338 See the discussions regarding NEPA, the Clean
Air Act Conformity, and the ESA.
339 See the discussions regarding NEPA, the Clean
Air Act Conformity, and the ESA.
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This joint action only concern the
question of preemption; the joint action
does not set CAFE or emissions
standards themselves. Further, as the
California waiver withdrawal is not a
rulemaking, it is not subject to the RFA.
Accordingly, only NHTSA’s final rule
establishing regulatory text related to
preemption is at issue in this action.
NHTSA has considered the impacts of
this document under the Regulatory
Flexibility Act and certifies that this
rule would not have a significant
economic impact on a substantial
number of small entities. One
commenter, Workhorse Group, Inc.
(Workforce), in comments echoed by a
trade association, argued that it was a
small business and would be affected
the preemption provisions because it
would no longer be able to earn and sell
credits under the ZEV mandates
established by California and the other
177 States. This argument is not
persuasive, as the preemption regulation
has no direct effect on Workforce or any
other similar entity because it does not
regulate any private entity, but instead
clarifies the agency’s views on what
State or local laws are preempted. Thus,
any effect on Workhorse or any other
similar entities is, at most, indirect. Any
effect is even further attenuated by the
fact that small entities such as
Workhorse are not even subject to a ZEV
mandate, but choose to participate in
the program voluntarily.
Additionally, in keeping with
previous waiver actions, EPA’s action is
not a rule as defined in the Regulatory
Flexibility Act, 5 U.S.C. 601(2).
Therefore, EPA has not prepared a
supporting regulatory flexibility
analysis addressing the impact of this
action on small business entities. See 78
FR at 2145 (Jan. 9, 2013); 74 FR at 32784
(July 8, 2009); 73 FR at 12169 (Mar. 6,
2008).
H. Executive Order 13132 (Federalism)
Executive Order 13132 requires
federal agencies to develop an
accountable process to ensure
‘‘meaningful and timely input by State
and local officials in the development of
regulatory policies that have federalism
implications.’’ The Order defines the
term ‘‘Policies that have federalism
implications’’ to include regulations
that have ‘‘substantial direct effects on
the States, on the relationship between
the national government and the States,
or on the distribution of power and
responsibilities among the various
levels of government.’’ Under the Order,
agencies may not issue a regulation that
has federalism implications, that
imposes substantial direct compliance
costs, unless the Federal government
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provides the funds necessary to pay the
direct compliance costs incurred by
State and local governments, or the
agencies consult with State and local
officials early in the process of
developing the proposed regulation. The
agencies complied with Order’s
requirements and discuss their response
to comments in the above sections.
I. Executive Order 12988 (Civil Justice
Reform)
Pursuant to Executive Order 12988,
‘‘Civil Justice Reform,’’ 340 NHTSA has
determined that this final rule does not
have any retroactive effect.
J. Executive Order 13175 (Consultation
and Coordination With Indian Tribal
Governments)
This final rule does not have tribal
implications, as specified in Executive
Order 13175 (65 FR 67249, November 9,
2000). This rule will be implemented at
the Federal level. Thus, Executive Order
13175 does not apply to this rule. Two
commenters raised issues associated
with this Executive Order. Issues raised
in these comments related to the
standards will be addressed that
forthcoming rulemaking. One
commenter, in an apparent reference to
the preemption actions being finalized
in this document, argued that the NPRM
would weaken tribal abilities to set GHG
standards. This is incorrect: The
finalization of the EPCA preemption
provisions merely clarifies the law that
any law or regulation of a State or
political subdivision of a State ‘‘related
to’’ fuel economy is preempted, while
EPA’s decision in this document only
affects a State, not a Tribal government.
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K. Unfunded Mandates Reform Act
Section 202 of the Unfunded
Mandates Reform Act of 1995 (UMRA)
requires Federal agencies to prepare a
written assessment of the costs, benefits,
and other effects of a proposed or final
rule that includes a Federal mandate
likely to result in the expenditure by
State, local, or tribal governments, in the
aggregate, or by the private sector, of
more than $100 million in any one year
(adjusted for inflation with base year of
1995). Adjusting this amount by the
implicit gross domestic product price
deflator for 2016 results in $148 million
(111.416/75.324 = 1.48).341 This final
rule will not result in the expenditure
by State, local, or Tribal governments, in
340 61
FR 4729 (Feb. 7, 1996).
of Economic Analysis, National
Income and Product Accounts (NIPA), Table 1.1.9
Implicit Price Deflators for Gross Domestic Product.
https://bea.gov/iTable/index_nipa.cfm.
341 Bureau
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the aggregate, or by the private sector of
more than $148 million annually.
be discussed in the final rule that will
establish CAFE and GHG standards.
L. Regulation Identifier Number
The Department of Transportation
assigns a regulation identifier number
(RIN) to each regulatory action listed in
the Unified Agenda of Federal
Regulations. The Regulatory Information
Service Center publishes the Unified
Agenda in April and October of each
year. You may use the RIN contained in
the heading at the beginning of this
document to find this action in the
Unified Agenda.
P. Privacy Act
M. National Technology Transfer and
Advancement Act
Section 12(d) of the National
Technology Transfer and Advancement
Act (NTTAA) requires NHTSA and EPA
to evaluate and use existing voluntary
consensus standards in its regulatory
activities unless doing so would be
inconsistent with applicable law (e.g.,
the statutory provisions regarding
NHTSA’s vehicle safety authority, or
EPA’s testing authority) or otherwise
impractical.342 As this action does not
affect the CAFE or GHG standards, it is
not subject to the NTTAA.
NHTSA and EPA undertake this joint
action under their respective authorities
pursuant to the Energy Policy and
Conservation Act and the Clean Air Act,
mindful of the Supreme Court’s
statement in Massachusetts v. EPA, 549
U.S. 497, 532 (2007), that ‘‘there is no
reason to think the two agencies cannot
both administer their obligations and
yet avoid inconsistency.’’ Pursuant to
Clean Air Act section 307(b), any
petitions for judicial review of this
action must be filed in the United States
Court of Appeals for the D.C. Circuit by
November 26, 2019. Given the inherent
relationship between the agencies’
actions, any challenges to NHTSA’s
regulation should also be filed in the
United States Court of Appeals for the
D.C. Circuit.
N. Department of Energy Review
49 U.S.C. 32902(j)(2) requires that
‘‘Before taking final action on a standard
or an exemption from a standard under
this section, the Secretary of
Transportation shall notify the Secretary
of Energy and provide the Secretary of
Energy a reasonable time to comment.’’
As this action does not establish a
standard or provide an exemption, it is
not subject to this requirement.
However, NHTSA has submitted this
action to OMB for interagency review
and, thus, the Department of Energy has
been afforded the opportunity to review.
O. Paperwork Reduction Act
The Paperwork Reduction Act (PRA)
of 1995, Public Law 104–13,343 gives the
Office of Management and Budget
(OMB) authority to regulate matters
regarding the collection, management,
storage, and dissemination of certain
information by and for the Federal
government. It seeks to reduce the total
amount of paperwork handled by the
government and the public. The PRA
requires Federal agencies to place a
notice in the Federal Register seeking
public comment on the proposed
collection of information. This action
includes no information collections.
The information collections associated
with the CAFE and GHG programs will
342 15
U.S.C. 272.
at 44 U.S.C. 3501 et seq.
343 Codified
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In accordance with 5 U.S.C. 553(c),
the agencies solicited comments from
the public to better inform the
rulemaking process. These comments
are posted, without edit, to
www.regulations.gov, as described in
DOT’s system of records notice, DOT/
ALL–14 FDMS, accessible through
www.transportation.gov/privacy.
Q. Judicial Review
List of Subjects in 49 CFR Parts 531 and
533
Fuel economy.
Regulatory Text
In consideration of the foregoing,
under the authority of 49 U.S.C. 322,
32901, 32902, and 32903, and
delegation of authority at 49 CFR 1.95,
NHTSA amends 49 CFR chapter V as
follows:
PART 531—PASSENGER
AUTOMOBILE AVERAGE FUEL
ECONOMY STANDARDS
1. The authority citation for part 531
continues to read as follows:
■
Authority: 49 U.S.C. 32902, delegation of
authority at 49 CFR 1.50.
■
2. Add § 531.7 to read as follows:
§ 531.7
Preemption.
(a) General. When an average fuel
economy standard prescribed under this
chapter is in effect, a State or a political
subdivision of a State may not adopt or
enforce a law or regulation related to
fuel economy standards or average fuel
economy standards for automobiles
covered by an average fuel economy
standard under this chapter.
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(b) Requirements must be identical.
When a requirement under section
32908 of title 49 of the United States
Code is in effect, a State or a political
subdivision of a State may adopt or
enforce a law or regulation on
disclosure of fuel economy or fuel
operating costs for an automobile
covered by section 32908 only if the law
or regulation is identical to that
requirement.
(c) State and political subdivision
automobiles. A State or a political
subdivision of a State may prescribe
requirements for fuel economy for
automobiles obtained for its own use.
Appendix to Part 531 [Designated as
Appendix A to Part 531 and Amended]
3. Designate the appendix to part 531
as appendix A to part 531 and in newly
designated appendix A, remove all
references to ‘‘Appendix’’ and add in
their place ‘‘Appendix A.’’
■ 4. Add appendix B to part 531 to read
as follows:
■
(1) A law or regulation of a State or a
political subdivision of a State regulating
tailpipe carbon dioxide emissions from
automobiles, particularly a law or regulation
that is not attribute-based and does not
separately regulate passenger cars and light
trucks, conflicts with:
(A) The fuel economy standards in this
part;
(B) The judgments made by the agency in
establishing those standards; and
(C) The achievement of the objectives of
the statute (49 U.S.C. Chapter 329) under
which those standards were established,
including objectives relating to reducing fuel
consumption in a manner and to the extent
consistent with manufacturer flexibility,
consumer choice, and automobile safety.
(2) Any law or regulation of a State or a
political subdivision of a State regulating or
prohibiting tailpipe carbon dioxide emissions
from automobiles is impliedly preempted
under 49 U.S.C. Chapter 329.
(3) A law or regulation of a State or a
political subdivision of a State having the
direct or substantial effect of regulating or
prohibiting tailpipe carbon dioxide emissions
from automobiles or automobile fuel
economy is impliedly preempted under 49
U.S.C. Chapter 329.
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Appendix B to Part 531—Preemption
(a) Express Preemption:
(1) To the extent that any law or regulation
of a State or a political subdivision of a State
regulates or prohibits tailpipe carbon dioxide
emissions from automobiles, such a law or
regulation relates to average fuel economy
standards within the meaning of 49 U.S.C.
32919.
(A) Automobile fuel economy is directly
and substantially related to automobile
tailpipe emissions of carbon dioxide;
(B) Carbon dioxide is the natural byproduct of automobile fuel consumption;
(C) The most significant and controlling
factor in making the measurements necessary
to determine the compliance of automobiles
with the fuel economy standards in this part
is their rate of tailpipe carbon dioxide
emissions;
(D) Almost all technologically feasible
reduction of tailpipe emissions of carbon
dioxide is achievable through improving fuel
economy, thereby reducing both the
consumption of fuel and the creation and
emission of carbon dioxide;
(E) Accordingly, as a practical matter,
regulating fuel economy controls the amount
of tailpipe emissions of carbon dioxide, and
regulating the tailpipe emissions of carbon
dioxide controls fuel economy.
(2) As a law or regulation related to fuel
economy standards, any law or regulation of
a State or a political subdivision of a State
regulating or prohibiting tailpipe carbon
dioxide emissions from automobiles is
expressly preempted under 49 U.S.C. 32919.
(3) A law or regulation of a State or a
political subdivision of a State having the
direct or substantial effect of regulating or
prohibiting tailpipe carbon dioxide emissions
from automobiles or automobile fuel
economy is a law or regulation related to fuel
economy standards and expressly preempted
under 49 U.S.C. 32919.
(b) Implied Preemption:
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PART 533—LIGHT TRUCK FUEL
ECONOMY STANDARDS
5. The authority citation for part 533
continues to read as follows:
■
Authority: 49 U.S.C. 32902; delegation of
authority at 49 CFR 1.50.
■
6. Add § 533.7 to read as follows:
§ 533.7
Preemption.
(a) General. When an average fuel
economy standard prescribed under this
chapter is in effect, a State or a political
subdivision of a State may not adopt or
enforce a law or regulation related to
fuel economy standards or average fuel
economy standards for automobiles
covered by an average fuel economy
standard under this chapter.
(b) Requirements must be identical.
When a requirement under section
32908 of title 49 of the United States
Code is in effect, a State or a political
subdivision of a State may adopt or
enforce a law or regulation on
disclosure of fuel economy or fuel
operating costs for an automobile
covered by section 32908 only if the law
or regulation is identical to that
requirement.
(c) State and political subdivision
automobiles. A State or a political
subdivision of a State may prescribe
requirements for fuel economy for
automobiles obtained for its own use.
Appendix to Part 533 [Designated as
Appendix A to Part 533 and Amended]
7. Designate appendix to part 533 as
appendix A to part 533 and in newly
redesignated appendix A, remove all
■
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Fmt 4701
Sfmt 4700
references to ‘‘Appendix’’ and add in
their place ‘‘Appendix A’’.
■ 8. Add appendix B to part 533 to read
as follows:
Appendix B to Part 533—Preemption
(a) Express Preemption:
(1) To the extent that any law or regulation
of a State or a political subdivision of a State
regulates or prohibits tailpipe carbon dioxide
emissions from automobiles, such a law or
regulation relates to average fuel economy
standards within the meaning of 49 U.S.C.
32919.
(A) Automobile fuel economy is directly
and substantially related to automobile
tailpipe emissions of carbon dioxide;
(B) Carbon dioxide is the natural byproduct of automobile fuel consumption;
(C) The most significant and controlling
factor in making the measurements necessary
to determine the compliance of automobiles
with the fuel economy standards in this part
is their rate of tailpipe carbon dioxide
emissions;
(D) Almost all technologically feasible
reduction of tailpipe emissions of carbon
dioxide is achievable through improving fuel
economy, thereby reducing both the
consumption of fuel and the creation and
emission of carbon dioxide;
(E) Accordingly, as a practical matter,
regulating fuel economy controls the amount
of tailpipe emissions of carbon dioxide, and
regulating the tailpipe emissions of carbon
dioxide controls fuel economy.
(2) As a law or regulation of a State or a
political subdivision of a State related to fuel
economy standards, any state law or
regulation regulating or prohibiting tailpipe
carbon dioxide emissions from automobiles
is expressly preempted under 49 U.S.C.
32919.
(3) A law or regulation of a State or a
political subdivision of a State having the
direct or substantial effect of regulating or
prohibiting tailpipe carbon dioxide emissions
from automobiles or automobile fuel
economy is a law or regulation related to fuel
economy standards and expressly preempted
under 49 U.S.C. 32919.
(b) Implied Preemption:
(1) A law or regulation of a State or a
political subdivision of a State regulating
tailpipe carbon dioxide emissions from
automobiles, particularly a law or regulation
that is not attribute-based and does not
separately regulate passenger cars and light
trucks, conflicts with:
(A) The fuel economy standards in this
part;
(B) The judgments made by the agency in
establishing those standards; and
(C) The achievement of the objectives of
the statute (49 U.S.C. Chapter 329) under
which those standards were established,
including objectives relating to reducing fuel
consumption in a manner and to the extent
consistent with manufacturer flexibility,
consumer choice, and automobile safety.
(2) Any law or regulation of a State or a
political subdivision of a State regulating or
prohibiting tailpipe carbon dioxide emissions
from automobiles is impliedly preempted
under 49 U.S.C. Chapter 329.
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(3) A law or regulation of a State or a
political subdivision of a State having the
direct or substantial effect of regulating or
prohibiting tailpipe carbon dioxide emissions
from automobiles or automobile fuel
economy is impliedly preempted under 49
U.S.C. Chapter 329.
Issued on September 19, 2019 in
Washington, DC, under authority delegated
in 49 CFR 1.95 and 501.4
51363
Dated: September 19, 2019.
James C. Owens,
Acting Administrator, National Highway
Traffic Safety Administration.
Dated: September 19, 2019.
Andrew R. Wheeler,
Administrator, Environmental Protection
Agency.
[FR Doc. 2019–20672 Filed 9–26–19; 8:45 am]
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BILLING CODE 4910–59–P
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]]>Agencies
[Federal Register Volume 84, Number 188 (Friday, September 27, 2019)]
[Rules and Regulations]
[Pages 51310-51363]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2019-20672]
[[Page 51309]]
Vol. 84
Friday,
No. 188
September 27, 2019
Part III
Environmental Protection Agency
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40 CFR Parts 85 and 86
Department of Transportation
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National Highway Traffic Safety Administration
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49 CFR Parts 531 and 533
The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: One
National Program; Final Rule
Federal Register / Vol. 84 , No. 188 / Friday, September 27, 2019 /
Rules and Regulations
[[Page 51310]]
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ENVIRONMENTAL PROTECTION AGENCY
40 CFR Parts 85 and 86
DEPARTMENT OF TRANSPORTATION
National Highway Traffic Safety Administration
49 CFR Parts 531 and 533
[NHTSA-2018-0067; EPA-HQ-OAR-2018-0283; FRL 10000-45-OAR]
RIN 2127-AL76; 2060-AU09
The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part
One: One National Program
AGENCY: Environmental Protection Agency and National Highway Traffic
Safety Administration, Department of Transportation.
ACTION: Withdrawal of waiver; final rule.
-----------------------------------------------------------------------
SUMMARY: On August 24, 2018, the Environmental Protection Agency (EPA)
and the Department of Transportation's National Highway Traffic Safety
Administration (NHTSA) jointly published in the Federal Register a
notice of proposed rulemaking entitled, ``The Safer Affordable Fuel-
Efficient (SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars
and Light Trucks.'' In the NPRM, the agencies proposed new and amended
greenhouse gas (GHG) and Corporate Average Fuel Economy (CAFE)
standards for model year 2021 to 2026 light duty vehicles. EPA also
proposed to withdraw the waiver it had previously provided to
California for that State's GHG and ZEV programs under section 209 of
the Clean Air Act. NHTSA also proposed regulatory text implementing its
statutory authority to set nationally applicable fuel economy standards
that made explicit that those State programs would also be preempted
under NHTSA's authorities. In this action, the agencies finalize the
two actions related to the waiver and preemption. Accordingly, in this
document: EPA announces its decision to withdraw the waiver; and NHTSA
finalizes regulatory text related to preemption. The agencies
anticipate issuing a final rule on standards proposed in the NPRM in
the near future.
DATES: This joint action is effective November 26, 2019.
Judicial Review: Pursuant to Clean Air Act section 307(b), any
petitions for judicial review of this action must be filed in the
United States Court of Appeals for the D.C. Circuit by November 26,
2019. Given the inherent relationship between the agencies' actions,
any challenges to NHTSA's regulation should also be filed in the United
States Court of Appeals for the D.C. Circuit. See also Sections III.G
and IV.Q of this preamble.
ADDRESSES: EPA and NHTSA have established dockets for this action under
Docket ID No. EPA-HQ-OAR-2018-0283 and NHTSA 2018-0067, respectively.
All documents in the docket are listed in the https://www.regulations.gov index. Although listed in the index, some
information is not publicly available, e.g., confidential business
information (CBI) or other information whose disclosure is restricted
by statute. Certain other material, such as copyrighted material, will
be publicly available in hard copy in EPA's docket, and electronically
in NHTSA's online docket. Publicly available docket materials can be
found either electronically in www.regulations.gov by searching for the
dockets using the Docket ID numbers above, or in hard copy at the
following locations: EPA: EPA Docket Center, EPA/DC, EPA West, Room
3334, 1301 Constitution Ave. NW, Washington, DC. The Public Reading
Room is open from 8:30 a.m. to 4:30 p.m., Monday through Friday,
excluding legal holidays. The telephone number for the Public Reading
Room is (202) 566-1744. NHTSA: Docket Management Facility, M-30, U.S.
Department of Transportation (DOT), West Building, Ground Floor, Rm.
W12-140, 1200 New Jersey Avenue SE, Washington, DC 20590. The DOT
Docket Management Facility is open between 9 a.m. and 5 p.m. Eastern
Time, Monday through Friday, except Federal holidays.
FOR FURTHER INFORMATION CONTACT:
EPA: Christopher Lieske, Office of Transportation and Air Quality,
Assessment and Standards Division, Environmental Protection Agency,
2000 Traverwood Drive, Ann Arbor, MI 48105; telephone number: (734)
214-4584; fax number: (734) 214-4816; email address:
[email protected], or contact the Assessment and Standards
Division, email address: [email protected].
NHTSA: James Tamm, Office of Rulemaking, Fuel Economy Division,
National Highway Traffic Safety Administration, 1200 New Jersey Avenue
SE, Washington, DC 20590; telephone number: (202) 493-0515.
SUPPLEMENTARY INFORMATION:
I. Overview
II. Preemption Under the Energy Policy and Conservation Act
III. EPA's Withdrawal of Aspects of the January 2013 Waiver of CAA
section 209(b) Preemption of the State of California's Advanced
Clean Car Program
IV. Regulatory Notices and Analyses
I. Overview
On August 24, 2018, the Environmental Protection Agency (EPA) and
the Department of Transportation's National Highway Traffic Safety
Administration (NHTSA) (collectively, ``the agencies'') jointly
published in the Federal Register a notice of proposed rulemaking
entitled, ``The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule
for Model Years 2021-2026 Passenger Cars and Light Trucks'' (the SAFE
Vehicles rule).\1\ In the NPRM, EPA proposed new greenhouse gas (GHG)
standards and NHTSA proposed new Corporate Average Fuel Economy (CAFE)
standards for model years (MY) 2021 to 2026 light duty vehicles. The
agencies also proposed to take two actions, separate from the proposed
standards, needed to ensure the existence of one Federal program for
light vehicles. First, EPA proposed to withdraw the waiver it had
previously provided to California for that State's GHG program and Zero
Emissions Vehicle (ZEV) mandate. Second, NHTSA proposed regulatory text
that made explicit that State programs to limit or prohibit tailpipe
GHG emissions or establish ZEV mandates are preempted, to carry out its
statutory authority to set nationally applicable fuel economy standards
and consistent with the express preemption provisions of the Energy
Policy and Conservation Act (EPCA).
---------------------------------------------------------------------------
\1\ 83 FR 42986.
---------------------------------------------------------------------------
The SAFE Vehicles Rule received several hundred thousand public
comments, which discussed in great detail all aspects of the proposal.
The nature of the comments received related to the proposed standards
and the proposed actions on preemption, though, were considerably
different. That is, the vast majority of comments, whether one
considers the number of commenters, the number of issues raised by
commenters, or the length and level of detail of those comments,
focused primarily on the agencies' proposed standards. In contrast, the
comments to the preemption issues, though substantive and thorough,
were fewer in number and length, and raised primarily legal issues,
rather than the technical or economic issues that were the focus of
many comments to the standards. Both the proposed waiver withdrawal and
discussion of EPCA
[[Page 51311]]
preemption are legal matters that are independent of the technical
details of the proposed standards and, as such, took up a relatively
small part of the NPRM.
Recent actions by the State of California taken after the
publication of the NPRM have confirmed the need for final decision from
the agencies that States do not have the authority to set GHG standards
or establish ZEV mandates. First, on December 12, 2018, California
unilaterally amended its ``deemed to comply'' provision, such that
CARB's GHG standards can be satisfied only by complying with EPA's
standards as those standards were promulgated in 2012.\2\ More
recently, on July 25, 2019, California announced a so-called
``voluntary framework'' with four automakers, which purported, without
analysis of the terms of the existing waiver, California law, or how
this ``framework'' is permissible under Federal law, to allow those
automakers to meet reduced standards on a national basis if they
promise not to challenge California's authority to establish GHG
standards or the ZEV mandate.\3\ These two actions, both of which
conflict with the maintenance of a harmonized national fuel economy and
tailpipe GHG emissions program and the terms of the agreement reached
in 2012 and 2013, confirm that the only way to create one actual,
durable national program is for GHG and fuel economy standards to be
set by the Federal government, as was intended by Congress in including
express preemption provisions in both the Clean Air Act (for new motor
vehicle emissions standards) and EPCA (for fuel economy).\4\
---------------------------------------------------------------------------
\2\ See In re: Air Resources Board, Notice of Approval of
Regulatory Action, No. 2018-1114-03 (State of California, Office of
Administrative Law Dec. 12, 2018), available at https://ww3.arb.ca.gov/regact/2018/leviii2018/form400dtc.pdf?_ga=2.183723951.866759811.1568583699-1441462912.1552677736 (last visited Sept. 15, 2019).
\3\ See California and Major Automakers Reach Groundbreaking
Framework Agreement on Clean Emission Standards, Office of Gov.
Gavin Newsome (July 25, 2019), available at https://www.gov.ca.gov/2019/07/25/california-and-major-automakers-reach-groundbreaking-framework-agreement-on-clean-emission-standards/ (last visited Sept.
14, 2019); Terms for Light-Duty Greenhouse Gas Emissions Standards,
available at https://ww2.arb.ca.gov/sites/default/files/2019-07/Auto%20Terms%20Signed.pdf (last visited Sept. 14, 2019).
\4\ At the time this joint action was signed, California had not
submitted or demonstrated any intention to submit an application for
a waiver for either its December 2018 amendment to its regulations
or its July 2019 ``framework.''
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In light of the divergence in the type of comments received to the
proposal (i.e., between the standards-related proposal and the waiver
and preemption proposals), and in light of the recent actions taken by
California, the agencies have determined it is appropriate to move
forward with the two actions related to preemption now, while
continuing work on a final rule to establish the CAFE and GHG standards
that were within the scope of the NPRM. This decision is appropriate,
as agencies have authority to finalize different parts of proposed
actions at different times. Further, the agencies previewed this
possibility in the NPRM by emphasizing the severability of the
standards from the actions being finalized in this document. EPA's
action in this document does not add or amend regulatory text pursuant
to the Clean Air Act and, thus, issuing this decision on the waiver and
the later rulemaking on the standard makes clear the difference between
EPA's two actions and their independence from one another. NHTSA's
action in this document is not to set standards for particular model
years, but rather is an exercise of its authority under 49 U.S.C. 32901
through 32903, necessary to maintain the integrity of the corporate
average fuel economy program and compliance regime established by
Congress as a nationwide program, and consistent with Congress'
statement of express preemption in 49 U.S.C. 32919. These two general
aspects of the SAFE Vehicles Rule are independent of the CAFE and GHG
standards for Model Years 2021-2026.\5\ For that reason, the decision
in this document to finalize the waiver and preemption issues does not
require the agencies to reopen the comment period for the standards, as
it does not have any effect on either agency's standards.
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\5\ The agencies note that the South Coast Air Quality
Management District commented that EPA should not take an action on
the waiver in the same notice as a rule that would change EPA's GHG
standards. See South Coast Air Quality Management District, Docket
No. NHTSA-2018-0067-11813. Although the agencies do not acknowledge
the validity of this argument, any such concern is rendered moot by
this action.
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The agencies note that several comments claimed that the comment
period of 63 days was inadequate or that the agencies did not hold a
sufficient number of public meetings. Although the agencies will
address this comment more directly in the forthcoming final rulemaking
to establish standards, for purposes of this action, it is clear to the
agencies that commenters had adequate time to respond to the issue of
the waiver and EPCA preemption. Courts give broad discretion to
agencies in determining whether the length of a comment period is
reasonable and, in assessing the sufficiency of a comment period, look
to whether the public had a meaningful opportunity to comment on a
proposed action. See, e.g., Rural Cellular Ass'n v. FCC, 588 F.3d 1095,
1101 (D.C. Cir. 2009); Connecticut Light & Power Co. v. Nuclear
Regulatory Comm'n, 673 F.2d 525, 534 (D.C. Cir. 1982). There was
unquestionably a meaningful opportunity to comment here. The agencies
received several hundred thousand comments, which included highly
detailed and technical comments on all aspects of the proposal from
seemingly all relevant stakeholders, including numerous comments
related to EPA's action on the waiver and NHTSA's proposal on
preemption. The agencies also note that the NPRM was initially issued
and made public on August 2, 2018, over three weeks prior to
publication in the Federal Register, and received extensive media
coverage immediately thereafter, and giving a total of 86 days to
review and comment. Furthermore, the agencies held three public
hearings during the comment period, including one in Fresno, California
on September 24, 2018, where the agencies heard from several hundred
commenters in person.
II. Preemption Under the Energy Policy and Conservation Act
A. NHTSA Is Finalizing Its Preemption Proposal
NHTSA is finalizing its proposal concerning preemption of State and
local laws and regulations related to fuel economy standards. Congress
passed EPCA to help achieve the important national objective of
protecting the United States against petroleum price shocks through
improvements in fuel efficiency for the light duty vehicle fleet. But
Congress did not seek to do so at any cost--instead directing the
Secretary of Transportation to balance statutory factors, such as the
need of the nation to conserve energy, technological feasibility, and
economic practicability, to arrive at stringent, but feasible,
standards on a Federal basis.
Increasing fuel economy is an expensive undertaking for automakers,
the costs of which are necessarily passed on to consumers, thereby
discouraging new vehicle purchases and slowing the renewal of the
nation's light duty fleet. That is why fuel economy standards must be
set considering other critical factors.
This is also why the notion of national applicability and
preemption of State or local laws or regulations related to fuel
economy standards is so critical. Allowing State or local governments
to establish their own fuel economy standards, or standards related to
fuel
[[Page 51312]]
economy, would provide for a universe in which automakers are placed in
the untenable situation of having to expend resources to comply not
only with Federal standards, but also meet separate State requirements.
If State or local governments are allowed to require--directly or
indirectly--automakers to develop and implement additional technologies
to improve fuel economy (or reduce or eliminate tailpipe greenhouse gas
emissions for all or a portion of a fleet), the fuel economy-related
expenses of automakers increase beyond those considered in establishing
federal standards. This would render the critical balancing required by
EPCA devoid of meaning.
Uniform national fuel economy standards are essential to
accomplishing the goals of EPCA. To ensure that the fuel economy
standards NHTSA adopts constitute the uniform national requirements
that Congress intended, NHTSA must address the extent to which State
and local laws and regulations are preempted by EPCA.
Furthermore, EPCA states: ``When an average fuel economy standard
prescribed under this chapter is in effect, a State or a political
subdivision of a State may not adopt or enforce a law or regulation
related to fuel economy standards or average fuel economy standards for
automobiles covered by an average fuel economy standard under this
chapter.'' 49 U.S.C. 32919(a). As a limited exception, a State or local
government ``may prescribe requirements for fuel economy for
automobiles obtained for its own use.'' 49 U.S.C. 32919(c). In
addition, when a Federal fuel economy labeling or information
requirement is in effect, pursuant to 49 U.S.C. 32908, a State or local
government may adopt or enforce an identical requirement on
``disclosure of fuel economy or fuel operating costs.'' 49 U.S.C.
32919(b). Absent this limited circumstance, a State or local government
cannot even have laws in place that are identical to the Federal
standards.
NHTSA will first summarize its discussion of preemption in the
proposal before turning to discussion of issues raised by the comments.
In this final rule, NHTSA fully reaffirms the discussion of preemption
set forth in the proposal, which provides additional detail regarding
NHTSA's views.\6\
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\6\ See 83 FR 42986, 43232-39 (Aug. 24, 2018).
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In the proposal, NHTSA described its preemption discussions in
prior rulemakings, which are consistent with the views on preemption
that NHTSA is finalizing in this document.\7\ NHTSA has asserted
preemption of certain State emissions standards under EPCA on multiple
occasions since 2002. The United States explained in a 2002 amicus
brief that EPCA preempted California's then-existing zero-emissions
vehicle (ZEV) regulations.\8\ NHTSA continued the discussion of
preemption later that year in a notice of proposed rulemaking setting
CAFE standards for model year 2005 through 2007 light trucks, and
reiterated its position in the 2003 final rule.\9\ NHTSA's 2005 notice
of proposed rulemaking setting standards for model year 2008 through
2011 light trucks also discussed preemption and the 2006 final rule
elaborated on the issue at length, including in a specific discussion
finding California's then-existing tailpipe greenhouse gas emissions
regulations were preempted.\10\ NHTSA's 2008 proposed rule for model
year 2011 through 2015 passenger cars and light trucks also addressed
preemption and proposed adding a summary of NHTSA's position on the
issue to the Code of Federal Regulations.\11\ That proposed rule also
addressed recent developments, specifically the Supreme Court's
decision in Massachusetts v. EPA, the enactment of EISA, and two
district court decisions finding that State tailpipe greenhouse gas
emissions standards were not preempted by EPCA.\12\ NHTSA explained
that those developments did not change its view of preemption and it
reaffirmed the detailed analysis and conclusions from the 2006 final
rule.\13\ Subsequent CAFE rulemaking documents, prior to the August
2018 proposal, did not discuss EPCA preemption.\14\ Thus, this final
rule is consistent with NHTSA's longstanding position on EPCA
preemption over the course of nearly two decades.
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\7\ Id. at 43232. As NHTSA noted in the proposal, it had not
previously directly addressed preemption of California's ZEV
program. Id. at 43233.
\8\ Brief for the United States as Amicus Curiae in Support of
Affirmance, Cent. Valley Chrysler-Plymouth Inc., et al, v. Kenny,
No. 02-16395 (9th Cir. 2002).
\9\ 68 FR 16868, 16895 (Apr. 7, 2003); 67 FR 77015, 77025 (Dec.
16, 2002). In the notice of proposed rulemaking, NHTSA specifically
rejected the argument made by California in litigation that NHTSA
had not treated EPCA as preempting State efforts to engage in CAFE-
related regulation, explaining that States may not ``issue a
regulation that relates to fuel economy and which addresses the same
public policy concern as the CAFE statute. Our statute contains a
broad preemption provision making clear the need for a uniform,
federal system. . . . The fact that NHTSA had not expressly
addressed this particular aspect of California's requirements should
not have been interpreted as tacit acceptance.'' 67 FR 77015, 77025
(Dec. 16, 2002).
\10\ 71 FR 17566, 17654-70 (Apr. 6, 2006); 70 FR 51414, 51457
(Aug. 30, 2005).
\11\ 73 FR 24352, 24478-79 (May 2, 2008). NHTSA finalized only
standards for model year 2011 through that rulemaking action, and
subsequently began a new rulemaking for model year 2012 and later
passenger cars and light trucks. In the final rule for model year
2011, NHTSA stated: ``NHTSA has decided not to include any
provisions addressing preemption in the Code of Federal Regulations
at this time. The agency will re-examine the issue of preemption in
the content of its forthcoming rulemaking to establish Corporate
Average Fuel Economy standards for 2012 and later model years.'' 74
FR 14196, 14200 (Mar. 30, 2009).
\12\ 73 FR 24352, 24478 (May 2, 2008).
\13\ Id.
\14\ As noted above, in NHTSA's final rule for model year 2011,
it stated that ``[t]he agency will re-examine the issue of
preemption in the content of its forthcoming rulemaking to establish
Corporate Average Fuel Economy standards for 2012 and later model
years.'' 74 FR 14196, 14200 (Mar. 30, 2009). However, in the NHTSA's
2009 proposal and 2010 final rule setting standards for model year
2012 through 2016 automobiles, NHTSA stated that is was ``deferring
further consideration of the preemption issue.'' 75 FR 25324, 25546
(May 7, 2010); 74 FR 49454, 49635 (Sept. 28, 2009).
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In the proposal, NHTSA also described certain developments,
including the Supreme Court's decision in Massachusetts v. EPA, that
preceded EPA's regulation of tailpipe greenhouse gas emissions through
joint rulemaking with NHTSA.\15\ In addition, NHTSA described the Obama
Administration's creation of a framework that was intended to allow a
manufacturer to ``meet all standards with a single national fleet.''
\16\ Appeals of the two district court decisions holding that the
California regulation and Federal regulation could co-exist were
withdrawn as part of the negotiated agreement for the National
Program.\17\ The announcement of the framework was followed by EPA's
decision less than two months later to grant a waiver to California for
its own greenhouse gas emissions standards, without taking any
substantive position on EPCA preemption.\18\ The national framework was
a negotiated agreement between the Federal government, California, and
the automotive industry.\19\
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\15\ 83 FR 42986, 43232-33 (Aug. 24, 2018).
\16\ Id. at 43233; 76 FR 74854, 74863 (Dec. 1, 2011).
\17\ See 83 FR 42986, 43233 (Aug. 24, 2018); Association of
Global Automakers, Docket No. NHTSA-2018-0067-12032.
\18\ In other words, the National Program included State
requirements not nationally applicable. 83 FR 42986, 43233 (Aug. 24,
2018); see also 74 FR 32744, 32783 (July 8, 2009) (``EPA takes no
position regarding whether or not California's GHG standards are
preempted under EPCA.'').
\19\ After President Obama announced the agreement, NHTSA and
EPA subsequently adopted CAFE and greenhouse gas emissions standards
through rulemaking. See 75 FR 25324 (May 7, 2010).
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NHTSA confirms its view, stated in the proposal on preemption, that
the agencies' consideration in 2012 of California's ``deemed to
comply''
[[Page 51313]]
regulatory provision as obviating NHTSA's consideration of preemption
was erroneous.\20\ This, too, was part of the negotiated agreement
described above.\21\ Under California's regulatory provision,
California deemed manufacturers to be in compliance with certain of
California's requirements if they complied with EPA's standards.\22\
However, EPCA explicitly provides that all State requirements ``related
to'' fuel economy standards, even those that may be identical or
equivalent to Federal requirements are preempted by EPCA.\23\ Moreover,
as discussed in additional detail below, California recently changed
its regulations so that it has no such ``deemed to comply'' provision
should the forthcoming SAFE final rule adopt any regulatory alternative
other than the no action alternative.\24\ This change sets up a direct
conflict between Federal and State requirements, exacerbating the
conflict that exists even now.
---------------------------------------------------------------------------
\20\ See id.; 77 FR 62624, 62637 (Oct. 15, 2012).
\21\ See 75 FR 25324, 25328 (May 7, 2010).
\22\ 83 FR 42986, 43233 (Aug. 24, 2018).
\23\ See id. at 43233-34.
\24\ See 83 FR 42986, 42990 tbl. I-4 (Aug. 24, 2018); Cal. Code
Regs. tit. 13, sec. 1961.3(c). California changed its regulation
following issuance of NHTSA and EPA's proposed rule. See State of
Cal., Office of Admin. Law, Notice of Approval of Regulatory Action
(Dec. 12, 2018), https://www.arb.ca.gov/regact/2018/leviii2018/form400dtc.pdf. NHTSA recognized the potential for such a change in
the proposal. 83 FR 42986, 43233 n.495 (Aug. 24, 2018).
---------------------------------------------------------------------------
Congress's intent to provide for uniform national fuel economy
standards is frustrated when State and local actors regulate in this
area. In the proposal, NHTSA explained that the need for regulatory
certainty, along with the clear prospect of disharmony, required it to
address preemption.\25\ NHTSA also explained its desire to seek
comments on this important issue from State and local officials, along
with other interested members of the public.\26\ NHTSA in fact received
many comments from State and local governments, NGOs, industry, and
others concerning preemption.\27\ This comment process helped ensure
that the agency considered all facets of this significant issue before
reaching a final determination in this rule.
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\25\ 83 FR 42986, 43233 (Aug. 24, 2018).
\26\ Id.
\27\ See, e.g., California Air Resources Board (CARB), Docket
No. NHTSA-2018-0067-11873; Alliance of Automobile Manufacturers,
Docket No. NHTSA-2018-0067-12073; Joint Submission from the States
of California et al. and the Cities of Oakland et al., Docket No.
NHTSA-2018-0067-11735.
---------------------------------------------------------------------------
NHTSA also discussed the broad and clear text of EPCA's express
preemption provision.\28\ As NHTSA explained in the proposal, unlike
the Clean Air Act, there is no set of circumstances under EPCA in which
it would be appropriate or permissible for NHTSA to waive preemption or
allow States or local governments to adopt or enforce identical or
equivalent requirements.\29\ EPCA does not provide NHTSA with any
waiver authority whatsoever. To ensure Federal primacy over this area,
EPCA broadly preempts all State and local laws ``related to'' fuel
economy standards or average fuel economy standards.\30\ NHTSA
reiterates, consistent with the proposal, that in this rulemaking NHTSA
is concluding that State and local requirements that relate to fuel
economy standards by directly or substantially affecting corporate
average fuel economy levels are preempted.\31\
---------------------------------------------------------------------------
\28\ 83 FR 42986, 43233-34 (Aug. 24, 2018).
\29\ Id. at 43233.
\30\ 49 U.S.C. 32919(a).
\31\ 83 FR 42986, 43233 (Aug. 24, 2018).
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NHTSA also described Supreme Court precedent interpreting the
meaning of ``related to.'' \32\ In addition to the plain language of
the statute, NHTSA applied to EPCA the guidance from Supreme Court case
law to consider both the objectives of the statute and the effect of
the State laws on the Federal standards.\33\ As NHTSA explained, the
primacy of a single national fuel economy standard, set by the Federal
government, was an important objective of Congress in enacting EPCA.
---------------------------------------------------------------------------
\32\ Id.
\33\ Id. at 43233-34.
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In adopting EISA, Congress did not repeal or amend EPCA's express
preemption provision.\34\ While Congress included in EISA a savings
provision preventing EISA from limiting preexisting authority or
responsibility conferred by any law, or from authorizing violation of
any law,\35\ the savings clause did not purport to expand either EPA's
or NHTSA's preexisting authority or responsibility.\36\ NHTSA
recognized that during debate on the floor, some Members of Congress
made statements about the savings provision's impact on California's
ability to set tailpipe greenhouse gas emissions standards.\37\ NHTSA
affirms its view, consistent with Supreme Court precedent, that such
legislative history does not alter the plain text of the statute.\38\
In the end, Congress did not change EPCA's preemption provision when it
adopted EISA, despite clearly having the opportunity to do so.\39\
Because States lacked preexisting authority to set tailpipe greenhouse
gas emissions standards, as a result of EPCA's preemption provision,
EISA's savings clause did not give them that authority.
---------------------------------------------------------------------------
\34\ See EISA, Public Law 110-140 (2007).
\35\ 42 U.S.C. 17002.
\36\ See id.
\37\ 83 FR 42986, 43234 (Aug. 24, 2018).
\38\ See Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct.
2356, 2364 (2019) (``In statutory interpretation disputes, a court's
proper starting point lies in a careful examination of the ordinary
meaning and structure of the law itself. Where, as here, that
examination yields a clear answer, judges must stop. Even those of
us who sometimes consult legislative history will never allow it to
be used to `muddy' the meaning of `clear statutory language.' '')
(internal citations omitted).
\39\ See EISA, Public Law 110-140 (2007); 83 FR 42986, 43234
(Aug. 24, 2018).
---------------------------------------------------------------------------
In the proposal, NHTSA also described in detail the reasons that
tailpipe carbon dioxide emissions regulations or prohibitions are
``related to'' fuel economy standards.\40\ NHTSA explained that carbon
dioxide emissions are a necessary and inevitable byproduct of burning
gasoline: The more fuel a vehicle burns or consumes, the more carbon
dioxide it emits.\41\ Based on the physical and mathematically
measurable relationship between carbon dioxide emissions and fuel
economy, EPCA has always specified that compliance with fuel economy
standards is determined through tests and calculation procedures
established by EPA.\42\ Specifically, compliance with fuel economy
standards is based almost entirely on carbon dioxide emission
rates.\43\ As NHTSA noted, it is significant that in enacting EPCA,
Congress both adopted test procedures reliant on the direct
relationship between carbon dioxide emissions and fuel economy, and
preempted State and local governments from adopting requirements
related to fuel economy standards in the same law.\44\
---------------------------------------------------------------------------
\40\ 83 FR 42986, 43234 (Aug. 24, 2018).
\41\ Id.
\42\ 49 U.S.C. 32904(c).
\43\ See 83 FR 42986, 43234 (Aug. 24, 2018).
\44\ Id.
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NHTSA affirms in this final rule that a State or local requirement
limiting tailpipe carbon dioxide emissions from automobiles has the
direct and substantial effect of regulating fuel consumption and, thus,
is ``related to'' fuel economy standards. Likewise, since carbon
dioxide emissions constitute the overwhelming majority of tailpipe
carbon emissions, a State regulation of all tailpipe greenhouse gas
emissions from automobiles or prohibiting all tailpipe emissions is
also ``related to'' fuel economy standards and preempted by EPCA.
NHTSA is also finalizing its conclusion that EPCA does not preempt
all potential State or local regulation of greenhouse gas emissions
from vehicles. As NHTSA explained in the proposal,
[[Page 51314]]
some greenhouse gas emissions from vehicles are not related to fuel
economy because they have either no effect on fuel economy, or only an
insignificant effect on fuel economy.\45\ NHTSA provided an example of
a requirement with no bearing on fuel economy: a State regulation of
vehicular refrigerant leakage.\46\ NHTSA also explained that State
safety requirements that have only an incidental impact on fuel
economy, such as a requirement to use child seats, is not preempted
because it does not sufficiently relate to fuel economy standards.\47\
NHTSA also confirms its view that, if preempted requirements are
combined with requirements not related to fuel economy, ECPA would void
only the preempted portion of the law.
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\45\ Id. at 43234-35.
\46\ Id. at 43235.
\47\ Id.
---------------------------------------------------------------------------
In addition, NHTSA and EPA are confirming their determination, in
this joint final action, that a Clean Air Act waiver does not waive
EPCA preemption. As explained in the proposal, a State or local law or
regulation related to automobile fuel economy standards is void ab
initio under the preemptive force of EPCA.\48\ As support, the proposal
cited longstanding Supreme Court case law concerning the Supremacy
Clause and action in violation of a statutory prohibition.\49\ In sum,
``[i]t is basic to this constitutional command [in the Supremacy
Clause] that all conflicting state provisions be without effect.'' \50\
---------------------------------------------------------------------------
\48\ Id.
\49\ Id.
\50\ Maryland v. Louisiana, 451 U.S. 725, 746 (1981) (citing
McCulloch v. Maryland, 4 Wheat. 316,
427 (1819)).
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As explained in the proposal, avoiding preemption under one Federal
law has no necessary bearing on another Federal law's preemptive
effect.\51\ For purposes of the present rule, this conclusion is
confirmed by Section 209 of the Clean Air Act, which explicitly states
that a waiver of preemption pursuant to that provision of the Clean Air
Act only relieves ``application of this section.'' \52\ NHTSA also
confirms its view that a Clean Air Act waiver does not ``federalize''
State or local requirements preempted by EPCA.
---------------------------------------------------------------------------
\51\ 83 FR 42986, 43235 (Aug. 24, 2018).
\52\ 42 U.S.C. 7543(b)(1).
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NHTSA and EPA also explained in the proposal their disagreement
with decisions from district courts in California and Vermont that held
that EPCA did not preempt State tailpipe greenhouse gas emissions
standards.\53\ The agencies particularly disagree with those district
courts' characterization of the ``related to'' language in EPCA's
preemption provision as narrow, their reliance on California's
application for a Clean Air Act waiver, and the courts' implied
preemption analyses.\54\ As the proposal explained, these decisions are
legally flawed, and NHTSA is not barred from proceeding with its
preemption determination here.\55\
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\53\ 83 FR 42986, 43232-38 (Aug. 24, 2018); see Green Mountain
Chrysler v. Crombie, 508 F. Supp. 2d 295 (D. Vt. 2007); Cent. Valley
Chrysler-Jeep, Inc. v. Goldstene, 529 F. Supp. 2d 1151 (E.D. Cal.
2007), as corrected (Mar. 26, 2008).
\54\ 83 FR 42986, 43232-38 (Aug. 24, 2018).
\55\ See id. at 43235.
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NHTSA also reaffirms its views on implied preemption, as described
in the proposal.\56\ State or local limitations or prohibitions on
tailpipe carbon dioxide emissions from automobiles directly conflict
with the objectives of EPCA. NHTSA balances statutory factors in
setting CAFE standards at ``the maximum feasible average fuel economy
level that the Secretary decides the manufacturers can achieve in that
model year'' (49 U.S.C. 32902(a)).\57\ State requirements, made based
on State-specific determinations unbound by the considerations in EPCA,
frustrate NHTSA's statutory role. If one or more States may issue
competing or overlapping requirements affecting fuel economy standards,
industry must also apply resources and effort at meeting standards
applicable only to discrete parts of the country in addition to those
spent to comply with the Federal standards. In accordance with EPCA,
manufacturers' ``average fuel economy'' is calculated based on specific
statutory requirements. 49 U.S.C. 32901(a)(5), 32904. Manufacturers
earn credits for exceeding average fuel economy standards. 49 U.S.C.
32903. This statutory compliance structure is impeded when States or
local governments attempt to set or enforce their own requirements,
which necessarily apply to manufacturers at a State or local level.
This interferes with the national ``average fuel economy'' program. The
broad preemption provision adopted by Congress in EPCA clearly
demonstrates the intention for a single national set of standards that
consider, among other things, economic feasibility and consumer choice.
Indeed, the entire purpose of a balanced standard is defeated if a
State can place its thumb on the scale. Likewise, separate State or
local requirements interfere with the compliance regime under EPCA of
performance determined based on nationwide fleet averages, which
determine manufacturers' credits or shortfalls. See 49 U.S.C. 32903.
---------------------------------------------------------------------------
\56\ See id. at 43237-38.
\57\ 49 U.S.C. 32902(f).
---------------------------------------------------------------------------
NHTSA also finalizes the view, as discussed in the proposal, that
ZEV mandates are preempted by EPCA.\58\ Such laws, which require that a
certain number or percentage of vehicles sold or delivered in a State
by a manufacturer meet ZEV requirements, directly and substantially
affect fuel economy standards by requiring manufacturers to eliminate
fossil fuel use in a portion of their fleet. Like State or local
tailpipe GHG emissions standards, ZEV mandates require the application
of additional efforts and resources beyond those needed to comply with
Federal standards. ZEV mandates also directly conflict with the goals
of EPCA as they apply irrespective of the Federal statutory factors the
Secretary of Transportation (through NHTSA) is required to consider in
setting fuel economy standards, including technological feasibility and
economic practicability. In the proposal, NHTSA described, as an
example, California's ZEV mandate, which manufacturers must comply with
individually for each State adopting California's mandate.\59\ This
regime of State mandates forces manufacturers to expend scarce
resources on specific technology regardless of consumer demand, and
regardless of what the Secretary has determined in her judgment to be
the appropriate expenditure of resources necessary to comply with fuel
economy standards set in accordance with the balancing required by
EPCA.
---------------------------------------------------------------------------
\58\ See id. at 43238-39.
\59\ Id.
---------------------------------------------------------------------------
NHTSA also confirms its view that the preemption portion of this
joint final action is a statement of what Federal law requires and is
effective without regard to any particular model year of vehicles and
without regard to the details of the fuel economy and greenhouse gas
emissions standards the agencies have set previously or set in the
future.\60\ In other words, NHTSA's regulation concerning EPCA
preemption is independent of and severable from the specific standards
it ultimately adopts for model year 2021 through 2026 automobiles.
Given the need for clarity on this issue, NHTSA has decided to issue
this as a separate final rule and will later finalize the standards for
model year 2021 through 2026 automobiles. NHTSA's preemption regulation
formalizes its longstanding position on preemption and incorporates
that position into the Code of Federal Regulations provisions
concerning passenger automobile
[[Page 51315]]
average fuel economy standards at 49 CFR 531.7 and 49 CFR part 531,
appendix B, and light truck fuel economy standards at 49 CFR 533.7 and
49 CFR part 533, appendix B. These portions of the regulations are
operable without regard to any specific Federal standards and
requirements in 49 CFR parts 531 and 533 or other parts of the Code of
Federal Regulations. Likewise, NHTSA's determination that a State or
local law or regulation of tailpipe greenhouse gas emissions from
automobiles is related to fuel economy standards is severable from
NHTSA's determination that State or local ZEV mandates are related to
fuel economy standards.
---------------------------------------------------------------------------
\60\ See id. at 43239.
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B. Scientific Relationship Between Tailpipe Carbon Dioxide Emissions
and Fuel Economy Standards
NHTSA is finalizing its conclusion that State requirements
regulating tailpipe carbon dioxide emissions from automobiles are
related to fuel economy standards. The relationship between fuel
economy standards and regulations that limit or prohibit tailpipe
carbon dioxide emissions from automobiles is a matter of science and
mathematics. Commenters did not and cannot dispute the direct
scientific link between tailpipe carbon dioxide emissions from
automobiles and fuel economy. Thus, State and local laws and
regulations that regulate such tailpipe emissions are preempted under
EPCA.
The relationship between carbon dioxide and fuel economy is
described in several statements in an appendix to parts 531 and 533
that NHTSA is finalizing in this document.
First, ``[a]utomobile fuel economy is directly and substantially
related to automobile tailpipe emissions of carbon dioxide.'' 49 CFR
part 531, appx. B, section (a)(1)(A); 49 CFR part 533, appx. B, section
(a)(1)(A).\61\ No commenters disputed or otherwise specifically
commented on this statement.
---------------------------------------------------------------------------
\61\ 83 FR 42986, 43489 (Aug. 24, 2018).
---------------------------------------------------------------------------
Second, ``[c]arbon dioxide is the natural byproduct of automobile
fuel consumption.'' 49 CFR part 531, appx. B, section (a)(1)(B); 49 CFR
part 533, appx. B, section (a)(1)(B).\62\ One comment identified this
as a correct statement,\63\ and another highlighted this fact in noting
NHTSA's longstanding and consistent view on preemption.\64\ No
commenters disagreed with this factual statement.
---------------------------------------------------------------------------
\62\ Id.
\63\ Walter Kreucher, Docket No. NHTSA-2018-0067-0444.
\64\ Association of Global Automakers, Docket No. NHTSA-2018-
0067-12032.
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Third, ``[t]he most significant and controlling factor in making
the measurements necessary to determine the compliance of automobiles
with the fuel economy standards in this part [531 and 533] is their
rate of tailpipe carbon dioxide emissions.'' 49 CFR part 531, appx. B,
section (a)(1)(C); 49 CFR part 533, appx. B, section (a)(1)(C).\65\ The
Alliance of Automobile Manufacturers similarly stated that the
measurements for CAFE compliance involved ``the same tests, vehicles,
sales data, and emissions measurements that the EPA uses to measure
carbon dioxide and tailpipe GHG emissions.'' \66\ Fiat Chrysler
Automobiles (FCA) also reiterated this point from the Alliance's
comments,\67\ and the Competitive Enterprise Institute highlighted
NHTSA's discussion of compliance measurement in agreeing that fuel
economy standards and greenhouse gas emissions standards are inherently
related.\68\ CARB did not dispute this factual statement, but pointed
out that carbon dioxide emissions are only one part of the compliance
testing regime Congress approved--a fact that NHTSA had already
recognized in its proposal.\69\ As NHTSA explained in the proposal, as
specified by EPCA, compliance with the CAFE standards is and has always
been based on the rates of emission of carbon dioxide, carbon monoxide,
and hydrocarbons from covered vehicles, but primarily on the emission
rates of carbon dioxide.\70\ The role of carbon dioxide is
approximately 100 times greater than the combined role of the other two
relevant carbon exhaust gases.\71\
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\65\ 83 FR 42986, 43489 (Aug. 24, 2018).
\66\ Alliance of Automobile Manufacturers, Docket No. NHTSA-
2018-0067-12073.
\67\ Fiat Chrysler Automobiles (FCA), Docket No. NHTSA-2018-
0067-11943.
\68\ Competitive Enterprise Institute, Docket No. NHTSA-2018-
0067-12015.
\69\ See California Air Resources Board (CARB), Docket No.
NHTSA-2018-0067-11873; 83 FR 42986, 43234 (Aug. 24, 2018).
\70\ See 83 FR 42986, 43234 (Aug. 24, 2018).
\71\ 71 FR 17566, 17655-56 (Apr. 6, 2006); 83 FR 42986, 43234
(Aug. 24, 2018).
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Fourth, ``[a]lmost all technologically feasible reduction of
tailpipe emissions of carbon dioxide is achievable through improving
fuel economy, thereby reducing both the consumption of fuel and the
creation and emission of carbon dioxide.'' 49 CFR part 531, appx. B,
section (a)(1)(D); 49 CFR part 533, appx. B, section (a)(1)(D).\72\ The
South Coast Air Quality Management District (South Coast) commented
that NHTSA previously proposed, in 2008, adopting similar regulatory
text that used the word ``most'' instead of ``almost all.'' \73\ South
Coast asserts that the 2008 proposal shows that NHTSA ``strains to
exaggerate'' the overlap between greenhouse gas emissions standards and
fuel economy standards.\74\ NHTSA disagrees. While South Coast points
to hybrid electric vehicles and ZEVs, it offers no evidence to refute
the fact that almost all technologically feasible reduction of tailpipe
emissions of carbon dioxide is achievable through improving the fuel
economy levels of the vehicles in question.
---------------------------------------------------------------------------
\72\ 83 FR 42986, 43489 (Aug. 24, 2018).
\73\ South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813.
\74\ Id.
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Fifth, ``as a practical matter, regulating fuel economy controls
the amount of tailpipe emissions of carbon dioxide, and regulating the
tailpipe emissions of carbon dioxide controls fuel economy.'' 49 CFR
part 531, appx. B, section (a)(1)(E); 49 CFR part 533, appx. B, section
(a)(1)(E).\75\ No commenter disputed this statement. The National
Automobile Dealers Association agreed, putting it this way: ``the
physics and chemistry involved with fuel economy and GHG emissions
standards are such that controlling fuel economy controls GHGs and
controlling GHGs controls fuel economy.'' \76\ It is also worth noting
that technology cannot reduce the amount of carbon dioxide produced by
combusting one gallon of gas. Instead, only technology that reduces the
amount of gas needed to drive one mile (fuel economy) will reduce the
amount of carbon dioxide generated per mile.
---------------------------------------------------------------------------
\75\ 83 FR 42986, 43489 (Aug. 24, 2018).
\76\ National Automobile Dealers Association, Docket No. NHTSA-
2018-0067-12064.
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These statements in the regulatory appendix concerning the
scientific relationship between automobile carbon dioxide emissions and
fuel economy provide the foundation for NHTSA's preemption analysis.
Due to this scientific relationship, which no commenter refuted, a
regulation of tailpipe carbon dioxide emissions from automobiles that
does not explicitly state that it is regulating fuel economy
nevertheless has the effect of doing so. The label a State chooses to
put on its regulations certainly is not dispositive in a preemption
analysis. See, e.g., Nat'l Meat Ass'n. v. Harris, 565 U.S. 452, 464
(2012). One comment, from the Northeast States for Coordinated Air Use
Management (NESCAUM), asserted that ``California's GHG standards do not
mention fuel economy or attempt to
[[Page 51316]]
regulate fuel economy.'' \77\ To such comments, the agencies must ask
ourselves the age-old question: ``What's in a name?'' and conclude
``[t]hat which we call a rose by any other name would smell as sweet.''
\78\ Arguments focused on form, or worse--labels--over substance are
not persuasive. Moreover, it is indisputable that EPCA preemption
reaches beyond explicit regulations of fuel economy and into
regulations ``related to'' fuel economy. The words ``related to''
cannot be read out of the statute or narrowed in a way that undermines
Congress's broad preemption intent.
---------------------------------------------------------------------------
\77\ Northeast States for Coordinated Air Use Management
(NESCAUM), Docket No. NHTSA-2018-0067-11691.
\78\ W. Shakespeare, Romeo & Juliet, II, ii (47-48) (1597).
---------------------------------------------------------------------------
It is a matter of undisputed fact that the more fuel a vehicle
burns or consumes, the more carbon dioxide it emits. There is a
necessary relation between the regulation of one side of this equation
and the regulation of the other. In other words, improving fuel economy
has two inherently related benefits: Reducing fuel consumption and
reducing carbon dioxide emissions. State and local governments cannot
evade the preemptive sweep of EPCA by emphasizing only one side of
these benefits and downplaying or ignoring the other when describing
their regulations.
To further illustrate the situation, consider types of regulations
for a swimming pool. If the pool has a hose on one side that is filling
the pool and a hose on the other side that is draining the pool, you
can regulate the water level in the pool by controlling either hose.
Limiting the amount of water released by the inflow hose, is not itself
a regulation of the outflow hose. But it is nonsensical to say that
regulating the pool's inflow is not related to regulating its outflow.
A regulation of either hose necessarily affects the level of water in
the same pool. The Supreme Court has recognized preemption should
appropriately apply in such contexts. See Rowe v. N.H. Motor Transp.
Ass'n, 552 U.S. 364, 368, 72 (2008) (looking at effect of regulation to
determine it was preempted even though ``it tells shippers what to
choose rather than carriers what to do'' where Federal law preempted
State laws ``related to a price, route, or service of any motor carrier
. . . with respect to the transportation of property''); Engine Mfrs.
Ass'n. v. South Coast Air Quality Mgmt. Dist., 541 U.S. 246, 255 (2004)
(explaining that it ``would make no sense'' to allow a State regulation
to evade preemption simply because it addressed the purchase, rather
than manufacture, of a federally regulated product).
C. Importance of One National Standard
To ensure uniform national fuel economy standards, Congress
determined that it was appropriate to preempt States and local
governments from adopting or enforcing laws or regulations related to
the Federal standards. Effectuating Congress's goal requires NHTSA to
address preemption. Preemption is necessary to the effectiveness of
NHTSA's existing and forthcoming fuel economy standards and regulatory
certainty into the future, specifically, one set of national standards.
Congress made clear, through the required comprehensive balancing of
factors and underlined by its inclusion of an express preemption
provision, that State and local requirements impede the national fuel
economy program. Thus, NHTSA is exercising its authority in this
document, under 49 U.S.C. 32901 through 32903, to promulgate
regulations to protect the integrity of the national program. This
confirms the clear preemptive nature of NHTSA's standards, as stated in
49 U.S.C. 329219 and provides additional clarity on the scope of
preemption, to carry out NHTSA's statutory authority to set nationally
applicable standards.
A consistent refrain throughout many of the comments NHTSA received
on its preemption proposal was the need for one national standard.\79\
Preemption provides for just that uniformity. Indeed, that was the very
purpose for Congress's including the express preemption provision in
EPCA.
---------------------------------------------------------------------------
\79\ See, e.g., Alliance of Automobile Manufacturers, Docket No.
NHTSA-2018-0067-12073; Association of Global Automakers, Docket No.
NHTSA-2018-0067-12032.
---------------------------------------------------------------------------
In enacting EPCA's preemption provision, Congress explicitly
recognized the need to avoid a patchwork of requirements related to
fuel economy standards, and gave NHTSA the exclusive authority to set
and enforce fuel economy standards with discrete and limited exceptions
as set forth in 49 U.S.C. 32919. NHTSA's exclusive authority is
exercised through joint rulemaking with EPA for the very reason that
tailpipe carbon dioxide emissions standards are directly and
substantially related to fuel economy standards and apply concurrently
to the same fleet of vehicles. This joint action enables the Federal
government to administer its overlapping obligations while avoiding
inconsistency. See Massachusetts v. EPA, 549 U.S. 497, 532 (2007).
Recent developments in California provide good examples of the need
for a national standard and the problem that Congress sought to address
in enacting EPCA's preemption provision. After the agencies published
the proposal, California amended its regulations such that
manufacturers are bound to comply with requirements consistent with the
no action alternative for model years 2021 through 2026,\80\ regardless
of what the Federal standards are ultimately adopted. Moreover, even as
to the existing Federal standard, California's regulations are
impermissible under EPCA because only a Federal standard can apply
nationally. State or local standards necessarily apply at the State and
local level, and therefore are inherently inconsistent with the
nationwide average standards pursuant to EPCA. See 49 U.S.C.
32901(a)(5)-(6), (13). Likewise, State and local compliance regimes
interfere with the national program of credits and shortfalls for
nationwide fleet performance by making compliance across the country
inordinately complicated, inefficient, and expensive. See id. 32903.
---------------------------------------------------------------------------
\80\ 83 FR 42986, 42990 tbl. I-4 (Aug. 24, 2018).
---------------------------------------------------------------------------
Despite a widespread shared belief in the importance of one
national standard, NHTSA's proposal on preemption received a mix of
support and opposition in comments. Some commenters weighed in on
preemption largely only to emphasize the importance of having a
national standard.\81\ Other commenters that supported the substance of
the proposal agreed with NHTSA's analysis of both express and implied
preemption, as well as the conclusion that both State laws that limit
and State laws that prohibit carbon dioxide tailpipe emissions from
automobiles, or have the direct or substantial effect of doing so, are
preempted.\82\ On the other hand, those commenters that opposed the
substance of the proposal asked NHTSA to withdraw and not finalize any
regulatory text concerning preemption.\83\ Doing so would ignore the
very purpose of EPCA's fuel economy provisions and NHTSA's statutory
obligation under EPCA: To balance statutory factors in order to
[[Page 51317]]
establish standards that are ``the maximum feasible average fuel
economy level that the Secretary decides the manufacturers can achieve
in that model year.'' \84\ NHTSA disagrees with the comments that ask
it to withdraw its proposal and not finalize any regulatory text on
preemption. Given the present circumstances, failing to address this
issue amounts to ignoring the existence of EPCA's preemption provision,
and allowing for State and local requirements that interfere with
NHTSA's statutory duty to set nationally consistent fuel economy
standards.
---------------------------------------------------------------------------
\81\ See, e.g., Toyota Motor North America, Docket No. NHTSA-
2018-0067-12150.
\82\ See, e.g., Alliance of Automobile Manufacturers, Docket No.
NHTSA-2018-0067-12073; Competitive Enterprise Institute, Docket No.
NHTSA-2018-0067-12015.
\83\ See, e.g., Joint Submission from the States of California
et al. and the Cities of Oakland et al., Docket No. NHTSA-2018-0067-
11735.
\84\ 49 U.S.C. 32902(a), (f).
---------------------------------------------------------------------------
The rule NHTSA is adopting in this document, under its authority to
implement a national automobile fuel economy program in 49 U.S.C. 32901
through 32903, will ultimately provide needed certainty concerning
preemption into the future. While EPCA's preemption provision has been
in place for decades, the present circumstances demonstrate the need
for greater clarity on this issue.
NHTSA's statutory role is to set nationwide standards based on a
reasoned balancing of statutory factors. State and local requirements--
unbound by these considerations--undermine NHTSA's ability to set
standards applicable across the entire country. NHTSA is obliged to set
standards at ``the maximum feasible average fuel economy level that the
Secretary decides the manufacturers can achieve in that model year.''
49 U.S.C. 32902(a). The regulation NHTSA is finalizing in this document
implements that authority in 49 U.S.C. 32902 by clarifying the State
requirements that impermissibly interfere with its statutory role to
set nationally applicable standards. As explained in the proposal, as a
practical matter, State and local actors would generally only set
requirements that have the effect of requiring a higher level of
average fuel economy (lest their standards lack impact).\85\ That
supposition has now been demonstrated by California's preemptive action
to effectively set higher standards than the Federal standards, should
the forthcoming final SAFE rule finalize anything lower than the no
action alternative described in the NPRM for model years 2021 through
2026. This state of regulatory inconsistency--and even the potential
for such inconsistency--is anathema to the express terms and purposes
of EPCA, which does not even permit States to set fuel economy
standards identical to those set by NHTSA in accordance with the
statutory requirements.\86\ Even identical standards interfere with the
national program by imposing requirements not applicable to nationwide
fleets and impose compliance regimes inconsistent with EPCA. See, e.g.,
49 U.S.C. 32903 (establishing specific requirements for earning and
using credits based on nationwide average fuel economy performance).
---------------------------------------------------------------------------
\85\ 83 FR 42986, 43238 (Aug. 24, 2018).
\86\ See 49 U.S.C. 32902(a), 32919(a).
---------------------------------------------------------------------------
California's recent action also demonstrates disregard for NHTSA's
mandate to set standards in no more than 5 model year increments.\87\
To avoid inconsistent State standards, California's regulatory change
would require NHTSA to adopt the most stringent of nine regulatory
alternatives it considered in the proposal.\88\ NHTSA did not bind
itself in any way to that regulatory alternative in its 2012 final
rule, and to do so would have been contrary to law.\89\
---------------------------------------------------------------------------
\87\ See id. 32902(a), (b)(3)(B).
\88\ See Cal. Code Regs. tit. 13, section 1961.3(c); see 83 FR
42986, 42990 tbl. I-4 (Aug. 24, 2018) (listing augural standards as
baseline/no action alternative, and eight other alternatives under
consideration).
\89\ See 49 U.S.C. 32902(b)(3)(B); 77 FR 62624, 62627 (Oct. 15,
2012).
---------------------------------------------------------------------------
Automakers must comply with the Federal fuel economy and GHG
emissions requirements, and do so at significant cost. States like
California that do not abide by the constraints of Federal law, and
instead set inconsistent or even duplicative requirements related to
fuel economy standards unjustifiably increase manufacturers' compliance
costs, which must be either passed along to consumers or absorbed by
the industry. Clarity on preemption is therefore essential to ensure
the industry has the ability to efficiently expend its resources to
comply with the nationally applicable standards determined by the
Federal government in light of the Federal statutory factors that must
be balanced, without the need to separately account for or comply with
State or local requirements.
While it is of course ideal for States to independently abide by
the constraints of Federal law, this does not reflect the current state
of affairs. NHTSA's awareness of laws and regulations already in place,
as well as the public comments it received in response to its proposal,
confirm the need for additional clarity on the boundaries of EPCA
preemption. Wrongly decided decisions by district courts in California
and Vermont (appeals of which were abandoned as a condition of the
negotiated agreement prior to the 2012 rulemaking), as well as NHTSA's
own silence on this issue in recent years, are sowing confusion,
emphasizing the need for the clarity provided by this final rule
affirmatively establishing One National Program.\90\
---------------------------------------------------------------------------
\90\ As described in the proposal, NHTSA's views on preemption
are longstanding. However, NHTSA has not directly addressed
preemption in its most recent CAFE rulemakings. South Coast disputes
that NHTSA's views on preemption are longstanding, pointing to legal
and factual developments since. South Coast Air Quality Management
District, Docket No. NHTSA-2018-0067-11813. That NHTSA has not
opined on developments does not mean that its views have changed.
South Coast also points to some wording changes to argue that NHTSA
has shifted positions. NHTSA disagrees. It has consistently held the
position that State regulation of tailpipe greenhouse gas emissions
from automobiles is preempted, and South Coast has not identified
any statements to the contrary. In any event, the fact that NHTSA
has not addressed EPCA preemption in its most recent rulemakings
highlights the need to address the issue without further delay.
---------------------------------------------------------------------------
D. NHTSA's Final Rule Provides Clarity and Certainty on EPCA Preemption
This final rule provides needed clarity on the scope of EPCA
preemption. NHTSA is adopting regulatory text, including a detailed
appendix, in addition to discussing this issue in the preamble to the
rule, specifically to provide clarity on EPCA's preemption provision.
NHTSA rejects the assertion advanced in one comment that NHTSA did
not provide notice and a fair opportunity to comment on its
interpretation of EPCA preemption.\91\ Any such suggestion is negated
by the host of commenters that addressed the issue of preemption in
response to the proposal. NHTSA proposed codifying its preemption
interpretation in parts 531 and 533, and all commenters were explicitly
asked to comment on the specific proposed regulatory text as well as on
the explanation of NHTSA's interpretation set out in the preamble to
the NPRM.
---------------------------------------------------------------------------
\91\ Joint Submission from the States of California et al. and
the Cities of Oakland et al., Docket No. NHTSA-2018-0067-11735.
---------------------------------------------------------------------------
NHTSA also disagrees with a comment from the California Air
Resources Board (CARB) that asserted the proposal was not clear on the
scope of preemption.\92\ The regulatory text articulates the boundaries
of both express and implied preemption, with appropriate limitation to
State or local laws or regulations that: (1) Regulate or prohibit
tailpipe carbon dioxide emissions from automobiles, or (2) have the
direct or substantial effect of regulating or prohibiting tailpipe
carbon
[[Page 51318]]
dioxide emissions from automobiles or automobile fuel economy. In the
proposal, NHTSA provided examples of laws that would not be
preempted.\93\ CARB did not identify any examples of laws where
additional clarity was needed.
---------------------------------------------------------------------------
\92\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873; Joint Submission from the States of California et
al. and the Cities of Oakland et al., Docket No. NHTSA-2018-0067-
11735.
\93\ 83 FR 42986, 43235 (Aug. 24, 2018).
---------------------------------------------------------------------------
It should not be difficult for States or local governments to
ascertain whether their laws or regulations regulate or prohibit
tailpipe carbon dioxide emissions. As NHTSA explained in the proposal
and reiterates in this document, both requirements specific to tailpipe
carbon dioxide emissions from automobiles and those that address all
tailpipe greenhouse gas emissions from automobiles are preempted, given
that carbon dioxide emissions constitute the overwhelming majority of
those emissions.\94\ Likewise, ZEV mandates are also preempted.\95\
---------------------------------------------------------------------------
\94\ Id. at 43234.
\95\ See id. at 43238-39.
---------------------------------------------------------------------------
NHTSA also does not believe it should be difficult for States or
local governments to determine if their laws or regulations have the
direct or substantial effect of regulating or prohibiting tailpipe
carbon dioxide emissions from automobiles or automobile fuel
economy.\96\ To aid in this effort, in the proposal, NHTSA described
requirements that would not be preempted because they have only
incidental impact on fuel economy or carbon dioxide emissions.\97\ The
examples NHTSA provided were child seat mandates and laws governing
vehicular refrigerant leakage.\98\
---------------------------------------------------------------------------
\96\ South Coast argued that EPCA preemption would not reach
possible State and local requirements concerning lease arrangements
or requirements for used vehicles. South Coast Air Quality
Management District, Docket No. NHTSA-2018-0067-11813. NHTSA does
not agree. EPCA preempts requirements related to fuel economy
standards or average fuel economy standards for automobiles covered
by an average fuel economy standard under EPCA. If a State
requirement falls within this scope, it is preempted. For example, a
State could not prohibit dealers from leasing automobiles or selling
used automobiles unless they meet a fuel economy standard.
\97\ 83 FR 42986, 43235 (Aug. 24, 2018).
\98\ Id.
---------------------------------------------------------------------------
Moreover, contrary to assertions in some comments, NHTSA's adoption
of regulatory text does provide a limiting principle \99\ and is not
overbroad.\100\ Congress set the extraordinarily broad boundaries of
preemption in EPCA, where it specified that State and local laws
``related to fuel economy standards'' are preempted. The words
``related to'' have meaning and cannot be read out of the statute. To
the extent that questions of interpretation remain about the scope of
preemption, that is a consequence of the statute, and is far from
unique--particularly with respect to the ``related to'' language, which
Congress has used in multiple contexts.\101\ The Supreme Court has
opined on the meaning of similar terms. However, NHTSA recognizes the
concerns about the appropriate limitations of preemption.
Notwithstanding the broad sweep of EPCA preemption, NHTSA intends to
assert preemption only over State or local requirements that directly
or substantially affect corporate average fuel economy standards.
---------------------------------------------------------------------------
\99\ Joint Submission from the States of California et al. and
the Cities of Oakland et al., Docket No. NHTSA-2018-0067-11735.
\100\ Id.; California Air Resources Board (CARB), Docket No.
NHTSA-2018-0067-11873; South Coast Air Quality Management District,
Docket No. NHTSA-2018-0067-11813.
\101\ See Rowe v. N.H. Motor Transp. Ass'n, 552 U.S. 364, 370-73
(2008); Am. Airlines v. Wolens, 513 U.S. 219, 226-27 (1995); Shaw v.
Delta Airlines, Inc., 463 U.S. 85, 97 (1983).
---------------------------------------------------------------------------
Through its adoption of specific regulatory text in this document,
NHTSA is providing guidance on the boundary set by Congress, as well as
under principles of implied preemption. Notably, NHTSA has not
concluded that implied preemption broadens the scope of preemption
established by Congress. As NHTSA recognized in its proposal, some
greenhouse gas emissions from automobiles have no relation to fuel
economy and therefore may be regulated by States or local governments
without running afoul of EPCA preemption. NHTSA provided examples of
State or local requirements that are not preempted. It also
specifically invited comment on the extent to which State or local
requirements can have some incidental impact on fuel economy or carbon
dioxide emissions without being related to fuel economy standards, and
thus are not preempted. NHTSA did not receive any directly responsive
comments regarding this issue, including from State and local
government commenters, suggesting that they do not currently have
questions about how preemption would apply to their laws or
regulations.\102\
---------------------------------------------------------------------------
\102\ Some commenters did assert that California's greenhouse
gas emissions standards or ZEV mandates have only an incidental
impact on fuel economy, or that NHTSA was not clear why those
requirements have more than an incidental impact on fuel economy.
California Air Resources Board (CARB), Docket No. NHTSA-2018-0067-
11873; Northeast States for Coordinated Air Use Management
(NESCAUM), Docket No. NHTSA-2018-0067-11691; South Coast Air Quality
Management District, Docket No. NHTSA-2018-0067-11813. NHTSA
disagrees. It discussed these issues in detail in parts b, f, and g
of the preemption discussion of the proposed rule and incorporates
those discussions here. 83 FR 42986, 43234, 37-39 (Aug. 24, 2018).
---------------------------------------------------------------------------
As an additional limiting principle, NHTSA reiterates the statement
in its proposal that only a portion of a law or regulation would be
preempted, where possible. This would be the case if the law or
regulation combined multiple severable elements that were allowable and
not allowable, such as with a regulation of both vehicular refrigerant
leakage and tailpipe carbon dioxide emissions--refrigerant leakage
requirements could remain in place while tailpipe carbon dioxide
emissions regulations would necessarily be preempted.
NHTSA rejects the argument made by certain commenters that the
presumption against preemption applies in this context.\103\ The
presumption is not appropriate given EPCA's express statutory
preemption provision. See Puerto Rico v. Franklin Cal. Tax-Free Trust,
136 S. Ct. 1938, 1946 (2016) (explaining that ``because the statute
`contains an express pre-emption clause,' we do not invoke any
presumption against pre-emption but instead `focus on the plain wording
of the clause, which necessarily contains the best evidence of
Congress' pre-emptive intent.' '') (quoting Chamber of Commerce of
United States of Am. v. Whiting, 563 U.S. 582, 594 (2011)).
---------------------------------------------------------------------------
\103\ See California Air Resources Board (CARB), Docket No.
NHTSA-2018-0067-11873; Center for Biological Diversity et al.,
Docket No. NHTSA-2018-0067-12000; South Coast Air Quality Management
District, Docket No. NHTSA-2018-0067-11813.
---------------------------------------------------------------------------
NHTSA reaffirms the view that EPCA's express preemption provision
is broad and clear. NHTSA's review and assessment of comments has not
changed its view. Some comments noted that the statute specifically
preempts laws or regulations related to fuel economy standards.\104\
They assert that States and local governments are unconstrained by EPCA
preemption in regulating future model year vehicles, before they are
covered by a fuel economy standard issued by NHTSA. NHTSA disagrees.
---------------------------------------------------------------------------
\104\ South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813; see also Joint Submission from the States of
California et al. and the Cities of Oakland et al., Docket No.
NHTSA-2018-0067-11735.
---------------------------------------------------------------------------
EPCA preempts State and local laws and regulations that relate to:
(1) Fuel economy standards, or (2) average fuel economy standards for
automobiles covered by an average fuel economy standard under 49 U.S.C.
Chapter 329. Currently, automobiles through model year 2021 are covered
by an average fuel economy standard under Chapter 329.\105\ NHTSA will
continue setting standards for future model years, pursuant to the
mandate in 49 U.S.C. 32902(a) that ``[a]t least 18 months
[[Page 51319]]
before the beginning of each model year, the Secretary of
Transportation shall prescribe by regulation average fuel economy
standards for automobiles manufactured by a manufacturer in that model
year.'' \106\ NHTSA prescribes ``average fuel economy standards for at
least 1, but not more than 5, model years.'' 49 U.S.C. 32902(b)(3)(B).
State and local requirements that address automobiles beyond model year
2026 are therefore preempted if they relate to ``fuel economy
standards'' that NHTSA is required to establish in the future. To
conclude otherwise would be to make the impermissible assumption that
NHTSA will not carry out Congress's command.
---------------------------------------------------------------------------
\105\ See 77 FR 62624, 62637 (Oct. 15, 2012).
\106\ 49 U.S.C. 32902(a) (emphasis added).
---------------------------------------------------------------------------
The regulation NHTSA is finalizing in this document implements that
authority in 49 U.S.C. 32902 by making clear that State and local
requirements that relate to fuel economy standards for future model
year vehicles conflict with NHTSA's ability to set nationally
applicable standards for those vehicles in the future and thus are
impliedly preempted. Manufacturers make design decisions well in
advance of production, as Congress recognized by adding ``lead time''
provisions to the statute. State and local requirements for automobiles
not yet covered by a NHTSA standard could force manufacturers into
plans that are not economically practical or otherwise inconsistent
with EPCA's statutory factors--since States and local governments are
not bound by those considerations. By the time future model year
vehicles are produced, they will be covered by a NHTSA standard. If
States or local governments were permitted to issue regulations related
to fuel economy for future model year vehicles, manufacturers would at
least act at risk of running afoul of those non-Federal regulations. At
least some manufacturers would undoubtedly feel compelled to conform
with such non-Federal regulations until the Federal government sets its
own standards. Even if non-Federal regulations are not ultimately
enforceable as to produced vehicles (since a Federal fuel economy
standard will be adopted, in time), they clearly conflict with the
congressionally imposed constraint of issuing standards for not more
than 5 model years. Such far-reaching regulations are based on
predictions about the future that are inevitably less reliable the
further in time they reach. Manufacturers are therefore put in an
untenable position of either planning towards State and local
regulations based on potentially outdated or unrealistic expectations
about the future, or ignoring them before knowing the Federal standards
that will eventually apply and acting at risk of enforcement by non-
Federal actors. Moreover, different States could impose different and
conflicting fuel economy requirements on manufacturers for future model
years, a result directly at odds with the single national standard
established by EPCA. Any of these scenarios demonstrates that the
position that EPCA preemption does not reach regulation of model year
vehicles not currently covered by a NHTSA standard is flawed. State or
local requirements related to fuel economy standards for any model year
automobiles are preempted.
The regulatory text and preamble discussion clearly articulates
NHTSA's views on the meaning of ``related to'' in EPCA's express
preemption provision, which are confirmed following NHTSA's review and
assessment of comments. As discussed in the proposal, EPCA is not
unique in using the phrase ``related to'' to set the scope of
preemption.\107\ NHTSA described prior Supreme Court case law
interpreting this phrase as broad and including such conceptual
relationships as having an ``association with'' or ``connection to.''
In its comments, South Coast asserted that NHTSA's discussion was
``legally erroneous'' because it did not include ``discussion and
analysis'' of a line of Supreme Court cases that began with New York
State Conference of Blue Cross v. Travelers Ins. Co., 514 U.S. 645
(1995).\108\ South Coast's criticism is unfounded; NHTSA directly
recognized the Travelers line of cases which look to the objectives of
the statute as a guide to the scope of preemption. See Travelers, 514
U.S. at 656. In the proposal, NHTSA specifically applied this analysis
to the CAFE context and cited a 1997 case quoting Travelers.\109\ The
Travelers line of cases supports NHTSA's position on preemption. As
NHTSA explained in the proposal, EPCA's preemption provision
demonstrates that one of Congress's objectives was to create a single
set of national fuel economy standards. The language Congress enacted
preempts all State and local laws and regulations that relate to fuel
economy standards, and does not exempt even State requirements that are
identical to Federal requirements. Moreover, NHTSA's proposal was not
intended as a comprehensive recitation of all case law addressing the
use of ``related to'' in statutory preemption provisions. There are
many Supreme Court decisions that support the breadth of that language
beyond those specifically cited in the proposal.\110\ For example, in
Rowe, the Court recognized that a State statute that forbid certain
retailers from employing a delivery service unless it followed certain
delivery procedures was preempted by the Federal Aviation
Administration Authorization Act, which preempted States from enacting
or enforcing laws ``related to a price, route, or service of any motor
carrier.'' Rowe, 552 U.S. at 368, 71-73. The Court recognized that the
State law was directed at shippers rather than carriers, but found that
the effect of the requirements impacted carriers. Id. at 372. The Court
explained that State laws ``whose `effect' is `forbidden' under federal
law are those with a `significant impact' on carrier rates, routes or
services.'' Id. at 375 (emphasis in original). Likewise, here,
regulation of tailpipe carbon dioxide emissions has a direct and
undeniably substantial effect on fuel economy.
---------------------------------------------------------------------------
\107\ 83 FR 42986, 43233 (Aug. 24, 2018).
\108\ South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813.
\109\ 83 FR 42986, 43233 (Aug. 24, 2018).
\110\ See, e.g., Rowe v. N.H. Motor Transp. Ass'n, 552 U.S. 364,
367-72 (2008).
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However, NHTSA, of course, agrees that ``related to'' is not
unlimited.\111\ NHTSA specifically discussed the limitations of
preemption in its proposal, which only seeks to preempt State or local
requirements that directly or substantially affect corporate average
fuel economy. NHTSA also provided specific examples of State laws and
regulations that would not be preempted, as well as clearly
articulating some that are preempted. As discussed above, the
regulatory text NHTSA is adopting in this document is appropriately
limited and consistent with the scope of preemption established by
Congress.
---------------------------------------------------------------------------
\111\ As the Supreme Court has stated, ``the breadth of the
words `related to' does not mean the sky is the limit.'' Dan's City
Used Cars, Inc. v. Pelkey, 569 U.S. 251, 260 (2013).
---------------------------------------------------------------------------
With respect to implied preemption, NHTSA agrees with comments that
assert it is a fact-driven analysis.\112\ However, NHTSA disagrees that
there was an insufficient factual record for it to evaluate the
conflict either at the time of the proposal or now.\113\ NHTSA is well
aware of State regulations of tailpipe greenhouse gas emissions
(including carbon dioxide) and ZEV mandates, and described several of
these in the proposal. The foundational
[[Page 51320]]
factual analysis involves the scientific relationship between
automobile fuel economy and automobile tailpipe emissions of carbon
dioxide. NHTSA discussed this scientific relationship in detail. No
commenter contested the scientific and mathematical relationship
between them.
---------------------------------------------------------------------------
\112\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873; Joint Submission from the States of California et
al. and the Cities of Oakland et al., Docket No. NHTSA-2018-0067-
11735.
\113\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873.
---------------------------------------------------------------------------
Contrary to CARB's contention in its comments, the fact that NHTSA
acknowledged that some State requirements that incidentally affect
greenhouse gas emissions are not preempted does not demonstrate that
there is an insufficient record for finding that other laws do pose a
conflict to NHTSA's statutory role to set nationwide fuel economy
standards for automobiles.\114\ To the contrary, NHTSA carefully
considered and acknowledged the limitations of EPCA preemption by
discussing a variety of types of laws, and providing specific examples.
---------------------------------------------------------------------------
\114\ Id.
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NHTSA also disagrees with the claim made in some comments that it
does not have delegated authority to issue a regulation on this topic,
and is not owed deference or weight for its regulation implementing
EPCA's express preemption provision or the conflict resulting from
State or local laws or regulations.\115\ Congress gave the Secretary of
Transportation express authorization to prescribe regulations to carry
out her duties and powers. 49 U.S.C. 322(a).\116\ NHTSA has delegated
authority to carry out the Secretary's authority under Chapter 329 of
Title 49, which encompasses EPCA's preemption provision, as well as
EISA.\117\ NHTSA therefore has clear authority to issue this regulation
under 49 U.S.C. 32901 through 32903 to effectuate a national automobile
fuel economy program unimpeded by prohibited State and local
requirements. As explained here, the statute is clear on the question
of preemption, and NHTSA must carry it out. See Coventry Health Care of
Missouri, Inc. v. Nevils, 137 S. Ct. 1190, 1193 n.3 (2017) (holding
that preemption applies and ``the statute alone resolves this
dispute''). However, to the extent there is any ambiguity, NHTSA is the
expert agency and its regulation adopted in this document is entitled
to deference.\118\ As explained in the proposal, NHTSA is the expert
agency given authority to administer the Federal fuel economy program
and has expert authority to interpret and apply the requirements of
EPCA, including preemption. See Medtronic, Inc. v. Lohr, 518 U.S. 470
(1996) (``Because the FDA is the federal agency to which Congress has
delegated its authority to implement the provisions of the Act, the
agency is uniquely qualified to determine whether a particular form of
state law `stands as an obstacle to the accomplishment and execution of
the full purposes and objectives of Congress,' Hines v. Davidowitz, 312
U.S. 52, 67, 61 S. Ct. 399, 404, 85 L. Ed. 581 (1941), and, therefore,
whether it should be pre-empted.''); see also Nat'l Rifle Ass'n v.
Reno, 216 F.3d 122 (D.C. Cir. 2000) (rejecting argument that Attorney
General lacked authority to issue regulation that she described as
clarifying that certain State requirements were not preempted by
Federal law). This is particularly true given the scientific nature of
the relationship between fuel economy and greenhouse gas emissions. See
Geier v. Am. Honda Motor Co., Inc., 529 U.S. 861 (2000) (``Congress has
delegated to DOT authority to implement the statute; the subject matter
is technical; and the relevant history and background are complex and
extensive. The agency is likely to have a thorough understanding of its
own regulation and its objectives and is `uniquely qualified' to
comprehend the likely impact of state requirements.'').
---------------------------------------------------------------------------
\115\ Id.; Center for Biological Diversity et al., Docket No.
NHTSA-2018-0067-12000; Joint Submission from the States of
California et al. and the Cities of Oakland et al., Docket No.
NHTSA-2018-0067-11735; South Coast Air Quality Management District,
Docket No. NHTSA-2018-0067-11813.
\116\ 49 U.S.C. 322(a) specifically states: ``The Secretary of
Transportation may prescribe regulations to carry out the duties and
powers of the Secretary. An officer of the Department of
Transportation may prescribe regulations to carry out the duties and
powers of the officer.''
\117\ 49 CFR 1.95(a), (j).
\118\ See, e.g., Chevron USA, Inc. v. Nat'l Res. Defense
Council, Inc., 467 U.S. 837, 843-45 (1984).
---------------------------------------------------------------------------
NHTSA is also finalizing its view that its regulation concerning
EPCA preemption is independent and severable from any particular CAFE
standards adopted by NHTSA. NHTSA's implementation of its authority to
set nationally applicable fuel economy standards under 49 U.S.C. 32902,
by clarifying the scope of preemption, is separate from its decision on
the appropriate standards for any given model years. No commenter
disagreed that this portion of the proposed rule is severable. The
Alliance of Automobile Manufacturers agreed, noting case law stating
that whether a regulation is severable depends on the agency's intent
and whether the remainder of the regulation may still function
sensibly.\119\ Both these considerations support severability here.
Given the lack of any comments to the contrary, NHTSA is finalizing its
conclusion that the standards for model year 2021 through 2026
automobiles are independent of and severable from the decision NHTSA is
finalizing in this document on EPCA preemption. Moreover, given the
need for clarity on preemption, and in order to give effect to existing
standards established pursuant to 49 U.S.C. 32902, NHTSA is issuing
this final rule now before making a final determination on the
standards portion of the proposal.
---------------------------------------------------------------------------
\119\ Alliance of Automobile Manufacturers, Docket No. NHTSA-
2018-0067-12073.
---------------------------------------------------------------------------
E. Direct and Substantial Relationship Between ZEV Mandates and Fuel
Economy Standards
NHTSA is also finalizing its conclusion that a State law or
regulation that either explicitly prohibits tailpipe carbon dioxide
emissions from automobiles or has the direct or substantial effect of
doing so is preempted, both pursuant to the express preemption
provision in 49 U.S.C. 32919 and implied preemption, as an obstacle to
NHTSA's national program pursuant to 49 U.S.C. 32901-32903.
As explained in greater detail in the proposal, carbon dioxide
emissions constitute the overwhelming majority of tailpipe carbon
emissions.\120\ The only feasible way of eliminating tailpipe carbon
dioxide emissions altogether is to eliminate the use of fossil fuel.
Thus, regulations that require a certain number or percentage of a
manufacturer's fleet of vehicles sold in a State to be ZEVs that
produce no carbon dioxide tailpipe emissions necessarily affect the
fuel economy achieved by the manufacturer's fleet as well as the
manufacturer's strategy to comply with applicable standards, and are
therefore preempted under EPCA. These regulations therefore have just
as a direct and substantial impact on corporate average fuel economy as
regulations that explicitly eliminate carbon dioxide emissions, and are
therefore preempted. NHTSA described types of ZEV mandates in detail in
its proposal, including California's ZEV mandate, which has been
adopted by ten other States.\121\
---------------------------------------------------------------------------
\120\ 83 FR 42986, 43234 (Aug. 24, 2018).
\121\ See id. at 43239. At the time of the proposal, nine States
had adopted California's ZEV mandate. Since that time, a tenth
State--Colorado--has also done so. https://www.colorado.gov/pacific/cdphe/aqcc (indicating that ZEV standards were adopted on August 16,
2019).
---------------------------------------------------------------------------
ZEV mandates force the development and commercial deployment of
ZEVs, irrespective of the technological feasibility or economic
practicability of doing so. The Alliance of Automobile Manufacturers
commented that this interference with NHTSA's balancing of
[[Page 51321]]
statutory factors and forced adoption of specific design approaches are
grounds for finding ZEV mandates preempted.\122\ NHTSA agrees.
---------------------------------------------------------------------------
\122\ Alliance of Automobile Manufacturers, Docket No. NHTSA-
2018-0067-12073.
---------------------------------------------------------------------------
In setting fuel economy standards, among the factors that NHTSA
must consider are technological feasibility and economic
practicability. 49 U.S.C. 32902(f). NHTSA is also required to set
performance-based standards, and not design mandates.\123\ See 49
U.S.C. 32902(b)(2). These considerations are at odds with ZEV mandates.
---------------------------------------------------------------------------
\123\ South Coast asserts that ZEV mandates are performance
based because any vehicle meeting the requirements can be certified
as a ZEV. South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813. But, it is inherent that the requirements--
ZEV means zero-emissions vehicle--dictate a particular design. In
any event, for the reasons described above, ZEV mandates are related
to fuel economy standards however framed.
---------------------------------------------------------------------------
NHTSA disagrees with comments that expressed the view that ZEV
mandates are not related to fuel economy standards because ZEVs emit no
criteria pollutants or greenhouse gases.\124\ Just as a State may not
require a specific level of tailpipe carbon dioxide emissions from
automobiles, since doing so effectively sets a specific level of fuel
economy, a State may not prohibit tailpipe carbon dioxide emissions
from automobiles. That is the equivalent of setting a specific
emissions level--zero, which also prohibits the use of fossil fuel. In
fuel economy terms, that is akin to requiring a vehicle to having the
maximum conceivable level of fuel economy. A prohibition on ozone-
forming emissions has the same effect, since the only vehicles capable
of emitting no ozone-forming emissions are vehicles that do not use
fossil fuels. As NHTSA explained, this type of regulation poses a
direct conflict with EPCA, particularly as it relates to requiring a
percentage of technological fleet penetration--represented by credits
or actual vehicles--that an automaker must distribute into a State. ZEV
mandates force investment in specific technology (battery electric and
fuel cell technology) rather than allowing manufacturers to improve
fuel economy by whatever technological path they choose, allowing them
to pursue more cost-effective technologies that better reflect consumer
demand, as is the case under the CAFE program. ZEV mandates also create
an even more fractured regulatory regime. As NHTSA explained in the
proposal, manufacturers must satisfy ZEV mandates in each State
individually.\125\
---------------------------------------------------------------------------
\124\ South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813.
\125\ 83 FR 42986, 43239 (Aug. 24, 2018); see Competitive
Enterprise Institute, Docket No. NHTSA-2018-0067-12015.
---------------------------------------------------------------------------
NHTSA also disagrees with a comment that argued ZEV mandates are
not preempted because the definition of fuel economy in EPCA is in
reference to gasoline or equivalent fuel.\126\ EPCA preempts State and
local requirements related to fuel economy standards. That ZEV mandates
are not themselves expressed as mile-per-gallon standards for fossil-
fuel powered vehicles is not dispositive. NHTSA explained the
relationship between ZEV mandates and fuel economy standards in detail
in the proposal and reiterates that discussion here.\127\
---------------------------------------------------------------------------
\126\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873.
\127\ See 83 FR 42986, 43238-39 (Aug. 24, 2018).
---------------------------------------------------------------------------
Many commenters expressed support for ZEV mandates as matter of
policy.\128\ NHTSA does not take issue with those policy objectives to
the extent they do not conflict with EPCA or otherwise impermissibly
interfere with the Federal regulation of fuel economy. NHTSA notes that
States and local governments are able to continue to encourage ZEVs in
many different ways, such as through investments in infrastructure and
appropriately tailored incentives.\129\ States and local governments
cannot adopt or enforce regulations related to fuel economy standards,
which include ZEV mandates, but they are able to pursue their policy
preferences, as long as the manner in which they do so does not
conflict with Federal law.
---------------------------------------------------------------------------
\128\ National Coalition for Advanced Transportation (NCAT),
Docket No. NHTSA-2018-0067-11969; Union of Concerned Scientists,
Docket No. NHTSA-2018-0067-12039.
\129\ Certain incentives are preempted by EPCA. See Metro.
Taxicab Bd. of Trade v. City of New York, 615 F.3d 152 (2d Cir.
2010) (holding that New York City rule that incentivized hybrid
taxis by allowing taxi owners to charge more for the lease of hybrid
vehicles were ``based expressly on the fuel economy of a leased
vehicle, [and] plainly fall within the scope of the EPCA preemption
provision.'').
---------------------------------------------------------------------------
F. EISA Did Not Narrow or Otherwise Alter EPCA Preemption
NHTSA reiterates, as it discussed in the proposal, that EISA did
not narrow the express preemption clause in 49 U.S.C. 32919. In fact,
EISA did not alter EPCA's express preemption clause in any way. As a
factual matter, Congress neither amended or nor repealed EPCA's
preemption clause with the enactment of EISA. EISA's savings clause did
not amend EPCA. The savings clause, codified at 42 U.S.C. 17002,
states: ``Except to the extent expressly provided in this Act or an
amendment made by this Act, nothing in this Act or an amendment made by
this Act supersedes, limits the authority provided or responsibility
conferred by, or authorizes any violation of any provision of law
(including a regulation), including any energy or environmental law or
regulation.'' \130\
---------------------------------------------------------------------------
\130\ One commenter pointed out that the proposal did not
include the clause before the first comma when it quoted the
language of the savings provision. South Coast Air Quality
Management District, Docket No. NHTSA-2018-0067-11813. However,
NHTSA disagrees with the commenter that the introductory clause has
a substantive impact on this issue. That clause states: ``Except to
the extent expressly provided in this Act or an amendment made by
this Act . . .'' But, EISA did not expressly authorize States to
regulate or prohibit tailpipe greenhouse gas emissions from
automobiles.
---------------------------------------------------------------------------
As described in the proposal, EISA's savings clause does not expand
any pre-existing authority. Instead, the clause expressly states that
it did not impose a new limitation on such authority. By its plain
text, EISA also does not authorize any violation of any provision of
law. This includes EPCA's express preemption clause. Thus, activities
prohibited by the express preemption clause before EISA, such as State
laws related to fuel economy standards, continued to be prohibited
after EISA.
The text of the savings clause is what controls its meaning, not
statements by individual Members of Congress. South Coast claims that
NHTSA did not discuss such statements in detail, including statements
by Senator Feinstein.\131\ NHTSA did recognize in the proposal that the
Congressional Record contains statements by certain Members of Congress
about their individual views, but explained that such statements lack
authority. As NHTSA explained in the proposal, such statements cannot
expand the scope of the savings clause or clarify it. Individual
Members, even those who may have played a lead role in drafting a
particular bill, cannot speak for the body of Congress as a whole.\132\
NHTSA interprets the statutory language based on the words actually
adopted by both Houses and signed by the President.
---------------------------------------------------------------------------
\131\ South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813.
\132\ N.L.R.B. v. SW Gen., Inc., 137 S. Ct. 929, 942-43 (2017)
(``Passing a law often requires compromise, where even the most firm
public demands bend to competing interests. What Congress ultimately
agrees on is the text that it enacts, not the preferences expressed
by certain legislators. . . .[F]loor statements by individual
legislators rank among the least illuminating forms of legislative
history.'' (citations omitted)).
---------------------------------------------------------------------------
NHTSA likewise does not find persuasive the argument that Congress
did not enact additional statutory language in EISA preempting
California from regulating tailpipe greenhouse gas
[[Page 51322]]
emissions from automobiles. A comment from three Senators provides
documents related to potential proposals to do so.\133\ There are many
reasons for Congress not to adopt proposals set forward by one interest
group or another, including, of course, because they were unnecessary.
That is the case here where EPCA's preemption provision already
prevented States from adopting and enforcing requirements related to
fuel economy standards.
---------------------------------------------------------------------------
\133\ U.S. Senators Tom Carper, Diane Feinstein and Edward J.
Markey, Docket No. NHTSA-2018-0067-11938
---------------------------------------------------------------------------
Given the words of the savings clause, NHTSA rejects the argument
made by South Coast that the ``EISA saving provision designedly narrows
EPCA's express preemption provision, and Congress intended this
result.'' \134\ The savings clause did not amend the preemption
provision in EPCA. Moreover, what the savings clause actually says is
that it does not limit authority. If a regulation is preempted by EPCA,
a State has no authority to enforce it, and EISA did not change that
status quo. If Congress wanted to amend the broad and clear express
preemption provision in EPCA, it could have and would have done so. It
did not.
---------------------------------------------------------------------------
\134\ South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813.
---------------------------------------------------------------------------
Because NHTSA disagrees that States could permissibly regulate
tailpipe greenhouse gas emissions from automobiles prior to EISA, it
also disagrees with comments that argue that Congress ``preserved'' the
ability of States to do so through the savings clause (or,
alternatively, that efforts to ``revoke'' such preexisting authority
failed).\135\
---------------------------------------------------------------------------
\135\ Joint Submission from the States of California et al. and
the Cities of Oakland et al., Docket No. NHTSA-2018-0067-11735.
---------------------------------------------------------------------------
NHTSA also disagrees with a comment by South Coast that argues that
EISA's savings provision forecloses implied preemption.\136\ The
specific words that South Coast points to are the opening clause:
``Except to the extent expressly provided in this Act or an amendment
made by this Act.'' This language does not address preemption under
EPCA. That introductory clause merely modifies the remainder of the
savings provision, which goes on to say that ``nothing in this Act or
an amendment made by this Act . . . limits the authority provided . . .
or authorizes any violation of any provision of law . . . .'' This
statutory language prevents EISA from limiting preexisting authority or
responsibility conferred by any law or from authorizing violation of
any law. States and local governments had no preexisting authority or
responsibility to set requirements related to fuel economy standards.
Such requirements are void ab initio. The savings provision also does
not purport to expand pre-existing authority or responsibility, nor did
Congress amend in any way the broad express preemption provision in
EPCA when it enacted EISA. Moreover, implied preemption as applied here
is not a limitation based in EISA or the Clean Air Act. Implied
preemption is instead based on the Secretary of Transportation's
preexisting responsibility under EPCA to balance statutory factors in
setting nationwide fuel economy standards for automobiles.
---------------------------------------------------------------------------
\136\ South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813.
---------------------------------------------------------------------------
The provision in EISA concerning minimum requirements for Federal
government vehicles also does not change NHTSA's view. Several comments
referenced this provision, which states that the EPA ``Administrator
shall take into account the most stringent standards for vehicle
greenhouse gas emissions applicable to and enforceable against motor
vehicle manufacturers for vehicles sold anywhere in the United States''
in identifying vehicles for the Federal government fleet. 42 U.S.C.
13212(f)(3)(B).\137\ Commenters argued that the phrase ``the most
stringent standards'' would be superfluous if only EPA were allowed to
set standards and, in addition, if EPA had not set any such standards
at the time EISA was enacted. On the contrary, this provision is fully
consistent with NHTSA's view of preemption, based on the plain text of
EPCA's express preemption provision. The language in the EISA provision
specifically indicates that it applies only to ``the most stringent
standards . . . enforceable against motor vehicle manufacturers.''
\138\ This means that EPA could consider only otherwise lawful
standards. States and local governments are not permitted to enforce
standards preempted by EPCA. 49 U.S.C. 32919(a).
---------------------------------------------------------------------------
\137\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873; Joint Submission from the States of California et
al. and the Cities of Oakland et al., Docket No. NHTSA-2018-0067-
11735.
\138\ 42 U.S.C. 13212(f)(3)(B) (emphasis added).
---------------------------------------------------------------------------
However, EPCA does specifically permit a State or local government
to ``prescribe requirements for fuel economy for automobiles obtained
for its own use.'' 49 U.S.C. 32919(c). It is logical that the Federal
government would consider the requirements for States and local
government vehicle fleets in evaluating vehicles for its own Federal
government fleet. Such requirements would be applicable to and could be
enforced against manufacturers in contractual procurement relationships
with States or local governments. In any event, this provision
concerning a limited set of vehicles (Federal government vehicles) is
not grounds for undoing the uniform national fuel economy standards
applicable to all light vehicles as prescribed by Congress in EPCA.
In enacting this provision in EISA, Congress required the EPA
Administrator to ``issue guidance identifying the makes and model
number of vehicles that are low greenhouse gas emitting vehicles'' to
aid in identifying vehicles for the Federal government's own fleet. 42
U.S.C. 13212(f)(3)(A). The provision requiring the Administrator to
``take into account the most stringent standards for vehicles
greenhouse gas emissions'' provides a consideration for that guidance.
Id. 13212(f)(3)(B). It is not plausible that Congress intended this
limited provision concerning guidance on Federal government procurement
to disrupt the longstanding express preemption provision in EPCA.
Further, to read this procurement-related provision as somehow
showing that Congress intended to allow California to establish laws
related to fuel economy standards is unreasonable, as doing so would
put California in an unequal setting vis-a-vis other states, and that
would not make sense in this context. ``The Act also differentiates
between the States, despite our historic tradition that all the States
enjoy `equal sovereignty.' '' Northwest Austin Municipal Utility
District Number One v. Holder, 557 U.S. 193, 203 (2009). A ``departure
from the fundamental principal of equal sovereignty requires a showing
that a statute's disparate geographic coverage is sufficiently related
to the problem that it targets.'' Id. Congress rejected any such
prospect in the area of fuel economy by adding an unwaivable preemption
clause in EPCA. NHTSA does not presume that Congress, when adopting
EISA, impliedly discarded the equal application of EPCA to the States
without a clear statement of intent to do so and a recitation of the
``extraordinary conditions'' permitting California special authority
related to fuel economy. Id. at 211. ``Congress . . . does not alter
the fundamental details of a regulatory scheme in vague terms or
ancillary provisions--it does not, one might say, hide elephants in
mouseholes.'' \139\
---------------------------------------------------------------------------
\139\ Whitman v. Am. Trucking Ass'ns, 531 U.S. 457, 468 (2001).
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[[Page 51323]]
G. Prior Case Law Does Not Preclude Preemption
Certain comments opposed to NHTSA's proposal rely upon the Supreme
Court's decision in Massachusetts v. EPA to argue that regulation of
tailpipe emissions is separate and distinct from regulation of fuel
economy.\140\ NHTSA disagrees with attempts to stretch the holding of
this decision well beyond the issues addressed by the Court. The Court
did not address EPCA preemption in Massachusetts v. EPA, or State
regulations pursuant to a Clean Air Act waiver. The Court addressed
only EPA's own statutory obligations, which have no bearing on EPCA
preemption.
---------------------------------------------------------------------------
\140\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873; see Northeast States for Coordinated Air Use
Management (NESCAUM), Docket No. NHTSA-2018-0067-11691.
---------------------------------------------------------------------------
Moreover, as discussed above, NHTSA and EPA conduct joint
rulemaking consistent with the Supreme Court's decision. The Court
acknowledged that NHTSA and EPA's statutory obligations may overlap,
but that the agencies may both administer those obligations while
avoiding inconsistency.\141\ NHTSA therefore disagrees with the
comment's assertion that regulations of tailpipe greenhouse gas
emissions and fuel economy are truly separate and distinct. The
agencies issue joint rules precisely because of the unavoidable
scientific relationship between the two.
---------------------------------------------------------------------------
\141\ Massachusetts v. EPA, 549 U.S. 497, 532 (2007).
---------------------------------------------------------------------------
A number of comments also rely on the prior district court
decisions in California and Vermont in opposing NHTSA's proposal on
preemption.\142\ As NHTSA discussed in the proposal, those courts
previously concluded that State tailpipe greenhouse gas emissions
standards were not preempted by EPCA.\143\ NHTSA continues to disagree
with both of these district court decisions, as described in detail in
the proposal.\144\ This includes the California district court's
erroneous view of the requirement in EPCA for NHTSA to consider ``other
standards'' in setting fuel economy standards.\145\ In reaching its
conclusion, the court misconstrued a separate provision of EPCA that,
by its explicit terms, has had no effect for decades. Importantly,
neither district court considered NHTSA's views on preemption in
construing the statute NHTSA administers.\146\ Although the United
States filed an amicus brief opposing the Vermont court's decision in
the Second Circuit, that appeal was not decided on the merits due to
the automotive industry's withdrawal of the appeal as a part of a
negotiated agreement connected to the national framework. In its brief,
the United States specifically raised the district court's failure to
consider NHTSA's views concerning preemption, let alone give them
weight.\147\ Withdrawal of appeals was expressly part of the agreement
to establish the national framework.
---------------------------------------------------------------------------
\142\ Joint Submission from the States of California et al. and
the Cities of Oakland et al., Docket No. NHTSA-2018-0067-11735;
South Coast Air Quality Management District, Docket No. NHTSA-2018-
0067-11813.
\143\ 83 FR 42986, 43235 (Aug. 24, 2018).
\144\ Id. at 43235-38.
\145\ Id. at 43236-37.
\146\ Id. at 43236; Proof Brief for the United States as Amicus
Curiae, 07-4342-cv (2d Cir. filed Apr. 16, 2008).
\147\ See Proof Brief for the United States as Amicus Curiae,
07-4342-cv (2d Cir. filed Apr. 16, 2008). NHTSA also was not a
litigant in the district court cases and, therefore, did not have a
full opportunity to raise its views.
---------------------------------------------------------------------------
The Vermont district court also attempted to reconcile EPCA and the
Clean Air Act by asserting that a Clean Air Act waiver converts State
requirements to ``other motor vehicle standards'' that NHTSA must
consider in setting fuel economy standards. As NHTSA noted in the
proposal, even the California district court found that there was no
legal foundation for the view that a State regulation pursuant to a
Clean Air Act waiver becomes the equivalent of a Federal
regulation.\148\ This is an erroneous finding not based on precedent
and is unsupported by applicable law.
---------------------------------------------------------------------------
\148\ 83 FR 42986, 43236 (Aug. 24, 2018).
---------------------------------------------------------------------------
As described in the proposal, NHTSA also disagrees with the
California and Vermont district courts' implied preemption
analyses.\149\ NHTSA does not believe those courts fully considered the
conflict posed by State regulations and, in one case, even went so far
as to assert erroneously that NHTSA could simply defer to California in
revising its standards.\150\ Those decisions are not binding on NHTSA.
---------------------------------------------------------------------------
\149\ Id. at 43238.
\150\ Cent. Valley Chrysler-Jeep, Inc., 529 F. Supp. 2d at 1179.
NHTSA has a statutory obligation to set standards at ``the maximum
feasible average fuel economy level that the Secretary decides the
manufacturers can achieve in that model year,'' in accordance with
the statutory considerations. 49 U.S.C. 32902(a), (f). Thus, NHTSA
cannot simply defer to a State. For example, the only standards that
California would permit to satisfy California requirements for model
years 2021 through 2025 are the augural standards. See Cal. Code
Regs. tit. 13, Sec. 1961.3(c). If NHTSA finalizes a determination
that the augural standards are not ``maximum feasible,'' as
discussed in the proposal, then it would be contrary to law for
NHTSA to nevertheless adopt them in deference to California.
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Given NHTSA's previously stated views on those decisions, arguments
that rely on the decisions are not persuasive. Commenters did not
provide any new information or analysis of those district court
decisions that caused the agency to change its view on the
decisions.\151\ NHTSA incorporates the prior discussion of those
decisions from the proposal here.
---------------------------------------------------------------------------
\151\ As noted by a commenter, the appeals were dismissed before
decision as a practical matter, and despite strong arguments on the
merits. Fiat Chrysler Automobiles (FCA), Docket No. NHTSA-2018-0067-
11943.
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While NHTSA need not belabor its views again here, it is worth
emphasizing, as did commenters, that both district courts ignored
NHTSA's published prior statements on preemption in rendering their
decisions.\152\ Some comments seem to suggest that this failure to
address NHTSA's views represents a substantive rejection of those
views.\153\ NHTSA disagrees. The district courts simply entirely failed
to consider the agency's views; they did not consider and reject them
or even find that they were not due any weight. This is among the
reasons that NHTSA is formalizing its views in a regulation. As the
expert agency charged with administering EPCA, NHTSA is tasked with
balancing the four statutory factors in determining the ``maximum
feasible average fuel economy standards'' for each model year.\154\ In
doing so, NHTSA has the unique ability to determine whether State or
local regulations would undermine this balancing.\155\ NHTSA's views on
preemption certainly should be considered by any court evaluating this
issue. This is particularly true given that the relationship between
fuel economy standards and greenhouse gas emissions is a matter of
science.
---------------------------------------------------------------------------
\152\ 83 FR 42986, 43236 (Aug. 24, 2018).
\153\ See California Air Resources Board (CARB), Docket No.
NHTSA-2018-0067-11873.
\154\ 49 U.S.C. 32902(f).
\155\ See id.
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One commenter also erroneously asserts that collateral estoppel
will bar the Department of Justice from defending a final rule that
asserts State greenhouse gas emissions regulations are preempted by
EPCA.\156\ Nonmutual offensive collateral estoppel does not apply to
the United States. United States v. Mendoza, 464 U.S. 154, 162 (1984).
Moreover, the Federal government was not even a party to the prior
litigation involving EPCA preemption. The assertion that the Department
of Justice would be barred from defending this final rule lacks merit.
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\156\ See South Coast Air Quality Management District, Docket
No. NHTSA-2018-0067-11813.
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[[Page 51324]]
H. A Clean Air Act Waiver and SIP Approvals Do Not Foreclose EPCA
Preemption
Both agencies are finalizing their tentative conclusion from the
proposal that a Clean Air Act waiver does not also foreclose EPCA
preemption. EPCA does not provide for a waiver of preemption, either by
NHTSA or by another Federal agency. EPA, like NHTSA, does not have the
authority to waive EPCA preemption. Therefore, its grant of a Clean Air
Act waiver cannot operate to waive EPCA preemption. NHTSA discussed the
basis for its view that a Clean Air Act waiver does not ``federalize''
EPCA-preempted State requirements in detail in its proposal. NHTSA
reaffirms that discussion.
Several comments recited the district court's holding in Green
Mountain Chrysler that it need not consider EPCA preemption due to the
EPA waiver.\157\ NHTSA discussed in detail in the proposal its reasons
for disagreeing with that decision and commenters did not identify any
new information that caused NHTSA to change its view. NHTSA agrees with
commenters that reject the flawed reasoning of the district court.\158\
As one commenter explained, the argument that an EPA waiver federalizes
State requirements renders the EPCA preemption provision a
nullity.\159\ As the commenter noted, this incorrect interpretation
would enable States to even issue explicit fuel economy requirements so
long as they were under cover of a waiver from EPA. EPA does not have
authority to waive any aspect of EPCA preemption, nor does NHTSA.
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\157\ See, e.g., California Air Resources Board (CARB), Docket
No. NHTSA-2018-0067-11873; Class of 85 Regulatory Response Group,
Docket No. NHTSA-2018-0067-12070; Joint Submission from the States
of California et al. and the Cities of Oakland et al., Docket No.
NHTSA-2018-0067-11735.
\158\ See, e.g., American Fuel & Petrochemical Manufacturers,
Docket No. NHTSA-2018-0067-12078.
\159\ Competitive Enterprise Institute, Docket No. NHTSA-2018-
0067-12015.
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NHTSA also finalizes its view that preempted standards are void ab
initio. No commenters presented information that altered NHTSA's view,
which is based on longstanding Supreme Court case law, as cited by the
proposal.
NHTSA agrees with South Coast, which suggested in its comments that
EPCA does not outweigh the Clean Air Act.\160\ Likewise, the Clean Air
Act does not outweigh EPCA. Just as manufacturers must comply with
requirements under both statutes, both statutes apply to State and
local governments as well. Moreover, EPCA's preemption provision is
fully consistent with the Clean Air Act. EPCA's preemption provision
does not implicitly repeal parts of Section 209(b), contrary to the
assertion in one comment.\161\ States must simply act in accordance
with both statutes. Cf. Massachusetts v. EPA, 549 U.S. 497, 532 (2007)
(finding no inconsistency between obligations of EPA under Clean Air
Act and NHTSA under EPCA).
---------------------------------------------------------------------------
\160\ See South Coast Air Quality Management District, Docket
No. NHTSA-2018-0067-11813.
\161\ Joint Submission from the States of California et al. and
the Cities of Oakland et al., Docket No. NHTSA-2018-0067-11735.
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NHTSA has rejected the argument that a Clean Air Act waiver renders
EPCA preemption inapplicable, and likewise rejects the even more
attenuated argument concerning EPA's approval of preempted State
requirements as a part of a State Implementation Plan (SIP) submission
for areas that do not meet National Ambient Air Quality Standards
(NAAQS). A State has no authority to adopt or enforce a requirement
that falls within the scope of EPCA preemption. 49 U.S.C. 32919(a).
This is true even if adopting the unlawfully enacted requirement would
assist the State in coming into compliance with the NAAQS. The
inclusion of an invalid fuel economy requirement in an air quality SIP
does not render the requirement suddenly valid.\162\ NHTSA therefore
disagrees with comments that suggest that EPCA preemption no longer
applies simply because an unauthorized requirement is included in a SIP
that is subsequently approved.\163\ It is inappropriate for a State to
take action unauthorized and rendered void by one statutory scheme to
meet the requirements of a different statutory scheme.
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\162\ SIPs must include ``enforceable emission limitations.'' 42
U.S.C. 7410(a)(2)(A). An EPCA preempted requirement is not
enforceable. 49 U.S.C. 32919(a).
\163\ See South Coast Air Quality Management District, Docket
No. NHTSA-2018-0067-11813.
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Moreover, EPCA preemption applies directly to States and local
governments which are obliged to adhere to the constraints of the
Supremacy Clause. EPCA explicitly prohibits States and local
governments from adopting or enforcing a law or regulation related to
fuel economy standards. It is unreasonable for States to expect a
Federal agency (EPA) acting under one statutory scheme (the Clean Air
Act) to analyze whether the State has adopted preempted regulations in
contravention of an entirely separate statute (EPCA) administered by a
different Federal agency (NHTSA). In fact, as noted above, historically
EPA has declined to address questions unrelated to CAA section 209,
such as preemption analysis, in its waiver decisions. NHTSA strongly
disagrees with the assertion that EPA's approval of a SIP silently acts
as an implied waiver of EPCA preemption. This suggestion is
particularly hollow given that neither EPA nor NHTSA has the authority
to waive EPCA preemption.
NHTSA agrees with the general principle that an approved SIP is
enforceable as a matter of Federal law.\164\ However, the case law does
not support the argument made by CARB and South Coast's comments. The
case law explains that a SIP approved by EPA creates binding
obligations, pursuant to the Clean Air Act.\165\ There is no indication
that Congress intended to permit one agency to legitimize an otherwise
EPCA-preempted State provision by ``federalizing'' it. As an analogy,
the IRS requires individuals to report and pay taxes on money earned
from illegal activity, such as dealing drugs.\166\ A drug dealer who
complies with Federal tax law is not relieved of the prohibitions on
possessing and selling drugs that apply under other Federal laws.
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\164\ See California Air Resources Board (CARB), Docket No.
NHTSA-2018-0067-11873; South Coast Air Quality Management District,
Docket No. NHTSA-2018-0067-11813.
\165\ See, e.g., Safe Air for Everyone v. United States Envt'l
Prot. Agency, 488 F.3d 1088, 1091 (9th Cir. 2007).
\166\ Internal Revenue Service, Publication 525: Taxable and
Nontaxable Income 32 (Mar. 8, 2019), https://www.irs.gov/pub/irs-pdf/p525.pdf.
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Since SIPs are binding on States, the agencies recognize that
certain States may need to work with EPA to revise their SIPs in light
of this final action.\167\ As stated in the proposal, EPA may
subsequently consider whether to employ the appropriate provisions of
the Clean Air Act to identify provisions of States' SIPs that may need
review because they include preempted ZEV mandates or greenhouse gas
emissions standards.\168\ However, this practical consideration is not
grounds for ignoring EPCA's limitations on State action. SIPs are not
written in stone. They are subject to revision, including based on
changed circumstances. The Clean Air Act allows SIPs to be revised for
various reasons, including that part of the plan was approved in error,
that the plan is ``substantially inadequate,'' or that the State is
suspending or
[[Page 51325]]
revoking a program included in a plan. 42 U.S.C. 7410(a)(5)(iii),
(k)(5)-(6).
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\167\ EPA explains below that it will consider whether and how
to address SIP implications of this action, to the extent that they
exist, in separate actions; EPA believes that it is not necessary to
resolve those implications in the course of this action.
\168\ 83 FR 42986, 43244 (Aug. 24, 2018).
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I. NHTSA Has Appropriately Considered the Views of States and Local
Governments Consistent With Law
NHTSA considers the views of all interested stakeholders--including
States and local governments--in carrying out its statutory obligation
to set nationally applicable fuel economy standards. However, EPCA does
not permit States or local governments to act as co-regulators with
NHTSA in the process of setting fuel economy standards. Indeed, EPCA
precludes them from doing so, with the sole exception of information
disclosure requirements identical to Federal requirements, and for
requirements for fuel economy for automobiles obtained for a State or
local governments' own use. A number of commenters urged NHTSA to work
cooperatively with California, and to negotiate with and reach a
compromise with California.\169\ NHTSA appreciates such comments, and
seeks to foster a collaborative regulatory approach to the extent
possible. That said, California is not permitted by Federal law to have
its own separate laws or regulations relating to fuel economy
standards. 49 U.S.C. 32902 makes clear that NHTSA sets nationally
applicable fuel economy standards, and NHTSA is implementing its
authority to do so through this regulation clarifying the preemptive
effect of its standards consistent with the express preemption
provision in 49 U.S.C. 32919.
---------------------------------------------------------------------------
\169\ See, e.g., American Honda Motor Company, Inc., Docket No.
NHTSA-2018-0067-11818; Sen. T. Carper, United States Senate, Docket
No. NHTSA-2018-0067-11910; Maryland Department of the Environment,
Docket No. NHTSA-2018-0067-12044; Joint Submission from the States
of California et al. and the Cities of Oakland et al., Docket No.
NHTSA-2018-0067-11735; Manufacturers of Emission Controls
Association, Docket No. NHTSA-2018-0067-11994; North Carolina
Department of Environmental Quality, Docket No. NHTSA-2018-0067-
12025.
---------------------------------------------------------------------------
The very limited exceptions to preemption set forth in EPCA--
covering vehicles for a government's own use, and for disclosure
requirements that are identical to Federal requirements--only confirm
the breadth of preemption. See 49 U.S.C. 32919(b)-(c). States or
localities cannot adopt or enforce requirements related to fuel economy
standards unless they fall into one of these two discrete exceptions.
This means requirements related to fuel economy standards for
automobiles for use by a State's citizens, and not merely the State
itself, are not permitted. Since States are not permitted to adopt or
enforce requirements related to fuel economy standards for vehicles
sold or delivered to the public, Federal law does not allow California
(or any other State or local government) to regulate in this area.
For California, or any other State or local government, to regulate
in this area would require NHTSA to waive EPCA preemption, but
commenters did not and cannot identify any statutory authorization for
NHTSA to do so and no such authority exists, either expressly or
impliedly. The Clean Air Act requires EPA to waive Clean Air Act
preemption under a specific section of that statute unless it makes
certain findings. But because EPCA does not enable NHTSA to issue a
waiver of preemption, it also does not set forth terms upon which a
waiver would be appropriate.\170\ Thus, NHTSA lacks a legal basis for
approving of or consenting to State or local requirements related to
fuel economy standards.
---------------------------------------------------------------------------
\170\ EPA also does not have authority to waive EPCA preemption,
under the Clean Air Act or otherwise.
---------------------------------------------------------------------------
Absent the affirmative authority to approve of or consent to State
or locality's requirements related to fuel economy standards,
commenters appear to ask NHTSA to simply to look aside. That is
inconsistent with NHTSA's legal responsibility to set nationally
applicable standards. It is also inconsistent with the self-executing
nature of EPCA preemption, meaning that State or local requirements
related to fuel economy standards are void ab initio. Even if NHTSA
wanted to do so, it cannot breathe life into an expressly preempted
State law. And doing so would effectively result in NHTSA's purporting
to rewrite a statute, which is beyond the power of a regulatory agency.
NHTSA also disagrees that it is appropriate to ignore EPCA
preemption as a strategy to avoid litigation over this issue, a
strategy strongly suggested by a large number of commenters. NHTSA
understands the concerns of such commenters who hope to avoid prolonged
litigation.\171\ However, NHTSA believes that long-term certainty is
best achieved by applying the law as written. NHTSA agrees with
commenters who acknowledge the disruption to the automotive marketplace
that would come if preempted standards remained in place.\172\
Addressing preemption directly, as NHTSA has done through its adoption
of regulatory text in this document, will ultimately provide the needed
regulatory certainty into the future.
---------------------------------------------------------------------------
\171\ American Honda Motor Company, Inc., Docket No. NHTSA-2018-
0067-11818; Ford Motor Company, Docket No. NHTSA-2018-0067-11928.
\172\ Fiat Chrysler Automobiles (FCA), Docket No. NHTSA-2018-
0067-11943.
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Those commenters that ask NHTSA to negotiate with California
demonstrate the nature of the problem.\173\ The underlying reason
commenters are concerned about the absence of a compromise resolution
is because of the conflict that will result if States proceed with
regulations that are inconsistent with Federal requirements.\174\ Such
commenters, appropriately, have recognized the disruptive effect of
continuing to tolerate multiple regulators in this area. Moreover, as
discussed in additional detail below, a negotiated resolution is
inconsistent with the APA's notice and comment rulemaking process.
NHTSA has no basis in law to ignore the substantive comments received
on its proposal from many stakeholders and instead determine an outcome
through negotiation with a regulatory agency in California. NHTSA is a
safety agency with different priorities than CARB, with a different set
of factors to balance, including safety implications.
---------------------------------------------------------------------------
\173\ See, e.g., American Honda Motor Company, Inc., Docket No.
NHTSA-2018-0067-11818; Sen. T. Carper, United States Senate, Docket
No. NHTSA-2018-0067-11910; Manufacturers of Emission Controls
Association, Docket No. NHTSA-2018-0067-11994.
\174\ See Cal. Code Regs. tit. 13, section 1961.3(c).
---------------------------------------------------------------------------
As discussed above, many comments emphasized a desire for
maintaining a National Program. Neither California nor any other State,
of course, has the authority to set national standards in any area. If
California were to adopt and enforce requirements related to fuel
economy standards, there could only be uniform standards applicable
throughout the country if California agrees with the standards set by
NHTSA or vice versa. But EPCA requires that ``[e]ach standard shall be
the maximum feasible average fuel economy level that the Secretary''--
not a regulatory agency in the State of California--``decides that the
manufacturers can achieve in that model year.'' \175\ 49 U.S.C.
32902(a).
---------------------------------------------------------------------------
\175\ As NHTSA explained in the proposal, it disagrees with the
implication of the district court's statement in Central Valley that
``NHTSA is empowered to revise its standards'' to take into account
California's regulations. 83 FR 42986, 43238 (Aug. 24, 2018); see
Cent. Valley Chrysler-Jeep, Inc., 529 F. Supp. 2d at 1179. NHTSA's
duty under EPCA is to balance the statutory factors, not to
acquiesce to the views of one State (which by its own assertion is
attempting to address State-specific concerns, including the
geography of its population centers). See, e.g., California Air
Resources Board (CARB), Docket No. NHTSA-2018-0067-11873 (stating
that California's ``population continues to live predominantly in
basins bounded by mountains, in which air quality is poor'').
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[[Page 51326]]
Moreover, a faithful application of EPCA requires more than just
avoiding inconsistency. For that reason, it is unavailing that CARB has
previously implemented its program purportedly consistent with the
Federal government.\176\ EPCA requires NHTSA to set nationally
applicably standards. EPCA does not permit States or local governments
to adopt or enforce even identical or equivalent standards.\177\ EPCA
allows for only a single regulator--NHTSA--to set fuel economy
standards. Moreover, it is now clear it does not intend to do so for
model year 2021 through 2026 vehicles, should the forthcoming final
SAFE rule finalize standards other than the no action alternative as
described in the NPRM.\178\ And even consistent programs subject
manufacturers to duplicative enforcement regimes, in conflict with
EPCA.\179\ State standards that are identical or equivalent standards
to the Federal standards manufacturers nevertheless obligate
manufacturers to meet more onerous requirements. That is because
States, of course, lack authority to set nationwide requirements.
Therefore, manufacturers must meet State standards within each State
that has adopted them. Since fuel economy standards are fleetwide
average standards, it is more difficult to achieve a standard in a
particular State, averaged across a smaller pool of vehicles, than it
is to achieve the Federal standard, averaged across the pool of
vehicles for all States.
---------------------------------------------------------------------------
\176\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873.
\177\ EPCA does allow States or local governments to adopt
identical requirements for disclosure of fuel economy or fuel
operating costs, but did not allow identical requirements in other
areas related to fuel economy. See 49 U.S.C. 32919(b).
\178\ See Cal. Code Regs. tit. 13, section 1961.3(c).
\179\ EPCA has an unusual civil penalty provision for violations
of fuel economy standards that enables various compliance
flexibilities, including use of banked credits, credit plans, credit
transfers, and credit trades. See 49 U.S.C. 32912. EPCA also
requires specific procedures and findings before the Secretary of
Transportation may increase the civil penalty rate applicable to
violations of fuel economy standards. 49 U.S.C. 32912(c). State and
local enforcement of even identical or equivalent requirements
interferes with this enforcement structure.
---------------------------------------------------------------------------
In addition, there is no legal basis in EPCA or the APA for
California or any other State to receive preferential treatment for
their views in this statutory scheme or rulemaking process.\180\ Nor is
California, or any other State, entitled to negotiate the appropriate
standards with NHTSA. Commenters appear to suggest closed-door
negotiations, and not an alternative rulemaking process (such as
negotiated rulemaking), that would ensure procedural fairness.\181\
NHTSA disagrees that negotiation is the appropriate mechanism to set
nationally applicable policy with billions of dollars of impacts. The
notice-and-comment rulemaking process used by the agencies is the
appropriate mechanism for setting standards under EPCA and the Clean
Air Act, with due consideration to the views of all interested parties
and transparency. NHTSA certainly would prefer a result that is
satisfactory to all interested stakeholders, but it may not set aside
its own considered views on the appropriate standards to reach a
negotiated resolution, nor may it set aside Congress's commands in
EPCA.
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\180\ See Nw. Austin Mun. Util. Dist. No. One v. Holder, 557
U.S. 193, 203 (2009) (stating that ``a departure from the
fundamental principle of equal sovereignty requires a showing that a
statute's disparate geographic coverage is sufficiently related to
the problem that it targets'').
\181\ One comment noted that prior negotiations were ``closed-
door, `put nothing in writing, ever' negotiations.'' Competitive
Enterprise Institute, Docket No. NHTSA-2018-0067-12015; see also
Sen. Phil Berger & Rep. Tim Moore, North Carolina General Assembly,
Docket No. NHTSA-2018-0067-11961.
---------------------------------------------------------------------------
While States or local governments may not adopt or enforce
requirements related to fuel economy standards, NHTSA, of course, is
considering their views in setting appropriate standards. Many State
and local governments commented at great length on both the preemption
and standard setting portions of NHTSA's proposal.\182\ NHTSA has taken
their views into account in finalizing this rule, along with those of
other commenters. States and local governments have had and will
continue to have a say in the adoption of fuel economy standards,
consistent with the APA. Indeed, many of the technical comments
provided by California and other State and local governments and
agencies are being considered to improve the analysis regarding the
appropriate standards. In an area with express preemption, this APA
process is the appropriate means by which the Federal government should
consider the views of States and local governments.
---------------------------------------------------------------------------
\182\ See, e.g., California Air Resources Board (CARB), Docket
No. NHTSA-2018-0067-11873; Joint Submission from Governors of Texas,
et al., Docket No. NHTSA-2018-0067-11935; Joint Submission from the
States of California et al. and the Cities of Oakland et al., Docket
No. NHTSA-2018-0067-11735; Maryland Department of the Environment,
Docket No. NHTSA-2018-0067-12044; Minnesota Pollution Control Agency
(MPCA), the Minnesota Department of Transportation (MnDOT), and the
Minnesota Department of Health (MDH), Docket No. NHTSA-2018-0067-
11706; North Carolina Department of Environmental Quality, Docket
No. NHTSA-2018-0067-12025; Pennsylvania Department of Environmental
Protection, Docket No. NHTSA-2018-0067-11956; Washington State
Department of Ecology, Docket No. NHTSA-2018-0067-11926.
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NHTSA also disagrees with the view expressed by some commenters
that there is not a direct conflict between State regulation of
tailpipe carbon dioxide emissions from automobiles issued pursuant to a
Clean Air Act waiver and NHTSA's ability to set fuel economy standards
under EPCA. South Coast argues that when there are inconsistent
standards, automakers can avoid a conflict by complying with the more
stringent standard.\183\
---------------------------------------------------------------------------
\183\ South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813.
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NHTSA disagrees that this situation does not pose a conflict.
Higher standards than those NHTSA has determined are ``maximum
feasible'' after balancing the statutory factors negates the agency's
judgment in setting national standards, including traffic safety. NHTSA
addressed this conflict in detail in the proposal and reiterates that
discussion here.\184\ NHTSA also disagrees that all manufacturers
should simply comply with a higher standard than the standards set by
the Federal government based on statutory considerations. It may not be
technically feasible for manufacturers to comply with higher standards
or the higher standards may not be economically practicable. These are
factors that NHTSA must carefully assess and balance in setting
standards under EPCA, and the notion that a State has the unilateral
ability to veto or undermine NHTSA's determination by setting higher
standards directly conflicts with EPCA.
---------------------------------------------------------------------------
\184\ See section f of the proposal's preemption discussion. 83
FR 42986, 43237-38 (Aug. 24, 2018).
---------------------------------------------------------------------------
South Coast also asserted in its comments that there is no direct
conflict between the purpose of EPCA to reduce fuel consumption by
increasing fuel economy and the purpose of the Clean Air Act to protect
public health from air pollution, including by allowing California to
establish motor vehicle standards if it meets the criteria for a
waiver.\185\ While it is true that there need not be a conflict between
EPCA and the Clean Air Act, this statement is irrelevant to the
determination of whether State standards are preempted by EPCA. NHTSA
and EPA conduct joint rulemaking in this area because EPA's greenhouse
gas emissions standards are inherently related to NHTSA's fuel economy
standards. This inherent linkage was recognized by the Supreme Court in
Massachusetts v.
[[Page 51327]]
EPA.\186\ California and other States have, for many years, regulated
ozone-forming emissions from vehicles pursuant to a Clean Air Act
waiver without posing a conflict with NHTSA's regulation of fuel
economy. It is when States regulate the emission of greenhouse gases,
especially carbon dioxide, that the conflict arises because of the
direct and substantial relationship between tailpipe emissions of
carbon dioxide and fuel economy. Regulation in this area is related to
NHTSA's fuel economy standards and impedes NHTSA's ability to set
nationally applicable fuel economy standards.
---------------------------------------------------------------------------
\185\ South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813.
\186\ See Massachusetts v. EPA, 549 U.S. 497, 532 (2007).
---------------------------------------------------------------------------
NHTSA also disagrees with comments that assert it did not properly
consider federalism concerns. Specifically, South Coast claimed that
NHTSA violated the executive order on federalism, Executive Order
13132, although South Coast acknowledges the Executive Order does not
create an enforceable right or benefit.\187\ Setting aside the
Executive Order's non-justiciability for the moment, NHTSA's action
complies with Executive Order 13132. Contrary to South Coast's
assertion, the executive order recognizes both express preemption and
conflict preemption, and it does not bar the application of conflict
preemption where a statute contains an express preemption
provision.\188\ The provisions concerning express preemption and
conflict preemption are in separate paragraphs, which are not mutually
exclusive. See E.O. 13132 section 4(a)-(b).
---------------------------------------------------------------------------
\187\ E.O. 13132 section 11; South Coast Air Quality Management
District, Docket No. NHTSA-2018-0067-11813. South Coast also states
that NHTSA did not mention the Tenth Amendment in its proposal.
South Coast Air Quality Management District, Docket No. NHTSA-2018-
0067-11813. However, South Coast does not assert that this action
violates the Tenth Amendment, which is fully consistent with Federal
preemption. See Constitution, Article VI.
\188\ South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813.
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Moreover, the executive order supports NHTSA's action in construing
preemption through rulemaking. See id. The executive order explicitly
supports the process NHTSA used here to consider the views of States
and local governments, stating that: ``When an agency proposes to act
through adjudication or rulemaking to preempt State law, the agency
shall provide all affected State and local officials notice and an
opportunity for appropriate participation in the proceedings.'' E.O.
13132 section 4(e). NHTSA cited to Executive Order 13132 in the
preemption portion of its proposal,\189\ and specifically solicited
comments from State and local officials, as well as other members of
the public. As discussed above, NHTSA has considered the extensive
comments from State and local governments.
---------------------------------------------------------------------------
\189\ 83 FR 42986, 43233 n.496 (Aug. 24, 2018).
---------------------------------------------------------------------------
EPCA preemption also does not improperly impinge on the rights of
States. Several commenters argued for allowing States to regulate in
this area due to asserted benefits of State regulation.\190\ CARB's
comments went into extensive detail on its history of regulating
vehicles.\191\ It also asserted that there is industry support for its
regulation in this area,\192\ and argued that it has reliance interests
in its regulations.\193\ CARB also argued that NHTSA's proposal would
adversely impact its police power and ability to protect its
citizens.\194\ In addition, it claimed that NHTSA's proposal would
impact its State-imposed mandate for emissions reductions by 2030,
given the transportation sector's contributions to California's
greenhouse gas emissions.\195\
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\190\ See, e.g., California Air Resources Board (CARB), Docket
No. NHTSA-2018-0067-11873.
\191\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873.
\192\ Id.
\193\ Id.
\194\ Id.; see also Joint Submission from the States of
California et al. and the Cities of Oakland et al., Docket No.
NHTSA-2018-0067-11735.
\195\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873.
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Notwithstanding these asserted interests of policy, Congress
determined that NHTSA should have exclusive authority to set fuel
economy standards and that States are not authorized to adopt or
enforce regulations related to those standards, with limited exceptions
described above. No commenter argued that EPCA's preemption provision
is unconstitutional. Some commenters, however, have argued that special
treatment afforded to the California is problematic.\196\ Just as
States have no valid police power to set fuel economy standards
directly, neither are they permitted under EPCA and the Supremacy
Clause to set standards related to fuel economy standards. States do
have input into the Federal fuel economy standards established by NHTSA
(as well as EPA's related greenhouse gas emissions standards) through
the notice-and-comment process, and the interests of California's
citizens as well as the citizens of the other 49 States are protected
by the standards set by the Federal agencies.
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\196\ E.g., Sen. Phil Berger & Rep. Tim Moore, North Carolina
General Assembly, Docket No. NHTSA-2018-0067-11961; Rep. M. Turzai,
Pennsylvania House of Representatives, Docket No. NHTSA-2018-0067-
11839.
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NHTSA recognizes that California may have different policy views,
as do many interested parties, including both those who expressed views
in favor of and in opposition to the proposal. However, Congress gave
NHTSA the duty to balance competing considerations. NHTSA also rejects
the notion that California has valid reliance interests in regulations
that are void ab initio. Indeed, even in the run-up to the 2012
rulemaking, California itself reserved its rights to go in a different
direction and recognized that the Federal Government may assert
preemption at a later date.\197\ The extent to which all or part of
industry does or does not support California's ability to regulate in
this area is also not a relevant consideration to whether California is
legally authorized to do so. NHTSA also notes that industry has
expressed a strong preference for one national standard, which is the
purpose of EPCA's preemption provision.\198\ California has now made
clear that it will not accept manufacturers' compliance with Federal
standards, unless the agencies adopt the no action alternative from the
proposal.\199\ EPCA preemption ensures that such State regulations are
unenforceable and that one set of national standards (the Federal
standards) will control. Not even identical standards are permissible.
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\197\ See Letter from M. Nichols, CARB to R. LaHood, DOT & L.
Jackson, EPA (July 28, 2011), available at https://www.epa.gov/sites/production/files/2016-10/documents/carb-commitment-ltr.pdf
(last visited Sept. 15, 2019) (making certain commitments for a
National Program, conditioned on certain events including EPA's
grant of a waiver of Clean Air Act preemption, vehicle manufacturers
not challenging California's standards on the basis of EPCA
preemption, and indicating that ``California reserves all rights to
contest final actions taken or not taken by EPA or NHTSA as part of
or in response to the mid-term evaluation'').
\198\ See Alliance of Automobile Manufacturers, Docket No.
NHTSA-2018-0067-12073; American Honda Motor Company, Inc., Docket
No. NHTSA-2018-0067-11818; Association of Global Automakers, Docket
No. NHTSA-2018-0067-12032; Fiat Chrysler Automobiles (FCA), Docket
No. NHTSA-2018-0067-11943; Ford Motor Company, Docket No. NHTSA-
2018-0067-11928; General Motors LLC, Docket No. NHTSA-2018-0067-
11858; Jaguar Land Rover, Docket No. NHTSA-2018-0067-11916; Mazda
Motor Company, Docket No. NHTSA-2018-0067-11727; Mitsubishi Motors
RD of America, Inc. (MRDA), Docket No. NHTSA-2018-0067-12056;
Subaru, Docket No. NHTSA-2018-0067-12020; Toyota Motor North
America, Docket No. NHTSA-2018-0067-12150; Volkswagen Group of
America, Docket No. NHTSA-2017-0069-0583.
\199\ See Cal. Code Regs. tit. 13, section 1961.3(c).
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J. Clarifying Changes to Final Rule Text
No commenter offered alternative regulatory text for consideration
by the
[[Page 51328]]
agency on preemption. Because NHTSA is finalizing its views on
preemption, it is adopting the proposed regulatory text, including an
appendix. However, based on its review of comments, NHTSA is adopting a
few minor, clarifying changes.
While not advocating for a change to the regulatory text, comments
from South Coast and CARB persuaded us to make changes to ensure
consistency with EPCA's express preemption provision, as was NHTSA's
intention.\200\ South Coast specifically pointed out that two
provisions of the proposed regulatory text (appendix B, sections (a)(3)
and (b)(3)) did not include the word ``automobiles.'' \201\ Contrary to
South Coast's suggestion, NHTSA's intention was not to reach beyond the
statutory text. Most of the proposed regulatory text explicitly
addressed automobiles. In the two provisions identified by South Coast
as omitting that term, NHTSA addressed tailpipe carbon dioxide
emissions and fuel economy. In context, these references address
automobile emissions and automobile fuel economy. However, for clarity
and consistency, NHTSA has added explicit reference to automobiles to
these two provisions.
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\200\ South Coast and CARB asked NHTSA to withdraw its proposal
on preemption, rather than to change the text of the proposed rule.
California Air Resources Board (CARB), Docket No. NHTSA-2018-0067-
11873; South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813. NHTSA declines to do so for the reasons
discussed in this final rule.
\201\ South Coast Air Quality Management District, Docket No.
NHTSA-2018-0067-11813.
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CARB also pointed out in its comments that the statute preempts
laws or regulations ``related to fuel economy standards,'' not simply
those related to fuel economy.\202\ While other provisions of the
proposed rule used the phrases ``relates to fuel economy standards'' or
``related to fuel economy standards,'' the word ``standards'' was
inadvertently omitted from section (a)(3) of the appendix. In the final
rule, NHTSA has added that word for clarity.
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\202\ California Air Resources Board (CARB), Docket No. NHTSA-
2018-0067-11873; see also Joint Submission from the States of
California et al. and the Cities of Oakland et al., Docket No.
NHTSA-2018-0067-11735.
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In addition, to ensure consistency throughout the regulatory text
and with the preamble discussion, NHTSA is clarifying that a State law
or regulations having either a direct or substantial effect of
regulating or prohibiting tailpipe carbon dioxide emissions or fuel
economy is a law or regulation related to fuel economy. The proposal
included this statement in the proposed regulatory text: ``Automobile
fuel economy is directly and substantially related to automobile
tailpipe emissions of carbon dioxide.'' This provides the foundation
for NHTSA's express and implied preemption analysis. NHTSA is therefore
clarifying that requirements directly or substantially related to fuel
economy are preempted by adding ``or substantially'' to two places in
the regulatory text. This is consistent with the proposal, which
explained that requirements with no bearing on fuel economy or those
with only an incidental impact on fuel economy are not preempted.\203\
Requirements with more than an incidental impact, i.e. those
requirements that directly or substantially affect fuel economy are
related to fuel economy and thus preempted. Therefore, this change in
the regulatory text of the final rule provides additional clarity on
the scope of preemption.
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\203\ 83 FR 42986, 43235 (Aug. 24, 2018). It is also consistent
with the Supreme Court case law interpreting ``related to'' in
preemption provisions, as discussed both in the proposal and this
final rule. See, e.g., Rowe, 552 U.S. at 375.
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In addition, several references throughout the proposed regulatory
text addressed a ``state law or regulation.'' Consistent with EPCA and
the discussion in the notice of proposed rulemaking, NHTSA intended to
address laws and regulations of States and their political
subdivisions. For clarity, NHTSA revised all references in its
regulatory text to cover States and their political subdivisions.
Specifically, in the rule NHTSA is finalizing in this document,
appendix B, section (a)(3) reads: ``A law or regulation of a State or
political subdivision of a State having the direct or substantial
effect of regulating or prohibiting tailpipe carbon dioxide emissions
from automobiles or automobile fuel economy is a law or regulation
related to fuel economy standards and expressly preempted under 49
U.S.C. 32919.'' \204\ Appendix B, section (b)(3) reads: ``A law or
regulation of a State or political subdivision of a State having the
direct or substantial effect of regulating or prohibiting tailpipe
carbon dioxide emissions from automobiles or automobile fuel economy is
impliedly preempted under 49 U.S.C. Chapter 329.'' \205\
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\204\ Emphases added.
\205\ Emphases added.
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Finally, NHTSA also added clarifying language to 49 CFR 531.7(b)
and 533.7(b) to indicate that the references to ``section 32908'' are
to section 32908 of title 49 of the United States Code.
These clarifying changes are consistent with the discussion in the
preamble to NHTSA's proposed rule.
III. EPA's Withdrawal of Aspects of the January 2013 Waiver of CAA
section 209(b) Preemption of the State of California's Advanced Clean
Car Program
In this section of this joint action, EPA is finalizing its August
2018 proposal to withdraw aspects of its January 2013 waiver of Clean
Air Act (CAA) section 209 preemption of the State of California's
Advanced Clean Car (ACC) program. First, subsection A provides
background regarding the ACC program. Second, subsection B finalizes
EPA's proposed determination that it has the authority to reconsider
and withdraw previously granted waivers. Third, subsection C finalizes
EPA's proposed determination that, in light of NHTSA's determinations
finalized elsewhere in this joint action regarding the preemptive
effect of EPCA on state GHG and ZEV programs, EPA's January 2013 grant
of a waiver of CAA preemption for those provisions of California's
program was invalid, null, and void; that waiver is hereby withdrawn on
that basis, effective on the effective date of this joint action.
Fourth, subsection D, separate and apart from the determinations in
subsection C with regard to the effect of EPCA preemption on the
January 2013 waiver, finalizes EPA's reconsideration of, and its
proposed determination that it is appropriate to withdraw, its January
2013 grant of a waiver of CAA preemption for the GHG and ZEV standards
in California's ACC program for model years 2021 through 2025, based on
a determination that California ``does not need [those] standards to
meet compelling and extraordinary conditions'' within the meaning of
CAA section 209(b)(1)(B). Fifth, subsection E sets forth and specifies
the terms of the waiver withdrawal. Sixth, subsection F finalizes EPA's
proposed determination that, separate and apart from the findings and
determinations described above, states other than California cannot use
CAA section 177 to adopt California's GHG standards. Seventh and
finally, subsection G sets forth EPA's understanding and intention with
regard to severability of, and the appropriate venue for judicial
review of, this action.
A. Background
On January 9, 2013, EPA granted California's request for a waiver
of preemption to enforce its Advanced Clean Car (ACC) program
regulations under CAA section 209(b)(1).\206\ 78 FR
[[Page 51329]]
2112. On August 24, 2018, EPA proposed to withdraw this waiver of
preemption with regard to the GHG and ZEV standards of its Advanced
Clean Car (ACC) program for MY 2021-2025. 83 FR 43240. In the SAFE
proposal, EPA provided extensive background on the history of CAA
section 209 and waivers granted thereunder, as well as on the specific
waiver which California sought for the ACC program which is at issue
here, in the SAFE proposal.\207\ 83 FR 43240-43242.
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\206\ As in the proposal, this final action uses ``California''
and ``California Air Resources Board'' (or ``CARB'')
interchangeably.
\207\ A complete description of the ACC program, as it existed
at the time that CARB applied for the 2013 waiver, can be found in
CARB's waiver request, located in the docket for the January 2013
waiver action, Docket No. EPA-HQ-OAR- 2012-0562.
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Since publication of the SAFE proposal, California has clarified
its ``deemed to comply'' provision, under which manufacturers are
afforded the option of complying with CARB's GHG standards by showing
that they comply with the applicable federal GHG standards. As amended,
CARB's ``deemed to comply'' provision now provides that compliance with
CARB's GHG standards can be satisfied only by complying with the
federal standards as those standards were promulgated in 2012. In other
words, while the content of CARB's GHG standards has never been
identical to the corresponding Federal standards, the ``deemed to
comply'' provision as originally designed, and as it existed when EPA
issued the January 2013 waiver, would have shielded automobile
manufacturers from having to comply with two conflicting sets of
standards unless they chose to do so. After the December 2018
amendment, however, CARB's regulations now contain within them a
mechanism which will automatically impose that state of affairs the
moment that the Federal government should exercise its authority to
revise its standards. California has further recently announced a
``voluntary agreement'' with four automobile manufacturers that, among
other things, requires the automobile manufacturers to refrain from
challenging California's GHG and ZEV programs. This ``voluntary
agreement'' further provides that California will accept automobile
manufacturer compliance with a less stringent standard (and one that
extends the phase-in of the GHG standard from 2025 to 2026) than either
the California program that was the subject of the 2013 waiver or the
Federal standards as promulgated in 2012. Neither California's
amendment of its ``deemed to comply'' provision, nor its more recent
announcement of the new ``voluntary agreement,'' constitute a necessary
part of the basis for the waiver withdrawal and other actions that EPA
finalizes in this document, and EPA would be taking the same actions
that it takes in this document even in their absence. Nevertheless, EPA
does not believe it appropriate to ignore these recent actions and
announcements on the State's part, and, as discussed below, believes
that they confirm that this action is appropriate.\208\
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\208\ EPA does not take any position at this point on what
effect California's December 2018 amendment to its ``deemed to
comply'' provision, or its July 2019 ``framework'' announcement, may
of their own force have had on the continued validity of the January
2013 waiver. EPA may address that issue in a separate, future
action.
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On January 9, 2013, EPA granted CARB's request for a waiver of
preemption to enforce its ACC program regulations pursuant to CAA
section 209(b). 78 FR 2112. The ACC program comprises regulations for
ZEV, tailpipe GHG emissions standards, and low-emission vehicles (LEV)
regulations \209\ for new passenger cars, light-duty trucks, medium-
duty passenger vehicles, and certain heavy-duty vehicles, for MY 2015
through 2025. Thus, in terms of the scope of coverage of the respective
state and federal programs, the ACC program is comparable to the
combined Federal Tier 3 Motor Vehicle Emissions Standards and the 2017
and later MY Light-duty Vehicle GHG Standards, with an additional
mandate to force the development and deployment of non-internal-
combustion-engine technology. According to CARB, the ACC program was
intended to address California's near and long-term ozone issues as
well as certain specific GHG emission reduction goals.\210\ 78 FR 2114.
See also 78 FR 2122, 2130-2131. The ACC program regulations impose
multiple and varying complex compliance obligations that have
simultaneous, and sometimes overlapping, deadlines with each standard.
These deadlines began in 2015 and are scheduled to be phased in through
2025. For example, compliance with the GHG requirements began in 2017
and will be phased in through 2025.\211\ The implementation schedule
and the interrelationship of regulatory provisions with each of the
three standards together demonstrates that CARB intended that at least
the GHG and ZEV standards, if not also the LEV standards, would be
implemented as a cohesive program. For example, in its ACC waiver
request, CARB stated that the ``ZEV regulation must be considered in
conjunction with the proposed LEV III amendments. Vehicles produced as
a result of the ZEV regulation are part of a manufacturer's light-duty
fleet and are therefore included when calculating fleet averages for
compliance with the LEV III GHG amendments.'' CARB's Initial Statement
of Reasons at 62-63.\212\ CARB also noted ``[b]ecause the ZEVs have
ultra-low GHG emission levels that are far lower than non-ZEV
technology, they are a critical component of automakers' LEV III GHG
standard compliance strategies.'' Id. CARB further explained that ``the
ultra-low GHG ZEV technology is a major component of compliance with
the LEV III GHG fleet standards for the overall light duty fleet.'' Id.
CARB's request also repeatedly touted the GHG emissions benefits of the
ACC program. Up until the ACC program waiver request, CARB had relied
on the ZEV requirements as a compliance option for reducing criteria
pollutants. Specifically, California first included the ZEV requirement
as part of its first LEV program, which was then known as LEV I, that
mandated a ZEV sales requirement that phased-in starting with the 1998
MY through 2003 MY. EPA issued a waiver of preemption for these
regulations on January 13, 1993 (58 FR 4166 (January 13, 1993). Since
this initial waiver of preemption, California has amended the ZEV
requirements multiple times and EPA has
[[Page 51330]]
subsequently granted waivers for those amendments. Notably, however, in
the ACC program waiver request, California also included a waiver of
preemption request for ZEV amendments that related to 2012 MY through
2017 MY and new requirements for 2018 MY through 2025 MY (78 FR 2118-
9). Regarding the ACC program ZEV requirements, CARB's waiver request
noted that there was no criteria emissions benefit in terms of vehicle
(tank-to-wheel--TTW) emissions because its LEV III criteria pollutant
fleet standard was responsible for those emission reductions.\213\ CARB
further noted that its ZEV regulation was intended to focus primarily
on zero emission drive--that is, battery electric (BEVs), plug-in
hybrid electric vehicles (PHEVs), and hydrogen fuel cell vehicles
(FCVs)--in order to move advanced, low GHG vehicles from demonstration
phase to commercialization (78 FR 2122, 2130- 31). Specifically, for
2018 MY through 2025 MY, the ACC program ZEV requirements mandate use
of technologies such as BEVs, PHEVs and FCVs, in up to 15% of a
manufacturer's California fleet by MY 2025 (78 FR 2114). Additionally,
the ACC program regulations provide various compliance flexibilities
allowing for substitution of compliance with one program requirement
for another. For instance, manufacturers may opt to over-comply with
the GHG fleet standard in order to offset a portion of their ZEV
compliance requirement for MY 2018 through 2021. Further, until MY
2018, sales of BEVs (since MY 2018, limited to FCVs) \214\ in
California count toward a manufacturer's ZEV credit requirement in CAA
section 177 States. This is known as the ``travel provision'' (78 FR
2120).\215\ For their part, the GHG emission regulations include an
optional compliance provision that allows manufacturers to demonstrate
compliance with CARB's GHG standards by complying with applicable
Federal GHG standards. This is known as the ``deemed to comply''
provision. Since proposal, California has amended its regulations to
provide that the ``deemed to comply'' provision only applies to the
standards originally agreed to by California, the federal government,
and automakers in 2012. In other words, automobile manufacturers would
not be able to rely on the ``deemed to comply'' provision for any
revision to those 2012 standards. California has further entered into a
voluntary agreement with four automobile manufacturers that amongst
other things, requires the automobile manufacturers to refrain from
challenging California's GHG and ZEV programs, and provides that
California will accept automobile manufacturer compliance with a less
stringent standard than either the California program that was the
subject of the 2013 waiver or the Federal standards as promulgated in
2012.
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\209\ The LEV regulations in question include standards for both
GHG and criteria pollutants (including ozone and PM).
\210\ ``The Advanced Clean Cars program . . . will reduce
criteria pollutants . . . and . . . help achieve attainment of air
quality standards; The Advanced Clean Cars Program will also reduce
greenhouse gases emissions as follows: by 2025, CO2 equivalent
emissions will be reduced by 13 million metric tons (MMT) per year,
which is 12 percent from base line levels; the reduction increases
in 2035 to 31 MMT/year, a 27 percent reduction from baseline levels;
by 2050, the proposed regulation would reduce emissions by more than
40 MMT/year, a reduction of 33 percent from baseline levels; and
viewed cumulatively over the life of the regulation (2017-2050), the
proposed Advanced Clean Cars regulation will reduce by more than 850
MMT CO2-equivalent, which will help achieve the State's climate
change goals to reduce the threat that climate change poses to
California's public health, water resources, agriculture industry,
ecology and economy.'' 78 FR 2114. CARB Resolution 12-11, at 19,
(January 26, 2012), available in the docket for the January 2013
waiver action, Document No. EPA-HQ-OAR-2012- 0562, the docket for
the ACC program waiver.
\211\ As discussed above, California has further entered into a
voluntary agreement with four automobile manufacturers that amongst
other things, purports to allow compliance with a less stringent
program than either the program that was the subject of the 2013
waiver or the Federal standards promulgated in 2012. See https://www.gov.ca.gov/2019/07/25/california-and-major-automakers-reach-groundbreaking-framework-agreement-on-clean-emission-standards/
(last visited Aug. 30, 2019).
\212\ Available in the docket for the January 2013 waiver
decision, Docket No. EPA-HQ-OAR-2012- 0562.
\213\ ``There is no criteria emissions benefit from including
the ZEV proposal in terms of vehicle (tank-to-wheel or TTW)
emissions.'' CARB ACC waiver request at 15 (May 2012), EPA-HQ-OAR-
2012-0562-0004.
\214\ This kind of ZEV technology continues to present
technological challenges and in 2006, for instance, EPA granted
California a waiver of its ZEV standards through the 2011MY but due
to feasibility challenges declined to grant a waiver for MY 2012 and
subsequent model years. See 71 FR 78190; EPA, EPA ZEV Waiver
Decision Document, EPA-HQ-OAR-2004-0437 (Dec. 21, 2006).
\215\ On March 11, 2013, the Association of Global Automakers
and Alliance of Automobile Manufacturers filed a petition for
reconsideration of the January 2013 waiver grant, requesting that
EPA reconsider the decision to grant a waiver for MYs 2018 through
2025 ZEV standards on technological feasibility grounds. Petitioners
also asked for consideration of the impact of the travel provision,
which they argue raise technological feasibility issues in CAA
section 177 States, as part of the agency's review under the third
waiver prong, CAA section 209(b)(1)(C). EPA continues to evaluate
the petition. As explained below, in this action EPA is not taking
final action with regard to the proposed determinations under the
third waiver prong. Whether and how EPA will respond to the March
2013 petition will be considered in connection with a potential
future final action with respect to the proposed third prong
determinations set forth in the SAFE proposal.
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As explained in the SAFE proposal (83 FR 83 FR 23245-46), up until
the 2008 GHG waiver denial, EPA had interpreted CAA section
209(b)(1)(B) as requiring a consideration of California's need for a
separate motor vehicle program designed to address local or regional
air pollution problems and not whether the specific standard that is
the subject of the waiver request is necessary to meet such conditions
(73 FR 12156; March 6, 2008). We also explained that California would
typically seek a waiver of particular aspects of its new motor vehicle
program up until the ACC program waiver request. We further explained
that in the 2008 GHG waiver denial, which was a waiver request for only
GHG emissions standards, EPA had determined that its interpretation of
CAA section 209(b)(1)(B) as calling for a consideration of California's
need for a separate motor vehicle program was not appropriate for GHG
standards because such standards are designed to address global air
pollution problems in contrast to local or regional air pollution
problems specific to and caused by conditions specific to California
(73 FR 12156-60). In the 2008 GHG waiver denial, EPA further explained
that its previous reviews of California's waiver request under CAA
section 209(b)(1)(B) had usually been cursory and undisputed, as the
fundamental factors leading to California's air pollution problems--
geography, local climate conditions (like thermal inversions),
significance of the motor vehicle population--had not changed over time
and over different local and regional air pollutants. These fundamental
factors applied similarly for all of California's air pollution
problems that are local or regional in nature. In the 2008 GHG waiver
denial, EPA noted that atmospheric concentrations of GHG are
substantially uniform across the globe, based on their long atmospheric
life and the resulting mixing in the atmosphere. EPA therefore posited
that with regard to atmospheric GHG concentrations and their
environmental effects, the California specific causal factors that EPA
had considered when reviewing previous waiver applications under CAA
section 209(b)(1)(B)--the geography and climate of California, and the
large motor vehicle population in California, which were considered the
fundamental causes of the air pollution in California--do not have the
same relevance to the question at hand. EPA explained that the
atmospheric concentration of GHG in California is not affected by the
geography and climate of California. The long duration of these gases
in the atmosphere means they are well-mixed throughout the global
atmosphere, such that their concentrations over California and the U.S.
are substantially the same as the global average. The number of motor
vehicles in California, while still a notable percentage of the
national total and still a notable source of GHG emissions in the
State, is not a significant percentage of the global vehicle fleet and
bears no closer relation to the levels of GHG in the atmosphere over
California than any other comparable source or group of sources of GHG
anywhere in the world. Emissions of greenhouse gases from California
cars do not generally remain confined within California's local
environment but instead become one part of the global pool of GHG
emissions, with this global pool of emissions leading to a relatively
homogenous concentration of GHG over the globe. Thus, the emissions of
motor vehicles in California do not affect California's air pollution
problem in any way that is different from how emissions from vehicles
and other pollution sources all around the U.S. (and, for that matter,
the world) do.
[[Page 51331]]
Similarly, the emissions from California's cars do not only affect the
atmosphere in California but in fact become one part of the global pool
of GHG emissions that affect the atmosphere globally and are
distributed throughout the world, resulting in basically a uniform
global atmospheric concentration. EPA then applied this reasoning to
the GHG standards at issue in the 2008 GHG waiver denial. Having
limited the meaning of this provision to situations where the air
pollution problem was local or regional in nature, EPA found that
California's GHG standards did not meet this criterion. Additionally,
in the 2008 GHG waiver denial, EPA also applied an alternative
interpretation where EPA would consider effects of the global air
pollution problem in California in comparison to the effects on the
rest of the country and again addressed the GHG standards separately
from the rest of California's motor vehicle program. Under this
alternative interpretation, EPA considered whether impacts of global
climate change in California were sufficiently different from impacts
on the rest of the country such that California could be considered to
need its GHG standards to meet compelling and extraordinary conditions.
EPA determined that the waiver should be denied under this alternative
interpretation as well. 83 FR 23245-46.
In 2009, EPA reversed its previous denial and granted California's
preemption waiver request for its GHG emission standards ``for 2009 and
later model years.'' 74 FR 32744. EPA announced that it was returning
to what it styled as the traditional interpretation of CAA section
209(b)(1)(B), under which it would only consider whether California had
a ``need for its new motor vehicle emissions program as a whole,'' id.
at 32761. It determined that California did, based on ongoing NAAQS
attainment issues. Id. at 32762-32763. In the alternative, while not
adopting either of the 2008 waiver denial's alternative approaches, EPA
also determined that California needed its GHG standards as part of its
NAAQS attainment strategy due to the indirect effects of climate change
on ground-level ozone formation, id. at 32763, and that waiver
opponents had not met their burden of proof to demonstrate that
California climate impacts ``are not sufficiently different'' to
nationwide impacts, id. at 32765. EPA also determined that there were
no grounds to deny the waiver under CAA section 209(b)(1)(A) (whether
the State's determination that its standards in the aggregate are at
least as protective as federal standards) or CAA section 209(b)(1)(C)
(whether ``such state standards'' and accompanying enforcement
procedures are inconsistent with CAA section 202(a)). Id. at 32759,
32780.
B. EPA's Authority To Reconsider and Withdraw a Previously Granted
Waiver Under CAA Section 209(b)
In this action, EPA finalizes its proposed determination that it
has the authority to withdraw a waiver in appropriate circumstances.
EPA explains below (in this subsection, III.B) the basis for its
conclusions that it has authority to withdraw a waiver in appropriate
circumstances, and (in subsections III.C and III.D) that it is
appropriate for EPA to exercise that authority at this time.\216\
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\216\ As a general matter, for purposes of determining if
withdrawal is appropriate, EPA may initiate reconsideration sua
sponte where CARB amends either a previously waived standard or
accompanying enforcement procedure. 47 FR 7306, 7309 (Feb. 18,
1982). See also 43 FR 998 (January 5, 1978) (Grant of
reconsideration to address portions of waived California's
motorcycle program that California substantially amended).
Additionally, if California acts to amend either a previously waived
standard or accompanying enforcement procedure, the amendment may be
considered to be within-the-scope of a previously granted waiver
provided that it does not undermine California's determination that
its standards, in the aggregate, are as at least as protective of
public health and welfare as applicable Federal standards, does not
affect its consistency with section 202(a) of the Act, and raises no
new issues affecting EPA's previous waiver decisions. See, e.g., 51
FR 12391 (April 10, 1986) and 65 FR 69673, 69674 (November 20,
2000).
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Agencies generally have inherent authority to reconsider their
prior actions. Nothing in CAA section 209(b) indicates Congressional
intent to remove that authority with respect to waivers that it has
previously granted. The text, structure, and context of CAA section
209(b) support EPA's interpretation that it has this authority. And no
cognizable reliance interests have accrued sufficient to foreclose
EPA's ability to exercise this authority here.
In considering EPA's authority to withdraw a waiver, it is clear
that EPA has authority to review and grant California's applications
for a waiver based on its evaluation of the enumerated criteria in CAA
section 209(b). In this action, we affirm the Agency's proposed view
that the absence of explicit language with regard to withdrawal of a
waiver does not foreclose agency reconsideration and withdrawal of a
waiver.
As explained at proposal, California's ability to obtain a waiver
under CAA section 209(b)(1) in the first instance is not unlimited.
Specifically, CAA section 209(b)(1) provides that ``no such waiver will
be granted'' if the Administrator finds any of the following: ``(A)
[California's] determination [that its standards in the aggregate will
be at least as protective] is arbitrary and capricious, (B)
[California] does not need such State standards to meet compelling and
extraordinary conditions, or (C) such State standards and accompanying
enforcement procedures are not consistent with section [202(a)].'' CAA
section 209(b)(1)(A)-(C), 42 U.S.C. 7543(b)(1)(A)-(C) (emphasis added).
CAA Section 209(b)(1) is therefore, premised on EPA review and grant of
a waiver prior to California's enforcement of vehicle and engine
standards unless certain enumerated criteria are met.
Congress could have simply carved out an exemption from preemption
under CAA section 209(b)(1), similar to the exemption it created in CAA
section 211(c)(4)(B) for California fuel controls and prohibitions.
Under CAA section 211(c)(4)(A), states and political subdivisions are
preempted from prescribing or attempting ``to enforce, for purposes of
motor vehicle emission control, any control or prohibition, respecting
any characteristic or component of a fuel or fuel additive in a motor
vehicle or motor vehicle engine'' if EPA has prescribed a control or
prohibition applicable to such characteristic or component of the fuel
or fuel additive under CAA section 211(c)(1). EPA may waive preemption
for states other than California to prescribe and enforce nonidentical
fuel controls or prohibitions subject to certain conditions. Further,
waivers are not required where states adopt state fuel controls or
prohibitions that are identical to federal controls or for California
to adopt fuel controls and prohibitions. CAA sections 211(c)(4)(A)(ii)
and 211(c)(4)(B). This stands in stark contrast to CAA section 209(b),
which requires EPA to make a judgment about California's request for a
waiver of preemption.\217\ Notably, CAA section 211(c)(4)(B) also
cross-references CAA section 209(b)(1): ``(B) Any State for which
application of section 7543(a) of this title has at any time been
waived under section 7543(b) \218\ of this title may at any time
[[Page 51332]]
prescribe and enforce, for the purpose of motor vehicle emission
control, a control or prohibition respecting any fuel or fuel
additive.'' CAA section 211(c)(4)(B).
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\217\ ``Noteworthy is the fact that under the terms of the Act,
EPA approval of California fuel regulations is not required. See Act
section 211(c)(4)(B), 42 U.S.C. 7545(c)(4)(B).'' (Emphasis in
original.) Motor Vehicle Mfrs. Ass'n v. NYS Dep. of Envt'l
Conservation, 17 F.3d 521, 527 (2d Cir. 1994).
\218\ CAA section 211(c)(4)(B), 42 U.S.C. 7545(c)(4)(B). This
provision does not identify California by name. Rather, it
references CAA section 209(b), which applies on its face to ``any
State which has adopted standards (other than crankcase emission
standards) for the control of emissions from new motor vehicles or
new motor vehicle engines prior to March 30, 1966.'' California is
the only State that meets this requirement. See S. Rep. No. 90-403
at 632 (1967).
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Under the third waiver prong, CAA section 209(b)(1)(C), for
example, EPA is to review the consistency of California's standards
with CAA section 202(a), a provision of the Clean Air Act that EPA
solely implements.\219\ CAA Section 202(a) provides in relevant part
that standards promulgated under this section ``shall take effect after
such period as the Administrator finds necessary to permit the
development and application of the requisite technology, giving
appropriate consideration to the cost of compliance within such
period.''
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\219\ EPA has explained that California's standards are not
consistent with CAA section 202(a) if there is inadequate lead time
to permit the development of technology necessary to meet those
requirements, given appropriate consideration to the cost of
compliance within that time. California's accompanying enforcement
procedures would also be inconsistent with CAA section 202(a) if the
Federal and California test procedures were inconsistent.
Legislative history indicates that under CAA section 209(b)(1)(C),
EPA is not to grant a waiver if it finds that there is: ``Inadequate
time to permit the development of the necessary technology given the
cost of compliance within that time period.'' H. Rep. No. 728, 90th
Cong., 1st Sess. 21 (1967); ``That California standards are not
consistent with the intent of section 202(a) of the Act, including
economic practicability and technological feasibility.'' S. Rep. No.
403, 90th Cong. 1st Sess. 32 (1967).
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In tying the third waiver prong to CAA section 202(a), Congress
gave a clear indication that, in determining whether to grant a waiver
request, EPA is to engage in a review that involves a considerable
degree of future prediction, due to the expressly future-oriented terms
and function of CAA section 202(a).\220\ In turn, where circumstances
arise that suggest that such predictions may have been inaccurate, it
necessarily follows that EPA has authority to revisit those predictions
with regard to rules promulgated under CAA section 202(a), the
requirements of that section, and their relation to the California
standards at issue in a waiver request, and, on review, withdraw a
previously granted waiver where those predictions proved to be
inaccurate.
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\220\ There is another textual indication that EPA's grant of a
waiver is not limited to a snapshot in time, with the Agency having
no authority to ever revisit, reconsider, and, where appropriate,
modify or withdraw waivers that it has previously granted. CAA
section 209(b) provides authority to waive the preemptive provision
of CAA section 209(a). CAA section 209(a) forbids states from
``adop[ting] or attempt[ing] to enforce'' vehicle emission
standards; so states cannot do so without or beyond the scope of a
waiver. EPA must presume that ``attempt to enforce'' is not
surplusage; it must mean something, and its potential meanings all
suggest some ability on EPA's part to consider actions on the
state's part separate from the state's ``adopt[ion]'' of statutory
or regulatory provisions and submission to EPA of a waiver request
for those provisions. An ``attempt to enforce'' could potentially
mean either a state's attempt to de facto control emissions without
having de jure codified emissions control requirements, or it could
refer to a state's enforcement actions under a program that it has
already ``adopt[ed].'' Under either scenario, the prohibition on
``attempt[ing] to enforce'' envisions state activity outside the
scope of what can be determined by EPA from the face of a waiver
submission. The prohibited activity is not limited to that which can
be subject to a snapshot, one-time-only waiver application, which is
further support for the conclusion that EPA has authority to
reconsider its action on such applications in light of activity
later in time than or outside the authorized scope of a waiver once
granted.
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Under CAA section 202(a), standards are often technology-forcing
and thus involve predictions on the part of EPA with regard to future
trends in technological and economic factors. This calls for
``substantial room for deference to the EPA's expertise in projecting
the likely course of development.'' Natural Resources Defense Council
v. EPA (NRDC), 655 F.2d 318, 331 (D.C. Cir. 1981) (upholding EPA's lead
time projections for emerging technologies as reasonable). The D.C.
Circuit has recognized that EPA might modify standards ``if the actual
future course of technology diverges from expectation.'' Id. at 329. It
cannot be that EPA has the inherent authority to revisit and revise its
own determinations under CAA section 202(a), but it lacks authority to
revisit those same determinations under CAA section 209(b).\221\
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\221\ According to one commenter, ``it would be very odd if
Sec. 209(b) waivers were a one-way ratchet that could be granted
but never rescinded. . . . For example, it would run contrary to the
statutory scheme to require EPA to leave a waiver in place even
after the compelling and extraordinary conditions that justified the
waiver are fully addressed.'' Comments of the Alliance of Automobile
Manufacturers at 182. EPA agrees.
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Thus, the structure of the statute--where State standards may only
be granted a waiver under CAA section 209(b) to the extent that they
are consistent with CAA section 202(a)--confirms that EPA has inherent
authority to reconsider its prior determination that a request for a
waiver for California standards met the criteria of CAA section 209(b).
This renders untenable the stance taken by some commenters that EPA is
somehow precluded from conducting a subsequent review and withdrawing a
waiver even when it becomes aware that its initial predictions in this
regard have proven inaccurate.
Further, as discussed in the SAFE proposal, the legislative history
of CAA section 209(b) confirms that Congress intended EPA's authority
under CAA section 209(b) to include the authority to withdraw a
previously granted waiver under appropriate circumstances. 83 FR 43242-
43243. See S. Rep. No. 50-403, at 34 (1967) (``Implicit in this
provision is the right of the [Administrator] to withdraw the waiver at
any time [if] after notice and an opportunity for public hearing he
finds that the State of California no longer complies with the
conditions of the waiver.'').
Some commenters that oppose the proposed withdrawal of the waiver
concede that the agency may review California's waiver applications
under the third waiver prong but then argue that such agency review is
a ``narrow one.'' \222\ Under CAA Section 209, they contend, grants
California ``maximum authority'' to set engine and vehicle standards.
Commenters' objection to the instant withdrawal therefore appears to be
grounded in some belief that CAA section 209(b) calls for complete
deference to California. This view is erroneous. EPA has in fact
previously initiated reconsideration under the third waiver prong, CAA
section 209(b)(1)(C), in order to ``vacate that portion of the waiver
previously granted under section 209(b)'' in response to CARB's post
waiver modification for previously waived standards. 47 FR 7309. In
that reconsideration action, EPA affirmed the grant of a waiver in the
absence of ``findings necessary to revoke California's waiver of
Federal preemption for its motorcycle fill-pipe and fuel tank opening
regulations.'' 43 FR 7310. Additionally, EPA has explained that
reconsideration will be initiated where leadtime concerns arise after
the grant of an initial waiver. ``If California's leadtime projections
later prove to have been overly optimistic, the manufacturer can ask
that California reconsider its standard, if they are unsuccessful in
securing such relief, the
[[Page 51333]]
manufacturers could petition EPA to reconsider the waiver.'' 49 FR
18895, 18896 n.104. Further, EPA has in the past repeatedly denied
portions of several waiver requests.\223\ EPA has also historically
deferred or limited the terms of its grant of aspects of some waiver
requests as a means of ensuring consistency with CAA section
202(a).\224\ It is precisely these kinds of EPA actions that have
forestalled withdrawal of any waiver to date--not any lack of authority
on EPA's part to withdraw. None of the commenters, however, provided
explanations as to why their apparent view of maximum deference to
California is not implicated by EPA's authority to either deny a waiver
request or to modify the terms of a waiver request in the course of
granting one. And EPA's 2009 reversal of its 2008 denial supports, and
demonstrates the long-held nature of, its position that EPA has
authority to reconsider and reverse its actions on waiver
applications.\225\
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\222\ According to several commenters, CAA section 209(b)
contains no express delegation of authority to EPA to withdraw a
waiver, and in proposing to revoke a previous waiver ``EPA has
arrogated to itself power only Congress can exercise.'' Comments of
the Center for Biological Diversity, Conservation Law Foundation,
EarthJustice, Environmental Defense Fund, Environmental Law and
Policy Center, Natural Resources Defense Council, Public Citizen,
Inc., Sierra Club, and Union of Concerned Scientists at 68. One
commenter also argued that either EPA lacks authority to revoke a
previously granted waiver or that any authority to do so is
``limited.'' ``The unique text and structure of this section limits
EPA's authority, contrary to EPA's assertion of open-ended
revocation authority in the proposal.'' Comments of the California
Air Resources Board at 340.
\223\ 38 FR 30136 (November 1, 1973) (denial of waiver for MY
1975 HC and CO standards ``because costs of compliance within the
lead time remaining is excessive.''); 43 FR 998 (January 5, 1978)
(denial of waiver for MY 1978 test procedures due to insufficient
lead time); 40 FR 30311 (July 18, 1975) (denial of waiver due to
insufficient lead time for MY 1977).
\224\ 58 FR 4166 (January 13, 1993) (deferring consideration of
portions of waiver request); 67 FR 54180, 81 n.1 (August 21, 2002)
(granting waiver with certain exceptions).
\225\ In seeking reconsideration of the March 8, 2008 waiver
denial, CARB also noted that ``EPA has the inherent authority to
reconsider its previous waiver denial'' 74 FR 32747.
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At least one commenter argued that this legislative history did not
support the position that EPA has authority to withdraw a previously
granted waiver because the legislative history relates to the original
creation of the waiver provision in the Air Quality Act of 1967,
whereas the Clean Air Act Amendments of 1977 revised language in the
root text of CAA section 209(b)(1). Specifically, Congress in 1977
amended CAA section 209(b)(1) to establish as a prerequisite for the
grant of a waiver that the State determine that its standards ``will
be, in the aggregate, at least as protective of public health and
welfare as applicable Federal standards'' for EPA to issue a waiver,
rather than the original requirement that State standards be ``more
stringent'' than corresponding federal standards.\226\ EPA disagrees
that this amendment was either intended to deprive EPA of authority to
withdraw a previously granted waiver when the Administrator finds
applicable one or more of the three criteria in CAA section 209(b)(1)
under which a waiver is inappropriate, or that the amendment can be
reasonably construed to have had such effect. There is no indication
that the amendment was intended to alter EPA's authority under the
original provision. Nor did the amendment alter the language of the
criteria enumerated in CAA section 209(b). In any event, as previously
discussed above, EPA has initiated reconsideration for purposes of
revoking a waiver since the 1977 CAA amendments. See for example, 47 FR
7306 (Feb. 18, 1982) (Agency reconsideration of grant of waiver for
purposes of withdrawal in response to CARB's post waiver modification
for previously waived standards).
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\226\ The intent of the 1977 amendment was to accommodate
California's particular concern with NOX, which the State
regarded as a more serious threat to public health and welfare than
carbon monoxide. California was eager to establish oxides of
nitrogen standards considerably more stringent than applicable
Federal standards, but technological developments posed the
possibility that emission control devices could not be constructed
to meet both the stringent California oxides of nitrogen standard
and the stringent federal carbon monoxide standard. Motor & Equip.
Mfrs. Ass'n, Inc. v. EPA, 627 F.2d at 1110 n.32. EPA has explained
that the phrase ``in the aggregate'' was specifically aimed at
allowing California to adopt CO standards less stringent than the
corresponding federal standards, while at the same time adopting
more stringent NOX standards, as part of California's
strategy to address ozone problems. California reasoned that a
relaxed CO standard would facilitate the technological feasibility
of more stringent NOX standards. 78 FR 43247.
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Some commenters question whether EPA has any authority at all to
reconsider a previously granted waiver. It is well-settled, however,
that EPA has inherent authority to reconsider, revise, or repeal past
decisions to the extent permitted by law. At proposal, EPA explained
that, although CAA section 209(b)(1) may not expressly communicate that
EPA has authority to reconsider and withdraw a waiver, both the
legislative history of the waiver provision and fundamental principles
of administrative law establish that EPA necessarily possesses that
authority. The authority to reconsider prior agency decisions need not
be rooted in any particular ``magic words'' in statutory text. Subject
to certain limitations, administrative agencies possess inherent
authority to reconsider their decisions. See ConocoPhillips Co. v. EPA,
612 F.3d 822, 832 (5th Cir. 2010) (``Embedded in an agency's power to
make a decision is its power to reconsider that decision.''); Dun &
Bradstreet Corp. Found. v. U.S. Postal Serv., 946 F.2d 189, 193 (2d
Cir. 1991) (``It is widely accepted that an agency may, on its own
initiative, reconsider its interim or even its final decisions,
regardless of whether the applicable statute and agency regulations
expressly provide for such review.''); Mazaleski v. Treusdell, 562 F.2d
701, 720 (D.C. Cir. 1977) (``[A]n agency has the inherent power to
reconsider and change a decision if it does so within a reasonable
period of time.''); Belville Min. Co. v. United States, 999 F.2d 989,
997 (6th Cir. 1993) (``Even where there is no express reconsideration
authority for an agency, however, the general rule is that an agency
has inherent authority to reconsider its decision, provided that
reconsideration occurs within a reasonable time after the first
decision.'').
The commenters' position that EPA does not have any authority to
reconsider either a grant or a denial of a waiver founders in light of
these principles. As explained in the SAFE proposal, 83 FR 43242-43243,
EPA does have that authority, in part because its interpretations of
the statutes it administers ``are not carved in stone.'' Chevron U.S.A.
v. NRDC, 467 U.S. 837, 863 (1984). An agency ``must consider varying
interpretations and the wisdom of its policy on a continuing basis.''
Id. at 863-64. Notably, in response to CARB's request, EPA has
previously reconsidered and reversed a previous waiver denial.\227\
Similarly, in keeping with agency CAA section 209(b)(1) practice, EPA
has reconsidered its previous decision to grant a waiver for portions
of California's motorcycle program in response to a petition for
reconsideration from the motorcycle industry.\228\
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\227\ EPA reconsidered the 2008 GHG waiver denial in response to
CARB's request and granted it upon reconsideration. 72 FR 32744
(July 9, 2009). See also 43 FR 998 (January 5, 1978) (Grant of
reconsideration to address portions of waived California's
motorcycle program that California substantially amended).
\228\ 43 FR 998 (January 5, 1978).
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Other commenters assert that EPA's proposal to withdraw the waiver
is solely based on a change in Presidential administration. There is no
basis for this claim. While EPA noted in the SAFE proposal that the
agency can review and reconsider a prior decision ``in response to . .
. a change in administration,'' National Cable & Telecommunications
Ass'n v. Brand X Internet Services, 545 U.S. 967, 981 (2005), we
further acknowledged that ``the EPA must also be cognizant where it is
changing a prior position and articulate a reasoned basis for the
change.'' FCC v. Fox Television Stations, Inc., 556 U.S. 502, 515
(2009). 83 FR 43242-43243, 43248. In keeping with the proposed waiver
withdrawal, under the second waiver prong, CAA section 209(b)(1)(B), as
discussed below, EPA in this document finalizes a determination that
California does not
[[Page 51334]]
need its GHG and ZEV standards to meet compelling and extraordinary
conditions, within the meaning of those terms as they are used in the
statute, that differs from its determination on the same question made
in the course of granting the ACC program waiver. Additionally, the
agency, in response to a request by automobile manufacturers, who have
consistently expressed reservations over their ability to comply with
MY 2022-2025 GHG standards, is reconsidering standards that are the
compliance mechanism for CARB's MY 2022-2025 GHG standards. This is the
compliance mechanism that California had provided in response to
automobile manufacturers request and support for the waiver of
preemption.
At proposal, EPA noted that California had given public notice that
it was considering amending its ``deemed to comply'' provision to
provide that that provision would be applicable only to vehicles that
meet the standards originally agreed to by California, the federal
government, and automakers in 2012. See 83 FR 43252 n.589. California
finalized that amendment to its regulations after the close of the SAFE
comment period, in late 2018. California more recently, in July 2019,
announced a ``framework'' agreement with certain automakers that
purported to establish a ``nationwide'' standards program different
from both the 2012 Federal standards and from the California program
for which EPA granted the January 2013 waiver. These actions on
California's part, while not proposed as bases for waiver withdrawal in
the August 2018 SAFE proposal, as those actions had not yet transpired
at the time of proposal, and while not necessary for the finalization
of this action, do provide further support for this action (although
EPA does not view them as necessary predicates for this action and
would be taking this action even in their absence).
Thus, contrary to some commenters' assertions, reconsideration of
the grant of the waiver, and EPA's proposal to withdraw the waiver, was
not solely motivated by a change in Presidential administration. The
policy, technical, and legal considerations discussed in the proposal
and in this final action provide the rationale for EPA's actions here.
It is therefore distinguishable from the instance where, for example,
an agency undertook reconsideration subsequent to a change in
administration because ``the withdrawn decision was doubtful in light
of changing policies.'' Coteau Properties Co. v. DOI, 53 F.3d 1466,
1479 (8th Cir. 1995).
Further, as earlier noted, California has now entered into a
voluntary agreement with at least four automobile manufacturers that
amongst other things, requires the automobile manufacturers to refrain
from challenging California's GHG and ZEV programs, and provides that
California will accept automobile manufacturer compliance with a less
stringent standard than either the California program that was the
subject of the 2013 waiver or the Federal standards as promulgated in
2012.\229\ This agreement appears to materially depart from the
existing grant of waiver for MY 2021-2025 GHG standards, is in tension
with California's above-mentioned amendment of the ``deemed to comply''
provision, and raises an additional reason to question whether
California ``needs'' their existing standards within the meaning of CAA
section 209(b)(1)(B), given that California has announced it is
proceeding to create a new ``voluntary'' program that would relax the
stringency of some aspects of those standards. That is to say,
California's apparent weakening of its program as it was originally
submitted for waiver calls into question whether it needs that program.
EPA believes that this provides additional support for its conclusion,
as set forth in subsections III.B and III.D, both that it has authority
to withdraw its grant of the waiver and that California does not in
fact need these waived standards to meet ``compelling and extraordinary
conditions,'' CAA section 209(b)(1)(B), if the State is itself already
proceeding to allow departures from those waived standards.\230\ EPA
further believes that California cannot claim reliance interests when
it is undertaking steps to alter the status quo.
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\229\ https://www.gov.ca.gov/2019/07/25/california-and-major-automakers-reach-groundbreaking-framework-agreement-on-clean-emission-standards/.
\230\ Again, neither California's late 2018 amendment to its
``deemed to comply'' provision, nor its July 2019 announcement of a
new ``framework,'' are necessary bases for the action EPA takes in
this document; instead, they provide further support for that
action.
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In short, the text, structure, and history of CAA section 209(b)(1)
support EPA's authority to withdraw previously granted waivers.\231\ At
the same time, nothing in CAA section 209(b)(1) can reasonably be read
to preclude the agency from withdrawing a previously issued waiver
under appropriate circumstances. EPA is not persuaded by commenters'
assertions to the contrary. In this action, EPA affirms the position
that the scope of review for California waivers under CAA section
209(b)(1) includes both a pre-grant review and, where appropriate,
post-grant review of an approved waiver; that post-grant review may, in
appropriate circumstances, result in a withdrawal of a prior waiver. A
withdrawal action could be premised on any one of the three findings in
CAA section 209(b)(1)(A)-(C) that render a waiver unavailable.
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\231\ In 2009, EPA reconsidered the 2008 GHG waiver denial at
CARB's request and granted it upon reconsideration. 74 FR 32744. EPA
noted the authority to ``withdraw a waiver in the future if
circumstances make such action appropriate.'' See 74 FR 32780 n.222;
see also id. at 32752-32753 n.50 (citing 50 S. Rep. No. 403, at 33-
34).
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EPA also disagrees with some commenters' assertions that ostensible
reliance interests foreclose withdrawal of the waiver for MY 2021-2025
GHG and ZEV standards. According to these commenters, ``California, and
the section 177 states that have elected to adopt those standards as
their own have incurred reliance interests ultimately flowing from
those standards. For instance, California has incurred reliance
interests because it is mandated to achieve an aggressive GHG emissions
reduction target for 2030.'' \232\ They further state: ``[b]ut EPA
provides no justification for applying that change in policy
retroactively to upend a five-year-old decision to which substantial
reliance interests have attached.'' (Emphasis in original).\233\
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\232\ Comments of CARB at 83.
\233\ Comments of States of California, Connecticut, Delaware,
Hawaii, Iowa, Illinois, Maine, Maryland, Minnesota, New Jersey, New
Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont and
Washington, the Commonwealth of Massachusetts, Pennsylvania and
Virginia, the District of Columbia, and the Cities of Los Angeles,
New York, Oakland, San Francisco and San Jose at 123; Comments of
CARB at 352.
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The federal GHG standards that EPA promulgated in 2012 included a
commitment to conduct and complete a Mid-Term Evaluation (MTE) of the
GHG standards for MY 2022-2025, given the lengthy phase-in compliance
period, EPA projections of control technology availability or
feasibility for MY 2021-2025, and the fact that EPA promulgated those
standards in a joint action with NHTSA, where NHTSA was acting under a
statute which limited its promulgation of fuel economy standards to
periods of five years.\234\ See NRDC,
[[Page 51335]]
655 F.2d at 329 (upholding EPA's lead time projections for emerging
technologies as reasonable, noting a longer lead time tends to ``give[
] the agency greater leeway to modify its standards if the actual
future course of technology diverges from expectation.''). The 2012
rulemaking also established the GHG standards for MY 2021-2025 that are
the subject of the ``deemed to comply'' provision. (i.e., California
allowed automobile manufacturers to demonstrate compliance with
California's GHG standards by complying with EPA's GHG standards). The
MTE construct required EPA to issue a Final Determination by April 1,
2018 regarding whether the GHG standards for MY 2022-2025 remained
appropriate under CAA section 202(a).\235\ Specifically, the MTE would,
amongst other things, assess the relevant factors pertinent to setting
standards under CAA section 202(a), such as the feasibility and
practicability of the standards, costs to vehicle manufacturers and
consumers, impacts on the automobile industry, emissions impacts, and
safety impacts. In comments during the 2012 national GHG rulemaking,
automakers supported the MTE, and several expressly predicated their
support of the GHG standards for MY 2022-2025 on the MTE.\236\ In the
waiver action, EPA reiterated its commitment to the MTE in light of
these considerations.\237\
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\234\ 40 CFR 86.1818-12(h). 77 FR 62624 (October 15, 2012). EPA
notes in this regard that the Supreme Court in Massachusetts v. EPA,
in rejecting the position that greenhouse gases are not air
pollutants under the general definition of that term in CAA section
302 because, if they were, EPA's regulations of GHG emissions from
the motor vehicle fleet could intrude on DOT's fuel economy
authority, opined that ``[t]he two obligations may overlap, but
there is no reason to think the two agencies cannot both administer
their obligations and yet avoid inconsistency.'' 549 U.S. 497, 532
(2007). In order for the two agencies to do so, they needed to take
account of the fact that DOT's fuel-economy authority faces temporal
constraints that EPA's emissions authority does not. They did so
through the MTE, and the MTE mechanism provided notice to all
interested parties that EPA's 2012 federal standards under CAA
section 202(a), and EPA's January 2013 waiver grounded in part on a
finding that the State provisions subject to the waiver were
compatible with CAA section 202(a), would be subject to review and
possibly revision within a few years of the waiver grant. Under
these circumstances, no reliance interests accrued sufficient to
foreclose EPA's authority to reconsider and withdraw the waiver.
\235\ The MTE process also called for a ``draft Technical
Assessment Report'' (to be prepared no later than November 15,
2017), public comments on that draft report, and public comments on
whether the model year 2022-2025 standards are ``appropriate'' under
CAA section 202(a).
\236\ 77 FR at 62636, 62652, 62785.
\237\ ``EPA is committed to conducting a mid-term evaluation for
MYs 2022-2025 in close coordination with NHTSA and CARB given the
long-time frame in implementing standards out to MY 2025 and given
NHTSA's obligation to conduct a separate rulemaking in order to
establish final standards for vehicles for those years.'' 78 FR
2137.
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In these circumstances, where GHG standards were being set far into
the future with an explicit commitment to revisit them, where
California agreed to deem compliance with certain federal GHG standards
to constitute compliance with California standards, and where all
parties were provided ample notice that EPA would be revisiting federal
standards and, accordingly, the waiver granted for a program that
acceded to those standards through the ``deemed to comply'' provision,
neither the State of California nor other parties (such as automakers)
have reasonable reliance interests sufficient to foreclose the
extension of federal standards to California. Likewise, under CAA
section 177, even though States other than California, under certain
circumstances and conditions, may ``adopt and enforce'' standards that
are ``identical to the California standards for which EPA has granted a
waiver for such model year,'' given that Title I \238\ does not call
for NAAQs attainment planning as it relates to GHG standards, those
States that may have adopted California's GHG standards and ZEV
standards for certain MYs would also not have any reliance interests as
a result of the grant of the ACC program waiver. As previously noted,
CAA section 177 States also lack reliance interests sufficient to
preclude reconsideration and withdrawal of the waiver both because they
were on notice of the commitment to review the federal standards, as
discussed above.\239\ Relatedly, with the revocation of these standards
in this action there will be no ``standards identical to the California
standards for which a waiver has been granted'' that any state may
adopt and enforce, under CAA section 177(1).\240\ (States may not
``tak[e] any action that has the effect of creating a car different
from those produced to meet either federal or California emission
standards, a so-called `third vehicle.' '' Motor Vehicle Mfrs. Ass'n of
U.S., Inc. v. New York State Dep't of Envtl. Conservation, 17 F.3d 521,
528 (2d Cir. 1994)). California also did not seek approval for MY 2021-
2025 GHG standards in its 2016 SIP approval request. 81 FR 39424, 27-28
(June 16, 2016).
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\238\ Under title I of the Clean Air Act, EPA establishes
national ambient air quality standards (NAAQS) to protect public
health and welfare, and has established such ambient standards for
ozone, carbon monoxide, nitrogen dioxide, sulfur dioxide, lead, and
particulate matter.
\239\ ``This new State authority should not place an undue
burden on vehicle manufacturers who will be required, in any event,
to produce vehicles meeting the California standards for sale in
California.'' H.R. Conf. Rep. No. 95-294, 95th Cong., 1st Sess. 337
(1977).
\240\ A State may not ``make attempt[s] to enforce'' California
standards for which EPA has not waived preemption. Motor Vehicle
Mfrs. Ass'n v. NYS Dep. of Envtl Conservation, 17 F.3d 521, 534 (2d
Cir. 1994).
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As a general matter, ``[w]henever a question concerning
administrative, or judicial, reconsideration arises, two opposing
policies immediately demand recognition: The desirability of finality,
on the one hand, and the public interest in reaching what, ultimately,
appears to be the right result on the other.'' Civil Aeronautics Bd. v.
Delta Air Lines, Inc., 367 U.S. 316, 321-22 (1961). See also
ConocoPhillips, 612 F.3d at 832 (5th Cir. 2010) (``Furthermore,
reconsideration also must occur within a reasonable time after the
decision being reconsidered was made, and notice of the agency's intent
to reconsider must be given to the parties.''); Belville Min. Co. v.
United States, 999 F.2d 989, 997 (6th Cir. 1993) (``Even where there is
no express reconsideration authority for an agency, however, the
general rule is that an agency has inherent authority to reconsider its
decision, provided that reconsideration occurs within a reasonable time
after the first decision.''); Bookman v. United States, 453 F.2d 1263,
1265 (Fed. Cir. 1972) (``[A]bsent contrary legislative intent or other
affirmative evidence, this court will sustain the reconsidered decision
of an agency, as long as the administrative action is conducted within
a short and reasonable time period.'').
For the reasons stated above, there was no ``finality'' in the
federal MY 2021-2025 GHG standards that EPA promulgated in 2012 in the
sense required for cognizable reliance to accrue sufficient to
foreclose EPA's exercise of authority to reconsider and, if
appropriate, withdraw the waiver. Nor is such ``finality'' to be found
in the January 2013 grant of the waiver for California's MY 2021-2025
GHG and ZEV standards. As explained at proposal, in granting the waiver
for the ACC program GHG and ZEV standards, EPA had evaluated certain
compliance flexibilities allowed by California under the third waiver
prong, CAA section 209(b)(1)(C) (consistency with CAA section 202(a)).
Specifically, EPA evaluated California regulations that included an
optional compliance provision (the ``deemed to comply'' provision) that
would allow automobile and engine manufacturers to demonstrate
compliance with CARB's GHG standards for MY 2017-2025 by complying with
applicable national or federal GHG standards. 78 FR 2136. During the
waiver proceedings, most automobile manufacturers either opposed the
grant of the waiver for MY 2021-2025 GHG and ZEV standards as not
consistent with CAA section 202(a) \241\ or premised their support for
[[Page 51336]]
those standards on California's permitting compliance through the
``deemed to comply'' provision.\242\ In comments on the proposed
withdrawal, California did not contest this aspect of the waiver
proceedings. For example, California in its comments on the SAFE
proposal, at page 57, states ``[b]ecause the federal program was
expected to achieve GHG emission reductions that are equivalent to the
California program, CARB modified its LEV III GHG regulation to
continue to allow the `deemed to comply' option beyond model year 2016,
by accepting federal compliance with the EPA standards as sufficient to
demonstrate compliance with California's standards for the 2017 through
2025 model years.'' Additionally, most automobile manufacturers
indicated that they would comply with California's GHG standards
through the ``deemed to comply'' provision. Both California and some
automobile manufacturers also alluded to their expectations that
standards would be revised in the future in light of technological
feasibility and cost considerations surrounding MY 2022-2025 GHG
standards.243 244
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\241\ 78 FR 2132 (manufacturers suggested that EPA should grant
California's waiver request after CARB finalized its regulatory
amendments to allow for a national compliance option; manufacturers
oppose granting the waiver for the ZEV program past the 2017 MY,
asserting that those standards will not be feasible either in
California or in the individual CAA section 177 States given the
status of the infrastructure and the level of consumer demand for
ZEVs; dealers suggest that EPA should not grant California a waiver
for its ZEV and GHG emission standards past MY 2018 and 2021,
respectively, asserting that technical capabilities after that time
are uncertain.).
\242\ ``[T]his national compliance option is integral to the
commitment letters the industry and California signed in July 2011
and to the single national GHG/fuel economy program all stakeholders
sought to achieve.'' 78 FR 2138.
\243\ 78 FR 2128. A waiver ``will remain an important backstop
in the event the national program is weakened or terminated;''
manufacturers note that both the federal and the California GHG
emission standards provide for a comprehensive mid-term evaluation
of the MYs 2022-2025; manufacturers clearly state that ``[a]ny
amendments to California's GHG emission standards made as a result
of the mid-term evaluation will require analysis to determine
whether the amendments fall within the scope of this waiver, or, if
not, whether they qualify for a separate waiver under Section 209(b)
of the Clean Air Act.'' 78 FR 2132. See also, e.g., comments of the
National Automobile Dealers Association, n.43. On March 11, 2013,
the Association of Global Automakers and Alliance of Automobile
Manufacturers filed a petition for reconsideration of the January
2013 waiver grant, requesting that EPA reconsider the decision to
grant a waiver for MYs 2018 through 2025 ZEV standards on
technological feasibility grounds. Petitioners also asked for
consideration of the impact of the travel provision, which they
argue raise technological feasibility issues in CAA section 177
States, as part of the agency's review under the third waiver prong,
CAA section 209(b)(1)(C). EPA continues to evaluate the petition. As
explained below, in this action EPA is not taking final action with
regard to the proposed determinations under the third waiver prong.
Whether and how EPA will respond to the March 2013 petition will be
considered in connection with a potential future final action with
respect to the proposed third prong determinations set forth in the
SAFE proposal.
\244\ Since the grant of the ACC waiver program, engine and
vehicle manufacturers who voiced concerns about the stringency of MY
2021-2025 GHG and ZEV standards during the waiver proceedings have
requested both reconsideration of the grant of the waiver for the
ZEV standards (which is a compliance mechanism for the GHG
standards) and aspects of the national GHG program.
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Regarding whether EPA is foreclosed from reconsidering its January
2013 waver grant due to the passage of time, on January 12, 2017, well
in advance of the April 2018 deadline that it had set for itself, EPA
completed the Mid-Term Evaluation called for under the 2012 national
GHG standards, determining that the MY 2017-2025 GHG standards
promulgated in that rulemaking were appropriate. Automobile
manufacturers, however, petitioned EPA for reconsideration of that
January 2017 determination. In March 2017, EPA granted this petition
for reconsideration. 82 FR 14671 (Mar. 22, 2017). In March 2017
California completed its own Mid-Term Evaluation review, in which it
arrived at different conclusions on technological feasibility and costs
for these standards than those that EPA would later reach.
Subsequently, in April 2018, consistent with the timing specified in
its regulations, EPA revised its finding on the appropriateness of the
federal MY 2022-2025 GHG standards, concluding that those standards
``are not appropriate and, therefore, should be revised.'' \245\ This
finding provided notice of a reasonable possibility that these federal
GHG standards would likely be changing.\246\ In the April 2018 action,
EPA also withdrew the January 2017 finding. 83 FR at 16077. Since then
California has challenged this revised finding; that challenge is
pending in the United States Court of Appeals for the District of
Columbia. California v. EPA, No. 18-1114 (D.C. Cir. argued Sept. 6,
2019). Moreover, California in December 2018 amended the ``deemed to
comply'' provision in its regulations after the publication of the SAFE
proposal, and in July 2019 announced a putative nationwide framework
for vehicle standards, as discussed above.
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\245\ Mid-Term Evaluation of Greenhouse Gas Emissions Standards
for Model Year 2022-2025 Light-Duty Vehicles: Notice; Withdrawal. 83
FR 16077 (Apr. 13, 2018).
\246\ 82 FR 14671 (Mar. 22, 2017).
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These procedural aspects of the federal GHG standards and the grant
of a waiver for California's ACC program are indicative of the absence
of the possibility of reasonable reliance in the ``finality'' of the
waiver, contrary to commenters' assertion of reliance interests. For
instance, as shown above, the engine and vehicle manufacturers have not
only complained about the stringency of MY 2021-2025 GHG and ZEV
standards, but also requested reconsideration of both the waiver as it
relates to the ZEV standards, and the 2017 Mid-Term Evaluation that
addresses the ``deemed to comply'' provision, which California provided
in response to their request. EPA has also initiated joint rulemaking
with NHTSA that proposes amended EPA GHG standards and fuel economy
standards for MY 2021-2026. See, the Safer Affordable Fuel-Efficient
(SAFE) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light
Trucks. 83 FR 42986 (Aug. 24, 2018). As also previously noted,
automobile and engine manufacturers operated under the assumption that
both California and national standards would, or at least could, be
revised.\247\ These circumstances are sufficient to put California and
others on notice that standards were in flux such that they could not
give rise to reasonable reliance interests. Further, CAA section 177
States do not have any reliance interests that are engendered by the
withdrawal of the waiver for the MY 2021-2025 GHG and ZEV standards. As
previously explained, although CAA section 177 allows States other than
California to adopt standards that are promulgated by California and
for which a waiver of preemption is granted by EPA pursuant to CAA
section 209, CAA section 177 States may do so only subject to certain
conditions and circumstances. None of these conditions and
circumstances, however, are at issue in this waiver decision, in light
of EPA's determination that CAA section 177 does not apply to states
seeking to adopt and enforce CARB's GHG standards. As also previously
noted, with the revocation of these standards in this action, there
will be no ``standards identical to the California standards for which
a waiver has been granted'' that any state may adopt and enforce, under
CAA section 177(1).\248\ States may not ``tak[e] any action that has
the effect of creating a car different from those produced to meet
either federal or California emission standards, a so-called `third
vehicle.' '' Motor
[[Page 51337]]
Vehicle Mfrs. Ass'n of U.S., Inc. v. New York State Dep't of Envt'l
Conservation, 17 F.3d 521, 528 (2d Cir. 1994).
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\247\ ``The manufacture of automobiles is a complex matter,
requiring decisions to be made far in advance of their actual
execution. The ability of those engaged in the manufacture of
automobiles to obtain clear and consistent answers concerning
emission controls and standards is of considerable importance so as
to permit economies in production.'' S. Rep. No. 403, 90th Cong., at
730 1st Sess. (1967).
\248\ A State may not ``make attempt[s] to enforce'' California
standards for which EPA has not waived preemption. Motor Vehicle
Mfrs. Ass'n v. NYS Dep. of Envtl Conservation, 17 F.3d 521, 534 (2d
Cir. 1994).
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California's comments argue that EPA cannot revisit its waiver with
respect to the ZEV standards in particular because EPA, in a SIP
approval action, approved ZEV provisions into the State's SIP. Final
CARB Detailed Comments, at 351. But in so doing, EPA noted that
California's GHG provisions were not part of California's SIP
submission.\249\ At the time, EPA explained that ``CARB has expressly
excluded from the August 14, 2015 SIP submittal certain sections or
subsections of California code that have been authorized or waived by
EPA under CAA section 209.'' \250\ Further, in the SAFE proposal, EPA
explained that the proposed withdrawal of the waiver for MY 2021-2025
ZEV standards was premised in part on California's explicit indications
that compliance with those standards formed part of the compliance
mechanism for MY 2021-2025 GHG standards. For instance, at proposal, we
explained ``because the ZEV and GHG standards are closely interrelated,
as demonstrated by the description above of their complex, overlapping
compliance regimes, EPA is proposing to withdraw the waiver of
preemption for ZEV standards under the second and third prongs of
section 209(b)(1).'' 83 FR 43243. California's responses to the SAFE
proposal do not rebut the Agency's views that the ZEV standards for MY
2021-2025 are inextricably interconnected with the design and purpose
of California's overall GHG reduction strategy.\251\ According to
California, for example, CARB's GHG standards for the 2017 through 2025
MYs are designed to respond to California's identified goals of
reducing GHG emissions to 80 percent below 1990 levels by 2050 and in
the near term to reduce GHG levels to 1990 levels by 2020;'' ``In 2009,
CARB staff analyzed pathways to meeting California's long-term 2050 GHG
reduction goals in the light duty vehicle subsector and determined that
ZEVs would need to comprise nearly 100 percent of new vehicle sales
between 2040 and 2050, and commercial markets for ZEVs would need to
launch in the 2015 to 2020 time frame.'' Analysis in support of
comments of the California Air Resources Board on the SAFE proposal,
pg. 54, 59 & 83. EPA reviewed California's SIP submission, including
ZEV measures, as a matter of NAAQS compliance strategy. But in the
2012-2013 CAA section 209(b) waiver proceeding, CARB presented its ZEV
program to EPA solely as a GHG compliance strategy--indeed, CARB
expressly stated that the ZEV program did not confer NAAQS pollutant
benefits. ``There is no criteria emissions benefit from including the
ZEV proposal in terms of vehicle (tank-to-wheel or TTW) emissions.''
CARB ACC waiver request at 15, EPA-HQ-OAR- 2012-0562-0004.\252\
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\249\ 81 FR 39424, 27-28 (June 16, 2016).
\250\ 81 FR 29427-28. ``The excluded provisions pertain to:
Greenhouse Gas (GHG) exhaust emission standards 2009 through 2016
Model Passenger Cars, Light-Duty Trucks, and Medium-Duty Vehicles,
and 2017 and subsequent Model Passenger Cars, Light-Duty Trucks, and
Medium Duty Vehicles.''
\251\ Analysis in support of comments of the California Air
Resources Board on the SAFE proposal, at 342. ``For example, and
relevant here, California's Legislature has established an
aggressive GHG emissions reduction target for 2030.'' ``The ZEV
mandate is a crucial part of this strategy; it `act[s] as the
technology forcing piece of the 2016 Draft TAR program' which is
necessary because `the new vehicle fleet [in California] will need
to be primarily composed of advanced technology vehicles . . . by
2035' in order to meet the State's 2050 GHG goal.'' Id. at 369-70
(Internal citations omitted). ``This increasing ZEV deployment is
critical to achieving the statewide 2030 and 2045 GHG requirements
and 2031 South Coast SIP commitments (the 2016 State SIP Strategy
identified the need for light-duty vehicles to reduce NOX
emissions by over 85 percent by 2031 to meet federal standards).''
Id. at 373.
\252\ CARB in its SAFE proposal comments refers to this as an
``alleged[ ]'' statement, Final Carb Detailed Comments at 351. The
SAFE proposal cited the Waiver Support Document in which CARB made
this statement, 83 FR at 43248 n.580. The statement is directly
quoted above. California's comments on the SAFE proposal do not
contest that California's ACC waiver request expressly disclaimed
criteria pollutant benefits from the ZEV program, nor do they
establish that EPA is foreclosed from revisiting the grant of the
waiver in light of the interpretation of 209(b)(1)(B) adopted below.
EPA notes in this regard that California's approach in its ACC
waiver request differed from the state's approach in its waiver
request for MY 2011 and subsequent heavy-duty tractor-trailer GHG
standards, where California quantified NOX emissions
reductions attributed to GHG standards and explained that they would
contribute to PM and ozone NAAQS attainment. 79 FR 46256, 46257
n.15, 46261, 46262 n.75 (August 7, 2014).
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Similarly, some commenters argued that EPA reconsideration would
constitute impermissible retroactive action, citing Bowen v. Georgetown
Univ. Hosp., 488 U.S. 204 (1988). However, the rulemaking which the
Supreme Court held was impermissibly retroactive in that case had been
proposed in February 1984 and had purported to establish reimbursement
rates effective July 1, 1981. By contrast, here EPA is reconsidering a
previous grant of a waiver of preemption for future model years 2021-
2025.\253\ Reconsideration of aspects of a prior adjudication whose
effects have not yet ripened is not barred by Bowen's proscription on
retroactive rulemaking--otherwise any reconsideration of agency action
would likewise be barred.
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\253\ As explained above, to the extent that NHTSA's final
determination that EPCA preempts State GHG and ZEV programs, the
implications of that determination for prior EPA waivers of such
programs are effective upon the effective date of this joint action.
Separate and apart from that analysis, to the extent that EPA is
withdrawing the waiver based on its determination that the waiver
does not meet the CAA section 209(b)(1)(B) criterion, that
withdrawal is for model years 2021-2025, as proposed in the SAFE
proposal.
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For all these reasons, EPA concludes it has authority under CAA
section 209 to reconsider its prior grant of the ACC waiver and to
withdraw the waiver for MY 2021-2025 GHG and ZEV standards, consistent
with the SAFE proposal.
C. The Effect of Preemption Under the Energy Policy and Conservation
Act (EPCA) on EPA's Previously Granted Waiver Under CAA Section 209(b)
With Regard to California's GHG and ZEV Standards
In the SAFE proposal, EPA explained its historical practice of
reviewing waiver requests under the prism of CAA section 209.
Specifically, EPA has ``historically declined to consider as part of
the waiver process whether California standards are constitutional or
otherwise legal under other Federal statutes apart from the Clean Air
Act.'' 83 FR 42340. See also Motor & Equip. Mfrs. Ass'n, Inc. v. EPA,
627 F.2d 1095, 1115 (D.C. Cir. 1979) (MEMA I) ``[T]he Administrator
operates in a narrowly circumscribed proceeding requiring no broad
policy judgments on constitutionally sensitive matters. Nothing in CAA
section 209 requires him to consider the constitutional ramifications
of the regulations for which California requests a waiver.''). This
historic position was reflected in granting the initial ACC program
waiver where EPA explained: ``Evaluation of whether California's GHG
standards are preempted, either explicitly or implicitly, under [the
Energy Policy and Conservation Act] EPCA, is not among the criteria
listed under section 209(b). EPA may only deny waiver requests based on
the criteria in section 209(b), and inconsistency with EPCA is not one
of those criteria.'' 78 FR 2145. But EPA, in the past, has also
solicited comments on ``whether the Energy Policy and Conservation Act
(EPCA) fuel economy provisions are relevant to EPA's consideration of
the request and to California's authority to implement its vehicle GHG
regulations'' and in response to comments opted to ``take[ ] no
position regarding whether or not California's GHG standards are
preempted under EPCA.'' 74 FR 32744, 32782-83 (July 8, 2008).
[[Page 51338]]
In the January 2013 waiver, EPA stated: ``Evaluation of whether
California's GHG standards are preempted, either explicitly or
implicitly, under EPCA, is not among the criteria listed under section
209(b). EPA may only deny waiver requests based on the criteria in
section 209(b), and inconsistency with EPCA is not one of those
criteria. In considering California's request for a waiver, [EPA]
therefore [has] not considered whether California's standards are
preempted under EPCA.'' 78 FR at 2145.
EPA believes that this January 2013 statement was inappropriately
broad, to the extent it suggested that EPA is categorically forbidden
from ever determining that a waiver is inappropriate due to
consideration of anything other than the ``criteria'' or ``prongs'' at
CAA section 209(b)(1)(B)(A)-(C). The statements quoted above, and EPA's
historical practice of disregarding issues of ``[c]onsistency with
EPCA'' in the context of evaluating California's waiver applications,
were made in the context of EPA acting on its own to administer CAA
section 209(b) in considering such applications. The context here is
different: EPA is undertaking a joint action with NHTSA. In the SAFE
proposal, EPA noted that NHTSA had proposed and could well finalize a
determination that California's GHG and ZEV standards are both
explicitly and implicitly preempted under EPCA.\254\ EPA explained that
such a determination would present a threshold question as to
California's ability to enforce these standards and proposed to
conclude that standards preempted under EPCA cannot be afforded a
waiver of preemption under CAA section 209(b). Unlike the Clean Air
Act, EPCA does not allow for any waiver of its express preemption
provision. EPCA contains no language that can be read to allow States
to either prescribe or enforce regulations related to fuel economy
standards. Consistent with this view, at SAFE proposal, NHTSA explained
that, ``when a State establishes a standard related to fuel economy, it
does so in violation of EPCA's preemption statute(sic) and the standard
is therefore void ab initio.'' 83 FR 43235. At the same time, NHTSA
explained that certain other GHG requirements that do not relate to
fuel economy, such as regulations addressing leaking refrigerants,
would likely not be preempted under EPCA. 83 FR 4324-35.
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\254\ 49 U.S.C. 32919(a). See 83 FR 43233.
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EPA does not intend in future waiver proceedings concerning
submissions of California programs in other subject areas to consider
factors outside the statutory criteria in CAA section 209(b)(1)(A)-(C).
But the unique situation in which EPA and NHTSA, coordinating their
actions to avoid inconsistency between their administration of their
respective statutory tasks, address in a joint administrative action
the issues of the preemptive effect of EPCA and its implications for
EPA's waivers, has no readily evident analogue.\255\ EPA will not dodge
this question here.
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\255\ See Massachusetts v. EPA.
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Consistent with the SAFE proposal, NHTSA is finalizing a
determination that EPCA preempts State GHG and ZEV standards. EPA
agrees with commenters that EPA is not the agency that Congress has
tasked with administering and interpreting EPCA. This is especially so
because ``[t]he waiver proceeding produces a forum ill-suited to the
resolution of constitutional claims.'' MEMA I, 627 F.2d at 1115. In the
SAFE proposal, EPA took the position that it is, at a minimum,
reasonable to consider NHTSA's conclusions about the preemptive effect
of EPCA. To the extent that NHTSA has determined that these standards
are void ab initio because EPCA preempts standards that relate to fuel
economy, that determination presents an independent basis for EPA to
consider the validity of the initial grant of a waiver for these
standards, separate and apart from EPA's analysis under the criteria
that invalidate a waiver request. In the context of a joint action in
which our sister agency is determining, and codifying regulatory text
to reflect, that a statute Congress has entrusted it to administer
preempts certain State law, EPA will not disregard that conclusion,
which would place the United States Government in the untenable
position of arguing that one federal agency can resurrect a State
provision that, as another federal agency has concluded and codified,
Congress has expressly preempted and therefore rendered void ab initio.
This conclusion is consistent with the Supreme Court's holding in
Massachusetts v. EPA, 549 U.S. 497 (2007). While this case did not
address EPCA preemption, the Supreme Court anticipated that EPA and
NHTSA would administer their respective authorities in a consistent
manner. (``The two obligations [for NHTSA to set fuel economy standards
under EPCA and for EPA to regulate motor vehicle GHG emissions under
CAA section 202] may overlap, but there is no reason to think the two
agencies cannot both administer their obligations and yet avoid
inconsistency.'' Id. at 532.) Considering that California cannot
enforce standards that are void ab initio, even assuming arguendo that
there existed a valid grant of waiver under CAA section 209(b), NHTSA's
determination renders EPA's prior grant of a waiver for those aspects
of California's regulations that EPCA preempts invalid, null, and void,
and, to the extent that administrative action is necessary on EPA's
part to reflect that state of affairs, EPA hereby withdraws that prior
grant of a waiver on this basis.
EPA's finding that California's GHG and ZEV standards are preempted
as a result of NHTSA's finalized determinations, issued in this joint
action, with respect to EPCA's preemptive effect on State GHG and ZEV
standards, is effective upon the effective date of this joint action.
This finding is separate and apart from findings with respect to EPA's
2013 waiver for CARB's Advanced Clean Car Program as it pertains to its
2021 through 2025 MY relating to GHG and ZEV standards and accompanying
withdrawal of the waiver, pursuant to CAA section 209(b)(1), as set
forth in subsection D below; as a matter of EPA's administration of CAA
section 209(b), without reference to EPCA's preemptive effect as
determined by NHTSA, that withdrawal applies to 2021 through 2025 MY
GHG and ZEV standards, as proposed in the SAFE
proposal.256 257
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\256\ EPA acknowledges that its action in this document may have
implications for certain prior and potential future EPA reviews of
and actions on state SIPs that may incorporate certain aspects of
California's state program, either California's own SIPs or SIPs
from states that have adopted one or more aspects of California's
state program pursuant to CAA section 177. EPA will consider whether
and how to address those implications, to the extent that they
exist, in separate actions. But EPA believes that it is not
necessary to resolve those implications in the course of this action
because the effects of EPCA preemption, as set forth in subsection
III.C, and the proper interpretation and application of CAA section
209(b)(1)(B) to California's GHG and ZEV program, as set forth in
subsection III.D, provide sufficient reason to take this final
action and that the potential implications for prior and future SIP
actions are not a sufficient basis to alter the rationale for or
terms of this final action. The questions of what EPCA means and
what its preemptive effect on certain state regulations is, and what
CAA section 209(b)(1)(B) means and what its limitations on
California's ability to obtain a waiver for its state programs are,
do not depend on whether one or more SIP actions pertaining to NAAQS
attainment and maintenance strategies may directly or indirectly be
affected by the agencies' resolution of those questions.
\257\ In the August 2018 SAFE proposal, EPA solicited comment on
whether one or more of the grounds supporting the proposed
withdrawal of this waiver would also support withdrawing other
waivers that it has previously granted. 83 FR at 43240 n.550. At
this time, EPA does not intend to take action with respect to any
prior waiver grants other than those specified above.
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[[Page 51339]]
D. Reconsideration of January 2013 Waiver and Determination That It Is
Appropriate To Withdraw EPA's January 2013 Waiver of CAA Section 209
Preemption for California's GHG and ZEV Standards for Model Years 2021-
2025, Pursuant to CAA Section 209(b)(1)(B)
1. Interpretation of CAA Section 209(b)(1)(B)
Under CAA section 209(b)(1)(B), EPA cannot grant a waiver request
if EPA finds that California ``does not need such State standards to
meet compelling and extraordinary conditions.'' \258\ In the August
2018 SAFE Proposal, EPA proposed to determine: (1) That it was
reasonable and appropriate to interpret the scope of ``such State
standards'' to authorize a consideration of whether California needs to
have its own GHG vehicle emissions program specifically, rather than
whether California needs any separate vehicle emissions program at all;
and (2) that California did not ``need'' its own GHG and ZEV programs
``to meet compelling and extraordinary conditions'' within the meaning
of the statute. EPA finalizes those determinations in this document.
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\258\ EPA notes that Congress provided no definition of the
phrase ``compelling and extraordinary conditions,'' and that the
phrase appears to be entirely unique, not found anywhere else in the
United States Code.
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EPA notes in this regard that regulation of emissions from new
motor vehicles and new motor vehicle engines under CAA section 202(a)
is triggered by a determination that ``the emission of any air
pollutant from any class or classes of new motor vehicles or new motor
vehicle engines . . . cause, or contribute to, air pollution which may
reasonably be anticipated to endanger public health or welfare.'' This
``endangerment finding,'' which triggers EPA's ability to use the CAA
section 202(a) regulatory authority which CAA section 209(a) preempts
the states from exercising (subject to the availability of a CAA
section 209(b) preemption waiver), links (1) emission of pollutants
from sources; to (2) air pollution; and (3) resulting endangerment to
health and welfare.\259\
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\259\ We therefore, also disagree with CARB's argument that
EPA's reading of CAA section 209(b)(1)(B) ``ignores the statutory
structure--improperly reading Section 209(b) without consideration
of the relationship between Sections 202(a), 209(a) and 209(b).
Specifically, EPA proposes to read Section 209(b) as excluding GHGs
at the same time that it proposes to continue regulating GHGs under
Section 202(a) and presumes, albeit implicitly, that Section 209(a)
preempts other States from regulating GHGs.'' CARB comments at 359.
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Congress enacted waiver authority for California under CAA section
209(b) against the backdrop of traditional, criteria pollutant
environmental problems, under which all three links in this chain bear
a particularized nexus to specific local California features: (1)
Criteria pollutants are emitted from the tailpipes of the California
motor vehicle fleet; (2) those emissions of criteria pollutants
contribute to air pollution by concentrating locally in elevated
ambient levels, which concentration, in turn; (3) results in health and
welfare effects (e.g., from ozone) that are extraordinarily aggravated
in California as compared to other parts of the country, with this
extraordinary situation being attributable to a confluence of
California's peculiar characteristics, e.g., population density,
transportation patterns, wind and ocean currents, temperature
inversions, and topography. In the case of GHG emissions from motor
vehicles, however, this particularized nexus to California's specific
characteristics is missing: (1) The GHG emissions from California cars
are no more relevant to the pollution problem at issue (i.e., climate
change) as it impacts California than are the GHG emissions from cars
being driven in New York, London, Johannesburg, or Tokyo; (2) the
resulting air pollution, i.e., elevated concentrations of GHG in the
upper atmosphere, is globally mixed; (3) the health and welfare effects
of climate change impacts on California are not extraordinary to that
state and to its particular characteristics. Although EPA concludes
that all three of these aspects are lacking in the case of GHG, EPA
further concludes that it is the connection between all the three which
is the original motivation for Congress's creation of the waiver. It is
that original motivation that informs the proper understanding of what
CAA section 209(b)(1)(B) requires.
It is important to note that, while this interpretation of CAA
section 209(b)(1)(B) departs in major respects from the interpretation
applied in the 2009 waiver denial reversal (74 FR 32744) and the 2013
waiver grant (78 FR 2112), it does not simply constitute a re-adoption
of the interpretation applied in the 2008 waiver denial (73 FR 12156).
The 2008 waiver denial applied what it styled as two alternative
approaches to determining whether California ``need[ed]'' its own
vehicle GHG emissions program to address global climate change ``to
meet compelling and extraordinary conditions'': One that looked at the
causal link between California emissions and elevated GHG
concentrations, 73 FR at 12160 (styled as ``the distinct nature of
global pollution as it relates to section 209(b)(1)(B)''), and an
``alternative'' approach that looked at the magnitude of California
climate effects compared to the rest of the nation, 73 FR at 12163-
12164 (``whether the potential impact of climate change resulting from
these emissions and concentrations will differ across geographic areas
and if so whether the likely effects in California amount to compelling
and extraordinary conditions''). The 2009 waiver denial reversal, and
the 2013 waiver grant, in contrast, applied an interpretation which EPA
styled as a return to the ``traditional'' interpretation. Under that
approach, EPA determined that California ``needs'' its own vehicle GHG
emissions program ``to meet compelling and extraordinary conditions,''
a determination that was predicated on what was then EPA's view that,
in the case of such later-adopted programs, satisfaction of the
``need'' criterion of CAA section 209(b)(1)(B) was effectively
automatic, being derivative as it were of the State's having long ago
established a ``need'' to have some form of its own vehicle emissions
program (i.e., its criteria pollutant program for which it had already
received many waivers). In conjunction with this, EPA also pointed to
the effects of climate change on certain criteria pollutant impacts.
See 74 FR at 32746; 78 FR at 2125 et seq.
In this action, EPA adopts an interpretation of CAA section
209(b)(1)(B) that it concludes is more in accord with the text,
structure, purpose, and legislative history of that provision than were
either the position in the 2008 denial (because it does not separate
causal issues and effects issues into alternatives) or the position the
2009 and 2013 grants (because it considers application of CAA section
209(b)(1)(B) to California's need for a GHG/climate program, rather
than subordinating that consideration to California's need for a
criteria pollutant program). Under this interpretation, EPA begins by
noting that only one state, California, is entitled to apply under CAA
section 209(b) for a waiver of the preemptive effect of CAA section
209(a). CAA section 209(a), in turn, provides that (unless a waiver is
issued) no state may regulate new motor vehicle or new motor vehicle
engine emissions. That authority instead is conferred on EPA under CAA
section 202(a), subject to an ``endangerment finding.'' That finding
requires EPA to consider the relationship between [1] sources and their
emissions of pollutants; [2] the pollution to which those emissions
contribute; and [3] resulting impacts on health and welfare. Congress
has
[[Page 51340]]
therefore, in the elements of the endangerment finding, laid out the
terms of what constitutes a pollution problem to provide the
appropriate and requisite predicate for federal regulation. Because CAA
section 209(a) expresses Congress's judgment that vehicle emission
pollution problems are presumptively appropriate only for federal
regulation, with one state afforded the extraordinary treatment under
CAA section 209(b) of being able to apply for a waiver from that
preemption, the best, if not the only, reading of the waiver criterion
under CAA section 209(b)(1)(B) is that it requires a pollution problem
at the local level that corresponds in a state-specific particularized
manner to the type of pollution problem that Congress required as the
predicate for federal regulation.
It is against this backdrop that EPA believes the text of CAA
section 209(b)(1)(B) is best interpreted. Informed by the criteria-
pollutant context in which California's pre-1970 program was enacted,
the legislative history, and the principle, as discussed elsewhere in
this action, that differential treatment of the states by Congress in a
geographically disparate way is extraordinary and is justified only by
a sufficient link between that differential treatment and
particularized local facts, EPA interprets Congress's command in CAA
section 209(b)(1)(B), that it may not grant a preemption waiver for a
California state vehicle emissions program if California does not
``need'' that program ``to meet compelling and extraordinary
conditions,'' to condition the issuance of a waiver on a state-specific
pollution problem that maps on to the elements as laid out in CAA
section 202(a): [1] Emissions of pollutants; [2] resulting air
pollution; [3] health and welfare effects from that resulting air
pollution. EPA concludes that the interpretation of CAA section
209(b)(1)(B) it adopts in this document is the best, if not the only,
reading of that provision.
The Supreme Court's opinion in UARG, 134 S. Ct. 2427 (2014),
instructs that Clean Air Act provisions cannot necessarily rationally
be applied identically to GHG as they are to traditional
pollutants.\260\ For the reasons set forth in this subsection, it is
appropriate to consider the application of the second waiver prong, CAA
section 209(b)(1)(B), to California's ``need'' vel non for its own GHG
and ZEV programs, separate and apart from its ``need'' for its own
criteria pollutant program. EPA determines, based on the application of
the second waiver prong, that California does not ``need'' its own GHG
and ZEV programs ``to meet compelling and extraordinary conditions,''
notwithstanding EPA's historical determinations that California does so
``need'' its own criteria pollutant programs.
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\260\ CARB is wrong to suggest in its comments that EPA's
interpretation in this action of CAA section 209(b)(1)(B) is
inconsistent with the Supreme Court's opinion in Massachusetts v.
EPA. CARB comments at 360. Massachusetts held that the general, CAA-
wide definition of ``air pollutant'' at CAA section 302(g)
encompasses carbon dioxide, and that the text of CAA section
202(a)(1), which provides that EPA shall regulate standards for
emissions of ``any air pollutant'' from new motor vehicles if EPA
makes certain predicate findings (referred to colloquially as
``endangerment findings''), also encompasses carbon dioxide. 549
U.S. at 528. But CAA section 209, as a whole, in its preemption
provision in 209(a), in the waiver provision in 209(b), and most
specifically in the second waiver prong under CAA 209(b)(1)(B), does
not contain the term ``pollutant,'' and EPA does not in this
document interpret section 209 as simply establishing a distinction
between criteria and GHG pollutants. Rather, for the reasons stated
in this document, EPA interprets CAA section 209(b), and its
extraordinary treatment afforded to one state, as requiring, in its
provision in CAA section 209(b)(1)(B) that no waiver shall issue
where a state does not need its own standards ``to meet compelling
and extraordinary conditions,'' as requiring a state-specific,
particularized nexus between the elements of a pollution problem--
i.e., pollutants, pollution, and impacts--as set forth in CAA
section 202(a). CARB asserts that ``[t]here is no reason Section
209(b)(1)(B) should be interpreted more narrowly than Section
202(a),'' CARB comments at 360. One such reason is perfectly
evident: They have different text. Another, as discussed in this
action, is that CAA 209(b)(1)(B) must be read against the principle
that extraordinary treatment afforded one state must be justified by
``extraordinary conditions'' in that state. Here, CARB misses the
mark when it invokes Massachusetts's observation that ``without
regulatory flexibility, changing circumstances and scientific
developments would soon render the Clean Air Act obsolete,'' quoting
549 U.S. at 532. CARB comments at 360. The Supreme Court there was
discussing evolution of scientific understanding of what pollutants
may pose harm. Nothing in Massachusetts suggests that scientific
developments can alter the fundamental relationship between the
States among themselves and vis-[agrave]-vis the federal government.
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Furthermore, the fact that GHG emissions may affect criteria
pollutant concentrations (e.g., increases in ambient temperature are
conducive to ground-level ozone formation) does not satisfy this
requirement for a particularized nexus, because to allow such
attenuated effects to fill in the gaps would eliminate the function of
requiring such a nexus in the first place and would elide the
distinction between national and local pollution problems which EPA
discerns as underlying the text, structure, and purpose of the waiver
provision. EPA departs in this regard from the position it took in the
2009 reversal of the 2008 waiver denial, 74 FR at 32763, where it
determined that ``[t]here is a logical link between the local air
pollution problem of ozone and California's desire to reduce GHGs as
one way to address the adverse impact that climate change may have on
local ozone conditions.''
EPA further notes that elsewhere in the 2009 waiver denial
reversal, EPA took the position that Massachusetts v. EPA supports the
view that, because ``every small reduction is helpful in reducing
[climate] concerns. . . . [A] reduction in domestic automobile
emissions would slow the pace of global emissions increase no matter
what happens with regard to other emissions,'' and therefore
``opponents [of the waiver] have not met their burden of demonstrating
that California's motor vehicle program, or its GHG standards, does not
have a rational relationship to contributing to amelioration of the air
pollution problems in California.'' Id. at 32766 (emphasis added). EPA
now departs from this prior position in several important respects.
First, to the extent that its 2009 waiver denial reversal was
guided by an interpretation of the teachings of Massachusetts under
which any reduction in GHG gives warrant for regulatory action (to
include EPA's waiver approvals), that must now be weighed against the
Supreme Court's subsequent 2014 UARG opinion, which stands for the
proposition that particular CAA provisions will not necessarily apply
identically in the case of GHG emissions as they do to criteria
pollutant emissions.
Second, to the extent that EPA's 2009 waiver denial reversal framed
the question under CAA section 209(b)(1)(B) as whether there is a
``rational relationship'' between California's programs and
California's air pollution problems, that conflated the ``arbitrary and
capricious'' test in CAA section 209(b)(1)(A) with the unique and
distinct term ``need[ed] to meet compelling and extraordinary
conditions'' in CAA section 209(b)(1)(B); EPA's position in this
document gives that term a distinct and appropriate meaning and
application.
Third, whereas the 2009 waiver denial reversal also noted in this
passage that ``there is some evidence in the record that proffers a
specific level of reduction in temperature resulting from California's
regulations,'' this action notes elsewhere that the 2012 joint rule
record reflected that even standards much more stringent than either
the 2012 Federal standards or California's ACC program would only
reduce global temperature by 0.02 degrees Celsius in 2100. As discussed
elsewhere in this action, EPA concludes that this does not constitute a
showing
[[Page 51341]]
that California ``needs'' its standards to ``meet'' climate change,
separate from the question whether climate change and its impacts on
California constitute ``compelling and extraordinary conditions''
within the meaning of the statute. Further, the claim by some
commenters that ``incremental progress is progress nonetheless'' does
not meaningfully address the reality that the waiver would result in an
indistinguishable change in global temperatures and, based on
geographic variability and measurement sensitivity, likely no change in
temperatures or physical impacts resulting from anthropogenic climate
change in California.
EPA proposed to determine that the balance of textual, contextual,
structural, and legislative history evidence supports the conclusion
that the statute is ambiguous in one particular respect: Whether CAA
section 209(b)(1)(B) refers to an individual standard or the California
standards as a whole when referring to the Administrator's review of
state standards submitted for a waiver, to determine whether the state
``needs such State standards to meet compelling and extraordinary
conditions.'' We explained that ``such State standards'' in CAA section
209(b)(1)(B) is ambiguous with respect to the scope of EPA's analysis.
For example, it is unclear whether EPA is meant to evaluate either the
standard or standards at issue in the waiver request or all of
California's standards in the aggregate. We also explained that CAA
section 209(b)(1)(B) does not specifically employ terms that could only
be construed as calling for a standard-by-standard analysis or each
individual standard. For example, it does not contain phrases such as
``each State standard'' or ``the State standard.'' Nor does the use of
the plural term ``standards'' definitively answer the question of the
proper scope of EPA's analysis, given that the variation in the use of
singular and plural form of a word in the same law is often
insignificant and a given waiver request typically encompasses multiple
``standards.'' Thus, we explained that while it is clear that ``such
State standards'' refers at least to all of the standards that are the
subject of the particular waiver request before the Administrator, that
phrase could reasonably be considered as referring either to the
standards in the entire California program, the program for similar
vehicles, or the particular standards for which California is
requesting a waiver under the pending request.\261\
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\261\ California suggests in its comments that EPA is
``logically inconsistent'' in that it said at proposal, 83 FR at
43246, that the CAA section 209(b)(1)(B) phrase ``such State
standards'' ``refers at least to all of the standards that are the
subject of the particular waiver request before the Administrator,''
while at the same time proposing to reconsider and withdraw the
January 2013 grant of a waiver with respect to some, but not all, of
the components of the ACC program (i.e., with respect to GHG and
ZEV, but not LEV). EPA disagrees that this is inconsistent. The
question of how to interpret ``such state standards'' refers to the
determination of what the total set of standards is with regard to
which EPA will consider whether California ``needs'' those standards
``to meet compelling and extraordinary conditions.'' It is
reasonable to assign that total set at the level of the waiver-
request package before the Agency, rather than all the state-
specific emission standards that California has ever adopted. If the
consideration reveals that, within that set, California does not
need particular subsets ``to meet compelling and extraordinary
conditions''--here, because the GHG and ZEV programs lack a
particularized, California-specific nexus between pollutant,
pollution, and impacts, a rationale that does not apply to the LEV
program, for which EPA did not propose to withdraw the waiver and is
not in this document withdrawing the waiver--that is nothing
unusual. And it is consistent with EPA's prior practice, as
discussed in subsection III.B, of only partially granting aspects
of, in combination with denial or deferral of action on other
aspects of, some previous waivers. The ultimate analysis whether a
waiver is appropriate is not limited to a binary, all-or-nothing
determination.
---------------------------------------------------------------------------
We did explain, however, that there are reasons to doubt that
``such State standards'' is intended to refer to all standards in
California's program, including all standards that it has previously
adopted and obtained waivers for, because this would limit EPA's
ability to consider and act on standards that are the subject of
particular waiver applications, even where that individualized
consideration is reasonable or the only rational approach.
Specifically, given that the term ``extraordinary'' should refer to
circumstances that are specific to California, such as thermal
inversions resulting from local geography and wind patterns, and
primarily responsible for causing the air pollution problems that the
standards are designed to address, standards which address pollution
problems that lack that type of particularized nexus to California are
particularly appropriate candidates for an individualized
consideration. EPA affirms this view as it relates to the review of GHG
standards, given that GHG emissions from in California cars, and their
consequences for California, bear no particular relation to these
California-specific circumstances--i.e., global GHG emissions in the
aggregate are what present problems for California, not California-
specific ones.
The waiver under CAA section 209(b) is a waiver of, and is
logically dependent on and presupposes the existence of, the
prohibition under CAA section 209(a), which forbids (absent a waiver)
any State to ``adopt or attempt to enforce any standard [singular]
relating to the control of emissions from new motor vehicles or new
motor vehicle engines subject to this part.'' States are forbidden from
adopting a standard, singular; California requests waivers seriatim by
submitting a standard or package of standards to EPA; it follows that
EPA considers those submissions as it receives them, individually, not
in the aggregate with all standards for which it has previously granted
waivers. Further, reading the phrase ``such State standards'' as
requiring EPA always and only to consider California's entire program
in the aggregate would limit the application of this waiver prong in a
way that EPA does not believe Congress intended. We explained that,
under the interpretation where EPA is constrained to the aggregate
approach, once EPA had determined that California needed its very first
set of submitted standards to meet extraordinary and compelling
conditions, EPA would never have the discretion to determine that
California did not need any subsequent standards for which it sought a
successive waiver--unless EPA is authorized to consider a later
submission separate from its earlier finding. Moreover, as also
explained at proposal, up until the ACC program waiver request,
California's waiver request involved individual standards or particular
aspects of California's new motor vehicle program. For example, only
GHG standards were at issue in the 2008 GHG waiver request
denial.262 263
---------------------------------------------------------------------------
\262\ 73 FR 12156 (March 6, 2008).
\263\ EPA determines in this document that GHG emissions, with
regard to the lack of a nexus between their State-specific sources
and their State-specific impacts, and California's GHG standard
program, are sufficiently distinct from criteria pollutants and
traditional, criteria pollutant standards, that it is appropriate
for EPA to consider whether California needs its own GHG vehicle
emissions program. EPA does not determine in this document and does
not need to determine today how this determination may affect
subsequent reviews of waiver applications with regard to criteria
pollutant control programs.
---------------------------------------------------------------------------
Several commenters disagreed with our view of ambiguity and the
proposal to construe ``such state standards,'' in the context of our
reconsideration and proposal to withdraw the January 2013 waiver for
California's GHG and ZEV provisions, as applying to those provisions
themselves, rather than California's entire, aggregate program
consisting of all California's motor vehicle emission standards, when
considering whether California needs its
[[Page 51342]]
GHG and ZEV provisions to meet compelling and extraordinary conditions
within the meaning of CAA section 209(b)(1)(B). One commenter argued
that this reading would require EPA to consider the protectiveness of
California's standards by looking at them in the aggregate while also
allowing EPA to consider California's ``need'' on an individual,
standard-by-standard basis. Commenters also argued that EPA's
historical or traditional interpretation was correct. They argued that
EPA could not apply a different interpretation of ``such State
standards'' given that ``such State standards'' in CAA section
209(b)(1)(B) does not relate back to the singular ``any standard'' in
CAA section 209(a). They cast this reading as ``implausible,'' given
that under the rule of last antecedent ``such'' should properly refer
to standards in (b)(1) and not 209(a). We disagree. As explained
earlier above, reading the phrase ``such State standards'' as requiring
EPA always and only to consider California's entire program in the
aggregate would limit the application of this waiver criterion.
Specifically, it would mean that once EPA determines that California
needed its very first set of submitted standards to meet extraordinary
and compelling conditions, EPA would never have the discretion to
determine that California did not need any subsequent standards for
which it sought a successive waiver--unless EPA is authorized to
consider a later submission separate from its earlier finding. Instead,
it is reasonable to read CAA section 209(b) as articulating, first,
that EPA shall consider the standards in the aggregate to determine if
the State's determination that they are sufficiently protective is
arbitrary and capricious (CAA section 209(b)(1)(A)). But, even if this
first criterion for denying a waiver is not triggered, nevertheless,
such a waiver shall not be granted as to such standards that are not
needed to meet compelling and extraordinary conditions, under the
second waiver denial criterion (CAA section 209(b)(1)(B)). Commenters'
argument, in effect, inserts the word ``every'' (or ``all'') into CAA
section 209(b)(1)(B) in between the words ``need'' and ``such.''
Additionally, as shown in further detail in section D.2., below,
the term ``extraordinary'' refers to circumstances that are specific to
California, such as thermal inversions resulting from local geography
and wind patterns, and that are primarily responsible for causing the
air pollution problems that the standard under waiver review is
designed to address. EPA affirms the view that the term
``extraordinary'' refers primarily to factors that tend to produce
higher levels of pollution: Geographical and climatic conditions (like
thermal inversions) that in combination with large numbers and high
concentrations of automobiles, create serious air pollution problems in
California (73 FR 12156, 12159-60).
The text, context, and structure of CAA section 209(b) support
EPA's reasoning that the relevant ``conditions'' are those conditions
present in a particular state and that have a particularized nexus to
emissions in that state. The statute calls for an examination of
whether the ``State'' needs such ``state standards'' in the context of
a prohibition in CAA section 209(a) of a ``state or other political
subdivision'' adopting or attempting to enforce alternative standards.
It would be inconsistent with the overall structure for a state's own
preferred policy approach to addressing national or global--rather than
local and state-specific--``conditions'' to permit a waiver from a
scheme that otherwise establishes a uniform, national policy.\264\
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\264\ Cf. Ford Motor Co. v. EPA, 606 F.2d 1293, 1301-02 (D.C.
Cir. 1979) (``Ford is asking this court to declare that Congress
intended to make standards adopted by California for its own
particular problems, and never substantively reviewed for stringency
or national protectiveness by federal officials, an option which
auto manufacturers can choose in the rest of the country as an
alternative to compliance with the federal standards which Congress
determined are in the best interests of the nation. We find this
reading to be wholly implausible.''). See also id. at 1303 (``It was
clearly the intent of the Act that that determination focus on local
air quality problems . . . that may differ substantially from those
in other parts of the nation.'').
---------------------------------------------------------------------------
Notably, pertinent legislative history supports this view of the
text and structure of 209(b), insofar as it refers to California's
``peculiar local conditions'' and ``unique problems.'' S. Rep. No. 403,
90th Cong. 1st Sess., at 32 (1967). This legislative history also
indicates that California is to demonstrate ``compelling and
extraordinary circumstances sufficiently different from the nation as a
whole to justify standards on automobile emissions which may, from time
to time, need to be more stringent than national standards.'' Id. EPA
views this as evidence of Congressional intent that separate standards
in California are to be justified by a showing of circumstances in
California that are different from circumstances in the country at
large. Additionally, EPA views this legislative history as
demonstrating that Congress did not intend for CAA section 209(b)(1)(B)
to be based on the need for California to enact separate standards that
address pollution problems of a more national or global nature.
Relevant legislative history also ``indicates that Congress allowed
waivers of preemption for California motor vehicle standards based on
the particular effects of local conditions in California on the air
pollution problems in California.'' Congress discussed ``the unique
problems faced in California as a result of its climate and
topography.'' H.R. Rep. No. 728, 90th Cong. 1st Sess., at 21 (1967).
See also Statement of Cong. Holifield (CA), 113 Cong. Rec. 30942-43
(1967). Congress also noted the large effect of local vehicle pollution
on such local problems. See, e.g., Statement of Cong. Bell (CA) 113
Cong. Rec. 30946. As explained at proposal, Congress focus was on
California's ozone problem, which is especially affected by local
conditions and local pollution. See Statement of Cong. Smith (CA) 113
Cong. Rec. 30940-41 (1967); Statement of Cong. Holifield (CA), id., at
30942. See also, MEMA I, 627 F.2d at 1109 (noting the discussion of
California's ``peculiar local conditions'' in the legislative history).
In sum and as explained at proposal, conditions that are similar on a
global scale are not ``extraordinary,'' especially where
``extraordinary'' conditions are a predicate for a local deviation from
national standards, under CAA section 209(b). 83 FR 43247.
As further explained in section D2., below, GHG is a globally
distributed pollutant with environmental effects that are different
from emissions of criteria pollutants. For example, GHG emissions from
the California vehicle fleet bear no more relation to GHG emissions in
California than fleet in other parts of the country. As also explained
in the SAFE proposal, EPA believes that the GHG and ZEV standards are
standards that would not meaningfully address global air pollution
problems posed by GHG emissions, in contrast to local or regional air
pollution problem with causal ties to conditions in California.
Additionally, the impacts of California vehicles' GHG emissions on
California are mediated through the context of the global mixture of
elevated levels of GHG in the upper atmosphere. As also shown below,
EPA finds that while potential conditions in California related to
global climate change could be substantial, they are not sufficiently
different from the potential conditions in the nation as a whole to
justify separate state standards under CAA section
[[Page 51343]]
209(b)(1)(B).\265\ In this action, EPA is reviewing a waiver for motor
vehicle standards designed to address a global air pollution problem
and its effects, as compared to a local or regional air pollution
problem that has causal ties to conditions in California. EPA must
therefore, review California's GHG standards in light of the fact that
GHG emissions impacts are different from criteria pollutants
themselves, and California must address their need for them as it
relates to conditions in California. In sum, as explained at proposal,
under our reading of ``such state standards'' and ``extraordinary and
compelling conditions,'' EPA will examine California's need for GHG
standards by considering levels of GHG emissions emitted from motor
vehicles in California to determine if they are specific to California
and contribute primarily to environmental effects that are specific to
California. This review, which calls for a showing of a particularized
causal link between the standards under review, emissions in
California, and conditions in California, is similar to agency review
of California's need for standards designed to address criteria
pollutants and is further discussed in section D.2.d, below.\266\
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\265\ See Fourth National Climate Assessment, Chapter 25:
Southwest, available at https://nca2018.globalchange.gov/chapter/25/. See also Intergovernmental Panel on Climate Change (IPCC)
Observed Climate Change Impacts Database, available at https://sedac.ipcc- data.org/ddc/observed_ar5/.
\266\ California argues in its comments that EPA has
inappropriately reduced the scope of waiver ability under CAA
section 209(b) to be narrower than the scope of express preemption
under CAA section 209(a). EPA disagrees. To the extent that CAA
section 209(b)(1)(B), as interpreted and applied here, precludes a
waiver for California's GHG vehicle emissions and ZEV programs, that
effect flows from the text and structure of this statutory section.
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CARB argues that what it characterizes as EPA's reading of
``compelling and extraordinary'' as equivalent to ``unique'' or
``sufficiently different from'' the rest of the country ``is
inconsistent with Section 209(b)(1)(B), other provisions of the Clean
Air Act, and the legislative history.'' CARB also asserts that EPA
``cites no case'' to support this reading. At the same time, CARB
claims that EPA has either interpreted legislative history incorrectly
or relies entirely on legislative history for the 1967 CAA, which does
note California's ``unique problems,'' instead of legislative history
for the 1977 amendments; CARB asserts that the latter legislative
history is more relevant, given that the addition of section 177 in the
1977 CAA meant that Congress did not intend that Section 209(b)(1)(B)
be construed as requiring ``California's problems to be entirely unique
or sufficiently different from those in other States.'' CARB also
contends that EPA is limiting application of CAA section 209(b)(1)(B)
to smog, even though EPA has granted waivers for pollutants that do not
contribute to smog, such as particulate matter. In addition, CARB
maintains that what it characterizes as EPA's reading ``compelling and
extraordinary conditions'' as restricted to ``local'' or ``regional''
pollutants would weaken Congress's intent that California retain its
own regulatory program and continue to lead the nation as a
``laboratory of innovation.'' CARB further argues that EPA provides no
support for this ``geographic distinction,'' while also casting the
reading as ``illusory.'' According to CARB, both local and global
pollution cause compelling and extraordinary conditions, as evidenced
by provisions of the CAA that address long-range transport of emissions
(beyond the state level). In sum, CARB argues that ``compelling and
extraordinary conditions'' is expansive enough to be read as including
GHG emissions and that EPA's ``exacting and unrealistic'' reading can
only be met by ``a rare air pollution problem.'' CARB comments at 360-
365.
EPA disagrees. First, as explained at proposal, the 1977 Amendments
revised CAA section 209(b)(1) in only one material aspect.
Specifically, California is required to determine that standards it
seeks a waiver for will be ``in the aggregate, at least as protective
of public health and welfare than applicable Federal standards,''
rather than the ``more stringent'' standard under 1967 Clean Air Act.
83 FR 43247 n.579. Second, there is relevant legislative history from
the 1977 amendments, which describes EPA's role in reviewing
California's protectiveness determination, under CAA section
209(b)(1)(A), as whether ``the State acted unreasonably in evaluating
the relative risks of various pollutants in light of air quality,
topography, photochemistry and climate in that State.'' This 1977
legislative history further supports a reading requiring a
particularized nexus. H. Rep. No. 294, 95th Cong., 1st Sess. 302
(1977), U.S. C.C.A.N. 1977, p. 1381. Third, in support of the proposed
reading, EPA cited MEMA I as noting the Senate Committee discussion of
California's ``peculiar local conditions'' in 1967 legislative history
for this provision in upholding the grant of a waiver subsequent to the
1977 CAA amendments. . 627 F.2d at 1109, citing S.Rep. No. 403, 90th
Cong., 1st Sess. 33 (1967); see also Ford Motor Co. v. EPA, 606 F.2d
1293,1303 (D.C. Cir. 1979) (``It was clearly the intent of the Act that
that determination focus on local air quality problems . . . that may
differ substantially from those in other parts of the nation.'').
Fourth, EPA's reading of CAA section 209(b)(1)(B) has never been and is
not limited to ``smog''-causing pollutants. Here, CARB's comment
glosses over extensive discussion in the SAFE proposal of the phrase
``compelling and extraordinary'' including, for example, legislative
history indicating that California is to demonstrate ``compelling and
extraordinary circumstances sufficiently different from the nation as a
whole to justify standards on automobile emissions which may, from time
to time, need to be more stringent than national standards.'' 83 FR
23427, citing S. Rep. No. 403, 90th Cong. 1st Sess., at 32 (1967).
Fifth, as shown in greater detail in section III.D, the phrase
``compelling and extraordinary conditions'' qualifies the ``need'' for
California's standards. And in a statute designed to address public
health and welfare, it certainly cannot mean standards that allow a
state to be ``a laboratory for innovation'' in the abstract, without
any connection to a need to address pollution problems. Most notably,
legislative history explains that CAA section 209(b)(1) was is intended
to recognize California's ``unique problems.'' For example, in
originally adopting the provision, the Senate Committee on Public Works
explained that ``California's unique problems and pioneering efforts
justified a waiver of the preemption section to the State of
California.'' S. Rep. No. 403, 90th Cong., 1st Sess. 33 (1967)
(emphasis added); see also 113 Cong. Rec. 30948 (bound ed. Nov.
2,1967), Statement of Representative Harley Staggers, chairman of the
House Interstate and Foreign Commerce Committee (explaining that
``overall national interest required administration of controls on
motor vehicle emissions, with special recognition given by the
Secretary to the unique problems facing California as a result of
numerous thermal inversions that occur within that state because of its
geography and prevailing wind patterns), ; id. at 30950, Remarks of
Rep. Corman (``The uniqueness and the seriousness of California's
problem is evident-more than 90 percent of the smog in our urban area
is caused by automobiles, and in the next 15 years the number of
automobiles in the state will almost double.''). Sixth, while it is
[[Page 51344]]
true that local and regional pollutants can be transported at greater
geographic scales than the state level, the Clean Air Act sets out a
comprehensive scheme for addressing air pollution transported to other
regions; see, e.g., CAA sections 126 and 110(a)(2)(D)(i). The fact that
the Act addresses pollutant transport elsewhere does not expand the
scope of the waiver provision. In contrast, in CAA section 209(b),
Congress set out a waiver of preemption for California to address
automotive pollution that give rise to local and regional air quality
problems. Finally, to the extent CARB casts EPA reading as ``exacting
and unrealistic,'' it mischaracterizes CAA section 209(a) and (b),
which preempts states from adopting and enforcing standards for new
motor vehicles and engines, with CAA section 209(b) allowing for a
waiver of the preemption in 209(a) only if certain enumerated
conditions are met. It is not ``a rare air pollution problem'' that
satisfies the particularized nexus interpretation of CAA section
209(b)(1)(B) that EPA adopts in this document. Rather, it is the all-
too-well understood and longstanding air pollution problem that
California continues to face: Aggravated criteria pollution at the
state and local level.
2. It Is Appropriate To Apply This Criterion to California's GHG
Standards Separately, Rather Than to California's Motor Vehicle Program
as a Whole
Under CAA section 209(b)(1)(B) of the Clean Air Act, the
Administrator may not grant a waiver if he finds that the ``State does
not need such State standards to meet compelling and extraordinary
conditions.'' EPA proposed to find that CARB does not need its own GHG
and ZEV standards to meet compelling and extraordinary conditions in
California, on the grounds that ``compelling and extraordinary
conditions'' mean environmental conditions with causes and effects
particular or unique to, California whereas GHG emissions present
global air pollution problems. Specifically, EPA proposed to determine
that the GHG-related standards are designed to address global air
pollution and its consequences, in contrast to local or regional air
pollution problems with causal ties to conditions in California. EPA
also proposed to find that, while effects related to climate change in
California could be substantial, they are not sufficiently different
from the conditions in the nation as a whole to justify separate State
standards under CAA section 209(b)(1)(B). 83 FR 43248-43250. Lastly,
EPA proposed to find that the State's GHG-related standards would not
have a meaningful impact on the potential conditions related to global
climate change. Because EPA has traditionally interpreted and applied
CAA section 209(b)(1)(B) in a manner that examines whether the
conditions that Congress identified (e.g., topography number of
vehicles, etc.) \267\ still give rise to serious air quality problems
in California, and thus a need for California's own motor vehicle
emission control program, EPA concludes that this causal-link test is
the appropriate basis on which to evaluate California's GHG emission
standards under the second waiver prong, CAA section 209(b)(1)(B).\268\
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\267\ See, e.g., 49 FR 18887, 18890 (May 3, 1984) (waiver
decision discussing legislative history of CAA section 209).
\268\ It is not appropriate for EPA to defer to California and
other outside parties when EPA is interpreting its own statute. By
contrast, EPA does defer to California's policy choices when it
comes to choosing emissions standards that will best address the
serious air quality problems and impacts on public health and
welfare in California--to the extent that the State standards at
issue will actually address pollution and its consequences that are
particular to California. But the question whether the State
regulations at issue actually do meet the statutory criterion of
being necessary ``to meet compelling and extraordinary conditions''
in the meaning of the statute, CAA section 209(b)(1)(B), is one
which EPA must answer. In this regard, EPA notes that it has
previously taken the position that ``the burden of proof [lies] on
the party opposing a waiver,'' and that ``the burden [is] on those
who allege, in effect, that EPA's GHG emission standards are
adequate to California's needs.'' 78 FR at 2117 (Jan. 2013 waiver
grant). EPA notes that this previous discussion is distinguishable
from the current context in two key regards. First, EPA was in 2013
analyzing third parties' opposition to a waiver, rather than
conducting its own analysis of whether a previously granted waiver
was appropriately granted. Second, EPA's change in position in this
document does not constitute an assertion that ``EPA's GHG emission
standards are [or are not] adequate to California's needs'' as a
matter of policy. Rather, EPA is adopting an interpretation of CAA
section 209(b)(1)(B), specifically its provision that no waiver is
appropriate if California does not need standards ``to meet
compelling and extraordinary conditions,'' similar to the
interpretation that it adopted in the 2008 waiver denial but
abandoned in the 2009 and 2013 waiver grants, and applying that
interpretation to determine to withdraw the January 2013 waiver for
California's GHG and ZEV program for model years 2021 through 2025.
Under that interpretation, the question is not whether existing
federal standards are ``adequate to California's needs,'' but
whether California's standards are needed under the meaning of CAA
section 209(b)(1)(B), which, as set forth in this document, requires
a particularized nexus between California-specific pollutant
sources, California-specific pollution contributed to thereby, and
California-specific pollutants impacts caused thereby. Furthermore,
we took comment on burden of proof in the proposal, see 83 FR at
43244 n.567. EPA believes it is not necessary to resolve that issue
in this action as regardless of whether a preponderance of the
evidence or clear and compelling evidence standard is applied, the
Agency concludes that withdrawal of the waiver is appropriate.
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In general, EPA has in the past recognized California's unique
underlying conditions and serious air pollution problems when reviewing
waiver requests.\269\ California, and others that oppose the withdrawal
of the waiver, assert that the relevant inquiry is merely whether
California needs to have some form of a separate State motor vehicle
emissions control program to meet compelling and extraordinary
conditions, not whether any given standard is needed to meet compelling
and extraordinary conditions related to that air pollution problem. On
the other hand, several commenters that support a withdrawal of the
waiver suggest EPA's determination should be based on whether
California needs greenhouse gas standards in particular to meet
compelling and extraordinary conditions, asserting that a proposed set
of standards must be linked to compelling and extraordinary conditions.
These commenters suggest that the Act requires EPA to look at the
particular ``standards'' at issue, not the entire State program.
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\269\ See American Trucking Associations, Inc. v. Environmental
Protection Agency, 600 F.3d 624, 627 (D.C. Cir. 2010) (``With
respect to the statutory language, EPA concluded that `compelling
and extraordinary conditions' refers to the factors that tend to
cause pollution--the `geographical and climate conditions that, when
combined with large numbers and high concentrations of automobiles,
create serious air pollution problems.' The expansive and statutory
language gives California (and in turn EPA) a good deal of
flexibility in assessing California's regulatory needs. We therefore
find no basis to disturb EPA's reasonable interpretation of the
second criterion. See Chevron, USA Inc v. Natural Res. Def. Council,
467 U.S. 837, 842-43.'') (citation omitted).
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EPA determines that it in this context it is appropriate to review
whether California needs its GHG standards to meet compelling and
extraordinary conditions separately from the need for the remainder of
California's new motor vehicle program, which has historically
addressed criteria pollutants with a particular causal link to local
and regional conditions both in the nature and quantity of emissions
and in the particularized local and regional impacts of the pollution
to which those emissions contribute. EPA bases this decision on the
fact that California's GHG standards are designed to address global
climate change problems that are different from the local pollution
conditions and problems that California has addressed previously in its
new motor vehicle program. The climate change problems are different in
terms of the distribution of the pollutants and the effect of local
California factors, including the local effect of motor vehicle
emissions as differentiated from other GHG emissions worldwide on the
GHG concentrations in California. In
[[Page 51345]]
addition, EPA notes that under its traditional interpretation of CAA
section 209(b)(1)(B), where EPA evaluates the need for a separate
California new motor vehicle program, conditions such as the nature of
the air quality problem may change whereby a particular motor vehicle
regulation designed for a specific criteria pollutant is no longer
needed to address a serious air quality problem (e.g., the underlying
air quality problem no longer exists). Therefore, EPA concludes that it
is appropriate to examine the need for GHG standards within
California's mobile source program to ensure that such standard is
linked to local conditions that giving rise to the air pollution
problem, that the air pollution problem is serious and of a local
nature, and that the State standards at issue will meaningfully redress
that local problem.\270\
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\270\ EPA notes in this regard that the position that GHG and
climate are no different from criteria pollutants and criteria air
pollution in terms of applicability of the CAA section 209(b) waiver
regime, and specifically that no particularized nexus between in-
state emissions and in-state impacts is necessary in order to meet
the CAA section 209(b)(1)(B) ``need[ed] . . . to meet compelling and
extraordinary conditions,'' would effectively read the term
``extraordinary'' out of the statute, or reduce it to surplusage
with the term ``compelling.'' Whether GHG emissions and attendant
climate impacts are, in the colloquial sense, compelling or not is
not the relevant question. It is whether they are ``compelling and
extraordinary'' within the reasonably interpreted meaning of that
term in its context here. Inasmuch as that term in its context
requires a particularized nexus between California emissions,
California pollution, and California impacts, they are not.
---------------------------------------------------------------------------
This waiver decision falls within the context of a few instances of
EPA applying the CAA section 209(b)(1)(B) criterion to a California
waiver request for a fundamentally global air pollution problem.\271\
Although EPA's review of this criterion has typically been cursory due
to California needing its motor vehicle emission program due to
fundamental factors leading to local and regional air pollution
problems that were well established at the time of creation of the
waiver provision (as discussed below), it is appropriate in this case
to carefully review the purpose of CAA section 209(b)(1)(B) when
applying it to the unique circumstance of California's regulation of
greenhouse gases. By doing so, EPA gives meaning to Congress's decision
to include this provision in CAA section 209(b).\272\
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\271\ See generally California State Motor Vehicle Pollution
Control Standards; Advanced Clean Car Program; Notice of Decision,
January 9, 2013 Volume 78, Number 6 pp. 2211--2145; California State
Motor Vehicle Pollution Control Standards; Greenhouse Gas Emissions
from 2014 and Subsequent Model Year Medium- and Heavy-Duty Engines
and Vehicles; Notice of Decision; December 29, 2016 Volume 81,
Number 250, pp. 95982-95987; California State Motor Vehicle
Pollution Control Standards; Heavy-Duty Tractor-Trailer Greenhouse
Gas Regulations; Notice of Decision; August 7, 2014 Volume 79,
Number 152 pp. 46256-46265; California State Motor Vehicle Pollution
Control Standards; Within-the-Scope Determination for Amendments to
California's Motor Vehicle Greenhouse Gas Regulations; Notice of
Decision; June 14, 2011 Volume 76, Number 114 pp. 34693-34700;
California State Motor Vehicle Pollution Control Standards; Notice
of Decision Granting a Waiver of Clean Air Act Preemption for
California's 2009 and Subsequent Model Year Greenhouse Gas Emission
Standards for New Motor Vehicles; July 8, 2009 Volume 74, Number 129
pp. 32744-32784; California State Motor Vehicle Pollution Control
Standards; Notice of Decision Denying a Waiver of Clean Air Act
Preemption for California's 2009 and Subsequent Model Year
Greenhouse Gas Emission Standards for New Motor Vehicles; March 6,
2008 Volume 73, Number 45 pp. 12156-12169.
\272\ See United States v. Menashe, 348 US 528, 538-39 (1955)
(courts must give effect to every word, clause, and sentence of a
statute).
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Moreover, because both CAA sections 209(b)(B) and (C) employ the
term ``such state standards,'' it is appropriate for EPA to read the
term consistently between prongs (B) and (C). Under CAA section
209(b)(1)(C) EPA conducts review of standards California has submitted
to EPA for the grant of a waiver to determine if they are consistent
with CAA section 202(a).\273\ It follows then that EPA must read ``such
state standards'' in CAA section 209(b)(1)(B) as a reference to the
same standards in subsection (C).\274\
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\273\ ``Technology exists with which to achieve California's
proposed standards for HC and CO, however, the standards are
inconsistent with Section 202(a) of the Clean Air Act because the
cost of compliance within the lead time remaining is excessive.'' 38
FR 30136 (November 1, 1973). See also 40 FR 30311 (July 18, 1975);
43 FR 998, 1001 (Jan. 5, 1978).
\274\ Under CAA section 177 states may adopt and enforce motor
vehicle emissions standards if ``such standards are identical to the
California standards for which a waiver has been granted.'' See,
e.g., Motor Vehicle Mfrs. Ass'n v. NYS Dep. of Envt'l Conservation,
17 F.3d 521, 532 (2d Cir. 1994). ``Section 177 refers to `standards
relating to control of emissions ... for which a waiver has been
granted.' Id. In enacting Sec. 209(b), which establishes
California's preemption exception, Congress uses the same words as
it did when it allowed California to set its own `standards . . .
for the control of emissions,' provided the EPA approves a waiver
application. Id. Sec. 7543(b)(1). Hence, the most logical reading
of Sec. 177 is that New York may adopt only those standards that,
pursuant to Sec. 209(b), California included in its waiver
application to the EPA.'' (Emphasis in original).
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a. EPA Practice in Previous Waivers
In past waivers that addressed local or regional air pollution, EPA
has interpreted CAA section 209(b)(1)(B) as requiring it to consider
whether California needs a separate motor vehicle program to meet
compelling and extraordinary conditions. Under this approach, EPA does
not consider whether the specific standards at issue are needed to meet
compelling and extraordinary conditions related to that air pollutant.
For example, EPA reviewed this issue in detail with regard to
particulate matter in a 1984 waiver decision.\275\ In that waiver
proceeding, California argued that EPA is restricted to considering
whether California needs to have its own motor vehicle program to meet
compelling and extraordinary conditions, and does not consider whether
any given standard is necessary to meet such conditions. Opponents of
the waiver in that proceeding argued that EPA was to consider whether
California needed these PM standards to meet compelling and
extraordinary conditions related to PM air pollution.
---------------------------------------------------------------------------
\275\ See 49 FR 18887 (May 3, 1984).
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The Administrator agreed with California that it was appropriate to
look at the program as a whole in determining compliance with CAA
section 209(b)(1)(B). One justification of the Administrator was that
many of the concerns with regard to having separate State standards
were based on the manufacturers' worries about having to meet more than
one motor vehicle program in the country, but that once a separate
California program was permitted, it should not be a greater
administrative hindrance to have to meet further standards in
California. The Administrator also justified this decision by noting
that the language of the statute referred to ``such state standards,''
which referred back to the use of the same phrase in the criterion
looking at the protectiveness of the standards in the aggregate. He
also noted that the phrase referred to standards in the plural, not
individual standards. He considered this interpretation to be
consistent with the ability of California to have some standards that
are less stringent than the federal standards, as long as, under CAA
section 209(b)(1)(A), in the aggregate its standards were at least as
protective as the federal standards.
The Administrator further stated that in the legislative history of
CAA section 209, the phrase ``compelling and extraordinary
circumstances'' refers to ``certain general circumstances, unique to
California, primarily responsible for causing its air pollution
problem,'' like the numerous thermal inversions caused by its local
geography and wind patterns. The Administrator also noted that Congress
recognized ``the presence and growth of California's vehicle
population, whose emissions were thought to be responsible for ninety
percent of the air pollution in certain parts of California.'' \276\
EPA reasoned that the term compelling and extraordinary conditions
``does not refer to the levels of pollution directly.'' Instead, the
term refers primarily to the
[[Page 51346]]
confluence of factors that tend to produce higher levels of pollution
of the type particular to California: ``geographical and climatic
conditions (like thermal inversions) that, when combined with large
numbers and high concentrations of automobiles, create serious air
pollution problems.''
---------------------------------------------------------------------------
\276\ Id. at 18890 (emphasis added).
---------------------------------------------------------------------------
The Administrator summarized that the question to be addressed in
the second criterion is whether these ``fundamental conditions'' (i.e.,
the geographical and climate conditions and large motor vehicle
population) that cause air pollution continued to exist, not whether
the air pollution levels for PM were ``compelling and extraordinary,''
nor the extent to which these specific PM standards will address the PM
air pollution problem.
From this it can be seen that EPA's interpretation in the context
of reviewing standards designed to address local or regional air
pollution has looked at the local causes of the air pollution problems:
Geographic and climatic conditions that turn local emissions into air
pollution problems, such as thermal inversions, combined with a large
number of motor vehicles in California emitting in the aggregate large
quantities of emissions. Under the interpretation EPA adopts in this
document, it is the particularized nexus between the emissions from
California vehicles, their contribution to local pollution, and the
extraordinary impacts that that pollution has on California due to
California's specific characteristics, that set California apart from
other areas when Congress adopted this provision.
EPA's review of this criterion has usually been cursory and not in
dispute, as the fundamental factors leading to these traditional
criteria air pollution problems--geography, local climate conditions
(like thermal inversions), significance of the motor vehicle
population--have not changed over time and over different local and
regional air pollutants. These fundamental factors have applied
similarly for all of California's air pollution problems that are local
or regional in nature. California's circumstances of geography,
climate, and motor vehicle population continue to show that it has
compelling and extraordinary conditions leading to such local air
pollution problems related to traditional pollutants.
California's motor vehicle program has historically addressed air
pollution problems that are generally local or regional in nature. The
emission standards have been designed to reduce emissions coming from
local vehicles, in circumstances where these local emissions lead to
air pollution in California that will affect directly the local
population and environment in California. The narrow question in this
waiver proceeding is whether this interpretation is appropriate when
considering motor vehicle standards designed to address a global air
pollution problem and its effects, as compared to a local or regional
air pollution problem that has particular causal ties to conditions in
California.
As EPA observed in the SAFE proposal, the agency has articulated
differing interpretations of CAA section 209(b)(1)(B). Historically,
EPA has interpreted this provision to require that California needs to
have its own separate new motor vehicle program in the aggregate to
meet compelling and extraordinary conditions in California, not whether
the state needs the specific standards under consideration. In 2008, in
contrast, when EPA first considered whether State GHG emission
regulations meet the requirements for a CAA section 209(b) waiver, EPA
determined that the better reading of CAA section 209(b)(1)(B) would be
to consider whether California ``need[s]'' the particular standards at
issue ``to meet compelling and extraordinary conditions,'' and the
agency denied the waiver on these grounds. Then, when EPA reconsidered
that denial in 2009, the agency reverted to the interpretation that it
had previously applied for criteria pollutants and granted the waiver.
EPA concludes that the long and contentious history of this
question, and the recent measures that California has taken even during
the pendency of this administrative action to amend its State
regulations beyond the form in which they were granted the waiver in
2013 and, even more recently, to purport to establish ``voluntary''
programs creating yet a third program distinct both from that for which
CAA preemption was waived in 2013 and the Federal standards promulgated
in 2012 and currently under review by the Federal government, confirm
that extension of CAA section 209(b) waivers to State GHG and ZEV
programs was inappropriate. Such waivers have led to actions by
California increasingly at odds with the clear Congressional design and
intent that national standards would be set by the federal government
with California having an ability to apply for targeted waivers of
preemption to address its own particular problems. EPA therefore views
this interpretation and application of CAA section 209(b)(1)(B) set
forth here as, at minimum, a reasonable one that gives appropriate
meaning and effect to this provision and does not second-guess
California's policy judgment notwithstanding assertions to the
contrary.
b. The Distinct Nature of Global GHG Pollution as It Relates to CAA
Section 209(b)(1)(B)
The air pollution problem at issue here is elevated atmospheric
concentrations of greenhouse gases, and the concern is the impact these
concentrations have on global climate change and the effect of global
climate change on California. In contrast to local or regional air
pollution problems, the atmospheric concentrations of these greenhouse
gases are substantially uniform across the globe, based on their long
atmospheric life and the resulting mixing in the atmosphere. The
factors looked at in the past when considering waiver requests for
State standards addressing criteria pollutants--the geography and
climate of California, and the large motor vehicle population in
California, which were considered the fundamental causes of the air
pollution levels found in California--cannot form the basis of a
meaningful analysis of the causal link between California vehicles' GHG
emissions and climate effects felt in California. The concentration of
greenhouse gases in the upper atmosphere may affect California, but
that concentration is not affected in any particular way by the
geography and climate of California. The long duration of these gases
in the atmosphere means they are well-mixed throughout the global
atmosphere, such that their concentrations over California and the U.S.
are, for all practical purposes, the same as the global average. The
number of motor vehicles in California, while still a notable
percentage of the national total and still a notable source of GHG
emissions in the State, bears no more relation to the levels of
greenhouse gases in the atmosphere over California than any other
comparable source or group of sources of greenhouse gases anywhere in
the world. Emissions of greenhouses gases from California cars do not
generally remain confined within California's local environment (and,
indeed, were they to do so, rather than rise to the upper atmosphere to
become well-mixed with other GHG emissions, those locally located
emissions would not, by definition, contribute to the ``pollution''
that is at issue here). Instead, those GHG emissions from vehicles
operating in California become one part of the global pool of GHG
emissions, with this global pool of emissions leading to a relatively
homogenous concentration of greenhouse gases over the globe. Thus, the
emissions of motor vehicles in
[[Page 51347]]
California do not affect California's air pollution problem in any way
different from emissions from vehicles and other pollution sources all
around the world. Similarly, the emissions from California's cars do
not just affect the atmosphere in California, but in fact become one
part of the global pool of GHG emissions that affect the atmosphere
globally and are distributed throughout the world, resulting in
basically a uniform global atmospheric concentration.
Given the different, and global, nature of the pollution at issue,
EPA determines that the conceptual basis underlying the practice of
considering California's motor vehicle program as a whole (in the
context of criteria emission regulations) does not meaningfully apply
with respect to elevated atmospheric concentrations of GHGs. Therefore,
EPA has considered whether it is appropriate to apply this criterion in
a different manner for this kind of air pollution problem; that is, a
global air pollution problem.
As previously explained, the text and relevant legislative history
of CAA section 209 also supports EPA's decision to examine the
application of the second waiver denial criterion (CAA section
209(b)(1)(B)) with regard to California's GHG and ZEV standards
specifically in the context of global climate change. It indicates that
Congress was moved to allow waivers of preemption for California motor
vehicle standards based on the particular effects of local conditions
in California on the air pollution problems in California. Congress
discussed ``the unique problems faced in California as a result of its
climate and topography.'' H.R. Rep. No. 728, 90th Cong. 1st Sess., at
21 (1967). See also Statement of Cong. Holifield (CA), 113 Cong. Rec.
30942-43 (1967). Congress also noted the large effect of local vehicle
pollution on such local problems. See, e.g., Statement of Rep. Bell
(CA), 113 Cong. Rec. 30946. In particular, Congress focused on
California's ozone problem, which is especially affected by local
conditions and local pollution. See Statement of Rep. Smith (CA), 113
Cong. Rec. 30940-41 (1967); Statement of Rep. Holifield (CA), id. at
30942. See also Motor & Equip. Mfrs. Ass'n, Inc. v. EPA (MEMA), 627 F.
2d 1095, 1109 (D.C. Cir., 1979) (noting the discussion of California's
``peculiar local conditions'' in the legislative history). Congress
clearly did not have in view pollution problems of a more national or
global nature in justifying this provision.\277\ Moreover, ``the [Clean
Air] Act also differentiates between the states, despite our historic
tradition that all the States enjoy equal sovereignty. Distinctions can
be justified in some cases. `The doctrine of the equality of States . .
. does not bar . . . remedies for local evils which have subsequently
appeared.' But a departure from the fundamental principle of equal
sovereignty requires a showing that a statute's disparate geographic
coverage is sufficiently related to the problem that it targets.'' Nw.
Austin Mun. Util. Dist. No. One. v. Holder, 557 U.S. 193, 203 (2009)
(some citations and internal quotation marks omitted) (quoting South
Carolina v. Katzenbach, 383 U.S. 301, 328-29 (1966)) (ellipses and
emphasis added by Northwest Austin Court); see also Katzenbach, 383
U.S. at 334 (``exceptional conditions can justify legislative measures
not otherwise appropriate'') (emphasis added); cf. 42 U.S.C.
7543(b)(1)(B) (``No such waiver shall be granted if the Administrator
finds that . . . . such State does not need such State standards to
meet compelling and extraordinary conditions.'') (emphasis added).
These principles support our conclusion that Congress did not intend
the waiver provision in CAA section 209(b) to be applied to California
measures that address pollution problems of a national or global
nature, as opposed to conditions that are ``extraordinary'' with
respect to California in particular--i.e., those with a particularized
nexus to emissions in California and to topographical or other features
peculiar to California.''
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\277\ In reference to another argument made in the 1984 waiver,
while the administrative costs of a program may not increase
significantly based on the addition of new standards, there is still
cost in the implementation of new standards, particularly in terms
of changes in design necessitated by the new standards. In any case,
this issue does not appear to be relevant to the issue of whether
California needs its standards to meet compelling and extraordinary
conditions.
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c. It Is Appropriate To Apply CAA Section 209(b)(1)(B) Separately to
GHG Standards
EPA concludes that in the context of reviewing California GHG
related standards designed to address global climate change, it is
appropriate to apply the second criterion separately for GHG standards.
The intent of Congress, in enacting CAA section 209(b) and in
particular Congress's decision to have a separate CAA section
209(b)(1)(B), was to require EPA to specifically review whether
California continues to have compelling and extraordinary conditions
and the need for State standards to address those conditions. Thus, EPA
concludes that it is appropriate to review California's GHG standards
separately from the remainder of the State's motor vehicle emission
control program for purposes of CAA section 209(b)(1)(B).
In this context it is appropriate to give meaning to this criterion
by looking at whether the emissions from California motor vehicles, as
well as the local climate and topography in California, are the
fundamental causal factors for the air pollution problem--elevated
concentrations of greenhouse gases--apart from the other parts of
California's motor vehicle program, which are intended to remediate
different air pollution concerns.
The appropriate criteria to apply therefore is whether the
emissions of California motor vehicles, as well as California's local
climate and topography, are the fundamental causal factors for the air
pollution problem of elevated concentrations of greenhouse gases.
d. Relationship of California Motor Vehicles, Climate, and Topography
to Elevated Concentrations of Greenhouse Gases in California
Under CAA section 209(b)(1)(B), EPA proposed to withdraw the waiver
of preemption of the ACC program GHG and ZEV standards for MY 2021-2025
on two alternative grounds. Specifically, (1) California ``does not
need'' these standards ``to meet compelling and extraordinary
conditions;'' and (2) even if California does have compelling and
extraordinary conditions in the context of global climate change,
California does not ``need'' these standards because they will not
meaningfully address global air pollution problems of the sort
associated with GHG emissions. 83 FR 43248.
As previously explained, EPA proposed to determine that the balance
of textual, contextual, structural, and legislative history evidence
provide reasonable support for the conclusion that the statute is
ambiguous in one particular respect: Whether section 209(b)(1)(B)
refers to an individual standard or the California standards as a whole
when referring to the Administrator's review of state standards
submitted for a waiver, to determine whether the state ``needs such
State standards to meet compelling and extraordinary conditions,'' and
that the approach of examining the need for GHG-related standards
separate from the other, traditional aspects of California's program is
reasonable given, among other factors, the unique nature of the global
pollutant. EPA recognizes that Congress's purpose in establishing the
prohibition in CAA section 209(a) and the waiver in CAA section 209(b)
was to
[[Page 51348]]
balance the benefit of allowing California significant discretion in
deciding how to protect the health and welfare of its population with
the burden imposed on the manufacturers of being subject to two
separate motor vehicle programs and the overarching policy judgment
that uniform national standards are appropriate. S. Rep. No. 403, 90th
Cong. 1st Sess., at 32-33 (1967). It is clear that Congress intended
this balance to be premised on a situation where California needs the
State standards to meet compelling and extraordinary conditions. Thus,
if EPA determines that California does not need its State GHG standards
to meet compelling and extraordinary conditions, a waiver of preemption
for those State standards is not permitted under the statute.
Commenters supportive of EPA's proposal to withdraw the waiver
commented that California should not continue to enjoy a waiver for
separate State GHG standards because those State standards are not
needed to meet compelling and extraordinary conditions because there is
no link between California-based motor vehicle GHG emissions and any
alleged extraordinary conditions in California. These commenters state
that while California spends a great deal of time discussing the
effects of climate change in California, California does not link its
GHG standards to those effects. They note that GHGs are not localized
pollutants that can affect California's local climate, or that are
problematic due to California's specific topography. Instead, emissions
from vehicles in California become mixed with the global emissions of
GHG and affect global climate (including California's climate) in the
same way that any GHG from around the world affect global (and
California) climate conditions. They claim that Congress authorized EPA
to grant a waiver of preemption only in cases where California
standards were necessary to address peculiar local air quality
problems. They claim that there can be no need for separate California
standards if the standards are not aimed at, and do not redress, a
California-specific problem.
In previous waiver decisions, EPA was asked to waive preemption of
standards regulating emissions that were local or regional in effect.
Local air pollution problems are affected directly by local conditions
in California, largely the emissions from motor vehicles in California
in the context of the local climate and topography. As a result, State
standards regulating such local motor vehicle emissions will have a
direct effect on the concentration of pollutants directly affecting
California's environment. They are effective mechanisms to reduce the
levels of local air pollution in California because local conditions
are the primary cause of that kind of air pollution problem. In
addition, reductions in emissions from motor vehicles that occur
elsewhere in the United States will not have the same impact, and often
will have no impact, on reducing the levels of local air pollution in
California.
By contrast, GHGs emitted by California motor vehicles become part
of the global pool of GHG emissions that affect concentrations of GHGs
on a uniform basis throughout the world. The local climate and
topography in California have no significant impact on the long-term
atmospheric concentrations of greenhouse gases in California.
Greenhouse gas emissions from vehicles or other pollution sources in
other parts of the country and the world will have as much effect on
California's environment as emissions from California vehicles. As a
result, reducing emissions of GHGs from motor vehicles in California
has the same impact or effect on atmospheric concentrations of GHGs as
reducing emissions of GHGs from motor vehicles or other sources
elsewhere in the U.S., or reducing emissions of GHGs from other sources
anywhere in the world. California's motor vehicle standards for GHG
emissions do not affect only California's concentration of GHGs, but
affect such concentrations globally, in ways unrelated to the
particular topography in California. Similarly, emissions from other
parts of the world affect the global concentrations of GHGs, and
therefore concentrations in California, in exactly the same manner as
emissions from California's motor vehicles.
Further, as explained in the SAFE proposal, California's claims
that it is uniquely susceptible to certain risks because it is a
coastal State does not differentiate California from other coastal
States such as Massachusetts, Florida, and Louisiana, much less that
conditions in California are any more ``extraordinary'' as compared to
any other coastal States, particularly those coastal States that may
possess a greater percentage of low-lying territory than California.
Any effects of global climate change (e.g. water supply issues,
increases in wildfires, effects on agriculture) could certainly affect
California. But those effects would also affect other parts of the
United States.\278\ Many parts of the United States, especially western
States, may have issues related to drinking water (e.g., increased
salinity) and wildfires, and effects on agriculture; these occurrences
are by no means limited to California. These are among the types of
climate change effects that EPA considered in the 2009 CAA section
202(a) endangerment finding which is the predicate for its authority to
issue national motor vehicle GHG standards. But EPA's evaluation of
whether California's standards are ``need[ed] to meet compelling and
extraordinary conditions'' is not identical to its prior determination,
pursuant to CAA section 202(a) whether GHG emissions from the national
motor vehicle fleet contribute to pollution that may reasonably be
anticipated to endanger public health or welfare. In order for a waiver
request to pass muster under CAA section 209(b)(1)(B), as set forth in
this document, a particularized, state-specific nexus must exist
between sources of pollutants, resulting pollution, and impacts of that
pollution. This is analogous to but distinct from the more abstract or
general predicate finding for regulation under CAA section 202(a); if
it were not distinct, then California would, under CAA section
209(b)(1)(B), always ``need'' a waiver for a state-specific program to
``meet'' any pollution problem that it experienced once EPA had found
under CAA section 202(a) that motor vehicle emissions contribute to
that pollution problem (without particular reference to that pollution
problem's impact on California). This would effectively nullify the
second waiver denial prong, CAA section 209(b)(1)(B).\279\ California
[[Page 51349]]
would have it that the 2009 CAA section 202(a) GHG endangerment finding
necessarily means California ``needs'' its own GHG program ``to meet
compelling and extraordinary conditions.'' That does not follow.\280\
Cf. Utility Air Regulatory Group v. EPA, 134 S. Ct. 2427 (2014)
(partially reversing the GHG ``Tailoring'' Rule on grounds that the CAA
section 202(a) endangerment finding for GHG emissions from motor
vehicles did not compel regulation of all sources of GHG emissions
under the Prevention of Significant Deterioration and Title V permit
programs). 83 FR 43249.
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\278\ Some commenters made this same point. See, e.g., Fiat
Chrysler Automobiles, Docket No. EPA-HQ-OAR-2018-0283-4406 at 89;
American Fuel & Petrochemical Manufacturers, Docket No. E_A-HQ-OAR-
2018-0283-5648 at 34, 36. At least one recent analysis, cited by a
number of commenters, has produced estimates of climate change
damage that project that with respect to such matters as coastal
damage, agricultural yields, energy expenditures, and mortality,
California is not worse-positioned in relation to certain other
areas of the U.S., and indeed is estimated to be better-positioned,
particularly as regards the Southeast region of the country. See S.
Hsiang, et al. ``Estimating Economic Damage from Climate Change in
the United States,'' 356 Science 1362 (2017).
\279\ Cf. Ford, 606 F.2d at 1303 n.68 (affirming EPA's refusal
to allow nationwide sale of cars that meet California standards
that, due to the waiver predicate that California's standards only
need be as stringent as federal standards in the aggregate, were not
certified as meeting national standards with respect to all
pollutants) (``[Appellants] suggest to varying degrees that
California is a microcosm of the entire nation and, as such, has no
particularized problems the resolution of which would require
emission control standards inappropriate to the rest of the country.
This may or may not be completely true. The fact remains, however,
that Congress expected California to be putting its interests first
and there is no guarantee that those interests are congruent with
the interests of the nation as a whole.''). Here, California offers
an inverse reflection of appellants' argument in Ford, but it is no
more valid: Because it can marshal a list of climate impacts that it
is experiencing, California insists it is entitled to a waiver for a
state-specific program to address those impacts. All of California's
problems and corresponding programs, under this logic, are
``particularized.'' If this were the case, no waiver request could
ever be denied under CAA section 209(b)(1)(B), and Congress would
much more likely have simply afforded California a blanket and
automatic waiver. Congress did not do so, its choice not to do so
should be respected and given meaning, and EPA in this document sets
forth an interpretation and application of CAA section 209(b)(1)(B)
that does so by articulating a required particularized nexus to
State-specific facts which is present in the case of California's
criteria vehicle emissions programs but lacking in the case of its
GHG and ZEV ones.
\280\ EPA notes in this regard that, even in the 2009 reversal
of the 2008 waiver denial, the Agency was careful to distinguish its
consideration of the waiver application from ``the issues pending
before EPA under section 202(a) of the Act,'' i.e., the then-pending
endangerment finding. 74 FR at 32765. While EPA maintains the
position that the CAA section 202(a) ``endangerment finding''
inquiry and the CAA section 209(b)(1)(B) inquiry are distinct, EPA
notes that the 2009 waiver denial reversal (and the 2008 waiver
denial itself) took pains to distinguish the two primarily because
the Agency was at that time still considering whether to issue the
endangerment finding. As EPA explains in this document, the two
provisions are distinct, but the CAA section 202(a) predicate
criteria for federal regulation do support the Agency's position
that the CAA section 209(b)(1)(B) waiver prong is best interpreted
as calling for a consideration whether the pollution problem at
issue has a State-specific, particularized nexus between emissions,
pollution, and impacts.
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EPA has discussed the reasons for concluding that it is appropriate
to consider California's GHGs standards separately in determining
whether the State needs those standards to meet compelling and
extraordinary conditions, as compared to looking at its need for a
motor vehicle program in general. These reasons also lead to the
conclusion that California does not need these GHG standards to meet
compelling and extraordinary conditions. The text, structure, and
legislative history indicates that Congress's intent in the second
waiver criterion, CAA section 209(b)(1)(B), was to allow California to
adopt new motor vehicle standards because of compelling and
extraordinary conditions in California that were causally related to
local or regional air pollution levels in California. These factors--
including topography and large population of motor vehicles--cause
these kinds of local or regional air pollution levels in California and
because of this causal link, California's motor vehicle standards can
be effective mechanisms to address these local problems. Reductions
outside California would lack that causal link to local or regional air
quality conditions inside California.
Congress did not indicate any intent to allow California to
promulgate local standards to deal with global air pollution like
atmospheric concentrations of GHGs. In California's comments on the
SAFE proposal, it asserted that it has a need for reductions in GHG
atmospheric concentrations and therefore emissions, but the issue is
not whether such reductions are needed as a matter of general policy,
but whether Congress intended them to be effectuated on a State-
specific basis by California through EPA granting a waiver for the GHG
aspects of the State's new motor vehicle program. This type of
pollution seems ill-fitted to Congress's intent to provide California
with a method of handling its local air pollution concentrations and
related problems with local emission control measures. EPA determines
that standards regulating emissions of global pollutants like
greenhouse gases were not part of the compromise envisioned by Congress
in passing CAA section 209(b).\281\ Moreover, even if California does
have compelling and extraordinary conditions in the context of global
climate change, California does not ``need'' these standards under CAA
section 209(b)(1)(B) because they will not meaningfully address global
air pollution problems of the sort associated with GHG emissions. As
noted in the SAFE proposal, the most stringent of the regulatory
alternatives considered in the 2012 final rule and FRIA (under much
more optimistic assumptions about technology effectiveness), which
would have required a seven percent average annual fleetwide increase
in fuel economy for MYs 2017-2025 compared to MY 2016 standards, was
forecast to decrease global temperatures only by 0.02 [deg]C in
2100.\282\ This conclusion was further bolstered by multiple
commenters.\283\ EPA therefore concludes that California's GHG and ZEV
regulations do not fulfil the requirement within CAA section
209(b)(1)(B) that such regulations are ``needed'' to ``meet'' the
impacts of global climate change in California, even assuming arguendo
that those impacts do constitute ``compelling and extraordinary
conditions'' within the meaning of that statutory phrase (although, to
be clear, EPA is determining that those impacts do not in fact fall
within that phrase's meaning). Given that Congress enacted CAA section
209(b) to provide California with a unique ability to receive a waiver
of preemption, which provides California with authority that it would
not otherwise have under CAA section 209, and given the specific
language in CAA section 209(b)(2) pointing out the need for
extraordinary and compelling conditions as a condition for the waiver,
EPA determines that it is not appropriate to waive preemption for
California's standards that regulate GHGs. Atmospheric concentrations
of greenhouse gases are an air pollution problem that is global in
nature, and this air pollution problem does not bear the same causal
link to factors local to California as do local or regional air
pollution problems. EPA determines that globally elevated atmospheric
concentrations of GHGs and their environmental effects are not the kind
of local or regional air pollution problem that fall within the scope
of the ``compelling and extraordinary conditions'' encompassed by the
terms of CAA section 209(b)(1)(B). As such, EPA finds that California
does not need its 2021 through 2025 MY GHG-related standards to meet
compelling and extraordinary conditions.\284\
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\281\ Moreover, EPA is mindful that principles of equal
sovereignty between the states ordinarily require `` `exceptional
conditions' prevailing in certain parts of the country [to]
justif[y] extraordinary legislation otherwise unfamiliar to our
federal system.'' Northwest Austin, 557 U.S. at 211.
\282\ 83 FR 42986, 43216-43217.
\283\ The George Washington University Regulatory Studies
Center, Docket No. EPA-HQ-OAR-2018-0283-4028; Competitive Enterprise
Institute, Docket No. NHTSA-2018-0067-12015.
\284\ EPA disagrees with comments that suggest that California
``needs'' its GHG and ZEV programs ``to meet compelling and
extraordinary conditions'' in the meaning of CAA section
209(b)(1)(B) because those programs are intended to reduce criteria
pollutants emissions, separate and apart from their status as
programs designed to address climate change. To take this position
would not be in keeping with historical agency practice in reviewing
California's waiver requests. Specifically, EPA practice is not to
scrutinize California's criteria pollutant emissions reductions
projections or air emissions benefits. Rather, EPA's view has been
that these are matters left for California's judgments, especially
given that Title I of the Clean Air Act imposes the obligation of
NAAQS attainment planning on states. See, e.g., 36 FR 17458; 78 FR
2134; 79 FR 46256, 46261 (Aug. 7, 2014). EPA's withdrawal action is
premised on CARB's 2012 ACC program waiver request, which, as
previously discussed, only discussed the potential GHG benefits or
attributes of CARB's GHG and ZEV standards program (78 FR 2114,
2130-2131). If EPA does not even scrutinize a California program's
criteria pollutant emission and benefits projections when California
applies for a waiver for that program presenting it as a criteria
program, then a fortiori commenters' retrospective attempt to claim
criteria benefits to maintain a waiver for programs that were
originally presented to EPA in a waiver request that disclaimed any
such benefits is not appropriate.
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[[Page 51350]]
e. No Findings Under CAA Section 209(b)(1)(C) Are Finalized at This
Time
In the SAFE proposal, EPA proposed to determine, as an additional
basis for the waiver withdrawal, that California's ZEV and GHG
standards for new MY 2021 through 2025 are not consistent with section
202(a) of the Clean Air Act. That proposed determination was
intertwined with the SAFE proposal's assessment with regard to the
technological feasibility of the Federal GHG standards for MY 2021
through 2025 and the proposed revisions thereto. Because EPA and NHTSA
are not at this time finalizing that assessment or taking final action
on the proposal to revise the Federal standards, and because the
finalized determinations under CAA section 209(b)(1)(B) and the
discussion of the implications of EPCA preemption with regard to the
waiver previously granted with respect to those standards set forth
above are each independent and adequate grounds for the waiver
withdrawal, EPA at this time is not finalizing any determination with
respect to CAA section 209(b)(1)(C). EPA may do so in connection with
potential future final action with regard to the Federal standards.
E. Withdrawal of Waiver
In this final action, EPA determines that the California Air
Resources Board's (CARB's) regulations pertaining to greenhouse gases-
related (GHG) emission standards for 2021 through 2025 model year (MY)
passenger cars, light-duty trucks, and medium-duty vehicles are not
needed to meet compelling and extraordinary conditions. EPA concludes
that CAA section 209(b) was intended to allow California to promulgate
State standards applicable to emissions from new motor vehicles to
address pollution problems that are local or regional, and that have a
particular nexus to emissions from vehicles in California.\285\ EPA
does not believe CAA section 209(b)(1)(B) was intended to allow
California to promulgate State standards for emissions from new motor
vehicles designed to address global climate change problems.
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\285\ As noted in the SAFE proposal, ``Attempting to solve
climate change, even in part, through the Section 209 waiver
provision is fundamentally different from that section's original
purpose of addressing smog-related air quality problems.'' 83 FR
42999.
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EPA's 2013 waiver for CARB's Advanced Clean Car Program (as it
pertains to its 2021 through 2025 MY relating to greenhouse gas
emissions and the ZEV mandate) is withdrawn. This is separate and apart
from EPA's determination that it cannot and did not validly grant a
waiver with respect to those California State measures which are
preempted under NHTSA's determination in this document that EPCA
preempts State GHG and ZEV programs, which, as explained above, is
effective on the effective date of this joint action.
F. States Cannot Adopt California's GHG Standards Under CAA Section 177
At proposal, EPA explained that CAA section 177 provides that other
States, under certain circumstances and with certain conditions, may
``adopt and enforce'' standards that are ``identical to the California
standards for which a waiver has been granted for [a given] model
year.'' 42 U.S.C. 7507. As a result, EPA proposed to determine that
this section does not apply to CARB's GHG standards given that they are
intended to address global air pollution. We also noted that the
section is titled ``New motor vehicle emission standards in
nonattainment areas' and that its application is limited to ``any State
which has [state implementation] plan provisions approved under this
part''--i.e., under CAA title I part D, which governs ``Plan
requirements for nonattainment areas.''
We received comments in support of and against our proposal.
Commenters opposing our interpretation argued that CAA section 177 does
not contain any text that could be read as limiting its applicability
to certain pollutants only. They also argued that EPA has
inappropriately relied on the heading for CAA section 177 to construe a
statutory provision as well as arrogated authority to implement an
otherwise self-implementing provision. We disagree with these
commenters, conclude that the text (including both the title and main
text), structural location, and purpose of the provision confirm that
it does not apply to GHG standards, and are finalizing this
determination as proposed.
Under the Clean Air Act, EPA establishes national ambient air
quality standards (NAAQS) to protect public health and welfare and has
established such ambient standards for the following criteria
pollutants: ozone, carbon monoxide, nitrogen dioxide, sulfur dioxide,
lead, and particulate matter. As also explained at proposal, areas are
only designated nonattainment with respect to criteria pollutants for
which EPA has issued a NAAQS, and nonattainment State Implementation
Plan (SIPs) are intended to assure that those areas attain the NAAQS.
Congress added CAA section 177 in the 1977 Clean Air Act amendments
cognizant that states might need to address air pollution within their
boundaries similar to California but were otherwise preempted under CAA
section 209(a) from setting new motor vehicle and engine standards.
See, e.g., H.R. Rep. No. 294, 95th Cong., 1st Sess. 309 (1977), 1977
U.S.C.C.A.N. 1077, 1388 (explaining that the Committee ``was concerned
that this preemption (section 209(a) of the Act) now interferes with
legitimate police powers of States''); Motor Vehicle Mfrs. Ass'n of
U.S., Inc. v. New York State Dep't of Envtl. Conservation, 17 F.3d 521,
527 (2d Cir. 1994) (``It was in an effort to assist those states
struggling to meet federal pollution standards that Congress, . . .
directed in 1977 that other states could promulgate regulations
requiring vehicles sold in their state to be in compliance with
California's emission standards or to `piggyback' onto California's
preemption exemption.''), citing H.R. Rep. No. 294, 95th Cong., 1st
Sess. 309-10 (1977); id. at 531 ((``[Section] 177 was inserted into the
Act in 1977 so that states attempting to combat their own pollution
problems could adopt California's more stringent emission controls.'').
Relevant legislative history further identifies CAA section 177 as a
means of addressing the NAAQS attainment planning requirements of CAA
section 172, including the specific SIPs content and approvals criteria
for EPA.\286\ H.R.
[[Page 51351]]
Rep. No. 294, 95th Cong., 1st Sess. 213 (1977), 1977 U.S.C.C.A.N 1077,
1292 (``Still another element of flexibility for States that is
afforded in this section is the authority for States with nonattainment
areas for automotive pollutants (other than California) to adopt and
enforce California new-car emission standards if adequate notice is
given.'').
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\286\ The version of CAA section 172 adopted in 1977 set forth
the general requirements for state plans for nonattainment areas and
CAA section 172(b) set forth the ``requisite provisions'' of those
plans. In drafting the provisions that would become CAA section
172(b), Congress explained that they required the Administrator,
after notice and opportunity for a public hearing, to approve ``a
State plan which meets the following criteria: It must identify all
nonattainment areas for each pollutant. Next it must assure
attainment of the national ambient air quality standard in those
areas as expeditiously as practicable, but not later than December
31, 1982, for all pollutants other than photochemical oxidants. In
respect to photochemical oxidants, the standard must be met as
expeditiously as practicable, but not later than December 31, 1987.
The plan must include a comprehensive, accurate, up-to-date
inventory of actual emissions from all sources of pollutants in the
area. This inventory must be revised and resubmitted every 2 years
to substantiate that reasonable further progress has been achieved
as a condition for permitting additional sources of pollution.
Finally, the plan must identify and quantify the actual emissions
which must be taken into account by the State for purposes of
deciding how to achieve reasonable further progress and assure
timely attainment. Thus, the plan must consider the following
factors among others: The actual emissions increases which will be
allowed to result from the construction and operation of major new
or modified stationary sources in the area; the actual emissions of
such pollutant from unregulated sources, fugitive emissions and
other uncontrolled sources; actual emissions of the pollutant from
modified and existing indirect sources; actual emissions resulting
from extension or elimination of transportation control measures;
actual emissions of such pollutant resulting from in-use motor
vehicles and emissions of such pollutant resulting from stationary
sources to which delayed compliance orders or enforcement orders
(pursuant to sec. 121 (pursuant to sec. 121 or sec 113(b)) and
compliance date extension (pursuant to sec. 119) have been issued;
and actual transported emissions.'' H.R. Rep. No. 294, 95th Cong.,
1st Sess. 212 (1977), 1977 U.S.C.C.A.N. 1077, 1291, 1977 WL 16034
(emphasis added).
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Contrary to commenters' assertions, therefore, the text, placement
in Title I, and relevant legislative history are all indicative that
CAA section 177 is in fact intended for NAAQS attainment planning and
not to address global air pollution. As further explained in section
D.2, GHG is a globally distributed pollutant with environmental effects
that are different enough from emissions of criteria pollutants. For
example, GHG emissions from fleet in California bear no more relation
to GHG emissions in California than fleet in other parts of the
country. Where states are now adopting standards for intents and
purposes far removed from NAAQS attainment planning or more
specifically directed at global air pollution, EPA as the agency
charged with implementing the Clean Air Act is acting well within that
role in setting out an interpretation that aligns with Congressional
intent. See Chevron U.S.A. v. NRDC, 467 U.S. 837, 843 (1984) (``The
power of an administrative agency to administer a congressionally
created . . . program necessarily requires the formulation of policy
and the making of rules to fill any gap left, implicitly or explicitly,
by Congress.''). This construct also comports with our reading of CAA
section 209(b)(1)(B) as limiting applicability of CAA section 209(b)
waiver authority to state programs that address pollutants that affect
local or regional air quality and not those relating to global air
pollution like GHGs.
G. Severability and Judicial Review
EPA intends that its withdrawal of the January 2013 waiver for
California's GHG and ZEV programs on the basis of EPCA preemption, to
take effect upon the effective date of this joint action, as set forth
in subsection III.C, on the one hand, is separate and severable from
its withdrawal of the January 2013 waiver for those programs on the
basis of an interpretation and application of CAA section 209(b)(1)(B),
beginning in model year 2021, as set forth in subsection III.D, on the
other. EPA further intends that its withdrawal of the waiver with
regard to California's GHG program is severable from its withdrawal of
the waiver with regard to California's ZEV program. The basis for this
distinction (i.e., that EPA intends that its withdrawal of the waiver
for California's GHG program and for its ZEV program should be
severable from one another) is, as follows, twofold: (1) While EPA
concludes for the reasons set forth in subsection III.D above that the
ZEV program, as subjected to the January 2013 waiver and as presented
to EPA by CARB in CARB's waiver application and supporting documents,
is a GHG-targeting program and as such is susceptible to the
interpretation and application of CAA 209(b)(1)(B) set forth above, EPA
acknowledges that there are aspects to the analysis as it affects the
state's ZEV program that are not applicable with respect to the state's
GHG program; (2) in this final action, NHTSA expresses in section II
above its intent that its determination that a State or local law or
regulation of tailpipe greenhouse gas emissions from automobiles is
related to fuel economy standards is severable from its determination
that State or local ZEV mandates are related to fuel economy standards.
EPA further intends that its determination with regard to the scope of
CAA section 177 as set forth in subsection III.F above be severable
from all other aspects of this joint action.
Pursuant to CAA section 307(b)(1), judicial review of this final
action may be sought only in the United States Court of Appeals for the
District of Columbia Circuit. For the reasons explained in this
section, this final waiver withdrawal action is nationally applicable
for purposes of CAA section 307(b)(1). To the extent a court finds this
action to be locally or regionally applicable, for the reasons
explained in this section, EPA determines and finds for purposes of CAA
section 307(b)(1) that this final waiver withdrawal action is based on
a determination of nationwide scope or effect. As also explained at
proposal, CAA Section 307(b)(1) of the CAA provides in which Federal
courts of appeal petitions of review of final actions by EPA must be
filed. This section provides, in part, that petitions for review must
be filed in the Court of Appeals for the District of Columbia Circuit
if: (i) The Agency action consists of ``nationally applicable
regulations promulgated, or final action taken, by the Administrator,''
or (ii) such action is locally or regionally applicable, but ``such
action is based on a determination of nationwide scope or effect and if
in taking such action the Administrator finds and publishes that such
action is based on such a determination.'' Additionally, we proposed to
find that any final action resulting from the August 2018 SAFE proposal
is based on a determination of ``nationwide scope or effect'' within
the meaning of CAA section 307(b)(1). We explained that the withdrawal,
when finalized, would affect persons in California and those
manufacturers and/or owners/operators of new motor vehicles nationwide
who must comply with California's new motor vehicle requirements. For
instance, California's program provides that manufacturers may generate
credits in CAA section 177 States as a means to satisfy those
manufacturers' obligations to comply with the mandate that a certain
percentage of their vehicles sold in California be ZEV (or be credited
as such from sales in CAA section 177 States). In addition, other
States have adopted aspects of California's ACC program; this decision
would also affect those States and those persons in such States, which
are in multiple EPA regions and federal circuits.
This final action is distinguishable from the situation faced by
the D.C. Circuit in Dalton Trucking Inc., v. EPA, 808 F.3d 875 (D.C.
Cir. 2015), where the Court held that EPA's action on California's
waiver request with respect to its nonroad engine program was not
nationally applicable, and that EPA had not properly made and published
a finding that its action was based on a determination of nationwide
scope and effect. First, Dalton Trucking noted that no other State had
ever adopted California's nonroad program, id. at 880; that is not the
case here. Second, Dalton Trucking noted that the nonroad waiver final
action was facially limited to fleets operating in California, id. at
881; the nature of the California program at issue here, with its
complex credit system connected with sales in other States, is quite
different. Third, Dalton Trucking noted that EPA in the nonroad waiver
[[Page 51352]]
final action did not actually make and publish a finding that that
final action was based on a determination of nationwide scope and
effect, id. Dalton Trucking expressly did not hold, and indeed
expressly disclaimed any intent to even suggest, that EPA could not
have made and published such a finding in that action. Id. at 882. EPA
in this document does so with regard to this final action, for the
reasons stated above. For these reasons, this final waiver withdrawal
action is nationally applicable for purposes of CAA section 307(b)(1),
or, in the alternative, EPA determines and finds for purposes of CAA
section 307(b)(1) that this final waiver withdrawal action is based on
a determination of nationwide scope or effect. Thus, pursuant to CAA
section 307(b), any petitions for review of this final action must be
filed in the Court of Appeals for the District of Columbia Circuit
within 60 days from the date such final action is published in the
Federal Register.
IV. Regulatory Notices and Analyses
As it is relevant to many of the following discussions, it is
important to clarify at the outset that this action does not finalize
or otherwise affect either EPA's GHG standards or NHTSA's CAFE
standards and, thus, the various impacts associated with those
standards have not been considered below. Further, consistent with its
past practice, EPA's withdrawal of the waiver does not add or amend
regulatory text and is, therefore, subject to considerably fewer of the
below discussions than NHTSA's final rule establishing regulatory text
on preemption.
A. Executive Order 12866, Executive Order 13563
Executive Order 12866, ``Regulatory Planning and Review'' (58 FR
51735, Oct. 4, 1993), as amended by Executive Order 13563, ``Improving
Regulation and Regulatory Review'' (76 FR 3821, Jan. 21, 2011),
provides for making determinations whether a regulatory action is
``significant'' and therefore subject to the Office of Management and
Budget (OMB) review and to the requirements of the Executive Order.
Under section 3(f) of Executive Order 12866, NHTSA's final rule has
been determined to be a ``significant regulatory action,'' but not an
economically significant action. EPA's withdrawal on the waiver,
however, is not a rule under E.O. 12866, as consistent with the
agency's historical classification of its notices and decisions related
to the waiver. However, as part of its commitment to working together
with NHTSA to establish a consistent Federal program for fuel economy
and GHG emissions, EPA has submitted this action to the OMB for review
and any changes made in response to OMB recommendations have been
documented in the docket for this action. EPA's action here, however,
is not a rule as defined by Executive Order 12866, consistent with its
previous actions on waiver requests, and is therefore exempt from
review by the Office of Management and Budget as required for rules and
regulations by Executive Order 12866. See, e.g., 78 FR at 2145 (Jan. 9,
2013); 74 FR at 32784 (July 8, 2009); 73 FR at 12169 (Mar. 6, 2008).
In determining the economic impact of this action, it is important
to be clear that the rule establishing new standards for the Model
Years within scope of the NPRM is expected to continue to be
economically significant and is, thus, anticipated, to include a full
FRIA. Moreover, as EPA's action is not a rule and not subject to E.O.
12866, its consideration of costs has been limited to the role costs
play under section 209. Accordingly, the following discussion only
concerns the economic impact associated with NHTSA's final regulatory
text clarifying its views on EPCA preemption.
As a general matter, NHTSA has determined that there may be some
nonsignificant economic impact arising out of its clarification,
particularly some reduction in costs, to this final rule, but the
agency has not quantified any such impact in this rulemaking, which has
been determined to be ``significant'' but not ``economically
significant'' under Executive Order 12866. This rulemaking merely
clarifies the existing statutory provisions relating to preemption that
have been in effect since EPCA was enacted and does not modify any
Federal requirement. As such, as in the NPRM, the agency has provided a
qualitative discussion of the impacts in response to the comments,
which themselves raised qualitative issues.
In the NPRM, NHTSA mentioned at a general, qualitative, level that
California's currently existing GHG program and ZEV mandate lead to
increased compliance costs, with some greater discussion of potential
increases in costs due specifically to the ZEV mandate, which
constrains an OEMs ability to meet their CAFE and GHG requirements in
the most cost-effective way.
The agencies received many comments on the economic analysis as it
relates to the CAFE and GHG standards, but only received a small number
of comments that specifically dealt with the issue of the economic
impact of the regulatory text concerning EPCA preemption. These
comments, similar to how the agency addressed the issue in the NPRM,
generally made qualitative and general points about the economic
impact.
Many of the comments that addressed the economic impacts of
preemption did so by stating that one important aspect of the ``One
National Program'' established beginning in 2009 was that it would
reduce regulatory cost by not allowing for the creation of different
Federal and California programs, with different levels of stringency
and different compliance regimes. NHTSA agrees with this concern, but
this is exactly why Congress provided that any State or local law
``related to'' fuel economy is preempted. This final rule will provide
more certainty on this issue than the prior approach, which would
always be subject to California removing itself from the program. This
is exactly what has occurred in recent months, as the State has taken
action to amend the ``deemed to comply'' provision and then announced
that it entered into an agreement with several automakers to apply a
different set of standards on a national basis.
Various other commenters noted that the GHG program and ZEV mandate
would increase compliance costs. Most of these comments only made
general statements to this effect and did not provide specific or
detailed information about potential costs. One commenter approvingly
noted NHTSA's citation of a study that found that the ZEV mandate could
potentially lead to increased costs, though the author of the cited
study also commented that the cited value did not provide a complete
picture of the economic effect. The agency agrees that programs such as
these are likely to introduce additional costs, which, of course, was a
significant part of Congress's motivation in providing NHTSA with its
broad preemptive authority over fuel economy. The agency, though, like
commenters, has found calculation of these costs to be challenging, as
they constrain the avenues of compliance with the Federal standards
without actually altering what must be, ultimately, achieved.
With regard to benefits, some commenters believed that California's
GHG program and ZEV mandate could provide additional benefits, but, as
with costs, these commenters did not provide detailed information about
the benefits of these programs independent of the Federal standards.
One commenter argued that a separate State GHG program is unlikely to
have any
[[Page 51353]]
meaningful benefits, because of ``leakage'' from vehicles in States
that adopt the California standards to vehicles in States that do not
adopt this standard. Although the comment was in context of supporting
the ``One National Program,'' NHTSA believes that the argument that
separate State standards will have little benefit has merit. The
existence of State or local laws does not in any way alter an OEM's
obligation under Federal law. For instance, OEMs would likely produce
more efficient vehicles for sale in California and the States that have
adopted California's standards, but the increased fuel economy of these
vehicles would likely be offset by less efficient vehicles produced for
sale in the rest of the U.S., leading to little to no change in either
fuel use or GHG emissions at a national level. Some commenters stated
that the decision to preempt programs including and similar to the ZEV
mandate, to the extent that those programs are related to fuel economy,
would have negative benefits related to ozone-forming pollutants,
though these commenters did not quantify these concerns. NHTSA notes
that, as was discussed in the NPRM, California, in its 2013 waiver
request, noted that the ZEV program did not provide for ozone-forming
pollutants, acknowledging, ``[t]here is no criteria emissions benefit
from including the ZEV proposal in terms of vehicle (tank-to-wheel or
TTW) emissions. The LEV III criteria pollutant fleet standard is
responsible for those emission reductions in the fleet; the fleet would
become cleaner regardless of the ZEV regulation because manufacturers
would adjust their compliance response to the standard by making less
polluting conventional vehicles.'' \287\ NHTSA continues to believe
that preemption of the programs such as the ZEV mandate will not have a
significant effect, as California remains free to revise its LEV
program to reduce ozone-forming emissions and seek a waiver of Clean
Air Act preemption from EPA, as described above, while not violating
NHTSA's preemption authority, and other States and local governments
would continue to be allowed to take other actions so long as those are
not related to fuel economy and are consistent with any other relevant
Federal law.
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\287\ Docket No. EPA-HQ-OAR-2012-0562, PP. 15-16.
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The comments, therefore, reaffirm NHTSA's preliminary determination
that State and Local programs including, and similar to, California's
GHG and ZEV programs are likely to lead to increased compliance costs
and highly uncertain, if any, benefits because they constrain the
ability of OEMs to meet the Federal standard without in anyway altering
their obligations under that standard. Further, the agency's decision
that State or local laws such as the GHG program and ZEV mandate should
be preempted is not based on any evaluation of the policy or other
merits of either program, but simply the fact that these programs are
clearly related to fuel economy.
B. DOT Regulatory Policies and Procedures
The final rule is also significant within the meaning of the
Department of Transportation's Order 2100.6, ``Policies and Procedures
for Rulemakings.'' Regulatory Policies and Procedures.
C. Executive Order 13771 (Reducing Regulation and Controlling
Regulatory Costs)
NHTSA's final rule is expected to be an E.O. 13771 deregulatory
action, but NHTSA has not estimated any quantifiable cost savings.
EPA's withdrawal is not a regulatory action and thus outside the scope
of E.O. 13771.
D. Congressional Review Act
Pursuant to the Congressional Review Act (5 U.S.C. 801 et seq.),
the Office of Information and Regulatory Affairs designated this action
as not a ``major rule'', as defined by 5 U.S.C. 804(2). The EPA and
NHTSA will submit a rule report to each House of the Congress and to
the Comptroller General of the United States.
E. Executive Order 13211 (Energy Effects)
Executive Order 13211 applies to any rule that: (1) Is determined
to be economically significant as defined under E.O. 12866, and is
likely to have a significant adverse effect on the supply,
distribution, or use of energy; or (2) that is designated by the
Administrator of the Office of Information and Regulatory Affairs as a
significant energy action. If the regulatory action meets either
criterion, the agencies must evaluate the adverse energy effects of the
proposed rule and explain why the proposed regulation is preferable to
other potentially effective and reasonably feasible alternatives
considered. NHTSA's final rule is not subject to E.O. 13211 because it
is not economically significant and is not a significant energy action.
As discussed in the E.O. 12866 section, NHTSA's final rule merely
clarifies the contours of its existing preemption authority and does
not in any way change the existing fuel economy standards. As EPA's
withdrawal is not within the scope of E.O. 12866, it is also not within
scope of E.O. 13211.
F. Environmental Considerations
1. National Environmental Policy Act
The National Environmental Policy Act (NEPA) \288\ directs that
Federal agencies proposing ``major Federal actions significantly
affecting the quality of the human environment'' must, ``to the fullest
extent possible,'' prepare ``a detailed statement'' on the
environmental impacts of the proposed action (including alternatives to
the proposed action).\289\ Concurrently with the NPRM, NHTSA released a
Draft Environmental Impact Statement (Draft EIS) pursuant to NEPA and
implementing regulations issued by the Council on Environmental Quality
(CEQ), 40 CFR part 1500, and NHTSA, 49 CFR part 520. NHTSA prepared the
Draft EIS to analyze and disclose the potential environmental impacts
of the proposed CAFE standards and a range of alternatives (largely
varying in terms of stringency). NHTSA considered the information
contained in the Draft EIS as part of developing its proposal and made
the Draft EIS available for public comment. For the final rule on the
standards for model year 2021 through 2026 automobiles proposed in the
NPRM, NHTSA will simultaneously issue a Final EIS and Record of
Decision, pursuant to 49 U.S.C. 304a(b) and U.S. Department of
Transportation Guidance on the Use of Combined Final Environmental
Impact Statements/Records of Decision and Errata Sheets in National
Environmental Policy Act Reviews (April 25, 2019),\290\ unless it is
determined that statutory criteria or practicability considerations
preclude simultaneous issuance.
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\288\ 42 U.S.C. 4321-4347.
\289\ 42 U.S.C. 4332. EPA is expressly exempted from the
requirements of NEPA for actions under the Clean Air Act. 15 U.S.C.
793(c)(1).
\290\ https://www.transportation.gov/sites/dot.gov/files/docs/mission/transportation-policy/permittingcenter/337371/feis-rod-guidance-final-04302019.pdf.
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NHTSA has not prepared a separate environmental analysis pursuant
to NEPA for this final action on preemption. This final rule provides
clarity on the scope of EPCA's preemption provision. Ultimately, the
determination of whether a particular State or local law is preempted
under EPCA is not determined based upon its environmental impact but
solely whether it is ``related to fuel economy standards or average
fuel economy standards.'' Any preemptive effect
[[Page 51354]]
resulting from this final action is not the result of the exercise of
Agency discretion, but rather reflects the operation and application of
the Federal statute. NHTSA does not have authority to waive any aspect
of EPCA preemption no matter the potential environmental impacts;
rather, preempted standards are void ab initio. Courts have long held
that NEPA does not apply to nondiscretionary actions by Federal
agencies.\291\ As NHTSA lacks discretion over EPCA's preemptive effect,
the Agency concludes that NEPA does not apply to this action.
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\291\ See, e.g., Department of Transp. v. Public Citizen, 541
U.S. 752 (2004); Milo Cmty. Hosp. v. Weinberger, 525 F.2d 144 (1st
Cir. 1975); State of South Dakota v. Andrus, 614 F.2d 1190 (8th Cir.
1980); Citizens Against Rails-to-Trails v. Surface Transp. Bd., 267
F.3d 1144 (D.C. Cir. 2001); Sierra Club v. Babbitt, 65 F.3d 1502
(9th Cir. 1995).
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It bears noting that this action only concerns the question of
preemption; it does not set CAFE standards. Fundamentally, this action
is about which sovereign entity (i.e., the Federal government or State
governments) can issue standards that relate to fuel economy. EPCA is
clear that this authority is restricted to the Federal government. This
action provides guidance on the boundary set by Congress, as well as
under principles of implied preemption. NHTSA's regulation concerning
EPCA preemption is independent and severable from any particular CAFE
standards adopted by NHTSA, and this action, in and of itself, is not
expected to have significant environmental impacts on a national scale.
As described above, OEMs would likely produce more efficient vehicles
for sale in California and the States that have adopted California's
standards, but the increased fuel economy of these vehicles would
likely be offset by less efficient vehicles produced for sale in the
rest of the U.S., leading to little to no change in either fuel use or
GHG emissions at a national level. In fact, as NHTSA has not finalized
any action to amend the fuel economy standards that were promulgated in
2012, California's ``deemed to comply'' provision remains operative. As
OEMs are anticipated to make use of this compliance mechanism, CARB's
GHG standards are functionally identical to Federal standards, and
their preemption would not result in additional environmental impacts.
Furthermore, as was discussed in the NPRM, California, in its 2013
waiver request, noted that the ZEV program did not provide for ozone-
forming pollutants, acknowledging, ``[t]here is no criteria emissions
benefit from including the ZEV proposal in terms of vehicle (tank-to-
wheel or TTW) emissions. The LEV III criteria pollutant fleet standard
is responsible for those emission reductions in the fleet; the fleet
would become cleaner regardless of the ZEV regulation because
manufacturers would adjust their compliance response to the standard by
making less polluting conventional vehicles.'' \292\ Ultimately NHTSA
will address potential environmental impacts of fuel economy standards
in its forthcoming Final EIS that will accompany the final rule on the
standards for model year 2021 through 2026 automobiles proposed in the
NPRM. This action, however, does not result in significant
environmental impacts to the quality of the human environment.
---------------------------------------------------------------------------
\292\ Docket No. EPA-HQ-OAR-2012-0562, Pp. 15-16. California's
LEV III criteria pollution standard would not be preempted under
this action.
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NHTSA intends to fully respond to all substantive comments received
on the Draft EIS in the forthcoming Final EIS, consistent with CEQ
regulations. NHTSA received numerous public comments on the Draft EIS
that related to the revocation of California's waiver and EPCA
preemption. The following summarizes and briefly addresses those
comments.
Multiple commenters called NHTSA's DEIS inadequate because it did
not analyze an alternative that would keep the California waiver and
regulations (as well as similar regulations adopted in the District of
Columbia and other States pursuant to section 177 of the CAA) in
place.\293\ On the other hand, one commenter noted its support for the
proposition that NHTSA is not obligated under NEPA to consider a
scenario that it believes Federal law does not permit.\294\ As
described above, NHTSA concludes that NEPA does not apply to this final
rule regarding preemption. Based on this conclusion, it is immaterial
whether NHTSA analyzed an alternative that would keep the California
waiver and regulations in place. NHTSA lacks the discretion and
authority to select such an alternative as a State or local law or
regulation related to automobile fuel economy standards is void ab
initio under the preemptive force of EPCA.
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\293\ Center for Biological Diversity, Earthjustice,
Environmental Law and Policy Center, Natural Resources Defense
Council, Public Citizen, Inc., Safe Climate Campaign, Sierra Club,
Southern Environmental Law Center, and Union of Concerned
Scientists, Docket No. NHTSA-2017-0069-0550; South Coast Air Quality
Management District, Docket Nos. NHTSA-2017-0069-0532 and NHTSA-
2017-0069-0497; Blanca Luevanos, Docket No. NHTSA-2017-0069-0508;
National Coalition for Advanced Transportation, Docket No. NHTSA-
2017-0069-0597; California Office of the Attorney General et al.,
Docket No. NHTSA-2017-0069-0625.
\294\ Alliance of Automobile Manufacturers, Docket No. NHTSA-
2017-0069-0588.
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One commenter criticized NHTSA for failing to consider the criteria
pollutant impacts of alternatives that keep the waiver in place and
that account for California's specific electricity grid.\295\ That
commenter also criticized NHTSA for not fully accounting for the
impacts to NOX emissions in the South Coast Air Basin as a
result of revoking the waiver.\296\ Another commenter noted that the
nine areas NHTSA identified as suffering from ``serious'' or
``extreme'' nonattainment conditions for ozone and PM2.5 are
located in California, even though the agencies proposed to revoke or
declare preempted the State's Clean Air Act waiver for GHG emissions
and the State's ZEV mandate.\297\ One commenter wrote that NHTSA should
consider and discuss the local impacts that preempting the ZEV mandate
would have on localities where ZEV sales are currently concentrated and
where they will likely concentrate in the future, and particularly in
California and the other States that have adopted the ZEV mandate
pursuant to section 177 of the CAA.\298\ While these comments are more
specific about identifying potential environmental impacts, these
impacts simply do not bear on the question of whether or how preemption
applies. Preemption relies solely on whether the State or local law or
regulation is ``related to fuel economy standards or average fuel
economy standards.'' Therefore, NHTSA is not obligated to analyze or
consider these environmental impacts as part of this final rule.
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\295\ South Coast Air Quality Management District, Docket No.
NHTSA-2017-0069-0497.
\296\ South Coast Air Quality Management District, Docket No.
NHTSA-2017-0069-0497.
\297\ Center for Biological Diversity, Earthjustice,
Environmental Law and Policy Center, Natural Resources Defense
Council, Public Citizen, Inc., Safe Climate Campaign, Sierra Club,
Southern Environmental Law Center, and Union of Concerned
Scientists, Docket No. NHTSA-2017-0069-0550.
\298\ New York State Department of Environmental Conservation,
NHTSA-2017-0069-0608.
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One commenter noted that if California's waiver is revoked, the
State would be unable to address pollution issues through adoption of
California's or its own standards, making it difficult to attain or
maintain compliance with the Clean Air Act.\299\ Another State alleged
that it depends on the criteria pollutant and air toxic emission
reduction co-benefits of the State's use of section 177 motor vehicle
emissions standards as a control strategy in its State Implementation
Plan to meet its
[[Page 51355]]
SIP.\300\ NHTSA disagrees with the underlying premise of the comments.
States and local governments are able to continue to encourage ZEVs in
many different ways, such as through investments in infrastructure and
appropriately tailored incentives. States and local governments cannot
adopt or enforce regulations related to fuel economy standards, which
include ZEV mandates, but they are able to address pollutants regulated
by the Clean Air Act in numerous ways that are not preempted by Federal
law. Moreover, as noted above, this action does not impact in any way
the Federal standards in place for greenhouse gas emissions from
automobiles and fuel economy standards. Since California and other
section 177 States have ``deemed'' compliance with the Federal
standards to be compliance with the State standards, this action does
not have significant environmental impacts to the quality of the human
environment. Any impacts associated with potential changes to Federal
standards are not a result of this action and are purely speculative
until the agencies finalize a change.
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\299\ Boulder County Public Health, Docket No. NHTSA-2017-0069-
0499.
\300\ Oregon Department of Environmental Quality, Docket No.
NHTSA-2017-0069-0526.
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2. Clean Air Act Conformity Requirements as Applied to NHTSA's Action
The Clean Air Act (42 U.S.C. 7401 et seq.) is the primary Federal
legislation that addresses air quality. Under the authority of the
Clean Air Act and subsequent amendments, EPA has established NAAQS for
six criteria pollutants, which are relatively commonplace pollutants
that can accumulate in the atmosphere as a result of human activity.
The air quality of a geographic region is usually assessed by comparing
the levels of criteria air pollutants found in the ambient air to the
levels established by the NAAQS (taking into account, as well, the
other elements of a NAAQS: Averaging time, form, and indicator). These
ambient concentrations of each criteria pollutant are compared to the
levels, averaging time, and form specified by the NAAQS in order to
assess whether the region's air quality is in attainment with the
NAAQS. When the measured concentrations of a criteria pollutant within
a geographic area are below those permitted by the NAAQS, EPA
designates the region as an attainment area for that pollutant, while
areas where concentrations of criteria pollutants exceed Federal
standards (or nearby areas that contribute to such concentrations) are
designated as nonattainment areas. Former nonattainment areas that come
into compliance with the NAAQS and are redesignated as attainment are
known as maintenance areas. When EPA revises a NAAQS, each State is
required to develop and implement a State Implementation Plan (SIP) to
address how it plans to attain and maintain the new standard. Each
State with a nonattainment area is also required to submit a SIP
documenting how the region will reach attainment levels within time
periods specified in the Clean Air Act. For maintenance areas, the SIP
must document how the State intends to maintain compliance with the
NAAQS.
No Federal agency may ``engage in, support in any way or provide
financial assistance for, license or permit, or approve'' any activity
in a nonattainment or maintenance area that does not ``conform'' to a
SIP or Federal Implementation Plan after EPA has approved or
promulgated it.\301\ Further, no Federal agency may ``approve, accept
or fund'' any transportation plan, program, or project developed
pursuant to title 23 or chapter 53 of title 49, U.S.C., in a
nonattainment or maintenance area unless the plan, program, or project
has been found to ``conform'' to any applicable implementation plan in
effect.\302\ The purpose of these conformity requirements is to ensure
that Federally sponsored or conducted activities do not interfere with
meeting the emissions targets in SIPs, do not cause or contribute to
new violations of the NAAQS, and do not impede the ability of a State
to attain or maintain the NAAQS or delay any interim milestones. EPA
has issued two sets of regulations to implement the conformity
requirements:
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\301\ 42 U.S.C. 7506(c)(1) and (5).
\302\ 42 U.S.C. 7506(c)(2) and (5).
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(1) The Transportation Conformity Rule \303\ applies to
transportation plans, programs, and projects that are developed,
funded, or approved under title 23 or chapter 53 of title 49, U.S.C.
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\303\ 40 CFR part 51, subpart T, and part 93, subpart A.
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(2) The General Conformity Rule \304\[thinsp]applies to all other
federal actions not covered under transportation conformity. The
General Conformity Rule establishes emissions thresholds, or de minimis
levels, for use in evaluating the conformity of an action that results
in emissions increases.\305\ If the net increases of direct and
indirect emissions are lower than these thresholds, then the project is
presumed to conform and no further conformity evaluation is required.
If the net increases of direct and indirect emissions exceed any of
these thresholds, and the action is not otherwise exempt,\306\ then a
conformity determination is required. The conformity determination can
entail air quality modeling studies, consultation with EPA and state
air quality agencies, and commitments to revise the SIP or to implement
measures to mitigate air quality impacts.
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\304\ 40 CFR part 93, subpart B.
\305\ 40 CFR 93.153(b).
\306\ 40 CFR 93.153(c).
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This action is not developed, funded, or approved under title 23 or
chapter 53 of title 49, U.S.C. Accordingly, this action is not subject
to transportation conformity. Under the General Conformity Rule, a
conformity determination is required when a Federal action would result
in total direct and indirect emissions of a criteria pollutant or
precursor originating in nonattainment or maintenance areas equaling or
exceeding the rates specified in 40 CFR 93.153(b)(1) and (2), and the
action is not otherwise exempt. As explained below, NHTSA's action
results in neither direct nor indirect emissions as defined in 40 CFR
93.152.
The General Conformity Rule defines direct emissions as ``those
emissions of a criteria pollutant or its precursors that are caused or
initiated by the Federal action and originate in a nonattainment or
maintenance area and occur at the same time and place as the action and
are reasonably foreseeable.'' \307\ NHTSA's action is to promulgate
regulatory text and a detailed appendix, in addition to discussing the
issue in this preamble to the rule, specifically to provide clarity on
EPCA's preemption provision in order to give already established
standards meaning, and thus is specifically exempt from general
conformity requirements.\308\ Moreover, this action would cause no
direct emissions consistent with the meaning of the General Conformity
Rule.\309\ Any changes in emissions that could occur as a result of
preemption would happen well after and in a different place from the
promulgation of this rule. Furthermore, any such changes in emissions--
especially those occurring in specific nonattainment or maintenance
areas--are not reasonably foreseeable. Any such changes are
[[Page 51356]]
unlikely because this action does not impact in any way the Federal
standards in place for criteria pollutant emissions from automobiles.
Further, this action does not impact the Federal standards in place for
greenhouse gas emissions from automobiles or fuel economy standards.
Since California and other section 177 States have ``deemed''
compliance with the Federal standards to be compliance with the State
standards, it is not clear that this action (as it pertains to the
State's greenhouse gas emissions standards) would result in changes to
the anticipated fleet of vehicles in those States and therefore to
criteria pollutant emissions. Any impacts associated with potential
changes to Federal standards are not a result of this action and are
purely speculative until the agencies finalize a change. Additionally,
we note California's statement in its 2013 waiver request that
``[t]here is no criteria emissions benefit from including the ZEV
proposal in terms of vehicle (tank-to-wheel or TTW) emissions. The LEV
III criteria pollutant fleet standard is responsible for those emission
reductions in the fleet . . . .'' \310\ As discussed previously, this
action clarifies that criteria pollutant standards are not preempted
unless they have a direct or substantial relationship to fuel economy
standards. California's LEV III criteria pollution standard would not
be preempted under this approach.
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\307\ 40 CFR 93.152.
\308\ 40 CFR 93.153(c)(2)(iii).
\309\ Department of Transp. v. Public Citizen, 541 U.S. 752, 772
(2004) (``[T]he emissions from the Mexican trucks are not `direct'
because they will not occur at the same time or at the same place as
the promulgation of the regulations.'').
\310\ Docket No. EPA-HQ-OAR-2012-0562, pp. 15-16.
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Indirect emissions under the General Conformity Rule are ``those
emissions of a criteria pollutant or its precursors: (1) That are
caused or initiated by the Federal action and originate in the same
nonattainment or maintenance area but occur at a different time or
place as the action; (2) That are reasonably foreseeable; (3) That the
agency can practically control; and (4) For which the agency has
continuing program responsibility.'' \311\ Each element of the
definition must be met to qualify as indirect emissions. NHTSA finds
that neither of the first two criteria are satisfied for the same
reasons as presented regarding direct emissions.
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\311\ 40 CFR 93.152.
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Furthermore, NHTSA cannot practically control, nor does it have
continuing program responsibility for, any emissions that could occur
as a result of preemption. ``[E]ven if a Federal licensing, rulemaking,
or other approving action is a required initial step for a subsequent
activity that causes emissions, such initial steps do not mean that a
Federal agency can practically control any resulting emissions.'' \312\
With regard to preemption, NHTSA lacks the discretion and authority to
keep the California waiver and regulations in place, as a State or
local law or regulation related to automobile fuel economy standards is
void ab initio under the preemptive force of EPCA. NHTSA cannot be
considered to practically control or have continuing program
responsibility for emissions that could result from preemption when
that result is required by Federal statute.\313\ NHTSA also does not
have continuing program responsibility for emissions that occur in
California and other section 177 States, are regulated by the Clean Air
Act, and for which the States and local governments can continue to
address in numerous ways that do not conflict with Federal law.
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\312\ 40 CFR 93.152.
\313\ See Public Citizen, 541 U.S. at 772-3.
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For the foregoing reasons, this action does not cause direct or
indirect emissions under the General Conformity Rule, and a general
conformity determination is not required. NHTSA will address any
responsibilities under the General Conformity Rule as it pertains to
potential changes to the fuel economy standards in the forthcoming
final rule for that action.
3. Endangered Species Act
Under Section 7(a)(2) of the Endangered Species Act (ESA), Federal
agencies must ensure that actions they authorize, fund, or carry out
are ``not likely to jeopardize the continued existence'' of any
Federally listed threatened or endangered species or result in the
destruction or adverse modification of the designated critical habitat
of these species. 16 U.S.C. 1536(a)(2). If a Federal agency determines
that an agency action may affect a listed species or designated
critical habitat, it must initiate consultation with the appropriate
Service--the U.S. Fish and Wildlife Service (FWS) of the Department of
the Interior (DOI) and/or the National Oceanic and Atmospheric
Administration's National Marine Fisheries Service of the Department of
Commerce (together, ``the Services''), depending on the species
involved--in order to ensure that the action is not likely to
jeopardize the species or destroy or adversely modify designated
critical habitat. See 50 CFR 402.14. Under this standard, the Federal
agency taking action evaluates the possible effects of its action and
determines whether to initiate consultation. See 51 FR 19926, 19949
(June 3, 1986).
Pursuant to Section 7(a)(2) of the ESA, the agencies have reviewed
this action and have considered applicable ESA regulations, case law,
and guidance to determine what, if any, obligations the agencies have
under the ESA. The agencies have considered issues related to emissions
of CO2 and other GHGs and issues related to non-GHG
emissions. Based on this assessment, the agencies have determined that
their actions (withdrawal of California's waiver and the final rule
regarding preemption) do not require consultation under Section 7(a)(2)
of the ESA.
a. The Agencies Lack Discretionary Authority
NHTSA's final rule adopts regulatory text (including a detailed
appendix) regarding EPCA's preemption provision, in addition to
discussing the issue in this preamble to the rule, specifically to
provide needed clarity on that provision. The new regulatory text
provides for why any law or regulation of a State or a political
subdivision of a State regulating or prohibiting tailpipe carbon
dioxide emissions from automobiles is expressly and impliedly preempted
by EPCA. Any preemptive effect resulting from this final action is not
the result of the exercise of Agency discretion, but rather reflects
the operation and application of the Federal statute. NHTSA does not
have authority to waive any aspect of EPCA preemption no matter the
potential impacts; rather, preempted standards are void ab initio.
EPA's action is to withdraw the waiver it had previously provided
in January 2013 to California for that State's GHG and ZEV programs
under section 209 of the Clean Air Act. This action is being undertaken
on two separate and independent grounds. First, EPA has determined EPCA
preemption renders its prior grant of a waiver for those aspects of
California's regulations that EPCA preempts invalid, null, and void,
thereby necessitating withdrawal of the waiver. Second, EPA concludes
that CAA section 209(b)(1)(B), which provides that EPA shall not issue
a waiver if California does not ``need'' separate state standards ``to
meet compelling and extraordinary conditions,'' was not intended to
allow California to promulgate State standards for emissions from new
motor vehicles designed to address global climate change problems.
Therefore, California does not meet the necessary criteria to receive a
waiver for these aspects of its program. Similar to NHTSA, these
decisions are not discretionary, but rather reflect EPA's conclusion
that EPCA preemption and the requirements
[[Page 51357]]
of the Clean Air Act prohibit the granting of a waiver to California.
The Supreme Court has held that Section 7(a)(2) of the ESA and its
implementing regulations apply only to actions in which there is
discretionary Federal authority.\314\ In National Association of Home
Builders, EPA considered the requirement of Section 402(b) of the Clean
Water Act that EPA transfer certain permitting powers to State
authorities upon an application and a showing that nine specified
criteria had been met. The Court concluded that the ESA did not operate
as a ``tenth criterion.'' \315\ According to the Court: ``While the EPA
may exercise some judgment in determining whether a State has
demonstrated that it has the authority to carry out [the] enumerated
statutory criteria, the statute clearly does not grant it the
discretion to add another entirely separate prerequisite to that list.
Nothing in the text of [the statute] authorizes the EPA to consider the
protection of threatened or endangered species as an end in itself when
evaluating a transfer application.'' \316\
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\314\ National Ass'n of Home Builders v. Defenders of Wildlife,
551 U.S. 644, 673 (2007) (``Applying Chevron, we defer to the
Agency's reasonable interpretation of ESA [section] 7(a)(2) as
applying only to `actions in which there is discretionary Federal
involvement or control.' '' (quoting 50 CFR 402.03)).
\315\ National Ass'n of Home Builders, 551 U.S. at 649.
\316\ Id. at 671.
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The agencies believe this holding applies to the instant action as
well. As this action results from nondiscretionary authorities, the
Section 7(a)(2) implementing regulations expressly exclude them from
coverage. Neither ECPA nor the Clean Air Act include the protection of
threatened or endangered species as a consideration for the application
of preemption (which operates by statute) or the prohibition on the
granting of a waiver (under the enumerated statutory criterion in CAA
section 209(b)(1)(B)). Although there is some judgment in considering
the application of EPCA and the CAA, neither action involves the type
of discretion that would require a Section 7(a)(2) consultation by the
agencies with the Services.
b. Any Effects Resulting From the Agencies' Actions Are too Attenuated
for Consultation To Be Required
In addition, the agencies have considered the potential effects of
this action to listed threatened or endangered species or designated
critical habitat of these species and concludes that any such effects
are too attenuated to require Section 7(a)(2) consultation. The
agencies base this conclusion both on the language of the Section
7(a)(2) implementing regulations and on the long history of actions and
guidance provided by DOI.
The Section 7(a)(2) implementing regulations require consultation
if a Federal agency determines its action ``may affect'' listed species
or critical habitat.\317\ The Services' current regulations define
``effects of the action'' in relevant part as ``the direct and indirect
effects of an action on the species or critical habitat, together with
the effects of other activities that are interrelated or interdependent
with that action, that will be added to the environmental baseline.''
\318\ Further, they define indirect effects as ``those that are caused
by the proposed action and are later in time, but still are reasonably
certain to occur.'' \319\
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\317\ 50 CFR 402.14(a). The Departments of the Interior and
Commerce recently issued a final rule revising the regulations
governing the ESA Section 7 consultation process. 84 FR 44966 (Aug.
27, 2019). The new regulations take effect on September 26, 2019. As
discussed in the text above, the agencies do not believe that the
change in regulations has any effect on the agencies' analysis here.
\318\ 50 CFR 402.02.
\319\ Id.
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The Services' recently published final rule revising the definition
of ``effects of the action'' to be ``all consequences to listed species
or critical habitat that are caused by the proposed action, including
the consequences of other activities that are caused by the proposed
action. A consequence is caused by the proposed action if it would not
occur but for the proposed action and it is reasonably certain to
occur.'' \320\ In the preamble to the final rule, the Services
emphasized that the ``but for'' test and ``reasonably certain to
occur'' are not new or heightened standards.\321\ In this context,
```but for' causation means that the consequence in question would not
occur if the proposed action did not go forward . . . . In other words,
if the agency fails to take the proposed action and the activity would
still occur, there is no `but for' causation. In that event, the
activity would not be considered an effect of the action under
consultation.'' \322\ As the Services do not consider these to be
changes in their longstanding application of the ESA, these
interpretations apply equally under the existing regulations (which are
effective through September 25, 2019) and the new regulations (which
are effective beginning September 26, 2019).
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\320\ 50 CFR 402.02, as amended by 84 FR 44976, 45016 (Aug. 27,
2019) (effective Sept. 26, 2019).
\321\ 84 FR at 44977 (``As discussed in the proposed rule, the
Services have applied the `but for' test to determine causation for
decades. That is, we have looked at the consequences of an action
and used the causation standard of `but for' plus an element of
foreseeability (i.e., reasonably certain to occur) to determine
whether the consequence was caused by the action under
consultation.'').
\322\ Id.
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Any potential effects of this action to threatened or endangered
species or designated critical habitat would be a result of changes to
GHG or criteria air pollutant emissions. In the next section, the
agencies discuss why this action is not anticipated to result in
changes to GHG or criteria air pollutant emissions. However, even if
such changes to emissions were to occur, the agencies do not believe
resulting impacts to listed species or critical habitat satisfy the
``but for'' test or are ``reasonably certain to occur.''
GHG emissions are relevant to Section 7(a)(2) consultation because
of the potential impacts of climate change on listed species or
critical habitat. For example, one comment to the NPRM documented the
potential impacts of climate change on federally protected species and
included a five-page table of species listed during 2006 to 2015 for
which the commenters claim climate change was a listing factor.\323\
However, the agencies believe this comment inappropriately attributes
the entire issue of climate change, including all GHG emissions no
matter which sector generated them, to NHTSA and EPA's actions.\324\ In
fact, the commenter demonstrates the very issue with doing so: There is
no ``but for'' causation associated with EPA's revocation of
California's waiver and NHTSA's final rule on preemption, as the
impacts of climate change will occur regardless of this action.
Furthermore, even if this action results in changes to GHG emissions,
such changes would be extremely small compared to global GHG emissions.
There is no scientific evidence that sufficiently ``connects the dots''
between those changes in emissions and any particular impact to a
listed species or critical habitat; thus, any impacts are not
``reasonably certain to occur.'' States (such as California) and local
governments may also continue to encourage ZEVs in numerous ways that
do not conflict with
[[Page 51358]]
Federal law, which may also prevent any alleged impact from these
actions.
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\323\ Center for Biological Diversity, Sierra Club, and Public
Citizen, Inc., Docket No. NHTSA-2018-0067-12378.
\324\ See, e.g., 78 FR 11766, 11785 (Feb. 20, 2013) (``Without
the requirement of a causal connection between the action under
consultation and effects to species, literally every agency action
that contributes GHG emissions to the atmosphere would arguably
result in consultation with respect to every listed species that may
be affected by climate change.'').
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Similarly, with regard to criteria air pollutants, States are still
subject to the Clean Air Act, which requires limitations on emissions
of those pollutants. Furthermore, since California and other Section
177 States have ``deemed'' compliance with the Federal standards to be
compliance with the State standards, it is not clear that this action
would result in changes to emissions. Any impacts associated with
potential changes to Federal standards are not a result of this action
and are purely speculative until the agencies finalize a change. We
again note California's statement in its 2013 waiver request that
``[t]here is no criteria emissions benefit from including the ZEV
proposal in terms of vehicle (tank-to-wheel or TTW) emissions. The LEV
III criteria pollutant fleet standard is responsible for those emission
reductions in the fleet . . . .'' \325\ As discussed previously, this
action clarifies that criteria pollutant standards are not preempted
unless they have a direct or substantial relationship to fuel economy
standards. California's LEV III criteria pollution standard would not
be preempted under this approach, and that program's benefits are
anticipated to remain in place.
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\325\ Docket No. EPA-HQ-OAR-2012-0562, pp. 15-16.
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The agencies have also considered the long history of actions and
guidance provided by DOI. To that point, the agencies incorporate by
reference Appendix G of the MY 2012-2016 CAFE standards EIS.\326\ That
analysis relied on the significant legal and technical analysis
undertaken by FWS and DOI. Specifically, NHTSA looked at the history of
the Polar Bear Special Rule and several guidance memoranda provided by
FWS and the U.S. Geological Survey. Ultimately, FWS concluded that a
causal link could not be made between GHG emissions associated with a
proposed Federal action and specific effects on listed species;
therefore, no Section 7(a)(2) consultation would be required.
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\326\ Available on NHTSA's Corporate Average Fuel Economy
website https://one.nhtsa.gov/Laws-&-Regulations/CAFE-%E2%80%93-Fuel-Economy/Final-EIS-for-CAFE-Passenger-Cars-and-Light-Trucks,-Model-Years-2012%E2%80%932016.
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Subsequent to the publication of that Appendix, a court vacated the
Polar Bear Special Rule on NEPA grounds, though it upheld the ESA
analysis as having a rational basis.\327\ FWS subsequently issued a
revised Final Special Rule for the Polar Bear.\328\ In that final rule,
FWS provided that for ESA section 7, the determination of whether
consultation is triggered is narrow and focused on the discrete effect
of the proposed agency action. FWS wrote, ``[T]he consultation
requirement is triggered only if there is a causal connection between
the proposed action and a discernible effect to the species or critical
habitat that is reasonably certain to occur. One must be able to
`connect the dots' between an effect of a proposed action and an impact
to the species and there must be a reasonable certainty that the effect
will occur.'' \329\ The statement in the revised Final Special Rule is
consistent with the prior guidance published by FWS and remains valid
today.\330\ Ultimately, EPA and NHTSA are not able to make a causal
link for purposes of Section 7(a)(2) that would ``connect the dots''
between this action, vehicle emissions from motor vehicles affected by
this action, climate change, and particular impacts to listed species
or critical habitats. Therefore, no Section 7(a)(2) consultation is
required.
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\327\ In re: Polar Bear Endangered Species Act Listing and
Section 4(D) Rule Litigation, 818 F. Supp. 2d 214 (D.D.C. Oct. 17,
2011).
\328\ 78 FR 11766 (Feb. 20, 2013).
\329\ 78 FR at 11784-11785.
\330\ See DOI Solicitor's Opinion No. M-37017, ``Guidance on the
Applicability of the Endangered Species Act Consultation
Requirements to Proposed Actions Involving the Emissions of
Greenhouse Gases'' (Oct. 3, 2008).
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c. The Agencies' Actions Would Have No Effect on Listed Species and
Designated Critical Habitat
In addition to the foregoing a Section 7(a)(2) consultation is not
required because this action will have no effect on a listed species or
designated critical habitat. This notification and final rule only
address the issues of California's waiver and preemption; they do not
set CAFE standards. Fundamentally, this action is about which sovereign
entity (i.e., the Federal government or State governments) can issue
standards that relate to fuel economy. EPCA is clear that this
authority is restricted to the Federal government. This action provides
clarity on the boundary set by Congress, as well as under principles of
implied preemption.
As previously described, absent this action, OEMs would likely
produce more efficient vehicles for sale in California and the States
that have adopted California's standards, but the increased fuel
economy of these vehicles would likely be offset by less efficient
vehicles produced for sale in the rest of the U.S., leading to little
to no change in either fuel use or GHG emissions at a national level.
Further, as EPA and NHTSA have not finalized any action to amend the
Federal GHG and fuel economy standards that were promulgated in 2012,
California's ``deemed to comply'' provision remains operative. As OEMs
are anticipated to make use of this compliance mechanism, CARB's GHG
standards are functionally identical to Federal standards, and their
preemption would not result in additional environmental impacts. Any
impacts associated with potential changes to Federal standards are not
a result of this action and are purely speculative until the agencies
finalize a change.
Finally, we again note California's 2013 waiver request statement
that there is no criteria emissions benefit associated with the ZEV
program because the LEV III criteria pollution standard is responsible
for those emissions reductions. This action clarifies that criteria
pollutant standards are not preempted unless they have a direct or
substantial relationship to fuel economy standards. California's LEV
III criteria pollution standard would not be preempted under this
approach. Therefore, those benefits are anticipated to remain in place.
For the foregoing reasons, automobile emissions are not anticipated
to change as a result of this action. Even if they do, any change would
be so minimal as to be unlikely to pose any effects on a listed species
or critical habitat. Because any effect on a listed species or critical
habitat is not reasonably certain to occur, the agencies conclude that
there will be no effect on listed species or critical habitat under the
Section (7)(a)(2) implementing regulations, and no Section 7(a)(2)
consultation is required for this action.
4. National Historic Preservation Act (NHPA)
The NHPA (54 U.S.C. 300101 et seq.) sets forth government policy
and procedures regarding ``historic properties''--that is, districts,
sites, buildings, structures, and objects included on or eligible for
the National Register of Historic Places. Section 106 of the NHPA
requires federal agencies to ``take into account'' the effects of their
actions on historic properties.\331\ The agencies conclude that the
NHPA is not applicable to this action because a rule regarding the
preemption of State laws and a decision to revoke California's waiver
are not the type of activities that have the potential to cause effects
on historic properties. This conclusion is supported by the lack of
discretion over
[[Page 51359]]
preemption and the underlying justification for the withdrawal of the
waiver to California, the fact that any causal relationship between
effects on historic properties as a result of emissions from the sale
and operation of motor vehicles in California and section 177 States
and this action are too attenuated, and the conclusion that impacts are
not reasonably foreseeable.\332\
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\331\ Section 106 is now codified at 54 U.S.C. 306108.
Implementing regulations for the Section 106 process are located at
36 CFR part 800.
\332\ See the discussions regarding NEPA, Clean Air Act
Conformity, and the ESA.
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5. Fish and Wildlife Conservation Act (FWCA)
The FWCA (16 U.S.C. 2901 et seq.) provides financial and technical
assistance to States for the development, revision, and implementation
of conservation plans and programs for nongame fish and wildlife. In
addition, the Act encourages all Federal departments and agencies to
utilize their statutory and administrative authorities to conserve and
to promote conservation of nongame fish and wildlife and their
habitats. The agencies conclude that the FWCA is not applicable to this
action because it does not involve the conservation of nongame fish and
wildlife and their habitats.
6. Coastal Zone Management Act (CZMA)
The Coastal Zone Management Act (16 U.S.C. 1451 et seq.) provides
for the preservation, protection, development, and (where possible)
restoration and enhancement of the nation's coastal zone resources.
Under the statute, States are provided with funds and technical
assistance in developing coastal zone management programs. Each
participating State must submit its program to the Secretary of
Commerce for approval. Once the program has been approved, any activity
of a Federal agency, either within or outside of the coastal zone, that
affects any land or water use or natural resource of the coastal zone
must be carried out in a manner that is consistent, to the maximum
extent practicable, with the enforceable policies of the State's
program.\333\
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\333\ 16 U.S.C. 1456(c)(1)(A).
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The agencies conclude that the CZMA is not applicable to this
action because it does not involve an activity within, or outside of,
the nation's coastal zones that affects any land or water use or
natural resource of the coastal zone. This conclusion is supported by
the lack of discretion over preemption and the underlying justification
for the withdrawal of the waiver to California, the fact that any
causal relationship between effects on coastal zones as a result of
emissions from the sale and operation of motor vehicles in California
and section 177 States and this action are too attenuated, and the
conclusion that impacts are not reasonably foreseeable.\334\
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\334\ See the discussions regarding NEPA, Clean Air Act
Conformity, and the ESA.
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7. Floodplain Management (Executive Order 11988 and DOT Order 5650.2)
These Orders require Federal agencies to avoid the long- and short-
term adverse impacts associated with the occupancy and modification of
floodplains, and to restore and preserve the natural and beneficial
values served by floodplains. Executive Order 11988 also directs
agencies to minimize the impact of floods on human safety, health and
welfare, and to restore and preserve the natural and beneficial values
served by floodplains through evaluating the potential effects of any
actions the agency may take in a floodplain and ensuring that its
program planning and budget requests reflect consideration of flood
hazards and floodplain management. DOT Order 5650.2 sets forth DOT
policies and procedures for implementing Executive Order 11988. The DOT
Order requires that the agency determine if a proposed action is within
the limits of a base floodplain, meaning it is encroaching on the
floodplain, and whether this encroachment is significant. If
significant, the agency is required to conduct further analysis of the
proposed action and any practicable alternatives. If a practicable
alternative avoids floodplain encroachment, then the agency is required
to implement it.
In this action, the agencies are not occupying, modifying and/or
encroaching on floodplains. The agencies, therefore, conclude that the
Orders are not applicable to this action.
8. Preservation of the Nation's Wetlands (Executive Order 11990 and DOT
Order 5660.1a)
These Orders require Federal agencies to avoid, to the extent
possible, undertaking or providing assistance for new construction
located in wetlands unless the agency head finds that there is no
practicable alternative to such construction and that the proposed
action includes all practicable measures to minimize harms to wetlands
that may result from such use. Executive Order 11990 also directs
agencies to take action to minimize the destruction, loss or
degradation of wetlands in ``conducting Federal activities and programs
affecting land use, including but not limited to water and related land
resources planning, regulating, and licensing activities.'' DOT Order
5660.1a sets forth DOT policy for interpreting Executive Order 11990
and requires that transportation projects ``located in or having an
impact on wetlands'' should be conducted to assure protection of the
Nation's wetlands. If a project does have a significant impact on
wetlands, an EIS must be prepared.
In this action, the agencies are not undertaking or providing
assistance for new construction located in wetlands and conclude that
these Orders do not apply to this action.
9. Migratory Bird Treaty Act (MBTA), Bald and Golden Eagle Protection
Act (BGEPA), Executive Order 13186
The MBTA (16 U.S.C. 703-712) provides for the protection of certain
migratory birds by making it illegal for anyone to ``pursue, hunt,
take, capture, kill, attempt to take, capture, or kill, possess, offer
for sale, sell, offer to barter, barter, offer to purchase, purchase,
deliver for shipment, ship, export, import, cause to be shipped,
exported, or imported, deliver for transportation, transport or cause
to be transported, carry or cause to be carried, or receive for
shipment, transportation, carriage, or export'' any migratory bird
covered under the statute.\335\
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\335\ 16 U.S.C. 703(a).
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The BGEPA (16 U.S.C. 668-668d) makes it illegal to ``take, possess,
sell, purchase, barter, offer to sell, purchase or barter, transport,
export or import'' any bald or golden eagles.\336\ Executive Order
13186, ``Responsibilities of Federal Agencies to Protect Migratory
Birds,'' helps to further the purposes of the MBTA by requiring a
Federal agency to develop a Memorandum of Understanding (MOU) with the
Fish and Wildlife Service when it is taking an action that has (or is
likely to have) a measurable negative impact on migratory bird
populations.
---------------------------------------------------------------------------
\336\ 16 U.S.C. 668(a).
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The agencies conclude that the MBTA, BGEPA, and Executive Order
13186 do not apply to this action because there is no disturbance,
take, measurable negative impact, or other covered activity involving
migratory birds or bald or golden eagles involved in this rulemaking.
This conclusion is supported by the lack of discretion over preemption
and the reasons underlying justification for the withdrawal of the
waiver to California, the fact that any causal relationship between
effects on migratory birds or bald or golden eagles as a result of
emissions from the sale
[[Page 51360]]
and operation of motor vehicles in California and section 177 States
and this action are too attenuated, and the conclusion that impacts are
not reasonably foreseeable.\337\
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\337\ See the discussions regarding NEPA, Clean Air Act
Conformity, and the ESA.
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10. Department of Transportation Act (Section 4(f))
Section 4(f) of the Department of Transportation Act of 1966 (49
U.S.C. 303), as amended, is designed to preserve publicly owned park
and recreation lands, waterfowl and wildlife refuges, and historic
sites. Specifically, Section 4(f) provides that DOT agencies cannot
approve a transportation program or project that requires the use of
any publicly owned land from a public park, recreation area, or
wildlife or waterfowl refuge of national, State, or local significance,
or any land from a historic site of national, State, or local
significance, unless a determination is made that:
(1) There is no feasible and prudent alternative to the use of
land, and
(2) The program or project includes all possible planning to
minimize harm to the property resulting from the use.
These requirements may be satisfied if the transportation use of a
Section 4(f) property results in a de minimis impact on the area.
NHTSA concludes that Section 4(f) is not applicable to its final
rule here because this rulemaking is not an approval of a
transportation program or project that requires the use of any publicly
owned land.
11. Executive Order 12898: ``Federal Actions To Address Environmental
Justice in Minority Populations and Low-Income Populations''
Executive Order (E.O.) 12898 (59 FR 7629 (Feb. 16, 1994))
establishes Federal executive policy on environmental justice. Its main
provision directs Federal agencies, to the greatest extent practicable
and permitted by law, to make environmental justice part of their
mission by identifying and addressing, as appropriate,
disproportionately high and adverse human health or environmental
effects of their programs, policies, and activities on minority
populations and low-income populations in the United States.
The agencies have determined that this action will not have
disproportionately high and adverse human health or environmental
effects on minority or low-income populations because it does not
change existing Federal standards. This conclusion is supported by the
lack of discretion over preemption and the underlying justification for
the withdrawal of the waiver to California, the fact that any causal
relationship between effects on minority or low-income populations as a
result of emissions from the sale and operation of motor vehicles in
California and section 177 States and this action are too attenuated,
and the conclusion that impacts are not reasonably foreseeable.\338\
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\338\ See the discussions regarding NEPA, the Clean Air Act
Conformity, and the ESA.
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12. Executive Order 13045: ``Protection of Children From Environmental
Health Risks and Safety Risks''
This action is not subject to E.O. 13045 (62 FR 19885, April 23,
1997) because it is not an economically significant regulatory action
as defined by E.O. 12866, and the agencies have no reason to believe
that the environmental health or safety risks related to this action
may have a disproportionate effect on children because it does not
change existing Federal standards. This conclusion is supported by the
lack of discretion over preemption and the underlying justification for
the withdrawal of the waiver to California, the fact that any causal
relationship between effects on children as a result of emissions from
the sale and operation of motor vehicles in California and section 177
States and this action are too attenuated, and the conclusion that
impacts are not reasonably foreseeable.\339\
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\339\ See the discussions regarding NEPA, the Clean Air Act
Conformity, and the ESA.
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G. Regulatory Flexibility Act
Pursuant to the Regulatory Flexibility Act (5 U.S.C. 601 et seq.,
as amended by the Small Business Regulatory Enforcement Fairness Act
(SBREFA) of 1996), whenever an agency is required to publish a notice
of proposed rulemaking or final rule, it must prepare and make
available for public comment a regulatory flexibility analysis that
describes the effect of the rule on small entities (i.e., small
businesses, small organizations, and small governmental jurisdictions).
No regulatory flexibility analysis is required if the head of an agency
certifies the proposal will not have a significant economic impact on a
substantial number of small entities. SBREFA amended the Regulatory
Flexibility Act to require Federal agencies to provide a statement of
the factual basis for certifying that a proposal will not have a
significant economic impact on a substantial number of small entities.
This joint action only concern the question of preemption; the
joint action does not set CAFE or emissions standards themselves.
Further, as the California waiver withdrawal is not a rulemaking, it is
not subject to the RFA. Accordingly, only NHTSA's final rule
establishing regulatory text related to preemption is at issue in this
action. NHTSA has considered the impacts of this document under the
Regulatory Flexibility Act and certifies that this rule would not have
a significant economic impact on a substantial number of small
entities. One commenter, Workhorse Group, Inc. (Workforce), in comments
echoed by a trade association, argued that it was a small business and
would be affected the preemption provisions because it would no longer
be able to earn and sell credits under the ZEV mandates established by
California and the other 177 States. This argument is not persuasive,
as the preemption regulation has no direct effect on Workforce or any
other similar entity because it does not regulate any private entity,
but instead clarifies the agency's views on what State or local laws
are preempted. Thus, any effect on Workhorse or any other similar
entities is, at most, indirect. Any effect is even further attenuated
by the fact that small entities such as Workhorse are not even subject
to a ZEV mandate, but choose to participate in the program voluntarily.
Additionally, in keeping with previous waiver actions, EPA's action
is not a rule as defined in the Regulatory Flexibility Act, 5 U.S.C.
601(2). Therefore, EPA has not prepared a supporting regulatory
flexibility analysis addressing the impact of this action on small
business entities. See 78 FR at 2145 (Jan. 9, 2013); 74 FR at 32784
(July 8, 2009); 73 FR at 12169 (Mar. 6, 2008).
H. Executive Order 13132 (Federalism)
Executive Order 13132 requires federal agencies to develop an
accountable process to ensure ``meaningful and timely input by State
and local officials in the development of regulatory policies that have
federalism implications.'' The Order defines the term ``Policies that
have federalism implications'' to include regulations that have
``substantial direct effects on the States, on the relationship between
the national government and the States, or on the distribution of power
and responsibilities among the various levels of government.'' Under
the Order, agencies may not issue a regulation that has federalism
implications, that imposes substantial direct compliance costs, unless
the Federal government
[[Page 51361]]
provides the funds necessary to pay the direct compliance costs
incurred by State and local governments, or the agencies consult with
State and local officials early in the process of developing the
proposed regulation. The agencies complied with Order's requirements
and discuss their response to comments in the above sections.
I. Executive Order 12988 (Civil Justice Reform)
Pursuant to Executive Order 12988, ``Civil Justice Reform,'' \340\
NHTSA has determined that this final rule does not have any retroactive
effect.
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\340\ 61 FR 4729 (Feb. 7, 1996).
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J. Executive Order 13175 (Consultation and Coordination With Indian
Tribal Governments)
This final rule does not have tribal implications, as specified in
Executive Order 13175 (65 FR 67249, November 9, 2000). This rule will
be implemented at the Federal level. Thus, Executive Order 13175 does
not apply to this rule. Two commenters raised issues associated with
this Executive Order. Issues raised in these comments related to the
standards will be addressed that forthcoming rulemaking. One commenter,
in an apparent reference to the preemption actions being finalized in
this document, argued that the NPRM would weaken tribal abilities to
set GHG standards. This is incorrect: The finalization of the EPCA
preemption provisions merely clarifies the law that any law or
regulation of a State or political subdivision of a State ``related
to'' fuel economy is preempted, while EPA's decision in this document
only affects a State, not a Tribal government.
K. Unfunded Mandates Reform Act
Section 202 of the Unfunded Mandates Reform Act of 1995 (UMRA)
requires Federal agencies to prepare a written assessment of the costs,
benefits, and other effects of a proposed or final rule that includes a
Federal mandate likely to result in the expenditure by State, local, or
tribal governments, in the aggregate, or by the private sector, of more
than $100 million in any one year (adjusted for inflation with base
year of 1995). Adjusting this amount by the implicit gross domestic
product price deflator for 2016 results in $148 million (111.416/75.324
= 1.48).\341\ This final rule will not result in the expenditure by
State, local, or Tribal governments, in the aggregate, or by the
private sector of more than $148 million annually.
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\341\ Bureau of Economic Analysis, National Income and Product
Accounts (NIPA), Table 1.1.9 Implicit Price Deflators for Gross
Domestic Product. https://bea.gov/iTable/index_nipa.cfm.
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L. Regulation Identifier Number
The Department of Transportation assigns a regulation identifier
number (RIN) to each regulatory action listed in the Unified Agenda of
Federal Regulations. The Regulatory Information Service Center
publishes the Unified Agenda in April and October of each year. You may
use the RIN contained in the heading at the beginning of this document
to find this action in the Unified Agenda.
M. National Technology Transfer and Advancement Act
Section 12(d) of the National Technology Transfer and Advancement
Act (NTTAA) requires NHTSA and EPA to evaluate and use existing
voluntary consensus standards in its regulatory activities unless doing
so would be inconsistent with applicable law (e.g., the statutory
provisions regarding NHTSA's vehicle safety authority, or EPA's testing
authority) or otherwise impractical.\342\ As this action does not
affect the CAFE or GHG standards, it is not subject to the NTTAA.
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\342\ 15 U.S.C. 272.
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N. Department of Energy Review
49 U.S.C. 32902(j)(2) requires that ``Before taking final action on
a standard or an exemption from a standard under this section, the
Secretary of Transportation shall notify the Secretary of Energy and
provide the Secretary of Energy a reasonable time to comment.'' As this
action does not establish a standard or provide an exemption, it is not
subject to this requirement. However, NHTSA has submitted this action
to OMB for interagency review and, thus, the Department of Energy has
been afforded the opportunity to review.
O. Paperwork Reduction Act
The Paperwork Reduction Act (PRA) of 1995, Public Law 104-13,\343\
gives the Office of Management and Budget (OMB) authority to regulate
matters regarding the collection, management, storage, and
dissemination of certain information by and for the Federal government.
It seeks to reduce the total amount of paperwork handled by the
government and the public. The PRA requires Federal agencies to place a
notice in the Federal Register seeking public comment on the proposed
collection of information. This action includes no information
collections. The information collections associated with the CAFE and
GHG programs will be discussed in the final rule that will establish
CAFE and GHG standards.
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\343\ Codified at 44 U.S.C. 3501 et seq.
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P. Privacy Act
In accordance with 5 U.S.C. 553(c), the agencies solicited comments
from the public to better inform the rulemaking process. These comments
are posted, without edit, to www.regulations.gov, as described in DOT's
system of records notice, DOT/ALL-14 FDMS, accessible through
www.transportation.gov/privacy.
Q. Judicial Review
NHTSA and EPA undertake this joint action under their respective
authorities pursuant to the Energy Policy and Conservation Act and the
Clean Air Act, mindful of the Supreme Court's statement in
Massachusetts v. EPA, 549 U.S. 497, 532 (2007), that ``there is no
reason to think the two agencies cannot both administer their
obligations and yet avoid inconsistency.'' Pursuant to Clean Air Act
section 307(b), any petitions for judicial review of this action must
be filed in the United States Court of Appeals for the D.C. Circuit by
November 26, 2019. Given the inherent relationship between the
agencies' actions, any challenges to NHTSA's regulation should also be
filed in the United States Court of Appeals for the D.C. Circuit.
List of Subjects in 49 CFR Parts 531 and 533
Fuel economy.
Regulatory Text
In consideration of the foregoing, under the authority of 49 U.S.C.
322, 32901, 32902, and 32903, and delegation of authority at 49 CFR
1.95, NHTSA amends 49 CFR chapter V as follows:
PART 531--PASSENGER AUTOMOBILE AVERAGE FUEL ECONOMY STANDARDS
0
1. The authority citation for part 531 continues to read as follows:
Authority: 49 U.S.C. 32902, delegation of authority at 49 CFR
1.50.
0
2. Add Sec. 531.7 to read as follows:
Sec. 531.7 Preemption.
(a) General. When an average fuel economy standard prescribed under
this chapter is in effect, a State or a political subdivision of a
State may not adopt or enforce a law or regulation related to fuel
economy standards or average fuel economy standards for automobiles
covered by an average fuel economy standard under this chapter.
[[Page 51362]]
(b) Requirements must be identical. When a requirement under
section 32908 of title 49 of the United States Code is in effect, a
State or a political subdivision of a State may adopt or enforce a law
or regulation on disclosure of fuel economy or fuel operating costs for
an automobile covered by section 32908 only if the law or regulation is
identical to that requirement.
(c) State and political subdivision automobiles. A State or a
political subdivision of a State may prescribe requirements for fuel
economy for automobiles obtained for its own use.
Appendix to Part 531 [Designated as Appendix A to Part 531 and Amended]
0
3. Designate the appendix to part 531 as appendix A to part 531 and in
newly designated appendix A, remove all references to ``Appendix'' and
add in their place ``Appendix A.''
0
4. Add appendix B to part 531 to read as follows:
Appendix B to Part 531--Preemption
(a) Express Preemption:
(1) To the extent that any law or regulation of a State or a
political subdivision of a State regulates or prohibits tailpipe
carbon dioxide emissions from automobiles, such a law or regulation
relates to average fuel economy standards within the meaning of 49
U.S.C. 32919.
(A) Automobile fuel economy is directly and substantially
related to automobile tailpipe emissions of carbon dioxide;
(B) Carbon dioxide is the natural by-product of automobile fuel
consumption;
(C) The most significant and controlling factor in making the
measurements necessary to determine the compliance of automobiles
with the fuel economy standards in this part is their rate of
tailpipe carbon dioxide emissions;
(D) Almost all technologically feasible reduction of tailpipe
emissions of carbon dioxide is achievable through improving fuel
economy, thereby reducing both the consumption of fuel and the
creation and emission of carbon dioxide;
(E) Accordingly, as a practical matter, regulating fuel economy
controls the amount of tailpipe emissions of carbon dioxide, and
regulating the tailpipe emissions of carbon dioxide controls fuel
economy.
(2) As a law or regulation related to fuel economy standards,
any law or regulation of a State or a political subdivision of a
State regulating or prohibiting tailpipe carbon dioxide emissions
from automobiles is expressly preempted under 49 U.S.C. 32919.
(3) A law or regulation of a State or a political subdivision of
a State having the direct or substantial effect of regulating or
prohibiting tailpipe carbon dioxide emissions from automobiles or
automobile fuel economy is a law or regulation related to fuel
economy standards and expressly preempted under 49 U.S.C. 32919.
(b) Implied Preemption:
(1) A law or regulation of a State or a political subdivision of
a State regulating tailpipe carbon dioxide emissions from
automobiles, particularly a law or regulation that is not attribute-
based and does not separately regulate passenger cars and light
trucks, conflicts with:
(A) The fuel economy standards in this part;
(B) The judgments made by the agency in establishing those
standards; and
(C) The achievement of the objectives of the statute (49 U.S.C.
Chapter 329) under which those standards were established, including
objectives relating to reducing fuel consumption in a manner and to
the extent consistent with manufacturer flexibility, consumer
choice, and automobile safety.
(2) Any law or regulation of a State or a political subdivision
of a State regulating or prohibiting tailpipe carbon dioxide
emissions from automobiles is impliedly preempted under 49 U.S.C.
Chapter 329.
(3) A law or regulation of a State or a political subdivision of
a State having the direct or substantial effect of regulating or
prohibiting tailpipe carbon dioxide emissions from automobiles or
automobile fuel economy is impliedly preempted under 49 U.S.C.
Chapter 329.
PART 533--LIGHT TRUCK FUEL ECONOMY STANDARDS
0
5. The authority citation for part 533 continues to read as follows:
Authority: 49 U.S.C. 32902; delegation of authority at 49 CFR
1.50.
0
6. Add Sec. 533.7 to read as follows:
Sec. 533.7 Preemption.
(a) General. When an average fuel economy standard prescribed under
this chapter is in effect, a State or a political subdivision of a
State may not adopt or enforce a law or regulation related to fuel
economy standards or average fuel economy standards for automobiles
covered by an average fuel economy standard under this chapter.
(b) Requirements must be identical. When a requirement under
section 32908 of title 49 of the United States Code is in effect, a
State or a political subdivision of a State may adopt or enforce a law
or regulation on disclosure of fuel economy or fuel operating costs for
an automobile covered by section 32908 only if the law or regulation is
identical to that requirement.
(c) State and political subdivision automobiles. A State or a
political subdivision of a State may prescribe requirements for fuel
economy for automobiles obtained for its own use.
Appendix to Part 533 [Designated as Appendix A to Part 533 and Amended]
0
7. Designate appendix to part 533 as appendix A to part 533 and in
newly redesignated appendix A, remove all references to ``Appendix''
and add in their place ``Appendix A''.
0
8. Add appendix B to part 533 to read as follows:
Appendix B to Part 533--Preemption
(a) Express Preemption:
(1) To the extent that any law or regulation of a State or a
political subdivision of a State regulates or prohibits tailpipe
carbon dioxide emissions from automobiles, such a law or regulation
relates to average fuel economy standards within the meaning of 49
U.S.C. 32919.
(A) Automobile fuel economy is directly and substantially
related to automobile tailpipe emissions of carbon dioxide;
(B) Carbon dioxide is the natural by-product of automobile fuel
consumption;
(C) The most significant and controlling factor in making the
measurements necessary to determine the compliance of automobiles
with the fuel economy standards in this part is their rate of
tailpipe carbon dioxide emissions;
(D) Almost all technologically feasible reduction of tailpipe
emissions of carbon dioxide is achievable through improving fuel
economy, thereby reducing both the consumption of fuel and the
creation and emission of carbon dioxide;
(E) Accordingly, as a practical matter, regulating fuel economy
controls the amount of tailpipe emissions of carbon dioxide, and
regulating the tailpipe emissions of carbon dioxide controls fuel
economy.
(2) As a law or regulation of a State or a political subdivision
of a State related to fuel economy standards, any state law or
regulation regulating or prohibiting tailpipe carbon dioxide
emissions from automobiles is expressly preempted under 49 U.S.C.
32919.
(3) A law or regulation of a State or a political subdivision of
a State having the direct or substantial effect of regulating or
prohibiting tailpipe carbon dioxide emissions from automobiles or
automobile fuel economy is a law or regulation related to fuel
economy standards and expressly preempted under 49 U.S.C. 32919.
(b) Implied Preemption:
(1) A law or regulation of a State or a political subdivision of
a State regulating tailpipe carbon dioxide emissions from
automobiles, particularly a law or regulation that is not attribute-
based and does not separately regulate passenger cars and light
trucks, conflicts with:
(A) The fuel economy standards in this part;
(B) The judgments made by the agency in establishing those
standards; and
(C) The achievement of the objectives of the statute (49 U.S.C.
Chapter 329) under which those standards were established, including
objectives relating to reducing fuel consumption in a manner and to
the extent consistent with manufacturer flexibility, consumer
choice, and automobile safety.
(2) Any law or regulation of a State or a political subdivision
of a State regulating or prohibiting tailpipe carbon dioxide
emissions from automobiles is impliedly preempted under 49 U.S.C.
Chapter 329.
[[Page 51363]]
(3) A law or regulation of a State or a political subdivision of
a State having the direct or substantial effect of regulating or
prohibiting tailpipe carbon dioxide emissions from automobiles or
automobile fuel economy is impliedly preempted under 49 U.S.C.
Chapter 329.
Issued on September 19, 2019 in Washington, DC, under authority
delegated in 49 CFR 1.95 and 501.4
Dated: September 19, 2019.
James C. Owens,
Acting Administrator, National Highway Traffic Safety Administration.
Dated: September 19, 2019.
Andrew R. Wheeler,
Administrator, Environmental Protection Agency.
[FR Doc. 2019-20672 Filed 9-26-19; 8:45 am]
BILLING CODE 4910-59-P
