Climate law could insulate Biden’s EV push in court

By Lesley Clark | 04/11/2023 06:36 AM EDT

EPA Administrator Michael Regan

EPA Administrator Michael Regan testifying in the Senate last month. The agency is preparing to announce stringent car rules for greenhouse gases. Jose Luis Magana/AP Photo

Each time EPA has tried to regulate vehicle emissions, its efforts have been met with challenges in federal court. The agency’s expected proposal this week to boost electric vehicle deployment is unlikely to be any different.

But this time around, EPA has a new tool in its legal arsenal to defend its attempt to tackle one of the nation’s leading sources of planet-warming emissions — the freshly minted Inflation Reduction Act.

The landmark climate law passed in 2022 is expected to buffer EPA’s anticipated regulation against scrutiny from a federal judiciary where conservative jurists — particularly at the Supreme Court — are increasingly skeptical of agencies seizing power that hasn’t been specifically delegated to them by Congress.

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“It’s Congress directly weighing in to provide direct support for zero-emitting vehicles,” said Peter Zalzal, senior counsel at the Environmental Defense Fund, of the Inflation Reduction Act.

President Joe Biden as soon as Wednesday could announce performance-based auto emissions standards, which could be strong enough to result in electric-powered cars making up as much as 67 percent of the new vehicle fleet by 2032, The New York Times reported Saturday, expanding on an earlier report from Bloomberg.

Details of the proposal aren’t yet public, but if the past is prologue, the initiative is likely to end up in court: Republican-led states are already suing EPA over its emissions standards for cars in model years 2024 through 2026, and a separate lawsuit is pending over California’s authority to write tougher tailpipe regulations than the agency’s national standards.

And later this week, a federal appeals court will hear arguments over the EPA science that underpins the agency’s climate rules. Conservative think tanks and climate skeptics have sought for years to force the agency to rescind its 2009 endangerment finding that supports EPA regulations to reduce emissions from sources like cars, trucks and power plants.

“Given the likelihood of litigation, EPA must ensure it has adequately addressed key Clean Air Act requirements, such as allowing sufficient lead time and feasibility for automakers to meet new mandates,” said Matthew Leopold, who served as the agency’s general counsel under former President Donald Trump, of the expected new vehicle emissions standards.

Leopold, now a partner at Hunton Andrews Kurth LLP, said the effort appears to be a “dramatic push to electrify the nationwide passenger fleet.”

He added that “pushing the industry too far, too fast could be an area that is hotly litigated if opponents attempt to demonstrate that EPA’s proposal exceeds the industry’s ability to keep up.”

Release of EPA’s proposal would trigger a notice and comment period, after which the agency would finalize the rule, opening the door to lawsuits.

Leopold said it will be important to watch the auto industry’s comments to the proposal to gauge whether EPA’s plan is achievable.

The Alliance for Automotive Innovation, which represents nearly all major automakers, has already expressed some concerns over the proposal (Greenwire, April 10). The alliance has previously backed EPA emissions standards for vehicles from model year 2023 through 2026, which aim to reverse Trump-era rollbacks, writing in a court filing last March that the rule “will challenge the industry” while providing automakers with “critically important flexibilities.”

Republican lawsuits have accused the Biden administration of overstepping its authority, but Zalzal said the anticipated EV proposal would fall in EPA’s wheelhouse: The agency has set greenhouse gas standards for motor vehicles for at least 15 years, and it has set standards for other pollutants for 50 years.

“There is just an extensive, unbroken, time-tested history of EPA setting standards and doing it considering available technologies and that’s likely what EPA will be doing for future standards,” he said.

He added that the agency has included rulemaking for zero-emissions vehicles in the past.

“All of this substantially strengthens the foundation for EPA rulemaking,” he said.

Zalzal noted that car manufacturers have increasingly embraced electric vehicles. A recent EDF report shows automakers will be capable of producing 4.3 million EVs annually by 2026.

“In terms of the record that would support protective standards, which is always an important consideration, it is hard to imagine a record that could be stronger than the one EPA is looking at,” he said.

The Inflation Reduction Act also inserted into the Clean Air Act a new definition of zero-emitting vehicles, he said. And the law provides support for states that want to adopt California’s stricter tailpipe emissions standards.

He suggested that by providing support for both EV consumers and manufacturers, as well as strengthening EPA’s Clean Air Act authority, the Inflation Reduction Act would protect the agency’s expected EV proposal from potential legal challenges.

“It’s hard to overstate how squarely this falls into the heartland of what EPA does,” he said.

EPA’s proposal could falter if — as some automakers warn — the Inflation Reduction Act hurts EV producers before helping them, said Lisa Rushton, a partner at Womble Bond Dickinson.

“The U.S. simply doesn’t have access to sufficient critical minerals to satisfy the growing demand for EVs on the road today,” she said, noting that by 2026, vehicles need to comply with strict battery material sourcing requirements in the climate law.

“If you layer on a new rule that establishes emissions standards that could make up to two-thirds of new passenger vehicles sold in the U.S. electric by 2032,” she said, “we are likely to face a severe supply chain problem and situation where most of the cars sold will simply not qualify for the promised tax credit.”

Rushton suggested that the Republican states and other critics that have accused EPA overstepping its authority could raise the “major questions” doctrine against the agency’s expected proposal.

The legal theory, which the Supreme Court used last year to curb EPA’s ability to restrict power plant emissions, states that agencies cannot regulate matters of vast economic and political importance unless Congress has explicitly authorized them to do so.

“We could see arguments that EPA exceeded its authority under the Clean Air Act by approving a program aimed at the global issues of climate change,” she said.

This story also appears in Energywire.