The United States Supreme Court has ruled in favor of fuel producers challenging California’s vehicle emissions standards, allowing their lawsuit to proceed. The court’s 7-2 decision overturned a lower court’s dismissal of the lawsuit, which was filed by Valero Energy’s Diamond Alternative Energy and fuel industry groups.
The dispute revolves around an exception granted to California under the Clean Air Act, permitting the state to set stricter emissions regulations than federal standards. In 2022, the Environmental Protection Agency (EPA) reinstated a waiver for California to set its own tailpipe emissions limits and zero-emission vehicle mandate through 2025.
This decision was challenged by Valero and other groups, who argued that the EPA exceeded its authority and that the regulations would harm their business by reducing demand for liquid fuels.
Justice Brett Kavanaugh, writing for the majority, stated that “the government generally may not target a business or industry through stringent and allegedly unlawful regulation, and then evade the resulting lawsuits by claiming that the targets of its regulation should be locked out of court as unaffected bystanders”. This ruling could have significant implications for California’s ability to set its own emissions standards and potentially impact the state’s goal of phasing out sales of new gasoline-powered cars by 2035.
California has received over 100 waivers under the Clean Air Act, allowing it to establish stricter emissions rules than the federal government. The state’s emissions standards have a significant impact on the US auto market, with 17 states following California’s lead in setting stricter emissions standards. The Supreme Court’s decision is part of a larger trend of skepticism towards broad authority for federal regulatory agencies, with the court restricting the powers of the EPA in recent years.
The ruling could complicate California’s efforts to reduce greenhouse gas emissions and transition to cleaner energy sources. However, the state’s large economy and influence often set the standard for automakers across the US, and it remains to be seen how this decision will affect the industry.