The Trump administration’s initiative to revoke U.S. climate regulations is aimed at reducing costs for industries. However, legal experts and trade organizations caution that this move could lead to a future filled with regulatory uncertainties and potential litigation risks for automakers, utilities, and manufacturers.
President Donald Trump’s administration recently announced a plan to retract the longstanding determination that greenhouse gas emissions pose a threat to human health. This action would eliminate the legal basis for existing U.S. greenhouse gas regulations. EPA Administrator Lee Zeldin mentioned that the proposal will undergo a 45-day public comment period before implementation. If approved, it would remove restrictions on greenhouse gas emissions from various sources such as vehicle tailpipes, power plants, and smokestacks, resulting in an estimated $52 billion in savings for companies on environmental compliance costs.
However, companies that have already made significant investments to reduce emissions in compliance with government regulations, which are also demanded by shareholders, are concerned that the proposal could lead to uncertainties in regulations and potential legal disputes, according to legal experts.
Reversing the endangerment determination could raise questions regarding the ability of state authorities to file lawsuits seeking compensation for past greenhouse gas emissions’ impacts or to enact laws holding companies accountable for damages caused. This could introduce additional uncertainties for companies, creating new challenges to navigate.
The EPA initially issued the endangerment determination in 2009 under the administration of President Barack Obama, following a U.S. Supreme Court decision in 2007 affirming the agency’s authority to regulate greenhouse gas emissions under the Clean Air Act.
Industry insiders revealed that the EPA’s proposal to roll back vehicle efficiency standards extends beyond initial expectations. Apart from tailpipe standards, the proposal includes eliminating air conditioning efficiency tests and removing requirements related to battery monitoring and durability.
Albert Gore, the executive director of the Zero Emission Transportation Association, criticized the EPA’s move to reverse established laws at a time when clean car sales are on the rise, driving growth in U.S. battery and vehicle manufacturing sectors. Manufacturers have announced over $197.6 billion in investments in U.S. electric vehicle and battery production facilities over the past decade, as reported by the Environmental Defense Fund.
Industry groups have cautiously responded to the EPA’s announcement, stating they will evaluate the proposal and provide feedback in the coming weeks. The Edison Electric Institute (EEI), the primary lobbying group for the electric utility industry, expressed support for the EPA in establishing clear and consistent regulatory frameworks to drive infrastructure development and investments, emphasizing the importance of flexible regulations that consider reliability and cost impacts on consumers.
The power sector, accounting for about a quarter of U.S. greenhouse gas emissions, has steadily reduced its carbon footprint by replacing older coal-fired plants with natural gas, solar, and wind energy sources over the past decade. EEI had previously aligned with the EPA, under the previous administration, in a Supreme Court case where the agency’s authority to regulate power plants was challenged. The EPA argued that maintaining tailpipe rules through 2032 would prevent over seven billion tons of carbon emissions and deliver nearly $100 billion in annual net benefits to society.
While some industry groups have welcomed the deregulation of tailpipe standards, others are still assessing the broader implications of repealing the endangerment determination. The American Petroleum Institute and the American Trucking Associations have expressed support for the planned repeal of vehicle tailpipe regulations.
The U.S. Chamber of Commerce, despite not advocating for the proposal, is reviewing it to provide feedback to the agency after consulting with its members. Marty Durbin, president of the chamber’s energy institute, emphasized the need for constructive engagement with the EPA on this matter.
In addition to the EPA proposal, the Trump administration has scaled back efforts to monitor climate change, prompting private entities and external organizations to back up critical data to prevent its loss. This includes restricting access to the National Climate Assessment and discontinuing the National Oceanic and Atmospheric Administration’s list of natural disasters causing over $1 billion in damages.