By David Shepardson and Clark Mindock
WASHINGTON (Reuters) -A U.S. appeals court on Tuesday upheld the Environmental Protection Agency's decision to grant California a waiver to set its own tailpipe emissions limits and electric-vehicle requirements.
The three-judge panel of the U.S. Court of Appeals for the District of Columbia rejected a legal challenge from 17 Republican-led states and entities that sell or produce liquid fuels. The EPA in March 2022 under President Joe Biden restored California's ability to set its own zero-emission vehicle sales mandate and tailpipe emissions limits through 2025, reversing a 2019 decision by then-President Donald Trump.
California Governor Gavin Newsom said the "court sided with common sense and public health against the fossil fuel industry and Republican-led states. This ruling reaffirms California’s longstanding right to address pollution from cars and trucks."
Republicans argued the rules gave California an unconstitutional regulatory power denied to other states.
The court rejected that argument and said reversing the EPA decision would address state claims if automakers responded by selling fewer EVs or by lowering prices of gas-powered models and said there was no evidence to support that conclusion.
In 1993, the EPA approved a waiver of California’s first zero-emission vehicle standard.
The EPA in 2022 reinstated a waiver under the Clear Air Act to California that was previously awarded in 2013. The EPA also rejected a Trump-era decision to prohibit other states from adopting the California tailpipe emission standards.
The California Air Resources Board (CARB) in August 2022 approved a landmark plan to end the sale of gasoline-only vehicles in the state by 2035 and set yearly, rising requirements for zero-emission vehicles, starting in 2026.
In May 2023, CARB asked the EPA to approve a new waiver under the Clean Air Act for the new EV rules beginning in 2026.
The Alliance for Automotive Innovation, which represents most major automakers including General Motors (NYSE:GM), Volkswagen (ETR:VOWG_p), Toyota Motor (NYSE:TM) and others, in February questioned California's EV requirements.
The EPA last month finalized stricter tailpipe emissions limits through 2032 that are weaker than it first proposed in early 2023. Automakers will need to sell at least 50% plug-in and electric vehicles by 2030 to meet regulatory targets. Under the initial proposal, they were projected to need to sell 60% EVs by 2030 and 68% by 2032.
Trump, who is seeking a return to the White House, has vowed to reverse the EV rules.