The Supreme Court Limits EPA's Authority To Regulate Greenhouse Gases

• Published date: 04 July 2022
• Subject Matter: Environment, Energy and Natural Resources, Energy Law, Environmental Law, Renewables
• Law Firm: Kelley Drye & Warren LLP
• Author: Mr William J. Jackson, Wayne J. D'Angelo and Lauren H. Shah

In a decision issued the final day of the Supreme Court's 2022 term, the Court sided with West Virginia and other States that had challenged the Environmental Protection Agency's ("EPA's" or "the Agency's") ability to regulate greenhouse gases. The Court's decision limits EPA's authority pursuant to the Clean Air Act ("CAA"), which as discussed below, may implicate changes to executive branch agencies' ability to regulate more broadly.

Preliminary Challenges in the District Courts Regarding the EPA's Authority Pursuant to the Clean Air Act

This case arises from differing interpretations of a section of the Clean Air Act'Standards of Performance for Existing Sources'that gives the EPA the authority to adopt regulations "under which each State or tribe shall submit to the [EPA] a plan which," in part "establishes standards of performance for any existing source[s]" that "contribute[] significantly to . . . air pollution which may reasonably be anticipated to endanger public health or welfare."¹

Pursuant to this section of the CAA, in 2015 the Obama Administration issued the Clean Power Plan ("CPP"), which established national carbon-dioxide emission rate requirements for coal- and gas-fired plants.² These limits could only be met through the use of outside-the-fenceline emissions reductions measures, such as transitioning to renewable energy. The CPP then gave States and tribes some flexibility to create their own plans for adopting enforceable emissions limits so long as State-wide emissions complied with the CPP's State-specific emission caps.

In October of 2015, West Virginia filed suit in the U.S. Court of Appeals for the D.C. Circuit ("D.C. Circuit") against the EPA to halt implementation of the plan.³ In February of 2016, in a very rare move, the Supreme Court stayed the implementation of the CPP while it was still under review by the D.C. Circuit.⁴ Then, in 2018, while the challenges to the CPP were still pending, the Trump Administration adopted the Affordable Clean Energy Act ("ACE"), which effectively repealed the CPP.⁵ ACE required less stringent emissions reduction ranges than the CPP. These limits were based on inside-the-fenceline controls which were usually already being met by plants through market-based switches from coal to natural gas. ACE also extended the deadlines for State compliance with emissions' standards.

Between 2020 and 2021, environmental groups, States, power utilities, trade associations for renewable energies, and coal mine...