Uncertainty thrives as Trump’s EPA plan rolls back key discoveries behind U.S. greenhouse gas rules

Lawyers and trade groups say the Trump administration has paid its plan to revoke U.S. climate regulation to cut industry costs, but according to lawyers and trade groups, it could backfire, which could put automakers, utilities and manufacturers in a future of regulatory uncertainty and litigation risks.

Republican President Donald Trump’s administration announced Tuesday that a plan to revoke a long-term discovery that greenhouse gas emissions harm human health, thus eliminating the legal basis of U.S. greenhouse gas (GHG) regulations.

The Environmental Protection Agency (EPA) administrator Lee Zeldin said the proposal would require a 45-day public comment period before it is adopted. If successful, it will end restrictions on greenhouse gas pollution from vehicle tailpipes, power plants, chimneys and other sources, saving the company $52 billion in environmental compliance costs.

But companies that have invested heavily in reducing emissions to meet government restrictions, and many shareholders have also called for the move, fearing the proposal will lead to regulatory and judicial unknowns, lawyers said.

“EPA-setting industries with greenhouse gas standards have always adhered to them and do not want them to be stripped,” said Meghan Greenfield, a partner at law firm Jenner & Block and former EPA lawyer. “The stability of the regulatory regime is extremely important for the industry as a benchmark.”

Holland & Knight senior attorney Zach Pilchen said the repeal of the hazard ruling would raise questions from relevant state authorities to file a lawsuit seeking damage caused by companies’ past greenhouse gas emissions or regulations that cause damage through those companies.

“Eliminating the danger may not only have consequences for federal regulations, but also have implications for the problems of state governments in regions that were previously believed to be considered by these federal regulations,” he said. “In that sense, it may inject more uncertainty into companies.”

The EPA issued the finding in 2009 in 2009 following a 2007 U.S. Supreme Court ruling, which confirmed the agency’s authority to regulate greenhouse gas emissions under the Clean Air Act.

During Trump’s first term, the EPA refused to accept an investigation into harms due to strong resistance to industry and the legal risks associated with undermining federal power, a former Trump administration source said.

Three sources in the automaker industry told Reuters privately that the EPA’s proposed repeal of vehicle efficiency standards is much broader than expected. In addition to tailpipe standards, the proposal will eliminate air conditioning efficiency testing and eliminate battery monitoring and battery durability requirements.

Albert Gore, executive director of the Zero Emissions Transport Association, said the EPA’s actions reversed long-standing laws as sales of “clean” cars are growing steadily and powering the U.S. battery and vehicle manufacturing boom.

Over the past decade, manufacturers have announced $17.6 billion in U.S. investment in electric vehicle and battery manufacturing facilities, according to the Environmental Defense Fund.

“Taking backward measures and adding new regulatory uncertainty can harm consumers, disturbing markets and complicate ongoing business decisions for automakers,” Gore said.

A cold reaction

Industry groups are guarded in their response to the EPA announcement, mainly saying they will review the proposal and comment in the coming weeks.

The Edison Electrical Institute (EEI), the main hall group of the power company, said it supports the EPA in developing clear, consistent regulatory policies to drive infrastructure and investment.

“EPA must use its powers to develop flexible regulations to affect reliability and customer bills,” said EEI spokesman Jeremy Ortiz.

The power industry is responsible for about a quarter of U.S. greenhouse gas emissions and has steadily reduced carbon production for more than a decade by replacing older coal-fired generators with natural gas, solar energy and wind.

EEI supported the EPA, which was then part of the administration of former President Joe Biden. At the time, the EPA said the tailpipe rules by 2032 would avoid more than 7 billion tons of carbon emissions and provide society with nearly $100 billion in net benefits in the U.S., including reducing fuel, maintenance and repair costs for drivers.

It said in its summary at the time: “Enable authority to subvert this predictability and unity and potentially make individual greenhouse gas emitters special anomalies for judges in various district courts.”

The Automotive Industry Group, a coalition of automotive innovation, welcomes the deregulation of tailpipes and says it is digesting broader recommendations for abolishing hazard discoveries. Both the American Petroleum Institute and the American Truck Transportation Association have cheered plans to repeal the vehicle tailpipe rules.

The U.S. Chamber of Commerce has also previously opposed the abolition because its impact on members is unstable. “While we are not calling for this proposal, we are reviewing it and will consult with members so that we can provide constructive feedback to the institution,” the Chamber of Commerce Institute of Energy (Marty Durbin) said Tuesday.

In addition to the EPA proposal, the Trump administration has also reduced efforts to track climate change, prompting a fight between private companies and external agencies to back up data before it is lost.

This includes restricting public access to the national climate assessment – a report is released every few years to document the impact of humans on temperature rise – and a suspension of the National Oceanic and Atmospheric Administration’s natural disaster list, totaling more than $1 billion in U.S. damages.