The U.S. Supreme Court signaled on Wednesday that it may allow a group of fuel producers to challenge California’s strict vehicle emissions and electric car standards, potentially reshaping how regulatory power is distributed under federal environmental law, Reuters has reported.
The case centers on a 2022 decision by the Biden administration’s Environmental Protection Agency (EPA) to reinstate a waiver under the Clean Air Act, allowing California to enforce tougher emissions standards than those set by the federal government.
A subsidiary of Valero Energy (NYSE: VLO) and several fuel industry groups are appealing a lower court ruling that found they lacked legal standing to sue.
Both conservative and liberal justices questioned whether the challengers could plausibly argue that California’s regulations harm their businesses by reducing demand for liquid fuels.
Some justices appeared open to the idea that the challengers’ economic claims might be enough to establish standing. Justice Amy Coney Barrett noted that relying on “common sense” could meet the legal threshold for a case, according to Reuters.
The Clean Air Act generally bars states from setting their own emissions standards but allows the EPA to grant California exceptions. Since 1967, the state has received over 75 such waivers.
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The 2022 waiver restored California’s authority to enforce strict tailpipe emissions limits and a zero-emission vehicle mandate through 2025, undoing a Trump-era reversal.
Critics, including former Trump administration lawyer Jeffrey Wall, argue that the EPA overstepped its authority and unfairly disrupted fuel markets.
However, government lawyers contend that the challengers have not shown direct harm and thus cannot sue.
The Supreme Court’s decision, expected by June, could impact how easily businesses can challenge environmental regulations.
In recent years, the court has limited the EPA’s authority in several major rulings, including restrictions on air and water pollution rules.
If the justices side with the fuel producers, it could open the door to more legal challenges against environmental regulations that affect industry profits.
Read more: US Supreme Court Limits EPA’s Ability To Reduce Emissions
