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By Andrew Chung
(Reuters) – The U.S. Supreme Court agreed on Friday to hear a fuel maker’s bid to challenge California’s emissions standards and electric cars under the federal air pollution law in a major case testing the Democrat-run state’s power to fight greenhouse gases .
The judges appealed a Valero Energi (THEY ARE NOT:) Subsidiary and fuel industry groups dismissed a lower court’s challenge to a decision by Democratic President Joe Biden’s administration to allow California to set its own regulations.
The dispute centers on an exemption granted to California in 2022 by the US Environmental Protection Agency from national vehicle emissions standards set by the agency under the landmark Air Pollution Protection Act.
Although states and municipalities are generally prevented from imposing their own restrictions, Congress has allowed the EPA to waive preemption rules to allow California to set certain regulations that are more stringent than federal standards.
California, America’s most populous state, has received more than 75 exemptions since 1967, requiring ever-better emissions performance and sales of electric vehicles.
The EPA’s March 2022 action reinstated a waiver for California to set its own tailpipe emissions limits and a zero-emission vehicle mandate through 2025, reversing a 2019 decision under Republican former President Donald Trump’s administration that revoked the waiver.
Valero’s Diamond Alternative Energy and related groups challenged the reinstatement of California’s waiver, arguing that the decision exceeded the EPA’s authority under the Clean Air Act and hurt their bottom line by reducing demand for liquid fuels.
The U.S. Court of Appeals for the District of Columbia District dismissed the lawsuits in April, finding that Valero and the states lacked the necessary standing to file their claims.
In their appeal to the Supreme Court, the fuel makers said that California acts as a “university EPA” and lacks the authority to set regulations to fight climate change and force the transition to electric vehicles. They invoked the “major questions” doctrine embraced by conservative members of the Supreme Court, which gives justices broad discretion to overturn executive agency actions unless they are deemed to have been clearly authorized by Congress.
The Supreme Court, which has a conservative 6-3 majority, has taken a skeptical view of the expansive powers of federal regulatory agencies and has limited the EPA’s powers in some landmark rulings in recent years.
In June, a court blocked the EPA’s “Good Neighbor” rule, which aims to reduce ozone emissions that can worsen air pollution in neighboring states. In 2023, the court denied the EPA’s power to protect wetlands and fight water pollution. In 2022, it imposed limits on the agency’s authority under the Clean Air Act to reduce carbon emissions from coal and gas-fired power plants.
