[Federal Register Volume 86, Number 80 (Wednesday, April 28, 2021)]
[Notices]
[Pages 22421-22430]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-08826]


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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2021-0257; FRL-10022-05-OAR]


California State Motor Vehicle Pollution Control Standards; 
Advanced Clean Car Program; Reconsideration of a Previous Withdrawal of 
a Waiver of Preemption; Opportunity for Public Hearing and Public 
Comment

AGENCY: Environmental Protection Agency (EPA).

ACTION: Notice of Opportunity for Public Hearing and Comment.

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SUMMARY: The Environmental Protection Agency (EPA) is reconsidering a 
prior action that withdrew a waiver of preemption for California's zero 
emission vehicle (ZEV) mandate and greenhouse gas (GHG) emission 
standards within California's Advanced Clean Car (ACC) program for 
purposes of rescinding that action. The ACC program waiver, as it 
pertains to the GHG emission standards and ZEV mandates, will become 
effective should EPA rescind the prior action. On September 27, 2019, 
EPA and the National Highway Transportation Safety Administration 
(NHTSA) issued an action titled ``The Safer Affordable Fuel-Efficient 
Vehicles Rule Part One: One National Program'' (SAFE 1) that included, 
among other matters, EPA's determination that the Agency had authority 
to reconsider the ACC program waiver and that elements of the ACC 
program waiver should be withdrawn due to NHTSA's action under the 
Energy Policy & Conservation Act (EPCA) and Clean Air Act (CAA) 
preemption provisions. In addition, SAFE 1 included EPA's 
interpretation of whether States can adopt California's GHG emission 
standards under section 177 of the CAA.
    EPA believes that there are significant issues regarding whether 
SAFE 1 was a valid and appropriate exercise of agency authority, 
including the amount of time that had passed since EPA's 2013 waiver 
decision, the novel approach and legal interpretations used in SAFE 1, 
and whether EPA took proper account of the environmental conditions in 
California and the environmental consequences from the waiver 
withdrawal in SAFE 1. Further, EPA will be addressing issues raised in 
several petitions for reconsideration of SAFE 1, including one filed by 
California (jointly with a number of States and Cities) and one jointly 
filed by nongovernmental organizations. Finally, on January 20, 2021, 
President Biden issued an Executive Order on ``Protecting Public Health 
and the Environment and Restoring Science to Tackle the Climate 
Crisis.'' The President directed the Federal Agencies to ``immediately 
review'' SAFE 1, and to consider action ``suspending, revising, or 
rescinding'' that action by April 2021. Therefore, based upon the 
issues associated with SAFE 1, the petitions for reconsideration, and 
the Executive Order, this Federal Register notice initiates 
reconsideration of SAFE 1 and announces a virtual public hearing as 
well as an opportunity to submit new written comment.

DATES: 
    Comments: Comments must be received on or before July 6, 2021.
    Public Hearing: EPA will hold a virtual public hearing on June 2, 
2021. Please refer to the SUPPLEMENTARY INFORMATION section for 
additional information on the public hearing. Additional information 
regarding the virtual public hearing and this action can be found at: 
https://www.epa.gov/regulations-emissions-vehicles-and-engines/public-hearing-information-epas-notice-reconsideration.

ADDRESSES: Comments. You may send your comments, identified by Docket 
ID No. EPA-HQ-OAR-2021-0257, by any of the following methods:
     Federal eRulemaking Portal: http://www.regulations.gov 
(our preferred method). Follow the online instructions for submitting 
comments.
     Email: a-and-r-Docket@epa.gov. Include Docket ID No. EPA-
HQ-OAR-2021-0257 in the subject line of the message.
     Mail: U.S. Environmental Protection Agency, EPA Docket 
Center, Air Docket, Mail Code 28221T, 1200 Pennsylvania Avenue NW, 
Washington, DC 20460.
     Hand Delivery or Courier (by scheduled appointment only): 
EPA Docket Center, WJC West Building, Room 3334, 1301 Constitution 
Avenue NW, Washington, DC 20004. The Docket Center's hours of 
operations are 8:30 a.m.-4:30 p.m., Monday-Friday (except Federal 
Holidays).
    Instructions: All submissions received must include the Docket ID 
No. for this action. Comments received may be posted without change to 
https://www.regulations.gov, including any personal information 
provided. For the full EPA public comment policy, information about CBI 
or multimedia submissions, and general guidance on making effective 
comments, please visit

[[Page 22422]]

http://www.epa.gov/dockets/commenting-epa-dockets.
    Out of an abundance of caution for members of the public and our 
staff, the EPA Docket Center and Reading Room are closed to the public, 
with limited exceptions, to reduce the risk of transmitting COVID-19. 
Our Docket Center staff will continue to provide remote customer 
service via email, phone, and webform. We encourage the public to 
submit comments via https://www.regulations.gov or email, as there may 
be a delay in processing mail and faxes. Hand deliveries and couriers 
may be received by scheduled appointment only. For further information 
on EPA Docket Center services and the current status, please visit us 
online at https://www.epa.gov/dockets.
    EPA continues to monitor information carefully and continuously 
from the Centers for Disease Control and Prevention (CDC), local area 
health departments, and our Federal partners so that we can respond 
rapidly as conditions change regarding COVID-19.
    Public Hearing. The virtual public hearing will be held on June 2, 
2021. The hearing will begin at 9:00 a.m. Eastern Time (ET) and end 
when all parties who wish to speak have had an opportunity to do so. 
All hearing attendees (including those who do not intend to provide 
testimony and merely listen) should notify the SAFE1Hearing@epa.gov 
email address listed under FOR FURTHER INFORMATION CONTACT by May 25, 
2021. Once an email is sent to this address you will receive an 
automatic reply with further information for registration. Be sure to 
check your clutter and junk mailboxes for this reply. Additional 
information regarding the hearing appears below under SUPPLEMENTARY 
INFORMATION.

FOR FURTHER INFORMATION CONTACT: For questions regarding this proposed 
action, contact David Dickinson, Office of Transportation and Air 
Quality, Transportation and Climate Division, Environmental Protection 
Agency; telephone number: (202) 343-9256; email address: 
dickinson.david@epa.gov. To register for the virtual public hearing, 
contact [email protected]

SUPPLEMENTARY INFORMATION:
I. Participation in Virtual Public Hearing
II. Background
    A. Scope of Preemption and Criteria for a Waiver Under the Clean 
Air Act
    B. The ACC Program Waiver
    C. The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part 
One: One National Program'' (SAFE 1)
    D. Prior EPA Waiver Decisions for California Greenhouse Gas 
Emission Standards
    E. The Petitions for Reconsideration
III. Request for Comments

I. Participation in Virtual Public Hearing

    Please note that EPA is deviating from its typical approach because 
the President has declared a national emergency. Because of current CDC 
recommendations, as well as state and local orders for social 
distancing to limit the spread of COVID-19, EPA cannot hold in-person 
public meetings at this time.
    EPA will begin pre-registering speakers for the hearing upon 
publication of this document in the Federal Register. To register to 
speak at the virtual hearing, please contact the email address listed 
in the FOR FURTHER INFORMATION CONTACT section. The last day to pre-
register to speak at the hearing will be May 25, 2021.
    Each commenter will have 3 minutes to provide oral testimony. EPA 
may ask clarifying questions during the oral presentations but will not 
respond to the presentations at that time. EPA recommends submitting 
the text of your oral comments as written comments to the rulemaking 
docket. Written statements and supporting information submitted during 
the comment period will be considered with the same weight as oral 
comments and supporting information presented at the public hearing. 
Please note that any updates made to any aspect of the hearing will be 
posted online at: https://www.epa.gov/regulations-emissions-vehicles-and-engines/public-hearing-information-epas-notice-reconsideration.
    While EPA expects the hearing to go forward as set forth above, 
please monitor the website or contact the person listed in the FOR 
FURTHER INFORMATION CONTACT section to determine if there are any 
updates. EPA does not intend to publish a document in the Federal 
Register announcing updates. A copy of the hearing transcript will be 
placed into the docket.
    If you require the services of a translator or special 
accommodations such as audio description, please pre-register for the 
hearing and describe your needs by May 25, 2021. EPA may not be able to 
arrange accommodations without advance notice.

II. Background

    EPA is reconsidering a prior action that withdrew the January 9, 
2013 waiver of preemption for the state of California's (California) 
Advanced Clean Car (ACC) program for purposes of rescinding the 
withdrawal action. The ZEV mandates and GHG emission standards within 
the ACC program waiver will come into effect should EPA rescind this 
prior action.\1\
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    \1\ 78 FR 2112 (January 9, 2013). EPA's waiver action on January 
9, 2013 was for several California emission standards, including the 
low emission vehicle (LEV) III regulations for criteria pollutants. 
SAFE 1 withdrew elements of the January 9, 2013 waiver pertaining to 
certain ZEV mandate and GHG emission standards. Other elements of 
the ACC program waiver remain in effect.
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    Specifically, on September 27, 2019, NHTSA and EPA each finalized 
agency actions that addressed greenhouse gas (GHG) emissions standards 
for new motor vehicles and zero emissions vehicle (ZEV) mandates in a 
single Federal Register notice titled: ``The Safer Affordable Fuel-
Efficient Vehicles Rule Part One: One National Program'' (SAFE 1).\2\ 
In that notice, NHTSA codified regulatory text, and appendices, that 
provided its view that state regulation of fuel economy is preempted 
under the Energy Policy and Conservation Act (EPCA). On its part, EPA 
withdrew a waiver of preemption that had been previously granted to 
California for the regulation of motor vehicle emissions through GHG 
standards and a ZEV mandate. EPA's action also took into consideration 
preemption regulations issued by NHTSA under EPCA in SAFE 1. On January 
20, 2021, President Biden issued an Executive Order 13990 on 
``Protecting Public Health and the Environment and Restoring Science to 
Tackle the Climate Crisis.'' The President directed each Federal agency 
to ``immediately review'' SAFE 1, and consider taking action 
``suspending, revising, or rescinding'' it by April 2021.\3\ 
Accordingly, EPA has conducted a review of both the legal and factual 
predicates for SAFE I. EPA now believes that there are significant 
issues with the SAFE 1 action, including the time elapsed since EPA's 
2013 waiver decision (and associated reliance interests), the novel 
statutory interpretations set forth in SAFE 1, and whether EPA took 
proper account of the environmental conditions in California and the 
environmental consequences of the waiver withdrawal in SAFE 1. Further, 
subsequent to SAFE 1, EPA received several petitions for 
reconsideration, including one filed by California seeking 
clarification of the scope of the SAFE 1 action, one filed by 
California (jointly with a number of States and Cities), and one 
jointly filed by nongovernmental organizations that

[[Page 22423]]

raised significant issues related to the agency's action in SAFE 1. EPA 
has evaluated each petition for reconsideration and believes there is 
merit in reviewing issues that petitioners have raised such as whether 
the withdrawal of the ACC program waiver was a valid exercise of EPA 
authority, and whether the Agency properly interpreted and applied the 
CAA preemption provisions. EPA has notified these petitioners that the 
agency will be addressing issues raised in their petitions as part of 
this proceeding.
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    \2\ The SAFE 1 action is at 84 FR 51310 (September 27, 2019).
    \3\ This action is being issued only by EPA and, therefore, does 
not bear upon any future or potential action NHTSA may take 
regarding its decision or pronouncements in SAFE 1.
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    In considering whether to rescind the action that withdrew portions 
of the ACC program waiver, EPA is seeking to determine whether it 
properly evaluated and exercised its authority to reconsider a previous 
waiver granted to CARB and whether the withdrawal was a valid and 
appropriate exercise of authority and consistent with judicial 
precedent.
    EPA is providing the following summary of sections of the Clean Air 
Act that are applicable to the Agency's review of the California Air 
Resources Board's (CARB's) new motor vehicle emissions program, an 
overview of CARB's ACC program waiver and subsequent EPA action to 
withdraw portions of the ACC program waiver pertaining to CARB's GHG 
emission standards and ZEV mandate in SAFE 1, an overview of prior EPA 
waiver actions applicable to CARB's GHG emission standards for motor 
vehicles, and a brief description of the petitions for reconsideration 
filed with EPA after the completion of SAFE 1 in order to provide the 
context for agency solicitation of comments, which can be found in 
section ``III. Request for Comments.'' EPA is not soliciting comments 
on the 2013 ACC program waiver decision, and therefore has not reopened 
that decision for comments. Specifically, EPA is not soliciting 
comments on issues addressed in the ACC program waiver decision beyond 
those issues addressed in the final SAFE 1 action. EPA will treat any 
other comments it receives as beyond the scope of this reconsideration 
proceeding.

A. Scope of Preemption and Criteria for a Waiver Under the Clean Air 
Act

    Title II of the Clean Air Act, as amended, generally preempts 
states from setting emission standards for new motor vehicles. Section 
209(a) provides:
    No State or any political subdivision thereof shall adopt or 
attempt to enforce any standard relating to the control of emissions 
from new motor vehicles or new motor vehicle engines subject to this 
part. No state shall require certification, inspection or any other 
approval relating to the control of emissions from any new motor 
vehicle or new motor vehicle engine as condition precedent to the 
initial retail sale, titling (if any), or registration of such motor 
vehicle, motor vehicle engine, or equipment.\4\
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    \4\ Section 209(a) of the Clean Air Act, 42 U.S.C. 7543(a).
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    California is the only state that is eligible to seek and receive a 
waiver of preemption under the terms of section 209(b)(1). This section 
provides:
    The Administrator, after notice and opportunity for public hearing, 
to waive application of the prohibitions of section 209(a) for any 
state that has adopted standards (other than crankcase emission 
standards) for the control of emissions from new motor vehicles or new 
motor vehicle engines prior to March 30, 1966, if the state determines 
that the state standards will be, in the aggregate, at least as 
protective of public health and welfare as applicable Federal 
standards. No such waiver shall be granted if the Administrator finds 
that--
    (A) the determination of the state is arbitrary and capricious,
    (B) the state does not need the state standards to meet compelling 
and extraordinary conditions, or
    (C) the state standards and accompanying enforcement procedures are 
not consistent with section 202(a) of the Act.\5\
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    \5\ Section 209(b)(1) of the Clean Air Act, 42 U.S.C. 
7543(b)(1).
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    Previous decisions granting California waivers of Federal 
preemption for motor vehicle emission standards have stated that State 
standards are inconsistent with section 202(a) if there is inadequate 
lead time to permit the development of the necessary technology giving 
appropriate consideration to the cost of compliance within that time 
period or if the Federal and State test procedures impose inconsistent 
certification procedures.\6\
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    \6\ To be consistent, the California certification procedures 
need not be identical to the Federal certification procedures. 
California procedures would be inconsistent, however, if 
manufacturers would be unable to meet the state and Federal 
requirements with the same test vehicle during the same test. See, 
e.g., 43 FR 32182 (July 25, 1978).
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    EPA has consistently interpreted Section 209(b) to require issuance 
of a waiver unless EPA finds that at least one of the three criteria is 
met.\7\ As noted above, the three waiver criteria are properly seen as 
the criteria for denial. Prior to SAFE 1, EPA has consistently declined 
to consider other potential bases for denying a waiver such as 
Constitutional claims or the preemptive effect of other Federal 
statutes.\8\ In addition, EPA, given the text, legislative history and 
judicial precedent, has consistently interpreted section 209(b) as 
placing the burden on the opponents of a waiver to demonstrate that one 
of the criterion for a denial has been met.\9\ Thus, EPA's practice has 
been to defer and not to intrude in policy decisions made by California 
in adopting standards for protecting the health and welfare of its 
citizens.\10\
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    \7\ This is different from most waiver proceedings before the 
Agency, where EPA typically determines whether it is appropriate to 
make certain findings necessary for granting a waiver, and if the 
findings are not made then a waiver is denied. This reversal of the 
normal statutory structure embodies and is consistent with the 
congressional intent of providing deference to California to 
maintain its own new motor vehicle emissions program. In previous 
waiver decisions, EPA has recognized that the intent of Congress in 
creating a limited review based on specifically listed criteria was 
to ensure that the Federal government did not second-guess state 
policy choices. See 40 FR 23102, 23103 (May 28, 1975); 78 FR 2112, 
2115 (January 9, 2013); 40 FR 23103-23104; see also LEV I waiver at 
58 FR 4166 (January 13, 1993), Decision Document at 64. Similarly, 
EPA has stated its practice of leaving the decision on ``ambiguous 
and controversial matters of public policy'' to California's 
judgment. 78 FR 2112, 2115; 40 FR 23103, 23104; 58 FR 4166.
    \8\ ``As EPA has stated on numerous occasions, section 209(b) of 
the Clean Air Act limits our authority to deny California's requests 
for waivers to the three criteria therein, and EPA has refrained 
from denying California's requests for waivers based on any other 
criteria. Where the Court of Appeals for the District of Columbia 
Circuit has reviewed EPA decisions declining to deny waiver requests 
based on criteria not found in section 209(b), the court has upheld 
and agreed with EPA's determination.'' 78 FR 2112, 2145 (citing 
Motor and Equipment Manufacturers Ass'n v. Nichols (MEMA II), 142 
F.3d 449, 462-63, 466-67 (D.C. Cir. 1998), Motor and Equipment 
Manufacturers Ass'n v. EPA (MEMA I), 627 F.2d 1095, 1111, 1114-20 
(D.C. Cir. 1979).
    \9\ MEMA at 1120-1121; MEMA II.
    \10\ EPA is ``to afford California the broadest possible 
discretion in selecting the best means to protect the health of its 
citizens and the public welfare.'' MEMA II, 142 F.3d at 453 (quoting 
H.R. Rep. No. 95-294, at 301-02 (1977)); EPA `` `is not to overturn 
California's judgment lightly,' '' Id., at 463 (quoting H.R. Rep. 
No. 95-294, at 302 (1977), reprinted in 1977 U.S.C.C.A.N. at 1381).
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    In 1977, Congress promulgated section 177 of the Clean Air Act, 
which permitted States to adopt California new motor vehicle emission 
standards for which a waiver of preemption has been granted if certain 
criteria are met.\11\ Also known as the ``opt-in'' provision, section 
177 of the Act, 42 U.S.C. 7507, provides:
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    \11\ Motor Vehicle Mfrs. Ass'n v. NYS Dep. of Envt'l 
Conservation, 17 F.3d 521, 532 (2d Cir. 1994).
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    Notwithstanding section 7543(a) of this title, any State which has 
plan provisions approved under this part may adopt and enforce for any 
model year standards relating to control of emissions from new motor 
vehicles or new motor vehicle engines and take such other actions as 
are referred to in

[[Page 22424]]

section 7543(a) of this title respecting such vehicles if--
    (1) such standards are identical to the California standards for 
which a waiver has been granted for such model year, and
    (2) California and such State adopt such standards at least two 
years before commencement of such model year (as determined by 
regulations of the Administrator).
    Nothing in this section or in subchapter II of this chapter shall 
be construed as authorizing any such State to prohibit or limit, 
directly or indirectly, the manufacture or sale of a new motor vehicle 
or motor vehicle engine that is certified in California as meeting 
California standards, or to take any action of any kind to create, or 
have the effect of creating, a motor vehicle or motor vehicle engine 
different than a motor vehicle or engine certified in California under 
California standards (a ``third vehicle'') or otherwise create such a 
``third vehicle''.

B. The ACC Program Waiver

    On June 27, 2012, CARB notified EPA of its adoption of the ACC 
program regulatory package that contained amendments to its low-
emission vehicle (LEV) and ZEV mandate and requested a waiver of 
preemption under section 209(b) to enforce regulations pertaining to 
this program.\12\ The ACC program combined the control of smog and 
soot-causing pollutants and GHG emissions into a single coordinated 
package of requirements for passenger cars, light-duty trucks, and 
medium-duty passenger vehicles (and limited requirements related to 
heavy-duty vehicles for certain model years). On August 31, 2012, EPA 
issued a notice of opportunity for public hearing and written comment 
on CARB's request and solicited comment on all aspects of a full waiver 
analysis under the criteria of section 209(b) of the CAA.\13\ On 
January 9, 2013, EPA granted California's request for a waiver of 
preemption to enforce the ACC program regulations.\14\
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    \12\ CARB's June 12, 2012 waiver request (including its 
attachments) was included in EPA's Air Docket at EPA-HQ-OAR-2012-
0562-0002 et seq. The waiver request and attachments have also now 
been placed in EPA's Air Docket pertaining to this reconsideration 
at EPA-HQ-OAR-2021-0257. A complete description of the ACC program, 
as it existed at the time that CARB applied for the 2013 waiver, can 
be found in the docket for the January 2013 waiver action, Docket 
No. EPA-HQ-OAR- 2012- 0562.
    \13\ 77 FR 53199 (August 31, 2012).
    \14\ 78 FR 2112 (January 9, 2013).
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    Set forth in the ACC program waiver decision is a summary 
discussion of EPA's decision to depart from its traditional 
interpretation of section 209(b)(1)(B) (the second waiver prong) in the 
2008 waiver denial for CARB's initial GHG standards for certain earlier 
model years along with EPA's return to the traditional interpretation 
in the waiver issued in 2009.\15\ The traditional interpretation, which 
EPA stated is the better interpretation of section 209(b)(1)(B), calls 
for evaluating California's need for a separate motor vehicle emission 
program to meet compelling and extraordinary conditions. Because EPA 
received comment on this issue during the ACC program waiver 
proceeding, as it pertained to both CARB's GHG emission standards and 
ZEV mandate, the Agency once again recounted the interpretive history 
associated with standards for both GHG emissions and criteria air 
pollutants to explain EPA's belief that section 209(b)(1)(B) should be 
interpreted the same way for all air pollutants.\16\ Applying this 
approach, and with deference to California, EPA found that it could not 
deny the waiver under the second waiver prong.\17\ Without adopting an 
alternative interpretation, EPA noted that to the extent that it was 
appropriate to examine the need for CARB's GHG standards to meet 
compelling and extraordinary conditions, EPA had discussed at length in 
its 2009 GHG waiver decision that California does have compelling and 
extraordinary conditions directly related to regulations of GHGs.\18\ 
Similarly, to the extent that it was appropriate to examine the need 
for CARB's ZEV mandate, EPA noted that the ZEV mandate in the ACC 
program enables California to meet both its air quality and climate 
goals into the future. EPA recognized CARB's coordinated strategies 
reflected in the ACC program for addressing both criteria pollutants 
and greenhouse gases and the magnitude of the technology and energy 
transformation needed to meet such goals.\19\ Therefore, EPA determined 
that to the extent the second waiver criterion should be interpreted to 
mean a need for the specific standards at issue, then CARB's GHG 
emission standards and ZEV mandate satisfy such a finding.\20\
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    \15\ 73 FR 12156 (March 6, 2008); 74 FR 32744 (July 8, 2009).
    \16\ 78 FR 2112, 2125-2128.
    \17\ Id. at 2129. ``CARB has repeatedly demonstrated the need 
for its motor vehicle program to address compelling and 
extraordinary conditions in California. As discussed above, the term 
compelling and extraordinary conditions ``does not refer to the 
levels of pollution directly.'' Instead, the term refers primarily 
to the factors that tend to produce higher levels of pollution--
geographical and climatic conditions (like thermal inversions) that, 
when combined with large numbers and high concentrations of 
automobiles, create serious air pollution problems. California still 
faces such conditions.''
    \18\ Id. at 2129-2130.
    \19\ Id. at 2130-2131.
    \20\ Id. at 2129-2131.
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    Also included in the ACC program waiver is a discussion of the 
technological feasibility of the ACC program GHG emission standards and 
the ZEV mandate as evaluated under section 209(b)(1)(C).\21\
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    \21\ Id. at 2131-2143.
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    Further, in response to a comment that the waiver request for GHG 
emission standards should be denied because GHG standards relate to 
fuel economy and are expressly preempted by the Energy Policy and 
Conservation Act (EPCA), EPA explained that section 209(b) of the Act 
limits the Agency's authority to deny California's requests for waivers 
to the three criteria therein and that the Agency has consistently 
refrained from denying California's requests for waivers based on any 
other criteria. EPA also relied on judicial precedent as support.\22\
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    \22\ Id. at 2145 (``Where the Court of Appeals for the District 
of Columbia Circuit has reviewed EPA decisions declining to deny 
waiver requests based on criteria not found in section 209(b), the 
court has upheld and agreed with EPA's determination.'' See MEMA II 
at 462-63, MEMA I at 1114-20).
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C. ``The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part One: 
One National Program'' (SAFE 1)

    In 2018, NHTSA issued a proposal for the next generation of the 
Congressionally-mandated Corporate Average Fuel Economy (CAFE) 
standards that must be achieved by each manufacturer for its car and 
light-duty truck fleet while EPA revisited its light-duty vehicle GHG 
emissions standards for certain model years in the rulemaking titled: 
``The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model 
Years 2021-2026 Passenger Cars and Light Trucks.'' \23\ EPA also 
proposed to withdraw the waiver for the ACC program GHG emission 
standards and ZEV mandate under both sections 209(b)(1)(B) and (C), 
based upon the Agency's exercise of its inherent authority to 
reconsider a previously granted waiver under the Clean Air Act. As part 
of EPA's asserted authority to reconsider that ACC program waiver 
issued in 2013, EPA noted the changed circumstances including its 
reassessment of section 209(b)(1)(B) as well as EPA's new assessment of 
the feasibility of CARB's standards under section 209(b)(1)(C). In 
addition, EPA noted that the proposal presented a unique situation to 
consider the implications of NHTSA's proposed

[[Page 22425]]

conclusion of EPCA preemption for California's GHG emission standards 
and ZEV mandate. EPA proposed to conclude that state standards 
preempted under EPCA cannot be afforded a valid section 209(b) waiver 
and thus also proposed that, if NHTSA finalized its determination 
regarding California's GHG standards and ZEV mandate, it would be 
necessary to withdraw the waiver separate and apart from section 
209(b)(1)(B) and (C).
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    \23\ 83 FR 42986 (August 24, 2018).
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    On September 27, 2019, EPA and NHTSA published a final action 
titled: ``The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule Part 
One: One National Program'' (SAFE 1) that promulgated regulations 
reflecting NHTSA's conclusion that EPCA preempted California's GHG 
standards and ZEV mandate. In the same action EPA withdrew the waiver 
of preemption for California to enforce the ACC program GHG and ZEV 
mandate on two grounds.\24\ First, EPA posited that standards preempted 
under EPCA could not be afforded a valid waiver of preemption under 
section 209(b). EPA explained that agency pronouncements in the ACC 
program waiver decision on the historical practice of disregarding the 
preemptive effect of EPCA in the context of evaluating California's 
waiver applications ``was inappropriately broad, to the extent it 
suggested that EPA is categorically forbidden from ever determining 
that a waiver is inappropriate due to consideration of anything other 
than the `criteria' or `prongs' at CAA section 209(b)(1)(B)(A)-(C).'' 
\25\ EPA further explained that those pronouncements were made in 
waiver proceedings where the agency was acting solely on its own in 
contrast to a joint action with NHTSA such as SAFE 1. Additionally, EPA 
expressed intentions not to consider factors other than statutory 
criteria set out in section 209(b)(1)(A)-(C) in future waiver 
proceedings, but explained that addressing the preemptive effect of 
EPCA and its implications for EPA's waiver for California standards was 
called for in SAFE 1 because EPA and NHTSA were coordinating regulatory 
actions in a single notice.\26\
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    \24\ 84 FR 51310 (September 27, 2019).
    \25\ Id. at 51338.
    \26\ Id.
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    Second, EPA withdrew the waiver for GHG standards and ZEV mandate 
on two alternative grounds under the second waiver prong. Specifically, 
EPA determined that California does not need the GHG standards ``to 
meet compelling and extraordinary conditions,'' under section 
209(b)(1)(B) and even if California does have compelling and 
extraordinary conditions in the context of global climate change, 
California does not ``need'' the GHG standards, under section 
209(b)(1)(B) because they will not meaningfully address global air 
pollution problems of the type associated with GHG emissions.\27\
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    \27\ 84 FR 51310, 51328-51333.
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    EPA premised the agency's finding on a consideration of 
California's ``need'' for its own GHG and ZEV programs, instead of the 
``need'' for a separate motor vehicle emission program to meet 
compelling and extraordinary conditions. In doing so, EPA read ``such 
State standards'' in section 209(b)(1)(B) as ambiguous with respect to 
the scope of agency analysis of California waiver requests and posited 
that reading this phrase as requiring EPA to only and always consider 
California's entire motor vehicle program would limit the application 
of this waiver prong in a way that EPA did not believe Congress 
intended. EPA further noted that the Supreme Court had found that Clean 
Air Act provisions may apply differently to GHGs than they do to 
traditional pollutants in UARG v. EPA, 134 S. Ct. 2427 (2014) 
(partially reversing the GHG ``Tailoring'' Rule on grounds that the 
section 202(a) endangerment finding for GHG emissions from motor 
vehicles did not compel regulation of all sources of GHG emissions 
under the Prevention of Significant Deterioration and Title V permit 
programs).
    EPA then interpreted section 209(b)(1)(B) as turning on whether 
there is a particularized, local nexus between (1) pollutant emissions 
from sources, (2) air pollution, and (3) resulting impact on health and 
welfare.\28\ EPA stated that these elements match the elements of the 
predicate finding EPA must make before regulating, under section 
202(a)(1), and are evident in California's criteria-pollutant problems, 
which prompted Congress to enact the waiver provision.\29\ Under this 
interpretation, EPA concluded that no such California nexus exists for 
greenhouse gases: (1) These emissions from California cars are no more 
relevant to climate-change impacts in the state than emissions from 
cars elsewhere; (2) the resulting pollution is globally mixed; and (3) 
climate-change impacts in California are not extraordinary to that 
state.\30\ EPA further determined that ``such State standards'' in 
sections 209(b)(1)(B) and (C) should be read consistently, which was a 
departure from the traditional approach where this phrase is read as 
referring back to ``in the aggregate'' in section 209(b)(1).\31\ EPA 
further reasoned that the most stringent regulatory alternative 
considered in the 2012 final rule and Final Regulatory Impact Analysis, 
which would have required a seven percent average annual fleetwide 
increase in fuel economy for MYs 2017-2025 compared to MY 2016 
standards, was forecasted to decrease global temperatures by only 0.02 
[deg]C in 2100.\32\
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    \28\ Id. at 51339, 51347.
    \29\ Id. at 51339-5134040, 51348-451349.
    \30\ Id.
    \31\ Id. at 51345.
    \32\ Id. at 51349.
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    Finally, as support for the determination that California did not 
need the ZEV mandate requirements to meet compelling and extraordinary 
conditions, EPA relied on a statement in the ACC program waiver support 
document where CARB noted that there were no criteria emissions benefit 
in terms of vehicle (tank-to-wheel) emissions because its LEV III 
criteria pollutant fleet standard was responsible for those emission 
reductions.\33\
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    \33\ ``There is no criteria emissions benefit from including the 
ZEV proposal in terms of vehicle (tank-to-wheel or TTW) emissions.'' 
CARB ACC program waiver request at 15 (May 2012), EPA-HQ-OAR- 2012-
0562-0004.
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    Regarding burden of proof in waiver proceedings, the agency posited 
that it was ``not necessary to resolve this issue as regardless of 
whether a preponderance of the evidence or clear and compelling 
evidence standard is applied, the Agency was concluding that withdrawal 
of the waiver was appropriate.'' \34\
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    \34\ 84 FR 51310, 51344 n.268. At proposal, EPA also took 
comment on the burden of proof in waiver proceedings even though the 
Agency had initiated reconsideration of the grant of the ACC program 
waiver and such evidentiary aspects for section 209(b) waivers had 
long been settled. Motor and Equip. Mfrs Ass'n. v. EPA, 627 F.2d 
1095, 1121, n.19, 1126 (D.C. Cir. 1979) (MEMA I).
---------------------------------------------------------------------------

    EPA did not finalize the withdrawal of the waiver under the third 
waiver criterion at section 209(b)(1)(C), as proposed, explaining 
instead that EPA and NHTSA were not finalizing the proposed assessment 
regarding the technological feasibility of the Federal GHG standards 
for MY 2021 through 2025 in SAFE 1.\35\
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    \35\ 84 FR 51310, 51350. EPA had proposed to determine, as an 
additional basis for the waiver withdrawal, that new GHG standards 
and ZEV mandate for 2021 through 2025 model years are not consistent 
with section 202(a) of the Clean Air Act, including how costs should 
be properly considered. EPA's waiver for CARB's ACC program, issued 
in 2013, fully evaluated this criterion.
---------------------------------------------------------------------------

    In withdrawing the waiver, EPA asserted that authority to 
reconsider and withdraw the grant of a waiver for the ACC program was 
implicit in section 209(b) given that the authority to revoke a waiver 
is implied in the authority for EPA to grant a waiver. The Agency

[[Page 22426]]

claimed further support for authority based on the legislative history 
of section 209(b) and the judicial principle that agencies possess 
inherent authority to reconsider their decisions:
    The legislative history from the 1967 CAA amendments where Congress 
enacted the provisions now codified in section 209(a) and (b) provides 
support for this view. The Administrator has ``the right . . . to 
withdraw the waiver at any time [if] after notice and an opportunity 
for public hearing he finds that the State of California no longer 
complies with the conditions of the waiver.'' S. Rep. No. 50-403, at 34 
(1967).\36\
---------------------------------------------------------------------------

    \36\ Id. at 51332.
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    EPA also noted that, subject to certain limitations, administrative 
agencies possess inherent authority to reconsider their decisions in 
response to changed circumstances:
    It is well settled that EPA has inherent authority to reconsider, 
revise, or repeal past decisions to the extent permitted by law so long 
as the Agency provides a reasoned explanation. This authority exists in 
part because EPA's interpretations of the statutes it administers ``are 
not carved in stone.'' Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837, 
863 (1984). An agency ``must consider varying interpretations and the 
wisdom of its policy on a continuing basis.'' Id. at 863-64. This is 
true when, as is the case here, review is undertaken ``in response to . 
. . a change in administration.'' National Cable & Telecommunications 
Ass'n v. Brand X internet Services, 545 U.S. 967, 981 (2005). The EPA 
must also be cognizant where it is changing a prior position and 
articulate a reasoned basis for the change. FCC v. Fox Television 
Stations, Inc., 556 U.S. 502, 515 (2009).\37\
---------------------------------------------------------------------------

    \37\ Id. at 51333.
---------------------------------------------------------------------------

    EPA opined that the text, structure, and context of section 209(b) 
support EPA's interpretation that it has this authority. EPA further 
asserted that no cognizable reliance interests had accrued sufficient 
to foreclose EPA's ability to exercise this authority.\38\ EPA stated:
---------------------------------------------------------------------------

    \38\ Id. at 51331-51337.
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    In tying the third waiver prong to CAA section 202(a), Congress 
gave a clear indication that, in determining whether to grant a waiver 
request, EPA is to engage in a review that involves a considerable 
degree of future prediction, due to the expressly future-oriented terms 
and function of CAA section 202(a). In turn, where circumstances arise 
that suggest that such predictions may have been inaccurate, it 
necessarily follows that EPA has authority to revisit those predictions 
with regard to rules promulgated under CAA section 202(a), the 
requirements of that section, and their relation to the California 
standards at issue in a waiver request, and, on review, withdraw a 
previously granted waiver where those predictions proved to be 
inaccurate.\39\
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    \39\ Id. at 51332, 51334. As noted above, however, EPA did not 
withdraw the ACC waiver based on the third waiver prong of Section 
209(b). 84 FR at 51334. Further, by way of example, EPA stated that 
California as well as other parties, such as section 177 states, 
were on notice that EPA would be conducting a midterm evaluation 
(MTE) of the Federal GHG emission standards and that such 
circumstances indicate a lack of sufficient reliance interests to 
preclude EPA's reconsideration of the ACC waiver issued in 2013. As 
relevant here, EPA's October 15, 2012 rulemaking setting GHG 
emission standards for 2017 and later model years included a 
commitment to perform the MTE for the Federal 2022 through 2025 
model year standards. 77 FR 62624 (October 15, 2012). The MTE called 
for EPA to issue a final determination regarding whether the Federal 
MY 2022-2025 GHG standards remained appropriate under section 
202(a). On January 12, 2017, EPA completed the MTE and determined 
that GHG standards for MY 2022-2025 remained appropriate under 
section 202(a). Subsequently, EPA withdrew the January 2017 final 
determination and revised the finding of appropriateness, concluding 
instead that GHG standards for MY 2022-2025 were not appropriate 
and, therefore, should be revised. 83 FR 16077 (April 13, 2018).
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    EPA also disagreed with some commenters' assertions that ostensible 
reliance interests foreclose withdrawal of the waiver for MY 2021-2025 
GHG and ZEV standards.\40\ EPA stated that ``CAA section 177 States do 
not have any reliance interests that are engendered by the withdrawal 
of the waiver for the MY 2021-2025 GHG and ZEV standards.'' \41\
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    \40\ According to commenters ``California, and the section 177 
states that have elected to adopt those standards as their own have 
incurred reliance interests ultimately flowing from those standards. 
For instance, California has incurred reliance interests because it 
is mandated to achieve an aggressive GHG emissions reduction target 
for 2030 . . .``[b]ut EPA provides no justification for applying 
that change in policy retroactively to upend a five-year old 
decision to which substantial reliance interests have attached.'' 84 
FR 51310, 51331, 51334-51335.
    \41\ Id. at 51336. Regarding states that had adopted the GHG 
standards into state implementation plans (SIPs), under section 177, 
EPA explained that because ``Title I does not call for NAAQS 
attainment planning as it relates to GHG standards, those States 
that may have adopted California's GHG standards and ZEV standards 
for certain MYs would also not have any reliance interests. 84 FR 
51310, 52335. ``EPA did, however, acknowledge the possibility of SIP 
implications arising from the withdrawal of these standards and 
indicated that the agency would engage in future actions to address 
those implications. Id. at 51338, n. 256.
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    In SAFE 1, EPA provided an interpretation of section 177 of the 
CAA, including the notion that this section does not authorize other 
states to adopt California's greenhouse gas emission standards for 
which EPA had granted a waiver of preemption under section 209(b). 
Although section 177 does not require States that adopt California 
emission standards to submit such regulations for EPA review, EPA chose 
to nevertheless provide an interpretation that this provision is 
available only to states with approved nonattainment plans. EPA stated 
that nonattainment designations exist only as to criteria pollutants 
and greenhouse gases are not criteria pollutants; therefore, states 
could not adopt GHG standards under section 177.\42\ Notably, 
California in previous waiver requests has addressed the benefits of 
GHG emissions reductions as it relates to ozone.
---------------------------------------------------------------------------

    \42\ Id. at 51350-51351. Since EPA was offering its views of 
section 177 in the abstract, its interpretation of section 177 in 
SAFE 1 did not have direct and appreciable legal consequences and 
was not a ``final action'' of the agency.
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D. Prior EPA Waiver Practice

    For over fifty years, EPA has evaluated California's requests for 
waivers of preemption under section 209(b), primarily considering 
CARB's motor vehicle emission program that addresses criteria 
pollutants.\43\ More recently, the Agency has been tasked with 
determining how section 209(b)(1)(B) should be interpreted and applied 
in the context of GHG standards and California's historical air quality 
problems, including the public health and welfare challenge of climate 
change. Although the withdrawal and revocation of the waiver for CARB's 
ACC program, in SAFE 1, represents a snapshot of this task, it is 
important to examine EPA's waiver practice in general, including prior 
waiver decisions pertaining to CARB GHG emission standards, in order to 
determine whether EPA properly reconsidered the ACC program waiver and 
properly applied the waiver criterion in section 209(b)(1)(B) in SAFE 
1. A summary of EPA's historical waiver practice and decisions 
regarding CARB's regulation of criteria and GHG emissions, including 
EPA's consideration of the second waiver prong, is provided below.
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    \43\ EPA notes that the 1990 amendments to the Clean Air Act 
added subsection (e) to section 209. Subsection (e) addresses the 
preemption of State or political subdivision regulation of emissions 
from nonroad engines or vehicles. Section 209(e)(2)(A) sets forth 
language similar to section 209(b) in terms of the criteria 
associated with EPA waiving preemption, in this instance for 
California nonroad vehicle and engine emission standards. Congress 
directed EPA to implement subsection (e). See 40 CFR part 1074. EPA 
review of CARB requests submitted under section 209(e)(2)(A)(ii) 
includes consideration of whether CARB needs its nonroad vehicle and 
engine program to meet compelling and extraordinary conditions. See 
78 FR 58090 (September 20, 2013).
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    EPA has consistently interpreted and applied the second waiver 
criterion by

[[Page 22427]]

considering whether California needed a separate mobile source program 
as compared to the individual standards at issue to meet compelling and 
extraordinary conditions. As previously noted, this is known as the 
``traditional approach'' of interpreting section 209(b)(1)(B).\44\ At 
the same time, in the event and in response to commenters that have 
argued that EPA is required to examine the specific standards at issue 
in the waiver request, EPA's practice has been to retain the 
traditional approach but to nevertheless review the specific standards 
to determine whether California needs such standards. This has not 
meant that EPA has adopted an ``alternative approach'' and required a 
demonstration for the need of specific standards; rather, this 
additional Agency review has been afforded to address commenters' 
concerns. For example, EPA granted an authorization for CARB's In-use 
Off-road Diesel Standards (Fleet Requirements) that included an 
analysis under both approaches.\45\
---------------------------------------------------------------------------

    \44\ 49 FR 18887, 18890 (May 3, 1984).
    \45\ 78 FR 58090 (Sept. 20, 2013). The United States Court of 
Appeals for the Ninth Circuit upheld EPA's grant of a waiver of 
preemption under either approach. Dalton Trucking v. EPA, No. 13-
74019 (9th Cir. 2021) (finding that EPA was not arbitrary in 
granting the waiver of preemption under either approach). The court 
opinion noted that ``[t]his disposition is not appropriate for 
publication and is not precedent except as provided by Ninth Circuit 
Rule 36-3.''
---------------------------------------------------------------------------

    The task of interpreting and applying section 209(b)(1)(B) to 
California's GHG standards and consideration of the state's historical 
air quality problems that now include the public health and welfare 
challenge of climate change began in 2005, with CARB's waiver request 
for 2009 and subsequent model years' GHG emission standards. On March 
6, 2008, EPA denied the waiver request based on a new interpretive 
finding that section 209(b) was intended for California to enforce new 
motor vehicle emission standards that address local or regional air 
pollution problems, and an Agency belief that California could not 
demonstrate a ``need'' under section 209(b)(1)(B) for standards 
intended to address global climate change problems. EPA also employed 
this new alternative interpretation to state a belief that the effects 
of climate change in California are not compelling and extraordinary in 
comparison with the rest of the country. Therefore, within this waiver 
denial, EPA no longer evaluated whether California had a need for its 
motor vehicle emission program to meet compelling and extraordinary 
conditions (the traditional interpretation) but rather focused on the 
specific GHG emission standard in isolation and not in conjunction with 
the other motor vehicle emission standards for criteria pollutants.
    In 2009, EPA initiated a reconsideration of the 2008 waiver denial 
based on a belief that significant issues had been raised since the 
denial of the waiver.\46\ The reconsideration resulted in granting CARB 
a waiver for its GHG emission standards commencing in the 2009 model 
year.\47\ This led to a rejection of the Agency's novel alternative 
interpretation of the second waiver prong announced in the previous 
waiver denial. Instead, EPA returned to its traditional approach of 
evaluating California's need for a separate motor vehicle emission 
program to meet compelling and extraordinary conditions because the 
agency viewed it as the better interpretation. Under the traditional 
interpretation of the second waiver prong, EPA found that the opponents 
of the waiver had not met their burden of proof to demonstrate that 
California did not need its motor vehicle emission program to meet 
compelling and extraordinary conditions. EPA also determined that, even 
if the alternative interpretation were to be applied, the opponents of 
the waiver had not demonstrated that California did not need its GHG 
emissions standards to meet compelling and extraordinary 
conditions.\48\ Since then EPA has employed the traditional approach 
for evaluating California's need for a separate motor vehicle emissions 
program in waiver requests. Notably, EPA also relied on the traditional 
approach in granting the waiver for the ACC program.
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    \46\ 74 FR 7040 (February 12, 2009).
    \47\ 74 FR 32744 (July 8, 2009).
    \48\ Id. at 32759-32767. See also 76 FR 34693 (June 14, 2011).
---------------------------------------------------------------------------

    Within the context of EPA's evaluation of the second waiver prong 
and California's GHG emission standards for on-highway vehicles, EPA 
notes the existence of two waivers of preemption for CARB's heavy-duty 
tractor-trailer (HD) GHG emission standards.\49\ Once again, EPA relied 
upon its traditional approach of evaluating California's need for a 
separate motor vehicle emission program to meet compelling and 
extraordinary conditions and found that no evidence had been submitted 
to demonstrate that California no longer needed its motor vehicle 
emissions program to meet compelling and extraordinary conditions.\50\ 
EPA's second waiver for the HD GHG emission standards made a similar 
finding that California's compelling and extraordinary conditions 
continue to exist under the traditional approach for the interpretation 
of the second waiver criterion.\51\
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    \49\ The first HD GHG emissions standard waiver related to 
certain new 2011 and subsequent model year tractor-trailers. 79 FR 
46256 (August 7, 2014). The second HD GHG emissions standard waiver 
related to CARB's ``Phase I'' regulation for 2014 and subsequent 
model year tractor-trailers. 81 FR 95982 (December 29, 2016).
    \50\ Relatedly, California explained the need for these 
standards based on projected ``reductions in NOx emissions of 3.1 
tons per day in 2014 and one ton per day in 2020 due to the HD GHG 
Regulations. California state[d] that these emissions reductions 
will help California in its efforts to attain applicable air quality 
standards. California further projects that the HD GHG Regulations 
will reduce GHG emissions in California by approximately 0.7 million 
metric tons (MMT) of carbon dioxide equivalent emissions (CO2e) by 
2020.'' 79 FR 46256, 46261.
    \51\ 81 FR 95982, 95987. At the time of CARB's Board adoption of 
the HD Phase I GHG regulation, CARB determined in Resolution 13-50 
that California continues to need its own motor vehicle program to 
meet serious ongoing air pollution problems. CARB asserted that 
``[t]he geographical and climatic conditions and the tremendous 
growth in vehicle population and use that moved Congress to 
authorize California to establish vehicle standards in 1967 still 
exist today. EPA has long confirmed CARB's judgment, on behalf of 
the State of California, on this matter.'' (See EPA Air Docket at 
regulations.gov at EPA-HQ-OAR-2016-0179-0012). In enacting the 
California Global Warming Solutions Act of 2006, the Legislature 
found and declared that ``Global warming poses a serious threat to 
the economic well-being, public health, natural resources, and the 
environment of California. The potential adverse impacts of global 
warming include the exacerbation of air quality problems, a 
reduction in the quality and supply of water to the state from the 
Sierra snowpack, a rise in sea levels resulting in the displacement 
of thousands of coastal businesses and residences, damage to the 
marine ecosystems and the natural environment, and an increase in 
the incidences of infectious diseases, asthma, and other health-
related problems.''
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F. Petitions for Reconsideration

    After it issued SAFE 1, EPA received multiple petitions for 
reconsideration urging the agency to reconsider the withdrawal of the 
ACC program's GHG standards and ZEV mandate on various grounds. EPA has 
granted the following petitions for reconsideration of SAFE 1 that were 
pending before the Agency: \52\
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    \52\ Separately from this action, EPA has notified the Parties 
to each of the Petitions for Reconsideration and informed them that 
EPA is initiating an action under the Administrative Procedure Act 
to reconsider SAFE 1. Copies of EPA's reply letters can be found in 
the public docket at EPA-HQ-OAR-2021-0257.
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    1. A Petition for Clarification/Reconsideration submitted by the 
State of California (the California Attorney General and the California 
Air Resources Board), on October 9, 2019 (California Petition for 
Clarification).\53\ The Petitioner sought both a

[[Page 22428]]

clarification and reconsideration of the scope of SAFE 1 as it related 
to the withdrawal of portions of the ACC program waiver. Regarding 
clarification, the Petitioner cited somewhat contradictory statements 
in SAFE 1 and indicated that there was confusion regarding model years 
that were affected by the waiver withdrawal.\54\ The Petitioner also 
requested reconsideration on grounds that the final action relied on 
analyses and justifications not presented at proposal and thus, was 
beyond the scope of the proposal.\55\
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    \53\ Copies of the petitions for reconsideration can be found in 
the public docket at EPA-HQ-OAR-2021-0257.
    \54\ The California Petition for Clarification notes ``[i]n the 
Final Actions, EPA makes statements that are creating confusion, 
and, indeed, appear contradictory, concerning the temporal scope of 
its action(s)--specifically, which model years are covered by the 
purported withdrawal of California's waiver for its GHG and ZEV 
standards. In some places, EPA's statements indicate that it has 
limited its action(s) to the model years for which it proposed to 
withdraw and for which it now claims to have authority to withdraw--
namely model years 2021 through 2025. In other places, however, 
EPA's statements suggest action(s) with a broader scope--one that 
would include earlier model years.''
    \55\ ``To the extent that EPA's response to this petition would 
result in final action(s) beyond the scope of what EPA proposed, or 
would contain analyses or justifications not included in the 
Proposal (such as purported justifications for broader withdrawal 
authority), then EPA must withdraw at least the portion of the Final 
Actions that extend beyond the Proposal, issue a revised proposal 
and accept and consider public comment before taking any final 
action.'' California Petition for Clarification at 9.
---------------------------------------------------------------------------

    2. A Petition for Reconsideration was submitted by several States 
and Cities on November 26, 2019 (States and Cities' Petition).\56\ This 
petition presented several issues, including whether EPA failed to 
articulate a valid rationale to support its authority to revoke the GHG 
standards and ZEV mandate and instead relied on facially unclear 
theories not made available at proposal for public comment.
---------------------------------------------------------------------------

    \56\ See EPA-HQ-OAR-2021-0257. This Petition was joined by the 
States of California, Colorado, Connecticut, Delaware, Hawaii, 
Illinois, Maine, Maryland, Minnesota, Nevada, New Jersey, New 
Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont, 
Washington, Wisconsin, Michigan, the Commonwealths of Massachusetts, 
Pennsylvania, and Virginia, the District of Columbia, and the Cities 
of Los Angeles, New York, San Francisco, and San Jose..
---------------------------------------------------------------------------

    Petitioners further asserted that EPA unlawfully changed course in 
SAFE 1 by considering (and relying on) the purported preemptive effect 
of EPCA, which is outside the confines of section 209(b) and argued 
that the agency rationale for withdrawing the waiver was flawed. They 
also disagreed with the Agency's interpretation of section 209(b)(1)(B) 
and EPA's reassessment of the factual record that existed at the time 
of the ACC program waiver, which led to a new finding under the second 
waiver prong and a new result in SAFE 1. They asserted, for example, 
that EPA's new reliance on the ``endangerment provision'' in Section 
202(a) does not support EPA's section 209(b)(1)(B) interpretation or 
conclusion and that the use of the equal sovereignty principle to 
inform EPA's interpretation of ``compelling and extraordinary 
conditions'' was inappropriate. Additionally, Petitioners asserted that 
EPA should have considered all supporting documentation instead of only 
considering the 2013 waiver record and that EPA failed to consider new 
evidence that further demonstrated California's need for GHG emission 
standards and ZEV mandates to address compelling and extraordinary 
conditions in California.
    3. Petition for Reconsideration by several non-governmental 
organizations on November 25, 2019 (NGOs' Petition).\57\ Petitioners 
asserted that EPA's reconsideration of the ACC program waiver was not a 
proper exercise of agency authority and that EPA relied on improper 
considerations in its decision-making. Petitioners cast the agency's 
rationale as ``pretextual.'' The NGOs' Petition further noted that EPA 
did not properly interpret and apply the second waiver prong and 
markedly ignored new evidence that further demonstrated California's 
need for its GHG emission standards and ZEV mandates to address 
compelling and extraordinary conditions in California.\58\
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    \57\ See EPA-HQ-OAR-2021-0257. This Petition was joined by The 
Center for Biological Diversity, Chesapeake Bay Foundation, 
Environment America, Environmental Defense Fund, Environmental Law & 
Policy Center, Natural Resources Defense Council, Public Citizen, 
Inc., Sierra Club, and the Union of Concerned Scientists.
    \58\ Among the comments is a letter from the CARB, dated June 
17, 2019, in support of Petitioners' arguments that EPA improperly 
considered the reliance interests associated with the ACC program 
waiver and that EPA improperly understood the scope of the need for 
the ZEV mandate and GHG standards to address a variety of 
transportation conformity obligations as well as State 
Implementation Plan planning requirements.
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V. Request for Comment

    When EPA receives new waiver requests from CARB, EPA traditionally 
publishes a notice of opportunity for public hearing and comment and 
then, after the comment period has closed, publishes a notice of its 
decision in the Federal Register. EPA believes it is appropriate to use 
the same procedures for reconsidering SAFE 1. EPA notes that, 
consistent with caselaw and EPA's past practice for California waivers, 
this proceeding is subject to the Administrative Procedure Act (APA) 
and is considered an informal adjudication under the APA. EPA 
encourages interested parties to provide comments on the topics below 
for consideration by EPA, in the context of reconsidering SAFE 1 and 
reaching a decision on rescinding that prior agency action. As noted 
below, EPA seeks public comment, in the context of SAFE 1 and now the 
Agency's reconsideration, on whether the Agency properly exercised its 
authority in reconsidering the ACC program waiver and whether the 
second waiver prong at section 209(b)(1)(B) was properly interpreted 
and applied. Additionally, EPA seeks comment on whether EPA had the 
authority in the SAFE 1 context to interpret section 177 of the CAA and 
whether the interpretation was appropriate, as well as whether EPA 
properly considered EPCA preemption and its effect on California's 
waiver. EPA will take all relevant comments into consideration before 
taking final action.
    The full waiver analysis, for new waiver requests, includes 
consideration of the following three criteria: Whether (a) California's 
determination that its motor vehicle emission standards are, in the 
aggregate, at least as protective of public health and welfare as 
applicable Federal standards is arbitrary and capricious, (b) 
California needs such standards to meet compelling and extraordinary 
conditions, and (c) California's standards and accompanying enforcement 
procedures are consistent with section 202(a) of the Clean Air Act.
    In contrast, in this instance EPA is not considering an initial 
waiver request (e.g., the 2012 ACC program waiver request from CARB, 
which EPA granted long ago, in 2013). Rather, EPA is now in the 
position of reconsidering the Agency's prior withdrawal of a waiver 
action (SAFE 1) for the purpose of determining whether the withdrawal 
was a valid exercise of the Agency's authority and consistent with 
judicial precedent and whether the agency's action in SAFE 1 should now 
be rescinded. Relatedly, certain ZEV mandate and GHG emission standards 
within the ACC program would become effective should EPA rescind SAFE 
1.
    EPA's purpose in soliciting public comment is to determine whether 
SAFE 1 was a valid and appropriate exercise of the Agency's authority. 
EPA is only reconsidering SAFE 1 and not reopening the ACC program 
waiver decision for comments. Therefore, EPA is not soliciting comments 
on issues raised and evaluated by EPA in the 2013 ACC program waiver 
decision that were not raised and evaluated in the final SAFE 1 
decision. EPA intends to treat any

[[Page 22429]]

such comments as beyond the scope of this action.
    EPA is seeking to determine whether it properly evaluated and 
exercised its authority in reconsidering a previous waiver granted to 
CARB and whether the withdrawal was a valid exercise of authority and 
consistent with judicial precedent. EPA specifically seeks comment on 
the matters raised in the Petitions for Reconsideration as they pertain 
to these evaluations.
    EPA is interested in any information or comments regarding EPA's 
inherent or implied authority to reconsider previously granted waivers. 
In particular, to the extent EPA has such authority, EPA seeks comments 
as to whether there are particular factors or issues that the Agency is 
required to take into consideration, and whether EPA properly evaluated 
such factors when reaching the decision in SAFE 1 to reconsider the ACC 
program waiver and withdraw elements of it. For example, was it 
permissible for EPA to withdraw elements of the ACC program waiver over 
five years after it was issued? Were the grounds EPA provided in SAFE 1 
a valid basis for withdrawing the identified elements of the ACC 
program waiver? Did EPA properly identify and consider any relevant 
reliance interests, such as the inclusion of GHG emission standards and 
ZEV mandates in approved SIPs, in its SAFE 1 action? Similarly, are 
there particular factors or reliance interests that EPA should consider 
in reconsidering the SAFE 1 action and recognizing the validity of 
EPA's 2013 ACC program waiver?
    EPA's decision to change course and withdraw the ACC program 
waiver, as it related to CARB's GHG emission standards and EPA's 
finding that such standards were only designed to address climate 
change and a global air pollution problem, was based in large part on a 
new interpretation of section 209(b)(1)(B)--the second waiver prong 
regarding whether California ``needs such standards to meet compelling 
and extraordinary conditions.'' EPA is also interested in any new or 
additional information or comments regarding whether it appropriately 
interpreted and applied section 209(b)(1)(B) in SAFE 1. For example, 
was it permissible for EPA to construe section 209(b)(1)(B) as calling 
for a consideration of California's need for a separate motor vehicle 
program where criteria pollutants are at issue and a consideration of 
California's specific standards where GHG standards are at issue?
    Likewise, EPA's decision to withdraw the ACC program waiver as it 
relates to California's ZEV mandate, based on the same new 
interpretation and application of the second waiver prong, rested 
heavily on the conclusion that California only adopted the ZEV program 
to achieve GHG emission reductions. EPA recognizes that this 
conclusion, in turn, rested solely on a specific reading of CARB's ACC 
program waiver request.\59\ EPA requests comment on these specific 
conclusions and readings as well as within the context of environmental 
conditions in California whether the withdrawal of the ACC program 
waiver as it applied to the ZEV mandate was permissible and 
appropriate, under applicable factors identified above and in relevant 
caselaw.
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    \59\ ``Regarding the ACC program ZEV mandate requirements, 
CARB's waiver request noted that there was no criteria emissions 
benefit in terms of vehicle (tank-to-wheel--TTW) emissions because 
its LEV III criteria pollutant fleet standard was responsible for 
those emission reductions.'' 84 FR at 51330.
---------------------------------------------------------------------------

    We also seek comment on EPA's action in SAFE 1 regarding section 
177 of the CAA. Specifically, EPA seeks comment on whether it was 
appropriate for EPA to provide an interpretation of section 177 within 
the SAFE 1 proceeding. To the extent it was appropriate to provide an 
interpretation, EPA seeks comment on whether section 177 was properly 
interpreted and whether California's mobile source emission standards 
adopted by states pursuant to Section 177 may have both criteria 
emission and GHG emission benefits and purposes.
    As explained above, SAFE 1 represented a unique and unprecedented 
circumstance where two Federal agencies issued a joint notice and 
provided separate interpretive opinions regarding their respective 
federal preemption statutes.\60\ Although EPA has historically declined 
to look beyond the waiver criteria in section 209(b) when deciding the 
merits of a waiver request from CARB, in SAFE 1 EPA chose not only to 
void portions of a waiver it had previously granted, but also to 
evaluate the effect of a pronouncement of preemption under EPCA on an 
existing Clean Air Act waiver. We seek comment on whether EPA properly 
considered and withdrew portions of the ACC program waiver pertaining 
to GHG standards and the ZEV mandate based on NHTSA's EPCA preemption 
action, including whether EPA has the authority to withdraw an existing 
waiver based on a new action that is beyond the scope of section 209 of 
the CAA. Because EPA relied on NHTSA's regulation on preemption, what 
significance should EPA place on the repeal of that regulation if NHTSA 
does take final action to do so?
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    \60\ The September 27, 2019 joint agency action is properly 
considered as two severable actions, a rulemaking by NHTSA and a 
final informal adjudication by EPA.
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Determination of Nationwide Scope or Effect

    Section 307(b)(1) of the CAA governs judicial review of final 
actions by EPA. This section provides, in part, that petitions for 
review must be filed in the Court of Appeals for the District of 
Columbia Circuit: (i) When the agency action consists of ``nationally 
applicable regulations promulgated, or final actions taken, by the 
Administrator,'' or (ii) when such action is locally or regionally 
applicable, if ``such action is based on a determination of nationwide 
scope or effect and if in taking such action the Administrator finds 
and publishes that such action is based on such a determination.'' For 
locally or regionally applicable final actions, the CAA reserves to EPA 
complete discretion whether to invoke the exception in (ii). \61\
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    \61\ In deciding whether to invoke the exception by making and 
publishing a finding that this final action is based on a 
determination of nationwide scope or effect, the Administrator 
intends to take into account a number of policy considerations, 
including his judgment balancing the benefit of obtaining the D.C. 
Circuit's authoritative centralized review versus allowing 
development of the issue in other contexts and the best use of 
agency resources.
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    In addition to California, thirteen other states and the District 
of Columbia have adopted California's greenhouse gas standards.\62\ The 
other states are New York, Massachusetts, Vermont, Maine, Pennsylvania, 
Connecticut, Rhode Island, Washington, Oregon, New Jersey, Maryland, 
Delaware, and Colorado. These jurisdictions represent a wide geographic 
area and fall within seven different judicial circuits.
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    \62\ In addition, other states are currently in the process of 
adopting California standards.
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    If the Administrator takes final action to revise or rescind SAFE 
1, then, in consideration of the effects of SAFE 1 not only on 
California, but also on those states that had already adopted 
California's standards under section 177, to the extent a court finds 
this action to be locally or regionally applicable, the Administrator 
intends to exercise the complete discretion afforded to him under the 
CAA to make and publish a finding that this action is based on a 
determination of

[[Page 22430]]

``nationwide scope or effect'' within the meaning of CAA section 
307(b)(1).\63\
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    \63\ In the report on the 1977 Amendments that revised CAA 
section 307(b)(1), Congress noted that the Administrator's 
determination that the ``nationwide scope or effect'' exception 
applies would be appropriate for any action that has a scope or 
effect beyond a single judicial circuit. See H.R. Rep. No. 95-294 at 
323-24, reprinted in 1977 U.S.C.C.A.N. 1402-03.

Michael S. Regan,
Administrator.
[FR Doc. 2021-08826 Filed 4-27-21; 8:45 am]
BILLING CODE 6560-50-P


