U.S. EPA Proposes Rescinding 2009 Endangerment Finding Underpinning GHG Regulations

The U.S. Environmental Protection Agency proposed rescinding the landmark 2009 Greenhouse Gas Endangerment Finding, which provides the legal basis for federal regulations on greenhouse gas emissions from vehicles, power generation and the oil and gas sector. EPA Administrator Lee Zeldin said finalization of the proposal would undo GHG regulations with an aggregate cost of $1 trillion.

The 2009 Endangerment Finding, issued by the Obama administration, established that greenhouse gas emissions endanger public health and welfare, providing the statutory authority for the EPA to regulate GHG emissions from automobiles, medium and heavy-duty vehicles, and the energy sector. The Trump EPA argues that scientific underpinnings of the finding are materially weaker than previously believed and that global warming projections were unduly pessimistic. Repealing the finding would remove the EPA's statutory basis to prescribe GHG standards.

Environmental groups strongly opposed the proposal. The Natural Resources Defense Council called it an attempt to reverse a long-standing decision and pledged legal action if needed. The Clean Air Task Force described it as a drastic step that would put the health of millions of Americans at risk. Greenpeace characterised the move as a handout to big oil. The proposal opens a public comment period and requires the EPA to produce a final rule backed by scientific justification, which is expected to face extensive legal challenges.

If finalized, the rule would remove all GHG standards for light-, medium- and heavy-duty vehicles and heavy-duty engines, with potential implications for power generation and oil and gas sector standards. The proposal is the most significant attempt yet by the Trump administration to unwind the regulatory architecture for U.S. climate policy. For international investors and companies tracking U.S. regulatory risk, the outcome will affect the trajectory of U.S. corporate emissions, technology investment in clean vehicles and the pace of energy transition in the world's largest economy.

Key figure — $1 trillion aggregate cost of GHG regulations the EPA says would be undone if the proposal is finalized