Chevron’s Fall and the Unraveling of California’s Clean Air Act Waiver
For over a decade, California has stood at the forefront of U.S. climate policy, using its Clean Air Act waiver to establish the nation’s most aggressive greenhouse gas emissions regulations in order to meet their goal of reaching carbon neutrality by 2045. However, in the wake of the overruling of Chevron deference in Loper Bright Enterprises v. Raimondo (2024) and the Supreme Court’s recent ruling in Diamond Alternative Energy, LLC v. Environmental Protective Agency (EPA) (2025), California’s Clean Air Act (CAA) waiver now rests on fragile ground. The overturning of Chevron deference alongside the recent ruling in Diamond Alternative Energy, LLC v. EPA signals that courts may now reinterpret the waiver provision more narrowly, undermining many states’ capacity to lead on climate regulation.
Since 1984, Chevron deference from the Supreme Court’s decision in Chevron U.S.A., Inc. v. Natural Resources Defense Council, Inc. has historically protected the EPA’s authority to interpret vague language in environmental laws and establish pollution regulations under the Clean Air Act. In the Chevron case, the Natural Resources Defense Council (NDRC) challenged an EPA regulation that allowed states to treat an entire industrial plant as a single “stationary source” of pollution, which allowed companies to circumvent pollution regulations. [1] The Supreme Court ruled in favor of the EPA, arguing that because Congress had not explicitly defined the term “stationary source” in the CAA and because the legislative history did not resolve the issue, the EPA had discretion to interpret it. [2] This established the Chevron deference doctrine, under which courts defer to “a federal agency’s interpretation of an ambiguous statute that the agency administers.” [3] Consequently, the ruling in the Chevron case gave the EPA authority to define broad terms such as “stationary source,” which has proven essential to protecting regulations in the CAA. For example, in Massachusetts v. EPA, the Supreme Court upheld the EPA’s authority to regulate greenhouse gases, deferring to the agency’s interpretation that such gases fell within the Clean Air Act’s broad definition of “air pollutants.” [4] In the later case Coalition for Responsible Regulation v. EPA, the D.C. Circuit Court rejected industry challenges to the EPA’s regulations targeting greenhouse gas emissions, again deferring to the EPA’s definition of “air pollutants” to include greenhouse gases according to Chevron deference. [5] The judicial acceptance of the EPA’s expert interpretations illustrates the power of Chevron deference and the importance of allowing expert agencies like the EPA, and not courts, to define and apply technical terms in complex regulatory schemes.
In a legal ruling very similar to the Coalition for Responsible Regulation v. EPA case, California’s Clean Air Act Waiver was also solidified using judicial deference to EPA’s statutory interpretations of “air pollutant” and “compelling and extraordinary conditions” granted by the Chevron deference doctrine. Yet, with the recent overturning of Chevron, the future of the Clean Air Act Waiver appears uncertain. In Massachusetts v. EPA, the Court allowed the EPA to regulate greenhouse gases by interpreting “air pollutant” broadly. [6] The interpretation then enabled the EPA in 2009 to grant California a Clean Air Act waiver that permits the state to implement stricter greenhouse gas emissions regulations. The waiver was granted based on the EPA’s judgment that climate change posed “compelling and extraordinary conditions,” according to the 2009 Endangerment Finding, which determined that greenhouse gases endanger both public health and welfare of people. [7] The waiver was later reinforced by the Coalition for Responsible Regulation v. EPA case, which used direct application of Chevron deference. [8] However, in June 2024, the Supreme Court overturned Chevron deference in Loper Bright Enterprises v. Raimondo (2024), leaving the Clean Air Act Waiver vulnerable. [9] Although the Court emphasized that prior decisions relying on Chevron remain intact under the principle of stare decisis, the removal of Chevron deference meant that courts will now interpret ambiguous statutory language de novo without deferring to the EPA’s expertise. [10] As a result, previously accepted definitions of “vague” terms by the EPA in the CAA Waiver are more susceptible to legal challenges in the future. Recent challenges to California’s waivers suggest that this shift is already underway. In an unprecedented and illegal move on June 12, 2025, President Trump signed into law Congressional Review Act resolutions revoking three of California’s most important vehicle emission waivers—despite the fact that the Government Accountability Office and the Senate parliamentarian agreed that the waivers are not themselves regulations and therefore not reviewable by Congress. [11] Although the resolutions were signed, their legal effect remains uncertain, as multiple lawsuits challenging the legitimacy of the Congressional Review Act’s application to these waivers are still pending in federal court, meaning the emissions programs remain in effect for now. [12]
Eight days later, on June 20th, the Supreme Court dealt the CAA Waiver another blow in their ruling in Diamond Alternative Energy, LLC v. EPA (2025), which granted standing to fuel companies to challenge the EPA’s approval of California’s vehicle emissions regulations as directly harmful to business. The decision opened the door for companies to legally attack California’s emissions regulations and force courts to reinterpret the Clean Air Act waiver provision more narrowly. [13] Although they did not rule on the legality of California’s waiver, the ruling in Diamond Alternative Energy, LLC v. EPA does establish an accessible pathway for companies to challenge regulations from the waiver. [14] Alongside the overturning of Chevron—which now forces courts to decide de novo whether a statute allows global concerns like climate change to justify California’s waiver—Diamond Alternative Energy, LLC v. EPA further positions future courts to more narrowly scrutinize serious challenges to the 2022 reinstatement of the waiver. This potential weakness in defense of the CAA Waiver is particularly relevant for several long-standing cases questioning the extent and jurisdiction of the waiver. [15]
In a recent announcement made on July 29, EPA Administrator Lee Zeldin announced a new proposal to rescind the 2009 Endangerment Finding and get rid of all greenhouse gas emission standards for new motor vehicles and engines. [16] If the finding is repealed, the EPA would have no legal authority to regulate the emission of greenhouse gases through the CAA. This would mark the end of California’s CAA Waiver. Prior to approval, the proposal is subject to a 45-day public comment period and is expected to face a wave of legal challenges. If it survives, the rule could be finalized within the next year.
If California’s Clean Air Act waiver is struck down as a result of the weakening of its legal defenses, then the 17 other states that have adopted California’s vehicle emissions standard would lose the authority to enforce those regulations as well. [17] Under the Clean Air Act in Section 209, all U.S. states except California are prohibited from setting their own vehicle emissions standards, but Section 177 allows them to adopt California’s stricter standards if a valid waiver is in place. [18] The legality of California’s waiver has national consequences, and if it falls, the greenhouse gas regulations of a third of the country will be set back years.
Amidst a shifting legal landscape, agencies are adapting to increasingly aggressive legal challenges against the CAA. Noting the court’s hostility towards Chevron, the EPA has not upheld any rulings on the basis of Chevron since 2014, and no decision has been made based on the doctrine since 2016. [19] California has also pivoted away from the Clean Air Act and taken steps to prevent pollution through local laws rather than through the waiver. [20] But while agencies have anticipated and prepared for the fall of Chevron, the recent ruling in Diamond Alternative Energy, LLC v. EPA and the active threat to the Endangerment Finding actively open the door for direct legal challenges to California’s Clean Air Act waiver, signaling a broader judicial willingness to reexamine and potentially nullify longstanding interpretations of environmental law. The end of Chevron deference and the court’s greenlighting of challenges to the CAA waiver mark a dramatic constriction of regulatory flexibility and shift in interpretive authority from expert agencies to the courts. This development threatens the legal foundation of California’s climate leadership and sets a precedent that may hinder aggressive climate action at both state and federal levels.
Edited by Ashley Zhou
[1] Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837 (1984).
[2] Chevron, 467 U.S. 837.
[3] “Chevron Deference.” Legal Information Institute. Cornell Law School. Accessed July 31, 2025. https://www.law.cornell.edu/wex/chevron_deference.
[4] Massachusetts v. Environmental Protection Agency, 549 U.S. 497, 1, 4 (2007).
[5] Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d 102 (D.C. Cir. 2012).
[6] Massachusetts, 549 U.S. 497, 4 (2007).
[7] Benjamin Barczewski, Kathryn Kynett, and Emily Peterson, “California and the Clean Air Act (CAA) Waiver: Frequently Asked Questions,” Congressional Research Service, May 9, 2025, https://www.congress.gov/crs-product/R48168.
[8] Coalition for Responsible Regulation, Inc. v. EPA, 684 F.3d 54 (D.C. Cir. 2012).
[9] Loper Bright Enterprises v. Raimondo, 603 U.S. 369 (2024).
[10] Loper Bright, 604 U.S. 369, 17.
[11] United States Environmental Protection Agency, “EPA Administrator Zeldin Celebrates President Trump Officially Ending California’s Vehicle Waivers, Delivering Another Major Blow to the EV Mandate,” June 12, 2025, https://www.epa.gov/newsreleases/epa-administrator-zeldin-celebrates-president-trump-officially-ending-californias.; Dana Drugmand, “What Will Happen if Republicans Revoke California’s Clean Air Act Waiver?,” June 11, 2025, https://www.sierraclub.org/sierra/what-will-happen-if-republicans-revoke-california-s-clean-air-act-waiver.
[12] Richard Revesz, “Congress Can’t Legally End California’s Tough Air Pollution Law,” Bloomberg Law, May 21, 2025, https://news.bloomberglaw.com/us-law-week/congress-cant-legally-end-californias-tough-air-pollution-law.
[13] Diamond Alternative Energy LLC v. Environmental Protection Agency, 145 S. Ct. 1468 (2025).
[14] Diamond, 145 S. Ct. 1468.
[15] Zach Pilchen and Brian Bunger, “Supreme Court Clarifies Standing for Regulatory Challenges in Diamond Alternative Energy v. EPA,” Holland & Knight, June 27, 2025, https://www.hklaw.com/en/insights/publications/2025/06/supreme-court-clarifies-standing-for-regulatory-challenges.
[16] United States Environmental Protection Agency, “EPA Releases Proposal to Rescind Obama-Era Endangerment Finding, Regulations that Paved the Way for Electric Vehicle Mandates” July 29, 2025, https://www.epa.gov/newsreleases/epa-releases-proposal-rescind-obama-era-endangerment-finding-regulations-paved-way.
[17] Benjamin Barczewski, Kathryn Kynett, and Emily Peterson, “California and the Clean Air Act (CAA) Waiver: Frequently Asked Questions,” Congressional Research Service, May 9, 2025, https://www.congress.gov/crs-product/R48168
[18] Barczewski, “California and the Clean Air Act Waiver.”
[19] Jean Chemnick, “What Chevron’s end could mean for EPA climate regulations,” E&E News, June 26, 2024, https://www.eenews.net/articles/what-chevrons-end-could-mean-for-epa-climate-regulations/
[20] Paul Berger, “Blocked by GOP and Trump, California Pivots in Clean-Air Fight,” The Wall Street Journal, June 6, 2025, https://www.wsj.com/articles/blocked-by-gop-and-trump-california-pivots-in-clean-air-fight-7c14cf00?gaa_at=eafs&gaa_n=ASWzDAiSBX3cuokXkutz0eehnj3MCtg_BYH-KDOZkcnlSi7xdATkExb4PTbLX1Tj_GY%3D&gaa_ts=688e99c8&gaa_sig=yn0PaurizSUmxEZHrdk3Kz7I3RS02I9fi-dg40sePFyCp8rBqc1o27QEM7b8_dk5aXdqAp76GMU8tCnGNat3MA%3D%3D