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Environmental Law Monitor

Your Guide to Emerging Issues in Environmental Regulation and Litigation.

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• Automotive, Emissions, Environmental Law Monitor, Regulations

U.S. Seeks to Pull the Plug on California’s Emissions’ Standards

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On March 13, 2026, the U.S. Department of Justice (“DOJ”) and Department of Transportation (“DOT”) on behalf of the U.S., filed suit against California in the United States District Court for the Eastern District of California to block the California fuel mandates.

At issue are regulations established by the California Air Resources Board (“CARB”). The first is the CO₂ emissions standard, which requires vehicles sold in California to meet specified carbon‑emission targets, currently capped at 131 grams per mile for passenger vehicles. The second is the Zero‑Emission Vehicle (“ZEV”) regulation, which mandates that 100% of new passenger vehicles sold in California achieve zero‑emission status by 2035.

Under the prior administration, California received waivers from the Environmental Protection Agency (“EPA”) to enforce these regulations (adopted by CARB as a part of its Advanced Clean Cars II regulations) under the Clean Air Act (CAA). Per Section 177 of the CAA, California is allowed to apply to the EPA to adopt their own independent air pollution standards. Other states are then allowed to adopt the same standards.

In June 2025, the current administration signed a series of joint resolutions (which were then passed by both chambers of Congress) to revoke these waivers and prohibit the EPA from approving substantially similar waivers in the future, effectively overturning Advanced Clean Cars II regulations. California, along with 10 other states, sued the administration in the U.S. District Court for the Northern District of California, alleging among other things that the administration’s actions were unconstitutional.

While the case remains ongoing, California has continued to move forward its emissions standards regulations under Executive Order N-27-25, which was signed by Governor Gavin Newsom this past summer. This Executive Order directs CARB to adopt a new phase of regulations, (which initiated the development of Advanced Clean Cars III) including ZEV regulations, under their powers to protect public health from harmful air pollution.

The most recent action filed against California by the DOJ and the DOT, argues that Congress, under the Energy Policy and Conservation Act (“EPCA”), mandated that the Secretary of Transportation, through the National Highway Traffic and Safety Administration, set economy standards for vehicles nationwide, which, would preempt any state regulation related to fuel economy standards. Any state regulation aimed at lowering carbon emissions necessarily relates to fuel‑economy standards because reducing emissions increases a vehicle’s fuel economy and effectively limits fuel consumption. Furthermore, the complaint argues that any waiver under the CAA does not pre-empt the EPCA, which has no waiver provision.

The DOJ and DOT ultimately requested the court to issue permanent injunctions to bar CARB from enforcing these regulations, to intervene before CARB’s Advanced Clear Cars III regulations are put into place, and to declare CARB’s regulations unlawful.

As this suit is in its early stages, California has not yet filed a response. It is likely that potential arguments by California will include a narrower interpretation of the EPCA, arguing that the emissions regulations at issue are not fuel economy standards as characterized in the complaint, but are in fact air pollution standards, and thus not under the domain of the EPCA. Furthermore, it could be expected that California will point to its state powers regarding regulating air pollution as it relates to the health of its citizens.

This case will set the stage for how states and federal agencies work together in the future to implement emissions standards and could prompt further challenges regarding the scope of states’ authority to set their own environmental regulations. It is also unclear how this might affect future clean-energy innovations, as California, with its unique status under the CAA, is a valuable testing ground for future clean energy initiatives in the nation. Last, this case will help shape the future of regulations for vehicle emissions in the United States, impacting manufacturing and the automotive industry.

A copy of the complaint can be found here. The full California Executive Order N-27-25 can be found here. For further resources on CARB regulations, please see the CARB calendar which includes a schedule of online seminars on CARB regulatory topics, here.