California’s zero emission regulations impacting trucking will be in the background as the Supreme Court takes up the question of the ability of the federal government to issue a waiver that allows the Golden State to implement tougher environmental rules than the rest of the country.
The Court Friday agreed to grant certiorari of an appeal from Diamond Alternative Energy. Diamond is the biofuels arm of Valero Energy (NYSE: VLO), the large independent refining company that has operations in California.
Diamond had lost earlier court challenges while fighting the granting of a waiver to California to implement its Advanced Clean Car (ACC) rule. Like the Advanced Clean Truck Rule and the Advanced Clean Fleet rule, the ACC has rules requiring a gradual phase out of new sales of automobiles with internal combustion engines.
Advanced Clean Trucks received a waiver from the Environmental Protection Agency in March 2023. At its most basic regulation, ACT requires that OEMs sell a growing percentage of zero emission vehicles into the state as a percentage of all sales in California.
As for the Advanced Clean Fleets rule, California initially did not believe it needed a waiver for ACF. But a year ago almost exactly, after being sued by the California Trucking Association over the lack of a waiver, it changed its policy and requested one.
While the state awaits the fate of that waiver, the ACF, which legally went into effect Jan. 1, is not being enforced. Its most prominent regulation that would have kicked in this year was the requirement that only ZEVs be allowed new registrations with the state for California’s drayage operations at its ports. Other rules would be introduced over time.
The waiver for the ACC rule that is at the heart of the case that will now go before the nine justices was first granted in 2013. But the portion of the waiver that dealt with ZEVs was withdrawn by the EPA in 2019 under the Trump administration. Three years later, under the Biden administration, it was reimplemented.
Diamond/Valero filed suit against that action in the District of Columbia Circuit Court, where it lost. The DC decision was based in part on the question of redressability, which would require Diamond/Valero to show that the court could counter damages the company said it would suffer as a result of ACC.
As to the issue of whether the decision to grant the ACC waiver was appropriate within the waiver power of the original Clean Air Act where it was first established, the federal government, in its brief objecting to Diamond/Valero’s request for certiorari, noted that “numerous waivers have been reviewed by courts on merits.”
A decision overturning the waiver provisions of the Clean Air Act could threaten not just the ACC but also the ACT and the ACF. And the resolution of that question has drawn interest far beyond California because of the fact that the sheer size of California can work to indirectly make the state’s standards the de facto national standard, since OEMs want to avoid building two cars or two trucks, one for California and one for the rest of the country.
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