On April 8, 2025, President Trump issued an executive order (EO) entitled "Protecting American Energy From State Overreach." The goal of the new, energy-focused EO is to remove what the Trump administration characterizes as "illegitimate impediments to the identification, development, siting, production, investment in, or use of domestic energy resources — particularly oil, natural gas, coal, hydropower, geothermal, biofuel, critical mineral, and nuclear energy resources." To that end, the EO directs "[t]he Attorney General, in consultation with the heads of appropriate executive departments and agencies, [to] identify all State and local laws, regulations, causes of action, policies, and practices ... burdening the identification, development, siting, production or use of domestic energy resources," prioritizing state laws "purporting to address 'climate change' or involving 'environmental, social, and governance' initiatives, 'environmental justice,' carbon or 'greenhouse gas' emissions, and funds to collect carbon penalties or carbon taxes."
The EO specifically calls out California as an example of a state trying "to dictate national energy policy" through its cap-and-trade program, which imposes a declining statewide cap on greenhouse gas emissions year-over-year and requires large emitters to either reduce their emissions and/or acquire allowances to cover their emissions. Given its broad scope, however, many other California laws and regulations may be examined and potentially attacked under this EO, including but not limited to the following:
- Zero-Emission Vehicle mandates, requiring light-duty vehicle manufactures to sell zero-emission vehicles as an increasing percentage of their fleets
- Low-Emission Vehicles standards, imposing more stringent emission standards for light-duty vehicles
- Advanced Clean Trucks regulation, requiring medium- and heavy-duty vehicle manufactures to sell zero-emission vehicles as an increasing percentage of their annual sales
- Low Carbon Fuel Standard, requiring declining carbon intensity of transportation fuels sold in the state
- 2025 Building Energy Efficiency Standards, encouraging newly constructed buildings, additions, and alterations to use energy efficient materials and infrastructure such as heat pumps
These laws and regulations may be subject to future challenges seeking to enjoin their enforcement or void their applicability on the basis that they regulate energy "beyond [the state's] constitutional or statutory authorities," but what those challenges might look like remains unclear.
Beyond the direct challenge to state laws and regulations, the EO also contemplates stopping "civil actions." The means and scope of any federal effort to stop civil actions brought under state common law or environmental laws is yet to be determined. However, the EO creates the potential for federal involvement through directly intervening in cases, filing suits challenging the validity of underlying laws, withdrawing regulatory waivers, or enacting new legislation to preempt claims brought through civil actions. If such efforts were to materialize, they would have significant implications for current and future environmental and energy litigation and enforcement in California and beyond.
During the same week that President Trump issued this EO he also issued a related EO aimed at sunsetting federal energy regulations. Entitled "Zero-Based Regulatory Budgeting to Unleash American Energy," the EO directs the U.S. Environmental Protection Agency, U.S. Department of Energy, Federal Energy Regulatory Commission, and the Nuclear Regulatory Commission, along with certain agency subcomponents, to "issue a sunset rule" for "each of their Covered Regulations" that "inserts a Conditional Sunset Date ... of [one] year after the effective date of the sunset rule." Unless a specific extension condition is satisfied, these Covered Regulations will cease "to be effective on that date for all purposes," thereby reducing the number of effective federal energy regulations. The near-concurrent issuance of EOs focused on federal and state energy policy may foreshadow a serious and concerted effort by the Trump administration to pursue its energy-policy goals. For more information on this and other recent EOs regarding federal regulations, see our recent Advisory.
The details of any federal efforts to carry out the April 8, 2025 EO and to stop enforcement of state laws, regulations, or civil actions remain to be seen. In response to the EO, California Governor Gavin Newsom issued a statement saying that "California's efforts to cut harmful pollution won't be derailed by a glorified press release masquerading as an executive order." It seems likely that, at a minimum, significant legal battles between California and the Trump administration over energy and environmental policy loom on the horizon, with important if as-yet unknown consequences for energy and environmental regulation.
As always, stay tuned to Arnold & Porter's Environmental Edge for future updates on changes and challenges to California's energy and environmental laws and policies.
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