The Future of Environmental Review of Federal Permitting Remains Unsteady as White House Seeks to Rescind NEPA Regulations
On February 19, 2025, the Council on Environmental Quality (CEQ) submitted a proposed Interim Final Rule rescinding its regulations implementing the National Environmental Policy Act (NEPA). The Rule will become effective 45 days after its publication in the Federal Register, marking the end of nearly 50 years of CEQ regulations serving as the foundation for federal environmental reviews. This Interim Rule comes right at the deadline set by President Trump’s Executive Order (EO) 14154—Unleashing American Energy—which rescinded CEQ’s authority to issue NEPA regulations and revoked President Carter’s EO 11991, which had originally directed CEQ to promulgate implementing regulations.
The Interim Rule comes on the heels of two court decisions holding that CEQ lacks authority to promulgate binding NEPA rules. First, the D.C. Circuit held in Marin Audubon Society v. Federal Aviation Administration that CEQ’s NEPA regulations were ultra vires. Second, the District Court for the District of North Dakota, in Iowa v. Council on Environmental Quality, vacated the Biden Administration’s 2024 Phase 2 NEPA rules in response to a lawsuit brought by 21 attorneys general. The Interim Rule expresses the Trump Administration’s agreement with those decisions, but invites public comments on the issue for 30 days after issuance.
Ultimately, legal challenges against the Interim Rule and any subsequent final rule will likely arise. In the meantime, the most immediate concern may be for those projects currently undergoing NEPA review. To address that concern, CEQ simultaneously published guidance directing federal agencies to continue processing active NEPA applications without delay. The guidance instructs agencies to apply their current NEPA implementing procedures, with any adjustments needed to be consistent with the 2023 statutory amendments to NEPA. The guidance further recommends that federal agencies voluntarily rely on the CEQ regulations promulgated in 2020 under the first Trump Administration as they complete pending NEPA reviews and defend court challenges to reviews completed while those regulations were in effect.
CEQ’s guidance also provides instructions to federal agencies regarding the implementation of EO 14154, which directed each federal agency, within the next year, to revise its NEPA implementing procedures (or establish such procedures) to expedite and streamline the permitting process consistent with the 2023 congressional amendments to NEPA. Further, the guidance indicates that NEPA documents should not include an Environmental Justice analysis.
The Interim Rule continues the Trump Administration’s shift towards deregulation in the federal environmental review process, and its implications for project proponents, stakeholders, and litigants are still unfolding. CEQ’s guidance offers some clarity and continuity for ongoing NEPA reviews, but it also raises questions about the legal status and enforceability of CEQ’s rescinded regulations and the agency-specific procedures that will replace them. Stakeholders should closely monitor these developments and any NEPA-related issues that may arise under the new regulatory landscape.
This post is as of the posting date stated above. Sidley Austin LLP assumes no duty to update this post or post about any subsequent developments having a bearing on this post.
