Zohaib Zahir

Associate Editor

Loyola University Chicago School of Law, JD 2027

Climate-related regulation remains one of the most politically and legally contested areas within the federal government, with regulatory direction often shifting alongside presidential administrations. The U.S. Environmental Protection Agency (EPA) protects human health and the environment by developing and enforcing regulations based on scientific evidence. The administrator of the EPA is nominated by the President of the United States and confirmed by the U.S. Senate. As a result, the EPA’s regulatory determinations often reflect the policy beliefs and priorities of the current administration. On February 12, 2026, the EPA finalized its rescission of the endangerment finding, which served as the legal basis for regulating  greenhouse gases, including greenhouse gas emissions from motor vehicles. Through its reversal, the EPA has introduced substantial regulatory uncertainty for the automotive industry and has set the stage for consequential legal, economic, and climate policy developments in the months ahead.

The endangerment finding and its rescission

In the landmark 2007 case, Massachusetts v. EPA, the Supreme Court held that the EPA could determine whether greenhouse gases posed a threat to public health through the Clean Air Act of 1970. If found to be true, the EPA was within its rights to regulate greenhouse gases. In 2009, the EPA issued the now rescinded endangerment finding, which stated that carbon dioxide, methane, and four other greenhouse gases significantly contributed to air pollution and should be regulated as they threatened public health by increasing global temperatures, heat-related illnesses, and lead to intensifying extreme weather events that cause injury and death.

Greenhouse gases are primarily released through emissions from motor vehicles, with 28% of total U.S greenhouse gas emissions coming from the transportation sector.  Under the Trump administration, the EPA reversed its view on the endangerment finding, indicating that it was a tool used by previous Democratic administrations to justify trillions of dollars in regulations.

The EPA’s justification for rescission

The Trump administration argues that climate change is broadly a hoax and not a problem that the federal government should solve. The administration further asserts that rolling back greenhouse regulations would benefit the U.S. economy, particularly the automotive industry. Legally, the EPA argues that it had no legal authority to regulate greenhouse gas emissions from vehicles, as the Clean Air Act authorizes regulation of only local and regional air pollutants that directly harm human health. Additionally, the EPA argues that the major questions doctrine (MQD) should apply. The MQD holds that Congress must provide clear authorization when an agency undertakes unprecedented actions that are transformative of its regulatory authority and are economically or politically significant. Thus, the EPA argues that any significant regulation of greenhouse gas emissions requires explicit congressional approval.

Environmental groups’ argument and judicial considerations

Environmental groups argue that the EPA’s rescission of the endangerment finding violates the concept of stare decisis, which requires courts to follow historical precedents when ruling on similar cases. These groups argue that in Massachusetts v. EPA, the Supreme Court recognized that Congress had provided clear authorization for regulating greenhouse gases under the Clean Air Act, something the EPA itself affirmed in the past. They argue that the Clean Air Act’s language empowers the EPA to regulate these pollutants to protect public health and human welfare. Further, by reversing the endangerment finding and greenhouse gas regulation, the EPA is undermining settled legal and scientific determinations.

On February 18, 2026, multiple environmental and public health groups filed a lawsuit in the U.S. Court of Appeals for the District of Columbia Circuit against the EPA for its decision to rescind limits on greenhouse gas emissions from motor vehicles. Legal experts anticipate the current lawsuit to be appealed to the Supreme Court with the belief that a more conservative Supreme Court could be sympathetic to the EPA’s arguments. In the 2022 decision of West Virginia v. EPA, the Supreme Court decided that the EPA lacked authority under the Clean Air Act to set an emissions cap for greenhouse gases. The Supreme Court used the MQD to explain that Congress must provide the EPA with clear authorization for it to cap emissions at a level that would force a nationwide transition away from the use of coal. Ultimately, significant uncertainty remains regarding the authority of the EPA and greenhouse gas regulation, with the Supreme Court poised to potentially play a decisive role in shaping the path forward.

Industry impact

The EPA’s rescission of the endangerment finding and the resulting relaxation of greenhouse gas regulations will have the greatest impact on the automative industry. The Trump administration argues that the endangerment finding led to vehicle regulations with an aggregate cost of more than $1 trillion, resulting in significant burdens on consumers and manufacturers both. Additionally, the Trump administration asserts that the rescission could reduce costs for new vehicles and lower manufacturing costs for electric vehicles by $2,400 per vehicle. In 2025, Congress also removed the federal tax credit for purchases of electric vehicles, contributing to a slowdown of EV sales. U.S. automakers have welcomed the rescission, emphasizing that they prioritize preserving consumer choice and reducing challenging regulatory requirements. Critics, however, argue that the standards could have been met at relatively low cost and that consumer demand for electric and hybrid vehicles will continue to grow, regardless of federal government intervention. From a climate perspective, rolling back emissions standards is likely to increase overall greenhouse gas emissions, undermining long-term environmental goals. Ultimately, the rescission introduces significant industry uncertainty, and the legal and market outcomes will shape the future of vehicle emissions and the automative industry for years to come.