[Federal Register Volume 87, Number 49 (Monday, March 14, 2022)]
[Notices]
[Pages 14332-14379]
[FR Doc No: 2022-05227]

Vol. 87

Monday,

No. 49

March 14, 2022

Part II

Environmental Protection Agency

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California State Motor Vehicle Pollution Control Standards; Advanced
Clean Car Program; Reconsideration of a Previous Withdrawal of a Waiver
of Preemption; Notice of Decision; Notice

Federal Register / Vol. 87 , No. 49 / Monday, March 14, 2022 /
Notices

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ENVIRONMENTAL PROTECTION AGENCY

[EPA-HQ-OAR-2021-0257; FRL-9325-01-OAR]

California State Motor Vehicle Pollution Control Standards;
Advanced Clean Car Program; Reconsideration of a Previous Withdrawal of
a Waiver of Preemption; Notice of Decision

AGENCY: Environmental Protection Agency.

ACTION: Notice of decision.

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SUMMARY: The Environmental Protection Agency (EPA) has completed the
reconsideration of its 2019 action withdrawing a 2013 Clean Air Act
(CAA) waiver of preemption for California's greenhouse gas (GHG)
emission standards and zero emission vehicle (ZEV) sale mandate, which
are part of California's Advanced Clean Car (ACC) program. This
decision rescinds EPA's 2019 waiver withdrawal, thus bringing back into
force the 2013 ACC program waiver, including a waiver of preemption for
California's ZEV sales mandate and GHG emissions standards. In
addition, EPA is withdrawing the interpretive view of CAA section 177
included in its 2019 action, that States may not adopt California's GHG
standards pursuant to section 177 even if EPA has granted California a
waiver for such standards. Accordingly, other States may continue to
adopt and enforce California's GHG standards under section 177 so long
as they meet the requirements of that section.

DATES: Petitions for review must be filed by May 13, 2022.

ADDRESSES: EPA has established a docket for this action under Docket ID
EPA-HQ-OAR-2021-0257. All documents relied upon in making this
decision, including those submitted to EPA by CARB, are contained in
the public docket. Publicly available docket materials are available
electronically through www.regulations.gov. After opening the
www.regulations.gov website, enter EPA-HQ-OAR-2021-0257 in the ``Enter
Keyword or ID'' fill-in box to view documents in the record. Although a
part of the official docket, the public docket does not include
Confidential Business Information (CBI) or other information whose
disclosure is restricted by statute. EPA's Office of Transportation and
Air Quality (OTAQ) maintains a web page that contains general
information on its review of California waiver and authorization
requests. Included on that page are links to prior waiver Federal
Register notices, some of which are cited in this notice; the page can
be accessed at https://www.epa.gov/state-and-local-transportation/vehicle-emissions-california-waivers-and-authorizations.

FOR FURTHER INFORMATION CONTACT: David Dickinson, Office of
Transportation and Air Quality, U.S. Environmental Protection Agency,
1200 Pennsylvania Ave. NW. Telephone:<PHONE_NUMBER>. Email:
[email protected] or Kayla Steinberg, Office of Transportation
and Air Quality, U.S. Environmental Protection Agency, 1200
Pennsylvania Ave. NW. Telephone:<PHONE_NUMBER>. Email:
[email protected].

SUPPLEMENTARY INFORMATION:

Table of Contents

I. Executive Summary
II. Background
    A. California's Advanced Clean Car (ACC) Program and EPA's 2013
Waiver
    B. Prior Waivers for GHG Standards
    C. SAFE 1 Decision
    D. Petitions for Reconsideration
III. Principles Governing This Review
    A. Scope of Preemption and Waiver Criteria Under the Clean Air
Act
    B. Deference to California
    C. Standard and Burden of Proof
IV. EPA did not Appropriately Exercise Its Limited Authority To
Reconsider the ACC Program Waiver in SAFE 1
    A. Comments Received
    B. Analysis: EPA Inappropriately Exercised Its Limited Authority
To Reconsider
    C. Conclusion
V. The SAFE 1 Interpretation of Section 209(b)(1)(B) was
Inappropriate and, in any Event, California met Its Requirements
    A. Historical Practice
    B. Notice of Reconsideration of SAFE 1 and Request for Comment
    C. Comments Received
    D. Analysis: California Needs the ACC Program GHG Standards and
ZEV Sales Mandate to Address Compelling and Extraordinary Conditions
Under Section 209(b)(1)(B)
    1. EPA is Withdrawing the SAFE 1 Section 209(b)(1)(B)
Interpretation
    2. California Needs the GHG Standards and ZEV Sales Mandate Even
Under the SAFE 1 Interpretation
    a. GHG Standards and ZEV Sales Mandates Have Criteria Emission
Benefits
    b. California Needs Its Standards To Address the Impacts of
Climate Change in California
    3. California's ZEV Sales Mandate as Motor Vehicle Control
Technology Development
    E. Conclusion
VI. EPA Inappropriately Considered Preemption Under the Energy and
Policy Conservation Act (EPCA) in Its Waiver Decision
    A. Historical Practice and Legislative History
    B. Notice of Reconsideration of SAFE 1 and Request for Comment
    C. Comments Received
    D. Analysis: EPA is Rescinding its SAFE 1 Actions Related to
Preemption Under EPCA
    1. NHTSA Has Since Repealed Its Findings of Preemption Made in
SAFE 1
    2. EPA Improperly Deviated From its Historical Practice of
Limiting its Review to Section 209(b) Criteria
    E. Conclusion
VII. EPA Inappropriately set Forth an Interpretive View of Section
177 in SAFE 1
    A. SAFE 1 Interpretation
    B. Notice of Reconsideration of SAFE 1 and Request for Comment
    C. Comments Received
    D. Analysis: EPA Is Rescinding SAFE 1's Interpretive Views of
Section 177
    E. Conclusion
VIII. Other Issues
    A. Equal Sovereignty
    B. CARB's Deemed-to-Comply Provision
IX. Decision
X. Statutory and Executive Order Reviews

I. Executive Summary

    CAA section 209(a) generally preempts states from adopting emission
control standards for new motor vehicles. But Congress created an
important exception from preemption. Under CAA section 209(b), the
State of California \1\ may seek a waiver of preemption, and EPA must
grant it unless the Agency makes one of three statutory findings.
California's waiver of preemption for its motor vehicle emissions
standards allows other States to adopt and enforce identical standards
pursuant to CAA section 177. Since the CAA was enacted, EPA has granted
California dozens of waivers of preemption, permitting California to
enforce its own motor vehicle emission standards.
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    \1\ The CAA section 209(b) waiver is limited ``to any State
which has adopted standards . . . for the control of emissions from
new motor vehicles or new motor vehicle engines prior to March 30,
1966,'' and California is the only State that had standards in place
before that date. ``California'' and ``California Air Resources
Board'' (CARB) are used interchangeably in certain instances in this
notice when referring to the waiver process under section 209(b).
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    Of particular relevance to this action, in 2013, EPA granted
California's waiver request for the state's Advanced Clean Car (ACC)
program (ACC program waiver).\2\ California's ACC program includes both
a Low Emission Vehicle (LEV) program, which regulates criteria
pollutants and greenhouse gas (GHG) emissions, as well as a Zero
Emission Vehicle (ZEV) sales mandate. These two requirements are
designed to control smog- and soot-causing pollutants and GHG emissions
in a single coordinated package of requirements for passenger cars,
light-duty trucks, and medium-duty passenger vehicles (as well as

limited requirements related to heavy-duty vehicles). Between 2013 and
2019, twelve other States adopted one or both of California's standards
as their own. But in 2019, EPA partially withdrew this waiver as part
of a final action entitled ``The Safer Affordable Fuel-Efficient (SAFE)
Vehicles Rule Part One: One National Program'' (SAFE 1), marking the
first time the agency withdrew a previously granted waiver.\3\ In
addition, in the context of SAFE 1, EPA provided an interpretive view
of CAA section 177 asserting that other states were precluded from
adopting California's GHG standards.
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    \2\ 78 FR 2111 (January 9, 2013).
    \3\ 84 FR 51310 (September 27, 2019).
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    As Administrator of the Environmental Protection Agency (EPA), I am
now rescinding EPA's 2019 actions in SAFE 1 that partially withdrew the
ACC program waiver for California's ACC program. I am rescinding these
actions because (1) EPA's reconsideration of the waiver under the
particular facts and circumstances of this case was improper; (2) EPA's
reconsideration was based on a flawed interpretation of CAA section
209(b); (3) even under that flawed interpretation, EPA misapplied the
facts and inappropriately withdrew the waiver; (4) EPA erred in looking
beyond the statutory factors in CAA 209(b) to action taken by another
agency under another statute to justify withdrawing the waiver; (5)
that agency has also since withdrawn the action EPA relied on in any
event; and (6) EPA inappropriately provided an interpretive view of
section 177.
    As a result of this action, EPA's 2013 waiver for the ACC program,
specifically the waiver for California's GHG emission standards and ZEV
sales mandate requirements for model years (MYs) 2017 through 2025,
comes back into force.\4\ I am also rescinding the interpretive view
set forth in SAFE 1 that States may not adopt California's GHG
standards pursuant to CAA section 177 even if EPA has granted
California a section 209 waiver for such standards. Accordingly, States
may now adopt and enforce California's GHG standards so long as they
meet the requirements of Section 177, and EPA will evaluate any State's
request to include those provisions in a SIP through a separate notice
and comment process.
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    \4\ In SAFE 1, EPA did not withdraw the entire 2013 waiver, but
instead only withdrew the waiver as it related to California's GHG
emission standards and the ZEV sales mandate. The waiver for the
low-emission vehicle (LEV III) criteria pollutant standards in the
ACC program remained in place. EPA's reconsideration of SAFE 1 and
the impact on the ACC waiver therefore relates only to the GHG
emission standards and the ZEV sales mandate, although ``ACC program
waiver'' is used in this document. This action rescinds the waiver
withdrawal in SAFE 1. In this decision, the Agency takes no position
on any impacts this decision may have on state law matters regarding
implementation.
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    Section II of this action contains a detailed history of EPA's
waiver adjudications leading up to this action. In summary, in 2012,
CARB submitted the ACC waiver request to EPA, which included ample
evidence of the criteria pollution benefits of the GHG standards and
the ZEV sales mandate. As it had in all prior waiver decisions with two
exceptions (including SAFE 1), in considering the request EPA relied on
its ``traditional'' interpretation of section 209(b)(1)(B), which
examines whether California needs a separate motor vehicle program as a
whole--not specific standards--to address the state's compelling and
extraordinary conditions. In 2013, EPA granted California's waiver
request for its ACC program in full. In 2018, however, EPA proposed to
withdraw portions of its waiver granted in 2013 based on a new
interpretation of section 209(b)(1)(B) that looked at whether the
specific standards (the GHG standards and ZEV sales mandate), as
opposed to the program as a whole, continued to meet the second and
third waiver prongs (found in sections 209(b)(1)(B) and (C)).\5\ In
addition, EPA proposed to look beyond the section 209(b) criteria to
consider the promulgation of a NHTSA regulation and pronouncements in
SAFE 1 that declared state GHG emission standards and ZEV sales
mandates preempted under EPCA. In 2019, after granting CARB a waiver
for its ACC program in 2013 and after 12 states had adopted all or part
of the California standards under section 177, EPA withdrew portions of
the waiver for CARB's GHG emission standards and ZEV sales mandates. In
SAFE 1, EPA cited changed circumstances and was based on a new
interpretation of the CAA and the agency's reliance on an action by
NHTSA that has now been repealed.\6\
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    \5\ EPA's 2018 proposal was jointly issued with the National
Highway Traffic Safety Administration (NHTSA). 83 FR 42986 (August
24, 2018) (the ``SAFE proposal''). In addition to partially
withdrawing the waiver, that proposal proposed to set less stringent
greenhouse gas and CAFE standards for model years 2021-2026. NHTSA
also proposed to make findings related to preemption under the
Energy Policy and Conservation Act (EPCA) and its relationship to
state and local GHG emission standards and ZEV sales mandates.
    \6\ 84 FR 51310. In SAFE 1, NHTSA also finalized its action
related to preemption under EPCA. NHTSA's action included both
regulatory text and well as pronouncements within the preamble of
SAFE 1. In 2020, EPA finalized its amended and less stringent carbon
dioxide standards for the 2021-2026 model years in an action titled
``The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule for Model
Years 2021-2026 Passenger Cars and Light Trucks'' (SAFE 2). 85 FR
24174 (April 30, 2020).
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    On January 20, 2021, President Biden issued Executive Order 13990,
directing the Federal Agencies to ``immediately review'' SAFE 1 and to
consider action ``suspending, revising, or rescinding'' that action by
April 2021. On April 28, 2021, EPA announced its Notice of
Reconsideration, including a public hearing and an opportunity for
public comment.\7\ The Agency stated its belief that there were
significant issues regarding whether SAFE 1 was a valid and appropriate
exercise of Agency authority, including the amount of time that had
passed since EPA's ACC program waiver decision, the approach and legal
interpretations used in SAFE 1, whether EPA took proper account of the
environmental conditions (e.g., local climate and topography, number of
motor vehicles, and local and regional air quality) in California, and
the environmental consequences from the waiver withdrawal in SAFE 1.
Further, EPA stated it would be addressing issues raised in the related
petitions for reconsideration of EPA's SAFE 1 action. In the meantime,
having reconsidered its own action, and also in response to Executive
Order 13990, NHTSA repealed its conclusion that state and local laws
related to fuel economy standards, including GHG standards and ZEV
sales mandates, were preempted under EPCA,\8\ and EPA revised and made
more stringent the Federal GHG emission standards for light-duty
vehicles for 2023 and later model years, under section 202(a).\9\
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    \7\ ``California State Motor Vehicle Pollution Control
Standards; Advanced Clean Car Program; Reconsideration of a Previous
Withdrawal of a Waiver of Preemption; Opportunity for Public Hearing
and Public Comment.'' 86 FR 22421 (April 28, 2021).
    \8\ 86 FR 74236 (December 29, 2021).
    \9\ 86 FR 74434 (December 30, 2021).
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    Section III of this action outlines the principles that govern
waiver reconsiderations. It sets forth the statutory background and
context for the CAA preemption of new motor vehicle emission standards,
the criteria for granting a waiver of preemption, and the ability of
other States to adopt and enforce California's new motor vehicle
emission standards where a waiver has been issued if certain CAA
criteria are met. In brief, CAA section 209(a) generally preempts all
States or political subdivisions from adopting and enforcing any
standard relating to the control of emissions from new motor vehicles
or new motor vehicle engines. But section 209(b) contains an important
exception that allows only

California to submit a request to waive preemption for its standards.
Importantly, EPA must grant the waiver unless the Administrator makes
at least one of three findings: (1) That California's determination
that its standards will be, in the aggregate, at least as protective of
public health and welfare as applicable Federal standards, is arbitrary
and capricious (the ``first waiver prong,'' under section
209(b)(1)(A)); (2) that California does not need such State standards
to meet compelling and extraordinary conditions (the ``second waiver
prong,'' under section 209(b)(1)(B)); or (3) that California standards
are not consistent with section 202(a), which contains EPA's authority
to regulate motor vehicles (the ``third waiver prong,'' under section
209(b)(1)(C)). In the 1977 amendments to the CAA, section 177 was added
to allow other States that may be facing their own air quality concerns
to adopt and enforce the California new motor vehicle emission
standards for which California has been granted a waiver under section
209(b) if certain criteria are met.
    Section III also provides more context to indicate that Congress
intended that, when reviewing a request for a waiver, EPA treat with
deference the policy judgments on which California's vehicle emission
standards are based. It discusses the history of Congress allowing
states to adopt more stringent standards. Ultimately, Congress built a
structure in section 209(b) that grants California authority to address
its air quality problems, and also acknowledges the needs of other
states to address their air quality problems through section 177.
Lastly, Section III describes the burden and standard of proof for
waiver decisions.
    Section IV of this action then discusses EPA's first basis for
rescinding the SAFE 1 waiver withdrawal: That EPA did not appropriately
exercise its limited authority to withdraw a waiver once granted.
Section 209 does not provide EPA with express authority to reconsider
and withdraw a waiver previously granted to California. EPA's authority
thus stems from its inherent reconsideration authority. In the context
of reconsidering a waiver grant, that authority may only be exercised
sparingly. EPA believes its inherent authority to reconsider a waiver
decision is constrained by the three waiver criteria that must be
considered before granting or denying a waiver request under section
209(b). EPA's reconsideration may not be broader than the limits
Congress placed on its ability to deny a waiver in the first place. EPA
notes further support for limiting its exercise of reconsideration
authority, relevant in the context of a waiver withdrawal, is evidenced
by Congress's creation of a state and federal regulatory framework to
drive motor vehicle emissions reduction and technology innovation that
depends for its success on the stable market signal of the waiver
grant--automobile manufacturers must be able to depend reliably on the
continuing validity of the waiver grant in order to justify the
necessary investments in cleaner vehicle technology. Accordingly, EPA
now believes it may only reconsider a previously granted waiver to
address a clerical or factual error or mistake, or where information
shows that factual circumstances or conditions related to the waiver
criteria evaluated when the waiver was granted have changed so
significantly that the propriety of the waiver grant is called into
doubt. Even then, as with other adjudicatory actions, when choosing to
undertake such a reconsideration EPA believes it should exercise its
limited authority within a reasonable timeframe and be mindful of
reliance interests. EPA expects such occurrences will be rare. The
Agency's waiver withdrawal in SAFE 1 was not an appropriate exercise of
EPA's limited authority; there was no clerical error or factual error
in the ACC program waiver, and SAFE 1 did not point to any factual
circumstances or conditions related to the three waiver prongs that
have changed so significantly that the propriety of the waiver grant is
called into doubt. Rather, the 2019 waiver withdrawal was based on a
change in EPA's statutory interpretation, an incomplete assessment of
the record, and another agency's action beyond the confines of section
209(b). EPA erred in reconsidering a previously granted waiver on these
bases. Accordingly, EPA is rescinding its 2019 withdrawal of its 2013
ACC program waiver.
    Sections V and VI further explain why, even if SAFE 1 were an
appropriate exercise of EPA's limited authority to reconsider its
previously-granted waiver, the Agency would still now rescind its
waiver withdrawal.
    As discussed in Section V, the Agency's reinterpretation of the
second waiver prong in SAFE 1 was flawed. While EPA has traditionally
interpreted the second waiver prong, section 209(b)(1)(B), to require a
waiver unless the Agency demonstrates that California does not need its
own motor vehicle emissions program, to meet compelling and
extraordinary conditions, the SAFE 1 waiver withdrawal decision was
based on a statutory interpretation that calls for an examination of
the need for the specific standard at issue. Section V explains why EPA
believes that its traditional interpretation is, at least, the better
interpretation of the second waiver prong because it is most consistent
with the statutory language and supported by the legislative history.
Accordingly, we reaffirm the traditional interpretation--in which EPA
reviews the need for California's motor vehicle program--in this
action.
    Additionally, Section V explains why even if the focus is on the
specific standards, when looking at the record before it, EPA erred in
SAFE 1 in concluding that California does not have a compelling need
for the specific standards at issue--the GHG emission standards and ZEV
sales mandate. In particular, in SAFE 1, the Agency failed to take
proper account of the nature and magnitude of California's serious air
quality problems, including the interrelationship between criteria and
GHG pollution.\10\ Section V further discusses EPA's improper
substitution in SAFE 1 of its own policy preferences for California's,
and discusses the importance of deferring to California's judgment on
``ambiguous and controversial matters of public policy'' that relate to
the health and welfare of its citizens.\11\ Based on a complete review
of the record in this action, EPA now believes that, even under the
SAFE 1 interpretation, California needs the ZEV sales mandate and GHG
standards at issue to address compelling and extraordinary air quality
conditions in the state. EPA's findings in SAFE 1, which were based on
the Agency's inaccurate belief that these standards were either not
intended to or did not result in criteria emission reductions to
address California's National Ambient Air Quality Standard (NAAQS)
obligations, are withdrawn.
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    \10\ As explained herein, the requirements in the ACC program
were designed to work together in terms of the technologies that
would be used to both lower criteria emissions and GHG emissions.
The standards, including the ZEV sales mandate and the GHG emission
standards, were designed to address the short- and long-term air
quality goals in California in terms of the criteria emission
reductions (including upstream reductions) along GHG emission
reductions. The air quality issues and pollutants addressed in the
ACC program are interconnected in terms of the impacts of climate
change on such local air quality concerns such as ozone exacerbation
and climate effects on wildfires that affect local air quality.
    \11\ 40 FR 23102, 23104 (May 28, 1975); 58 FR 4166 (January 13,
1993).
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    Section VI discusses SAFE 1's other basis for withdrawing the ACC
program waiver, EPCA. In SAFE 1, EPA reached beyond the waiver criteria
in section 209(b)(1) and considered NHTSA's regulations in SAFE 1 that
state or local regulation of carbon dioxide emission from new motor
vehicles (including

California's ZEV sales mandate and GHG standards) are related to fuel
economy and as such are preempted under EPCA. NHTSA has since issued a
final rule that repeals all regulatory text and additional
pronouncements regarding preemption under EPCA set forth in SAFE 1.\12\
This action by NHTSA effectively removes the underpinning and any
possible reasoned basis for EPA's withdrawal decision based on
preemption under EPCA in SAFE 1. Additionally, the Agency has
historically refrained from consideration of factors beyond the scope
of the waiver criteria in section 209(b)(1) and the 2013 ACC program
waiver decision was undertaken consistent with this practice. EPA
believes that the consideration of EPCA preemption in SAFE 1 led the
Agency to improperly withdraw the ACC program waiver on this non-CAA
basis. EPA's explanation that withdrawal on this basis was justified
because SAFE 1 was a joint action, and its announcement that this would
be a single occurrence, does not justify the ACC waiver withdrawal.
Thus, EPA is rescinding the withdrawal of those aspects of the ACC
program waiver that were based on NHTSA's actions in SAFE 1.
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    \12\ 86 FR 74236.
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    Section VII addresses SAFE 1's interpretive view of section 177
that States adopting California's new motor vehicle emission standards
could not adopt California's GHG standards.\13\ EPA believes it was
both unnecessary and inappropriate in a waiver proceeding to provide an
interpretive view of the authority of states to adopt California
standards when section 177 does not assign EPA any approval role in
states' adoption of the standards. Therefore, as more fully explained
in Section VII, the Agency is rescinding the interpretive view on
section 177 set out in SAFE 1. Section VIII discusses certain other
considerations, including the equal sovereignty doctrine and
California's deemed-to-comply provision, and concludes that they do not
disturb EPA's decision to rescind the 2019 waiver withdrawal action.
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    \13\ 84 FR at 51310, 51350.
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    Section IX contains the final decision to rescind the withdrawal of
the 2013 ACC program waiver. In summary, I find that although EPA has
inherent authority to reconsider its prior waiver decisions, that
authority to reconsider is limited and may be exercised only when EPA
has made a clerical or factual error or mistake, or where information
shows that factual circumstances or conditions related to the waiver
criteria evaluated when the waiver was granted have changed so
significantly that the propriety of the waiver grant is called into
doubt. Further, EPA's reconsideration may not be broader than the
limits Congress placed on its ability to deny a waiver in the first
place. Even where those conditions are met, I believe that any waiver
withdrawal decision should consider other factors such as the length of
time since the initial decision and California and others' reliance on
the initial decision. Because there were no factual or clerical errors
or such significantly changed factual circumstances or conditions
necessary to trigger EPA's authority to reconsider its previously
granted waiver during the SAFE 1 proceeding, I believe SAFE 1 was not
an appropriate exercise of EPA's authority to reconsider. In addition,
even if it were an appropriate exercise, EPA should not have departed
from its traditional interpretation of the second waiver prong (section
209(b)(1)(B)), which is properly focused on California's need for a
separate motor vehicle emission program--not specific standards--to
meet compelling and extraordinary conditions. And even under EPA's SAFE
1 interpretation of the second waiver prong, a complete review of the
factual record demonstrates that California does need the GHG emission
standards and ZEV sales mandate to meet compelling and extraordinary
conditions in the State. Therefore, EPA should not have withdrawn the
ACC program waiver based upon the second waiver prong in SAFE 1 and
recission of the withdrawal is warranted. Additionally, I find that EPA
inappropriately relied on NHTSA's finding of preemption, now withdrawn,
to support its waiver withdrawal, and rescind the waiver withdrawal on
that basis as well. Finally, independently in this action, I am
rescinding the interpretive views of section 177 that were set forth in
SAFE 1, because it was inappropriate to include those views as part of
this waiver proceeding.
    For these reasons, I am rescinding EPA's part of SAFE 1 related to
the CAA preemption of California's standards. This recission has the
effect of bringing the ACC program waiver back into force.

II. Background

    This section provides background information needed to understand
EPA's decision process in SAFE 1, and this decision. This context
includes: A summary of California's ACC program including the record on
the criteria pollutant benefits of its ZEV sales mandate and GHG
emission standards; a review of the prior GHG emission standards
waivers in order to explain EPA's historical evaluation of the second
waiver prong; an overview of the SAFE 1 decision; a review of the
petitions for reconsideration filed subsequent to SAFE 1; and a
description of the bases and scope of EPA's reconsideration of SAFE 1.
EPA's sole purpose in soliciting public comment on its reconsideration
was to determine whether SAFE 1 was a valid and appropriate exercise of
the Agency's authority. In the Notice of Reconsideration, EPA therefore
noted that reconsideration was limited to SAFE 1 and that the Agency
was not reopening the ACC program waiver decision.

A. California's Advanced Clean Car (ACC) Program and EPA's 2013 Waiver

    On June 27, 2012, CARB notified EPA of its adoption of the ACC
program regulatory package that contained amendments to its LEV III and
ZEV sales mandate, and requested a waiver of preemption under section
209(b) to enforce regulations pertaining to this program.\14\ The ACC
program combined the control of smog- and soot-causing pollutants and
GHG emissions into a single coordinated package of requirements for
passenger cars, light-duty trucks, and medium-duty passenger vehicles
(as well as limited requirements related to heavy-duty vehicles for
certain model years).\15\
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    \14\ 2012 Waiver Request, EPA-HQ-OAR-2012-0562-0004 (2012 Waiver
Request) at 1, 3-6. CARB's LEV III standards include both its
criteria emission standards and its GHG emission standards. SAFE 1
did not address the LEV III criteria emission standards and as such
the ACC program waiver remained in place. SAFE 1 did address CARB's
GHG emission standards and ZEV sales mandate and this action
addresses these two standards as well. As noted in CARB's 2012
Waiver Request, these three standards are interrelated and
comprehensive in order to address the State's serious air quality
problems including its criteria pollutants and climate change
challenges.
    \15\ As noted in CARB's waiver request, ``[a]t the December 2009
hearing, the Board adopted Resolution 09-66, reaffirming its
commitment to meeting California's long term air quality and climate
change reduction goals through commercialization of ZEV
technologies. The Board further directed staff to consider shifting
the focus of the ZEV regulation to both GHG and criteria pollutant
emission reductions, commercializing ZEVs and PHEVs in order to meet
the 2050 goals, and to take into consideration the new LEV fleet
standards and propose revisions to the ZEV regulation accordingly.''
2012 Waiver Request at 2 (emphasis added). EPA stated in SAFE 1 that
California's ZEV standard initially targeted only criteria
pollutants. 84 FR at 51329. See also 78 FR at 2118.
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    In its 2012 waiver request, CARB noted that the 2012 ZEV amendments
would also result in additional criteria pollutant benefits in
California in comparison to the earlier ZEV regulations and would
likely provide benefits beyond those achieved by

complying with the LEV III criteria pollutant standard for conventional
vehicles only. CARB attributed these benefits not to vehicle emissions
reductions specifically, but to increased electricity and hydrogen use
that would be more than offset by decreased gasoline production and
refinery emissions.\16\ CARB's waiver request attributed the criteria
emissions benefits to its LEV III criteria pollutant fleet standard and
did not include similar benefits from its ZEV sales mandate. According
to the request, the fleet would become cleaner regardless of the ZEV
sales mandate because the ZEV sales mandate is a way to comply with the
LEV III standards and, regardless of the ZEV sales mandate,
manufacturers might adjust their compliance response to the standard by
making less polluting conventional vehicles. CARB further explained
that because upstream criteria and PM emissions are not captured in the
LEV III criteria pollutant standard, net upstream emissions are reduced
through the increased use of electricity and concomitant reductions in
fuel production.\17\
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    \16\ 2012 Waiver Request at 6.
    \17\ Id. at 15-16.
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    On August 31, 2012, EPA issued a notice of opportunity for public
hearing and written comment on CARB's request and solicited comment on
all aspects of a full waiver analysis for such request under the
criteria of section 209(b).\18\ Commenters opposing the waiver asked
EPA to deny the waiver under the second waiver prong, section
209(b)(1)(B), as it applied to the GHG provisions in the ACC Program,
calling on EPA to adopt an alternative interpretation of that provision
focusing on California's need for the specific standards. Following
public notice and comment and based on its traditional interpretation
of section 209(b), on January 9, 2013, EPA granted California's request
for a waiver of preemption to enforce the ACC program regulations.\19\
The traditional interpretation, which EPA stated is the better
interpretation of section 209(b)(1)(B), calls for evaluating
California's need for a separate motor vehicle emission program to meet
compelling and extraordinary conditions.\20\ As explained, EPA must
grant a waiver to California unless the Administrator makes at least
one of the three statutorily-prescribed findings in section 209(b)(1).
Concluding that opponents of the waiver did not meet their burden of
proof to demonstrate that California does not have such need, EPA found
that it could not deny the waiver under the second waiver prong.\21\
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    \18\ 77 FR 53119 (August 31, 2012).
    \19\ Set forth in the ACC program waiver decision is a summary
discussion of EPA's earlier decision to depart from its traditional
interpretation of section 209(b)(1)(B) (the second waiver prong) in
the 2008 waiver denial for CARB's initial GHG standards for certain
earlier model years along with EPA's return to the traditional
interpretation of the second prong in the waiver issued in 2009. 78
FR at 2125-31. These interpretations are discussed more fully in
Section III.
    \20\ Id. at 2128 (``The better interpretation of the text and
legislative history of this provision is that Congress did not
intend this criterion to limit California's discretion to a certain
category of air pollution problems, to the exclusion of others. In
this context it is important to note that air pollution problems,
including local or regional air pollution problems, do not occur in
isolation. Ozone and PM air pollution, traditionally seen as local
or regional air pollution problems, occur in a context that to some
extent can involve long range transport of this air pollution or its
precursors. This long range or global aspect of ozone and PM can
have an impact on local or regional levels, as part of the
background in which the local or regional air pollution problem
occurs.'').
    \21\ Because EPA received comment on this issue during the ACC
program waiver proceeding, as it pertained to both CARB's GHG
emission standards and ZEV sales mandate, the Agency recounted the
interpretive history associated with standards for both GHG
emissions and criteria air pollutants to explain EPA's belief that
section 209(b)(1)(B) should be interpreted the same way for all air
pollutants. Id. at 2125-31 (``As discussed above, EPA believes that
the better interpretation of the section 209(b)(1)(B) criterion is
the traditional approach of evaluating California's need for a
separate motor vehicle emission program to meet compelling and
extraordinary conditions. Applying this approach with the reasoning
noted above, with due deference to California, I cannot deny the
waiver.'').
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    Without adopting the alternative interpretation, EPA noted that, to
the extent that it was appropriate to examine the need for CARB's
specific GHG standards to meet compelling and extraordinary conditions,
EPA had explained at length in its earlier 2009 GHG waiver decision
that California does have compelling and extraordinary conditions
directly related to regulation of GHGs. This conclusion was supported
by additional evidence submitted by CARB in the ACC program waiver
proceeding, including reports that demonstrate record-setting
wildfires, deadly heat waves, destructive storm surges, and loss of
winter snowpack. Many of these extreme weather events and other
conditions have the potential to dramatically affect human health and
well-being.\22\ Similarly, to the extent that it was appropriate to
examine the need for CARB's ZEV sales mandate, EPA noted that the ZEV
sales mandate in the ACC program enables California to meet both its
air quality and climate goals into the future. EPA recognized that
CARB's coordinated strategies reflected in the ACC program for
addressing both criteria pollutants and GHGs and the magnitude of the
technology and energy transformation needed to meet such goals.\23\
Therefore, EPA determined that, to the extent the second waiver prong
should be interpreted to mean a need for the specific standards at
issue, CARB's GHG emission standards and ZEV sales mandate satisfy such
a finding.
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    \22\ Id. at 2126-29. Within the 2009 GHG waiver, and again in
the 2013 ACC program waiver, EPA explained that the traditional
approach does not make section 209(b)(1)(B) a nullity, as EPA must
still determine whether California does not need its motor vehicle
program to meet compelling and extraordinary conditions as discussed
in the legislative history. Conditions in California may one day
improve such that it may no longer have a need for its motor vehicle
program.
    \23\ Id. at 2131 (``Whether or not the ZEV standards achieve
additional reductions by themselves above and beyond the LEV III GHG
and criteria pollutant standards, the LEV III program overall does
achieve such reductions, and EPA defers to California's policy
choice of the appropriate technology path to pursue to achieve these
emissions reductions. The ZEV standards are a reasonable pathway to
reach the LEV III goals, in the context of California's longer-term
goals.'').
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    In the context of assessing the need for the specific ZEV sales
mandate in the ACC program waiver, EPA noted CARB's intent in the
redesign of the ZEV regulation of addressing both criteria pollutants
and GHG emissions, and CARB's demonstration of ``the magnitude of the
technology and energy transformation needed from the transportation
sector and associated energy production to meet . . . the goals set
forth by California's climate change requirements'' and found that the
ZEV standards would help California achieve those ``long term emission
benefits as well as . . . some [short-term] reduction in criteria
pollutant emissions.'' \24\
---------------------------------------------------------------------------

    \24\ Id. at 2130-31. See also 2012 Waiver Request at 15-16);
CARB Supplemental Comments, EPA-HQ-OAR-2012-0562-0373 at 4
(submitted November 14, 2012).
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B. Prior Waivers for GHG Standards

    For over fifty years, EPA has evaluated California's requests for
waivers of preemption under section 209(b), primarily considering
CARB's motor vehicle emission program for criteria pollutants.\25\ More
recently, the Agency has worked to determine how

section 209(b)(1)(B) should be interpreted and applied to GHG
standards, including consideration of the relationship of GHG standards
to California's historical air quality problems, the public health
impacts of GHG emissions on NAAQS pollutants, and the direct impacts of
GHG emissions and climate change on California and its inhabitants.
While the SAFE 1 withdrawal and revocation of the waiver for CARB's ACC
program represents a singular snapshot of this task, it is important to
examine EPA's long-standing and consistent waiver practice in general,
including EPA's interpretations in prior waiver decisions pertaining to
CARB's GHG emission standards, in order to determine whether EPA
properly applied the waiver criterion in section 209(b)(1)(B) in SAFE
1.\26\
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    \25\ EPA notes that the 1990 amendments to the CAA added
subsection (e) to section 209. Subsection (e) addresses the
preemption of State or political subdivision regulation of emissions
from nonroad engines or vehicles. Section 209(e)(2)(A) sets forth
language similar to section 209(b) in terms of the criteria
associated with EPA waiving preemption, in this instance for
California nonroad vehicle and engine emission standards. Congress
directed EPA to implement subsection (e). See 40 CFR part 1074. EPA
review of CARB requests submitted under section 209(e)(2)(A)(ii)
includes consideration of whether CARB needs its nonroad vehicle and
engine program to meet compelling and extraordinary conditions. See
78 FR 58090 (September 20, 2013).
    \26\ EPA notes that, in the history of EPA waiver decisions, it
has only denied a waiver once (in 2008) and withdrawn a waiver once
(in 2019). Each instance was under this second waiver prong in
section 209(b)(1)(B).
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    Historically, EPA has consistently interpreted and applied the
second waiver prong by considering whether California needed a separate
motor vehicle emission program as compared to the specific standards at
issue to meet compelling and extraordinary conditions.\27\ At the same
time, in response to commenters that have argued that EPA is required
to examine the specific standards at issue in the waiver request, EPA's
practice has been to nevertheless review the specific standards to
determine whether California needs those individual standards to meet
compelling and extraordinary conditions.\28\ This does not mean that
EPA has adopted an ``alternative approach'' and required a
demonstration for the need for specific standards; rather, this
additional Agency review has been afforded to address commenters'
concerns and this secondary analysis has been done to support the
Agency's primary assessment. For example, EPA granted an authorization
for CARB's In-use Off-road Diesel Standards (Fleet Requirements) that
included an analysis under both approaches.\29\ The only two departures
from this traditional approach occurred first in 2008 when EPA adopted
an ``alternative approach'' to the second waiver prong and second in
2019 when EPA adopted the ``SAFE 1 interpretation'' of the second
waiver criterion.
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    \27\ 49 FR 18887, 18890 (May 3, 1984).
    \28\ For example, in EPA's 2009 GHG waiver that reconsidered the
2008 GHG waiver denial, the Agency noted that ``Given the comments
submitted, however, EPA has also considered an alternative
interpretation, which would evaluate whether the program or
standards has a rational relationship to contributing to
amelioration of the air pollution problems in California. Even under
this approach, EPA's inquiry would end there. California's policy
judgment that an incremental, directional improvement will occur and
is worth pursuing is entitled, in EPA's judgment, to great
deference. EPA's consistent view is that it should give deference to
California's policy judgments, as it has in past waiver decisions,
on California's choice of mechanism used to address air pollution
problems. EPA does not second-guess the wisdom or efficacy of
California's standards. EPA has also considered this approach with
respect to the specific GHG standards themselves, as well as
California's motor vehicle emissions program.'' 74 FR at 32766
(citing to Motor & Equip. Mfrs. Ass'n, Inc. v. EPA, 627 F.2d 1095,
1110-11 (D.C. Cir. 1979)).
    \29\ 78 FR at 58090. The United States Court of Appeals for the
Ninth Circuit reviewed EPA's grant of a waiver of preemption under
the traditional approach, and because of comments seeking an
alternative interpretation, an assessment of the need for the
standards contained in California's request. Dalton Trucking v. EPA,
No. 13-74019 (9th Cir. 2021) (finding that EPA was not arbitrary in
granting the waiver of preemption under either approach). The court
opinion noted that ``[t]his disposition is not appropriate for
publication and is not precedent except as provided by Ninth Circuit
Rule 36-3.''
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    EPA's task of interpreting and applying section 209(b)(1)(B) to
California's GHG standards and consideration of the State's historical
air quality problems that now include the public health and welfare
challenge of climate change began in 2005, with CARB's waiver request
for 2009 and subsequent model years' GHG emission standards. On March
6, 2008, EPA denied the waiver request based on a new interpretive
finding that section 209(b) was intended for California to enforce new
motor vehicle emission standards that address local or regional air
pollution problems, and an Agency belief that California could not
demonstrate a ``need'' under section 209(b)(1)(B) for standards
intended to address global climate change problems. EPA also employed
this new alternative interpretation to state a belief that the effects
of climate change in California are not compelling and extraordinary in
comparison with the rest of the country. Therefore, in the 2008 waiver
denial, EPA did not evaluate whether California had a need for its
motor vehicle emission program to meet compelling and extraordinary
conditions (the traditional interpretation) but rather focused on the
specific GHG emission standard in isolation and not in conjunction with
the other motor vehicle emission standards for criteria pollutants.
    In 2009, EPA initiated a reconsideration of the 2008 waiver denial.
The reconsideration resulted in granting CARB a waiver for its GHG
emission standards commencing in the 2009 model year.\30\ In granting
the waiver, EPA rejected the Agency's alternative interpretation of the
second waiver prong announced in the 2008 waiver denial. Instead, EPA
returned to its traditional approach of evaluating California's need
for a separate motor vehicle emission program to meet compelling and
extraordinary conditions because the Agency viewed it as the better
interpretation of the second waiver prong. Under the traditional
interpretation, EPA found that the opponents of the waiver had not met
their burden of proof to demonstrate that California did not need its
motor vehicle emission program to meet compelling and extraordinary
conditions. In responding to comments on this issue, EPA also
determined that, even if the alternative interpretation were to be
applied, the opponents of the waiver had not demonstrated that
California did not need its GHG emissions standards to meet compelling
and extraordinary conditions.\31\
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    \30\ 74 FR 32743, 32745 (July 8, 2009).
    \31\ 74 FR at 32759-67. For example, EPA noted that the analysis
of the need for CARB's GHG standards in the 2008 waiver denial
failed to consider that although the factors that cause ozone are
primarily local in nature and that ozone is a local or regional air
pollution problem, the impacts of global climate change can
nevertheless exacerbate this local air pollution problem. EPA noted
that California had made a case that its greenhouse gas standards
are linked to amelioration of its smog problems. See also 76 FR
34693 (June 14, 2011).
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    Since EPA's 2009 GHG waiver decision and before SAFE 1 the Agency
applied the traditional interpretation of the second waiver prong in
its GHG-related waiver proceedings, including the on-going review of
California's GHG emission standards for vehicles. In the first
instance, in 2009, CARB adopted amendments to its certification
requirements that would accept demonstration to the Federal GHG
standards as compliance with CARB's GHG program. This provision is
known as a ``deemed-to-comply'' provision.\32\ In 2011, EPA determined
that this deemed-to-comply provision was within-the-scope of the waiver
issued in July 2009, relying on the traditional interpretation of the
second waiver prong.\33\ As such, in the June 14, 2011

within-the-scope decision EPA determined that CARB's 2009 amendments
did not affect or undermine the Agency's prior determination made in
the 2009 GHG waiver decision, including the technological feasibility
findings in section 209(b)(1)(C).\34\ EPA also acted on two requests
for waivers of preemption for CARB's heavy-duty (HD) tractor-trailer
GHG emission standards.\35\ Once again, EPA relied upon its traditional
approach of evaluating California's need for a separate motor vehicle
emission program to meet compelling and extraordinary conditions and
found that no evidence had been submitted to demonstrate that
California no longer needed its motor vehicle emission program to meet
compelling and extraordinary conditions.\36\ EPA's second waiver for
the HD GHG emission standards made a similar finding that California's
compelling and extraordinary conditions continue to exist under the
traditional approach for the interpretation of the second waiver
criterion.\37\
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    \32\ California Code of Regulations, Title 13 1961(a)(1)(B).
Under this provision, automakers could comply with the California
GHG standards for model years 2017-2025 by meeting Federal GHG
standards for the same model years.
    \33\ 76 FR 34693. EPA's ``within-the-scope'' decisions are
generally performed when CARB has amended its regulations that were
previously waived by EPA under section 209(b)(1) and include an
analysis of whether EPA's prior evaluation of the waiver criteria
has been undermined by CARB's amendments. EPA received comment
during the reconsideration of SAFE 1 that questioned whether CARB
needed its GHG standards if it was otherwise accepting compliance
with the Federal GHG standards. EPA addressed the issue in its final
decision (76 FR at 34696-98) and continues to believe EPA's analysis
applies. The existence of federal emission standards that CARB may
choose to harmonize with or deem as compliance with its own State
standards (or that CARB may choose to set more stringent standards)
does not on its own render California's as not needed. CARB
continues to administer an integrated and comprehensive motor
vehicle emission program (including its ZEV sales mandate and GHG
emission standards and other applicable emission standards for
light-duty vehicles) and this program continues to evolve to address
California's serious air quality issues. CARB's decision to select
some federal emission standards as sufficient to comply with its own
State emission standards does not negate the overall design and
purpose of section 209 of the CAA. In the within-the-scope decision
issued in 2011, EPA agreed with Global Automakers comment that the
deemed-to-comply provision renders emission benefits equally
protective as between California and Federal programs. Id. at 34696.
    \34\ Id. at 34696-97.
    \35\ The first HD GHG emissions standard waiver related to
certain new 2011 and subsequent model year tractor-trailers. 79 FR
46256 (August 7, 2014). In this waiver decision EPA responded to
comments regarding whether CARB had quantified how the GHG
regulations would contribute to attainment of ozone or particulate
matter standards by noting that nothing in section 209(b)(1)(B)
calls for California to quantify specifically how its regulations
would affect attainment of the NAAQS in the State. Rather, EPA
noted, the relevant question is whether California needs its own
motor vehicle emission program and not whether there is a need for
specific standards. The second HD GHG emissions standard waiver
related to CARB's ``Phase I'' regulation for 2014 and subsequent
model year tractor-trailers. 81 FR 95982 (December 29, 2016).
    \36\ Relatedly, California explained the need for these
standards based on projected ``reductions in NOX
emissions of 3.1 tons per day in 2014 and one ton per day in 2020
due to the HD GHG Regulations. California state[d] that these
emissions reductions will help California in its efforts to attain
applicable air quality standards. California further projects that
the HD GHG Regulations will reduce GHG emissions in California by
approximately 0.7 million metric tons (MMT) of carbon dioxide
equivalent emissions (CO2e) by 2020.'' 79 FR at 46261.
See also 81 FR at 95982.
    \37\ 81 FR at 95987. At the time of CARB's Board adoption of the
HD Phase I GHG regulation, CARB determined in Resolution 13-50 that
California continues to need its own motor vehicle program to meet
serious ongoing air pollution problems. CARB asserted that ``[t]he
geographical and climatic conditions and the tremendous growth in
vehicle population and use that moved Congress to authorize
California to establish vehicle standards in 1967 still exist today.
EPA has long confirmed CARB's judgment, on behalf of the State of
California, on this matter.'' See EPA Air Docket at regulations.gov
at EPA-HQ-OAR-2016-0179- 0012. In enacting the California Global
Warming Solutions Act of 2006, the Legislature found and declared
that ``Global warming poses a serious threat to the economic well-
being, public health, natural resources, and the environment of
California. The potential adverse impacts of global warming include
the exacerbation of air quality problems, a reduction in the quality
and supply of water to the state from the Sierra snowpack, a rise in
sea levels resulting in the displacement of thousands of coastal
businesses and residences, damage to the marine ecosystems and the
natural environment, and an increase in the incidences of infectious
diseases, asthma, and other health-related problems.''
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C. SAFE 1 Decision

    In 2018, NHTSA issued a proposal for new Corporate Average Fuel
Economy (CAFE) standards that must be achieved by each manufacturer for
its car and light-duty truck fleet while EPA revisited its light-duty
vehicle GHG emissions standards for certain model years in the SAFE
Proposal.\38\ EPA also proposed to withdraw the waiver for the ACC
program GHG emission standards and ZEV sales mandate, referencing both
sections 209(b)(1)(B) and (C). EPA posited that since the grant of the
initial waiver a reassessment of California's need for its GHG
standards and ZEV sales mandate under the second waiver prong, section
209(b)(1)(B), was appropriate. EPA further posited that its own Federal
GHG rulemaking in the SAFE proposal raised questions about the
feasibility of CARB's standards under the third waiver prong, section
209(b)(1)(C).\39\ In addition, EPA reasoned that the SAFE proposal
presented a unique situation that required EPA to consider the
implications of NHTSA's proposed conclusion that California's GHG
emission standards and ZEV sales mandate were preempted by EPCA.\40\
EPA thus also posited that state standards preempted under EPCA cannot
be afforded a valid section 209(b) waiver and then proposed that it
would be necessary to withdraw the waiver separate and apart from
section 209(b)(1)(B) and (C) if NHTSA finalized its interpretation
regarding preemption under EPCA.
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    \38\ The Safer Affordable Fuel-Efficient (SAFE) Vehicles Rule
for Model Years 2021-2026 Passenger Cars and Light Trucks, 83 FR at
42986.
    \39\ As explained below, EPA did not make a determination
regarding section 209(b)(1)(C) in SAFE 1.
    \40\ ``To the extent that NHTSA has determined that these
standards are void ab initio because EPCA preempts standards that
relate to fuel economy, that determination presents an independent
basis for EPA to consider the validity of the initial grant of a
waiver for these standards, separate and apart from EPA's analysis
under the criteria that invalidate a waiver request.'' 84 FR at
51338.
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    During the SAFE 1 proceeding, EPA received additional information
demonstrating that the ZEV sales mandate plays a role in reducing
criteria pollution, including CARB's comments that EPA's prior findings
in the ACC program waiver were correct. As noted by a number of States
and Cities, ``[f]or example, CARB modeled the consequences of the
actions proposed in SAFE, which included withdrawing California's
waiver for its GHG and ZEV standards and freezing the federal GHG
standards at MY 2020 levels. CARB concluded these actions, which would
eliminate California's ZEV and GHG standards and leave in place only
federal GHG standards at MY 2020 levels, would increase NOx emissions
in the South Coast air basin alone by 1.24 tons per day.'' \41\ The
SAFE 1 record also includes information that demonstrates that
California is ``one of the most climate challenged'' regions of North
America, and that it is home to some of the country's hottest and
driest areas, which are particularly threatened by record-breaking
heatwaves, sustained droughts, and wildfire, as a result of GHG
emissions.\42\ This record also includes information from the United
States Fourth National Climate Assessment that documents the impact of
climate change in exacerbating California's record-breaking fires
seasons, multi-year drought, heat waves, and flood risk, and notes that
California faces a particular threat from sea-level rise and ocean
acidification and that the State has ``the most valuable ocean-based
economy in the country.'' \43\ EPA

received information during the SAFE 1 public comment period regarding
the criteria emission benefits of CARB's ZEV sales mandate and GHG
emission standards.\44\
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    \41\ States and Cities in Support of EPA Reversing Its SAFE 1
Actions (States and Cities), Docket No. EPA-HQ-OAR-2021-0257-0132 at
10 (citing CARB, Docket No. NHTSA-2018-0067-11873 at 287-88, 290-91
(upstream emission impacts), 308).
    \42\ States and Cities at 43-47 (citing EPA-HQ-OAR-2018-0283-
5481, EPA-HQ-OAR-2018-0283-5683, and EPA-HQ-OAR-2018-0283-5054).
    \43\ Id. at 45 (EPA-HQ-OAR-2018-0283-7447--U.S. Global Research
Program, Impacts, Risks, and Adaptation in the United States: Fourth
National Climate Assessment, Volume II, Chapter 25., 2018). (E.g.,
``The California coast extends 3,400 miles (5,500 km), 8 with
200,000 people living 3 feet (0.9 m) or less above sea level.9 The
seaports of Long Beach and Oakland, several international airports,
many homes, and high-value infrastructure lie along the coast. In
addition, much of the Sacramento-San Joaquin River Delta is near sea
level. California has the most valuable ocean-based economy in the
country, employing over half a million people and generating $20
billion in wages and $42 billion in economic production in 2014.10
Coastal wetlands buffer against storms, protect water quality,
provide habitat for plants and wildlife, and supply nutrients to
fisheries. Sea level rise, storm surges, ocean warming, and ocean
acidification are altering the coastal shoreline and ecosystems.''
    \44\ During the current reconsideration proceeding, EPA received
additional comment regarding the criteria pollution benefits of
California's GHG and ZEV standards. The States and Cities at 10-11.
Likewise, CARB notes this connection in comments on the SAFE
proposal. Multi-State SAFE Comments, EPA-HQ-OAR-2018-0283-5481 at
24. The States and Cities provided supplemental information in
response to the Notice of Reconsideration by submitting California's
latest analyses of the criteria pollutant benefits of its GHG
standards. For example, CARB estimated those benefits for calendar
years by which the South Coast air basin must meet increasingly
stringent NAAQS for ozone: 2023, 2031, and 2037. States and Cities
app. A at 2-4, app. C at 8-9.
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    On September 27, 2019, EPA and NHTSA published the final SAFE 1
action that promulgated preemption regulations which supported NHTSA's
conclusion that EPCA preempted California's GHG standards and ZEV sales
mandate. In the same action, EPA withdrew the waiver of preemption for
California to enforce the ACC program GHG and ZEV sales mandate on two
grounds.\45\
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    \45\ 84 FR at 51328-29. Parties subsequently brought litigation
against EPA on its SAFE 1 decision. See generally Union of Concerned
Scientists, et al. v. NHTSA, et al., No. 19-1230 (D.C. Cir. filed
Oct. 28, 2019) (on February 8, 2021, the D.C. Circuit granted the
Agencies' motion to hold the case in abeyance in light of the
reconsideration of the SAFE 1 action). EPA also received three
petitions for reconsideration of this waiver withdrawal.
---------------------------------------------------------------------------

    First, in SAFE 1 the Agency posited that standards preempted under
EPCA could not be afforded a valid waiver of preemption under section
209(b). EPA explained that Agency pronouncements in the ACC program
waiver decision on the historical practice of disregarding the
preemptive effect of EPCA in the context of evaluating California's
waiver applications were ``inappropriately broad, to the extent it
suggested that EPA is categorically forbidden from ever determining
that a waiver is inappropriate due to consideration of anything other
than the `criteria' or `prongs' at section 209(b)(1)(B)(A)-(C).'' \46\
EPA further explained that those pronouncements were made in waiver
proceedings where the Agency was acting solely on its own in contrast
to a joint action with NHTSA such as SAFE 1. Additionally, EPA
expressed its intention not to consider factors other than statutory
criteria set out in section 209(b)(1)(A)-(C) in future waiver
proceedings, explaining that addressing the preemptive effect of EPCA
and its implications for EPA's waiver for California's GHG standards
and ZEV sales mandate was uniquely called for in SAFE 1 because EPA and
NHTSA were coordinating regulatory actions in a single notice.\47\
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    \46\ 84 FR at 51338.
    \47\ Id.
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    Second, EPA withdrew the waiver for the GHG standards and ZEV sales
mandate under the second waiver prong, section 209(b)(1)(B), on two
alternative grounds. Specifically, EPA determined first that California
does not need the GHG standards ``to meet compelling and extraordinary
conditions,'' under section 209(b)(1)(B), and second, even if
California does have compelling and extraordinary conditions in the
context of global climate change, California does not ``need'' the
specific GHG standards under section 209(b)(1)(B) because they will not
meaningfully address global air pollution problems of the type
associated with GHG emissions.\48\ EPA also reasoned that because CARB
had characterized the ZEV sales mandate as a compliance mechanism for
GHG standards, both were ``closely interrelated'' given the overlapping
compliance regimes for the ACC program, and as a result the ZEV sales
mandate was inextricably interconnected with CARB's GHG standards.\49\
In support of its overall determination that the ZEV sales mandate was
not needed to meet compelling and extraordinary conditions, EPA relied
on a single statement in the ACC program waiver support document where
CARB did not attribute criteria emission reductions to the ZEV sales
mandate, but rather noted its LEV III criteria pollutant fleet standard
was responsible for those emission reductions.\50\ Relying on this
reasoning, EPA also withdrew the waiver for the ZEV sales mandate under
the second waiver prong finding that California had no ``need'' for its
own ZEV sales mandate.
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    \48\ Id. at 51341-42.
    \49\ Id. at 51337.
    \50\ Id. at 51330.
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    In withdrawing the waiver, EPA relied on an alternative view of the
scope of the Agency's analysis of California waiver requests and
posited that reading ``such State standards'' as requiring EPA to only
and always consider California's entire motor vehicle program would
limit the application of this waiver prong in a way that EPA did not
believe Congress intended.\51\ EPA further noted that the Supreme Court
had found that CAA provisions may apply differently to GHGs than they
do to traditional pollutants in UARG v. EPA, 134 S. Ct. 2427 (2014)
(partially reversing the GHG ``Tailoring'' Rule on grounds that the CAA
section 202(a) endangerment finding for GHG emissions from motor
vehicles did not compel regulation of all sources of GHG emissions
under the Prevention of Significant Deterioration and Title V permit
programs). EPA then interpreted section 209(b)(1)(B) as requiring a
particularized, local nexus between (1) pollutant emissions from
sources, (2) air pollution, and (3) resulting impact on health and
welfare.\52\ Interpreting section 209(b)(1)(C) to be limited to the
specific standards under the waiver, EPA stated that ``such State
standards'' in sections 209(b)(1)(B) and (C) should be read
consistently with each other, which EPA asserted was a departure from
the traditional approach where this phrase in section 209(b)(1)(B) is
read as referring back to ``in the aggregate'' in section
209(b)(1).\53\
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    \51\ In other words, EPA asserted that once it determines that
California needed its very first set of submitted standards to meet
extraordinary and compelling conditions, EPA would never have the
discretion to determine that California did not need any subsequent
standards for which it sought a successive waiver. EPA based its
reading also on an assertion of ambiguity in the meaning of ``such
State standards'' in section 209(b)(1)(B).
    \52\ Id. at 51339-40.
    \53\ Id. at 51344-45.EPA notes that this SAFE 1 position was
taken despite the Agency previously stating in the ACC program
waiver that ``Similarly, although the Dealers might suggest that EPA
only be obligated to determine whether each of CARB's ACC regulatory
components, in isolation, is consistent with section 202(a) we
believe the better approach is to determine the technological
feasibility of each standard in the context of the entire regulatory
program for the particular industry category. In this case, we
believe CARB has in fact recognized the interrelated, integrated
approach the industry must take in order to address the regulatory
components of the ACC program. As noted above, the House Committee
Report explained as part of the 1977 amendments to the Clean Air Act
that California was to be afforded flexibility to adopt a complete
program of motor vehicle emission controls (emphasis added). As
such, EPA believes that Congress intended EPA to afford California
the broadest possible discretion in selecting the best means to
protect the health of its citizens and the public welfare.32 EPA
believes this intent extends to CARB's flexibility in designing its
motor vehicle emission program and evaluating the aggregate effect
of regulations within the program.'' 78 FR at 2217.
---------------------------------------------------------------------------

    In the SAFE proposal, as an additional basis for the waiver
withdrawal, EPA proposed to find that CARB's ZEV sales mandate and GHG

standards are not consistent with section 202(a) of the CAA under the
third waiver prong, section 209(b)(1)(C).\54\ However, in the final
SAFE 1 action, EPA and NHTSA explained they were not finalizing the
proposed assessment regarding the technological feasibility of the
Federal GHG and CAFE standards for MY 2021 through 2025 in SAFE 1, and
thus EPA did not finalize any determination with respect to section
209(b)(1)(C).\55\
---------------------------------------------------------------------------

    \54\ 83 FR at 43240.
    \55\ 84 FR at 51350. EPA explained that it may make a
determination in connection with a future final action with regard
to Federal standards. EPA's subsequent regulation to issue Federal
standards did not address this issue. 85 FR 24174.
---------------------------------------------------------------------------

    In justifying the withdrawal action in SAFE 1, EPA opined that the
text, structure, and context of section 209(b) supported EPA's
authority to reconsider prior waiver grants. Specifically, EPA asserted
that the Agency's authority to reconsider the grant of ACC program
waiver was implicit in section 209(b) given that revocation of a waiver
is implied in the authority to grant a waiver. The Agency noted that
further support for the authority to reconsider could be found in a
single sentence in the 1967 legislative history of provisions now
codified in sections 209(a) and (b) and the judicial principle that
agencies possess inherent authority to reconsider their decisions.
According to the Senate report from the 1967 CAA amendments, the
Administrator has ``the right . . . to withdraw the waiver at any time
[if] after notice and an opportunity for public hearing he finds that
the State of California no longer complies with the conditions of the
waiver.'' \56\ EPA also noted that, subject to certain limitations,
administrative agencies possess inherent authority to reconsider their
decisions in response to changed circumstances: ``It is well settled
that EPA has inherent authority to reconsider, revise, or repeal past
decisions to the extent permitted by law so long as the Agency provides
a reasoned explanation.'' \57\ This authority exists in part because
EPA's interpretations of the statutes it administers ``are not carved
in stone.'' \58\
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    \56\ 84 FR at 51332 (citing S. Rep. No. 90-403, at 34 (1967)).
    \57\ Id. at 51333.
    \58\ Chevron U.S.A. Inc. v. NRDC, Inc., 467 U.S. 837, 863
(1984).
---------------------------------------------------------------------------

    Finally, in SAFE 1, EPA provided an interpretive view of section
177 as not authorizing other states to adopt California's GHG standards
for which EPA had granted a waiver of preemption under section 209(b).
Although section 177 does not require states that adopt California's
emission standards to submit such regulations for EPA review and
provides no statutory role for EPA in states' decision to adopt
California's standards, EPA chose to nevertheless provide an
interpretation that this provision is available only to states with
approved nonattainment plans. EPA stated that nonattainment
designations exist only as to criteria pollutants and GHGs are not
criteria pollutants; therefore, states could not adopt GHG standards
under section 177. Notably, California in previous waiver requests
addressed the criteria pollutant benefits of GHG emissions reductions,
specifically related to ground level ozone.

D. Petitions for Reconsideration

    After issuing SAFE 1, EPA received three petitions for
reconsideration urging the Agency to reconsider the waiver withdrawal
of the ACC program's GHG standards and ZEV sales mandate and to rescind
part or all of the SAFE 1 action.\59\ The first Petition for
Clarification/Reconsideration was submitted by the State of California
and a number of States and Cities on October 9, 2019 (California
Petition for Clarification).\60\ These Petitioners sought both
clarification and reconsideration of the scope of SAFE 1. Citing
somewhat contradictory statements in the action, they claimed that SAFE
1 created confusion regarding which model years of the ACC program were
affected by the waiver withdrawal.\61\ They based their request for
reconsideration of the withdrawal on the grounds that the SAFE 1 action
relied on analyses and justifications not presented at proposal and,
thus, was beyond the scope of the proposal.
---------------------------------------------------------------------------

    \59\ The California Petition for Clarification only sought
reconsideration of SAFE 1 to the extent it withdrew the ACC program
waiver for model years outside those proposed. The other two
petitions sought reconsideration of the full SAFE 1 action.
    \60\ EPA-OAR-2021-0257-0015.
    \61\ The California Petition for Clarification notes that,
``[i]n the Final Actions, EPA makes statements that are creating
confusion, and, indeed, appear contradictory, concerning the
temporal scope of its action(s)--specifically, which model years are
covered by the purported withdrawal of California's waiver for its
GHG and ZEV standards. In some places, EPA's statements indicate
that it has limited its action(s) to the model years for which it
proposed to withdraw and for which it now claims to have authority
to withdraw--namely model years 2021 through 2025. In other places,
however, EPA's statements suggest action(s) with a broader scope--
one that would include earlier model years.'' Id. at 2. In SAFE 1,
EPA withdrew the waiver for California's GHG and ZEV standards for
model years 2017-2025 on the basis of EPCA preemption and for model
years 2021-2025 on the basis of the second waiver prong.
---------------------------------------------------------------------------

    A second Petition for Reconsideration was submitted by several non-
governmental organizations on November 25, 2019 (NGOs' Petition).\62\
These Petitioners claimed that EPA's reconsideration of the ACC program
waiver was not a proper exercise of agency authority because the Agency
failed to consider comments submitted after the formal comment period--
which they charged as inadequate--and because the EPA's rationale was a
pretextual cover for the Administration's political animosity towards
California and the oil industry's influence. The late comments
summarized in the Petition address SAFE 1's EPCA preemption and second
waiver prong arguments. On EPCA preemption, the summarized comments
asserted that EPCA does not preempt GHG standards because GHG emission
standards are not the ``functional equivalent'' of fuel economy
standards, as SAFE 1 claimed. On the second waiver prong, the
summarized comments asserted both that GHG and ZEV standards do have
criteria pollutant benefits, and that the threat of climate change is
compelling and extraordinary and will have California-specific impacts.
In addition to objections to SAFE 1's EPCA preemption and second waiver
prong arguments, the summarized comments asserted that ZEV standards
play a key role in SIPs, which were disrupted by SAFE 1. This
disruption, Petitioners claimed, violated ``conformity'' rules
prohibiting federal actions from undermining state's air quality
plans.\63\
---------------------------------------------------------------------------

    \62\ EPA-HQ-OAR-2021-0257-0014. This Petition was joined by The
Center for Biological Diversity, Chesapeake Bay Foundation,
Environment America, Environmental Defense Fund, Environmental Law &
Policy Center, Natural Resources Defense Council, Public Citizen,
Inc., Sierra Club, and the Union of Concerned Scientists.
    \63\ These ``late comments'' can be found in the ``Appendix of
Exhibits'' attached to the Petition for Reconsideration. These
comments are considered part of EPA's record for purposes of the
reconsideration of SAFE 1.
---------------------------------------------------------------------------

    A third Petition for Reconsideration was submitted by several
states and cities on November 26, 2019 (States and Cities'
Petition).\64\ These Petitioners sought reconsideration of the
withdrawal on the grounds that EPA failed to provide an opportunity to
comment on various rationales and determinations, in particular on its
authority to revoke argument, flawed re-interpretation and application
of the second waiver prong, its flawed new

rationale for considering factors outside section 209(b) (namely, EPCA
preemption), and its determination that states cannot adopt
California's GHG standards under section 177. For example, these
Petitioners claimed they did not have an adequate opportunity to
comment on EPA's use of equal sovereignty or the endangerment finding
as rationales for its new ``particularized nexus'' interpretation of
the second waiver prong. These Petitioners also claimed that EPA's
statements concerning the burden of proof applicable to a waiver
revocation were either unclear or inaccurate, particularly whether the
Agency bears the burden of proof in withdrawing a previously granted
waiver and, if not, how and why this burden of proof is different from
the burden of proof for denying a waiver request.\65\ Finally, these
Petitioners asserted that the Agency failed to consider comments,
submitted after the formal comment period, that challenged EPA's
interpretation of the second waiver prong, including new evidence of
California's need for its GHG emission standards and ZEV sales mandate,
and alleged that EPA's rationale was pretextual and based on the
Administration's political animosity towards California and on the oil
industry's influence.
---------------------------------------------------------------------------

    \64\ See EPA-HQ-OAR-2021-0257-0029. This Petition was joined by
the States of California, Colorado, Connecticut, Delaware, Hawaii,
Illinois, Maine, Maryland, Minnesota, Nevada, New Jersey, New
Mexico, New York, North Carolina, Oregon, Rhode Island, Vermont,
Washington, Wisconsin, Michigan, the Commonwealths of Massachusetts,
Pennsylvania, and Virginia, the District of Columbia, and the Cities
of Los Angeles, New York, San Francisco, and San Jose.
    \65\ The applicable burden of proof for a waiver withdrawal is
discussed in Section III of this decision.
---------------------------------------------------------------------------

    EPA notified the petitioners in the above-noted Petitions for
Reconsideration that the Agency would be considering issues raised in
their petitions as part of the proceeding to reconsider SAFE 1. This
action addresses these petitions in the broader context of EPA's
adjudicatory reconsideration of SAFE 1 commenced in response to a
number of significant issues with SAFE 1.

III. Principles Governing This Review

    The CAA has been a paradigmatic example of cooperative federalism,
under which ``States and the Federal Government [are] partners in the
struggle against air pollution.'' \66\ In Title II, Congress authorized
EPA to promulgate emission standards for mobile sources and generally
preempted states from adopting their own standards.\67\ At the same
time, Congress created an important exception for the State of
California.
---------------------------------------------------------------------------

    \66\ General Motors Corp. v. United States, 496 U.S. 530, 532
(1990).
    \67\ ``The regulatory difference [between Titles I and II] is
explained in part by the difficulty of subjecting motor vehicles,
which readily move across state boundaries, to control by individual
states.'' Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075, 1079 (D.C. Cir.
1996). Congress also asserted federal control in this area to avoid
``the specter of an anarchic patchwork of federal and state
regulatory programs'' nationwide. See Motor & Equip. Mfrs. Ass'n,
Inc. v. EPA, 627 F.2d 1095, 1109 (D.C. Cir. 1979) (MEMA I).
---------------------------------------------------------------------------

A. Scope of Preemption and Waiver Criteria Under the Clean Air Act

    The legal framework for this decision stems from the waiver
provision first adopted by Congress in 1967, and subsequent amendments.
In Title II of the CAA, Congress established only two programs for
control of emissions from new motor vehicles--EPA emission standards
adopted under the CAA and California emission standards adopted under
its state law. Congress accomplished this by preempting all state and
local governments from adopting or enforcing emission standards for new
motor vehicles, while at the same time providing that California could
receive a waiver of preemption for its emission standards and
enforcement procedures in keeping with its prior experience regulating
motor vehicles and its serious air quality problems. Accordingly,
section 209(a) preempts states or political subdivisions from adopting
or attempting to enforce any standard relating to the control of
emissions from new motor vehicles.\68\ Under the terms of section
209(b)(1), after notice and opportunity for public hearing, EPA must
waive the application of section 209(a) to California unless the
Administrator finds at least one of three criteria to deny a waiver in
section 209(b)(1)(A)-(C) has been met.\69\ EPA may thus deny a waiver
only if it makes at least one of these three findings based on evidence
in the record, including arguments that opponents of the waiver have
provided. This framework struck an important balance that protected
manufacturers from multiple and different state emission standards and
preserved a pivotal role for California in the control of emissions
from new motor vehicles. Congress intentionally structured this waiver
provision to restrict and limit EPA's ability to deny a waiver and did
this to ensure that California had broad discretion in selecting the
means it determined best to protect the health and welfare of its
citizens in recognition of both the harsh reality of California's air
pollution and to allow California to serve as a pioneer and a
laboratory for the nation in setting new motor vehicle emission
standards and developing control technology.\70\ Accordingly, section
209(b) specifies that EPA must grant California a waiver if California
determines that its standards are, in the aggregate, at least as
protective of the public health and welfare as applicable Federal
standards.
---------------------------------------------------------------------------

    \68\ 42 U.S.C. 7543(a)-(a) Prohibition No State or any political
subdivision thereof shall adopt or attempt to enforce any standard
relating to the control of emissions from new motor vehicles or new
motor vehicle engines subject to this part. No State shall require
certification, inspection, or any other approval relating to the
control of emissions from any new motor vehicle or new motor vehicle
engine as condition precedent to the initial retail sale, titling
(if any), or registration of such motor vehicle, motor vehicle
engine, or equipment.
    \69\ 42 U.S.C. 7543(b)(1):
    (1) The Administrator shall, after notice and opportunity for
public hearing, waive application of this section to any State which
has adopted standards (other than crankcase emission standards) for
the control of emissions from new motor vehicles or new motor
vehicle engines prior to March 30, 1966, if the State determines
that the State standards will be, in the aggregate, at least as
protective of public health and welfare as applicable Federal
standards. No such waiver shall be granted if the Administrator
finds that--
    (A) the determination of the State is arbitrary and capricious,
    (B) such State does not need such State standards to meet
compelling and extraordinary conditions, or
    (C) such State standards and accompanying enforcement procedures
are not consistent with section 7521(a) of this title.
    \70\ See, e.g., S. Rep. No. 403, 90th Cong., 1st Sess. 33 (1967)
(The waiver of preemption is for California's ``unique problems and
pioneering efforts.''); 113 Cong. Rec. 30950, 32478 (``[T]he State
will act as a testing agent for various types of controls and the
country as a whole will be the beneficiary of this research.'')
(Statement of Sen. Murphy); MEMA I, 627 F.2d 1095, 1111 (D.C. Cir.
1979).
---------------------------------------------------------------------------

    EPA has consistently interpreted the waiver provision as placing
the burden on the opponents of a waiver and EPA to demonstrate that one
of the criteria for a denial has been met. In this context, since 1970,
EPA has recognized its limited discretion in reviewing California
waiver requests. For over fifty years, therefore, EPA's role upon
receiving a request for waiver of preemption from California has been
limited and remains only to determine whether it is appropriate to make
any of the three findings specified by the CAA. If the Agency cannot
make at least one of the three findings, then the waiver must be
granted. The three waiver criteria are also properly seen as criteria
for a denial. This reversal of the normal statutory structure embodies
and is consistent with the congressional intent of providing deference
to California to maintain its own new motor vehicle emission program.
    The 1970 CAA Amendments strengthened EPA's authority to regulate
vehicular ``emission[s] of any air pollutant,'' while reaffirming the
corresponding breadth of California's entitlement to regulate those
emissions (amending CAA section 202 and recodifying the waiver
provision as section 209(b), respectively). Congress also established
the NAAQS program,

under which EPA issues air quality criteria and sets standards for so-
called ``criteria'' pollutants, and states with regions that have not
``attained'' those federal standards must submit SIPs indicating how
they plan to attain the NAAQS (which is often a multi-year,
comprehensive plan). With the CAA Amendments of 1977, Congress allowed
California to consider the protectiveness of its standards ``in the
aggregate,'' rather than requiring that each standard proposed by the
State be as or more stringent than its federal counterpart.\71\
Congress also approved EPA's interpretation of the waiver provision as
providing appropriate deference to California's policy goals and
consistent with Congress's intent ``to permit California to proceed
with its own regulatory program'' for new motor vehicle emissions.\72\
---------------------------------------------------------------------------

    \71\ 42 U.S.C. 7543(b)(1).
    \72\ H.R. Rep. No. 95-294, at 301 (1977).
---------------------------------------------------------------------------

    In previous waiver decisions, EPA has noted that the statute
specifies particular and limited grounds for rejecting a waiver and has
therefore limited its review to those grounds. EPA has also noted that
the structure Congress established for reviewing California's decision-
making is deliberately narrow, which further supports this approach.
This has led EPA to reject arguments that are not specified in the
statute as grounds for denying a waiver:

    The law makes it clear that the waiver requests cannot be denied
unless the specific findings designated in the statute can properly
be made. The issue of whether a proposed California requirement is
likely to result in only marginal improvement in air quality not
commensurate with its cost or is otherwise an arguably unwise
exercise of regulatory power is not legally pertinent to my decision
under section 209, so long as the California requirement is
consistent with section 202(a) and is more stringent than applicable
Federal requirements in the sense that it may result in some further
reduction in air pollution in California. Thus, my consideration of
all the evidence submitted concerning a waiver decision is
circumscribed by its relevance to those questions that I may
consider under section 209(b).\73\
---------------------------------------------------------------------------

    \73\ 78 FR at 2115 (footnote omitted).

    Given the text, legislative history, and judicial precedent, EPA
has consistently interpreted section 209(b) as requiring it to grant a
waiver unless opponents of a waiver can demonstrate that one of the
criteria for a denial has been met.\74\
---------------------------------------------------------------------------

    \74\ MEMA I, 627 F.2d at 1120-21 (``The language of the statute
and its legislative history indicate that California's regulations,
and California's determination that they comply with the statute,
when presented to the Administrator are presumed to satisfy the
waiver requirements and that the burden of proving otherwise is on
whoever attacks them.''); Motor & Equip. Mfrs. Ass'n, Inc. v.
Nichols, 142 F.3d 449, 462 (D.C. Cir. 1998) (MEMA II) (``[S]ection
209(b) sets forth the only waiver standards with which California
must comply. . . . If EPA concludes that California's standards pass
this test, it is obligated to approve California's waiver
application.'').
---------------------------------------------------------------------------

    The 1977 CAA Amendments additionally demonstrated the significance
of California's standards to the Nation as a whole with Congress'
adoption of a new section 177. Section 177 permits other states
addressing their own air pollution problems to adopt and enforce
California new motor vehicle standards ``for which a waiver has been
granted if certain criteria are met.'' \75\ Also known as the ``opt-
in'' provision, section 177 of the Act, 42 U.S.C. 7507, provides:
---------------------------------------------------------------------------

    \75\ This provision was intended to continue the balance,
carefully drawn in 1967, between states' need to meet increasingly
stringent federal air pollution limits and the burden of compliance
on auto-manufacturers. See, e.g., H.R. Rep. No. 294, 95th Cong., 1st
Sess. 309-10 (1977) (``[S]ection 221 of the bill broadens State
authority, so that a State other than California . . . is authorized
to adopt and enforce new motor vehicle emission standards which are
identical to California's standards. Here again, however, strict
limits are applied . . . . This new State authority should not place
an undue burden on vehicle manufacturers . . . .''); Motor Vehicle
Mfrs. Ass'n v. NYS Dep't of Env't Conservation, 17 F.3d 521, 527 (2d
Cir. 1994) (``Many states, including New York, are in danger of not
meeting increasingly stringent federal air pollution limits . . . .
It was in an effort to assist those states struggling to meet
federal pollution standards that Congress, as noted earlier,
directed in 1977 that other states could promulgate regulations
requiring vehicles sold in their state to be in compliance with
California's emission standards or to ``piggyback'' onto
California's preemption exemption. This opt-in authority, set forth
in Sec.  177 of the Act, 42 U.S.C. 7507, is carefully circumscribed
to avoid placing an undue burden on the automobile manufacturing
industry.'').

    Notwithstanding section 7543(a) of this title, any State which
has plan provisions approved under this part may adopt and enforce
for any model year standards relating to control of emissions from
new motor vehicles or new motor vehicle engines and take such other
actions as are referred to in section 7543(a) of this title
respecting such vehicles if--
    (1) such standards are identical to the California standards for
which a waiver has been granted for such model year, and
    (2) California and such State adopt such standards at least two
years before commencement of such model year (as determined by
regulations of the Administrator).
    Nothing in this section or in Subchapter II of this chapter
shall be construed as authorizing any such State to prohibit or
limit, directly or indirectly, the manufacture or sale of a new
motor vehicle or motor vehicle engine that is certified in
California as meeting California standards, or to take any action of
any kind to create, or have the effect of creating, a motor vehicle
or motor vehicle engine different that a motor vehicle or engine
certified in California under California standards (a ``third
vehicle'') or otherwise create such a ``third vehicle.''

    Any state with qualifying SIP provisions may exercise this option
and become a ``Section 177 State,'' without first seeking the approval
from EPA.\76\ Thus, over time, Congress has recognized the important
state role, for example, by making it easier (by allowing California to
consider its standards ``in the aggregate'') and by expanding the
opportunity (via section 177) for states to adopt standards different
from EPA's standards.\77\
---------------------------------------------------------------------------

    \76\ In 1990 Congress amended the CAA by adding section 209(e)
to section 209. Section 209(e) sets forth the terms of CAA
preemption for nonroad engines and vehicles and the ability of
States to adopt California emissions standards for such vehicles and
engines if certain criteria are met. 42 U.S.C. 7543(e)(2)(B) (``Any
State other than California which has plan provisions approved under
part D of subchapter I may adopt and enforce, after notice to the
Administrator, for any period, standards relating to control of
emissions from nonroad vehicles or engines . . . if (i) such
standards and implementation and enforcement are identical, for the
period concerned, to the California standards . . . .''). Courts
have interpreted these amendments as reinforcing the important role
Congress assigned to California. See Engine Mfrs. Ass'n v. EPA, 88
F.3d 1075, 1090 (``Given the indications before Congress that
California's regulatory proposals for nonroad sources were ahead of
the EPA's development of its own proposals and the Congressional
history of permitting California to enjoy coordinated regulatory
authority over mobile sources with the EPA, the decision to identify
California as the lead state is comprehensible. California has
served for almost 30 years as a `laboratory' for motor vehicle
regulation.''); MEMA I, 627 F.2d 1095, 1110 (D.C. Cir. 1979) (``Its
severe air pollution problems, diverse industrial and agricultural
base, and variety of climatic and geographical conditions suit it
well for a similar role with respect to nonroad sources.'').
    \77\ 40 FR at 23104; see also LEV I waiver at 58 FR 4166,
Decision Document at 64.
---------------------------------------------------------------------------

B. Deference to California

    EPA has consistently noted that the text, structure, and history of
the California waiver provision clearly indicate both congressional
intent and appropriate EPA practice of leaving the decision on
``ambiguous and controversial matters of public policy'' to
California's judgment. In waiver decisions, EPA has thus recognized
that congressional intent in creating a limited review of California
waiver requests based on the section 209(b)(1) criteria was to ensure
that the federal government did not second-guess the wisdom of state
policy. In an early waiver decision EPA highlighted this deference:

    It is worth noting * * * I would feel constrained to approve a
California approach to the problem which I might also feel unable to
adopt at the federal level in my own capacity as a regulator. The
whole approach of the Clean Air Act is to force the development of
new types of emission

control technology where that is needed by compelling the industry
to ``catch up'' to some degree with newly promulgated standards.
Such an approach * * * may be attended with costs, in the shape of
reduced product offering, or price or fuel economy penalties, and by
risks that a wider number of vehicle classes may not be able to
complete their development work in time. Since a balancing of these
risks and costs against the potential benefits from reduced
emissions is a central policy decision for any regulatory agency
under the statutory scheme outlined above, I believe I am required
to give very substantial deference to California's judgments on this
score.\78\
---------------------------------------------------------------------------

    \78\ 40 FR at 23104.

    As noted above, Congress amended the CAA in 1977. Within these
amendments, Congress had the opportunity to reexamine the waiver
provision and elected to expand California's flexibility to adopt a
complete program of motor vehicle emission controls. The House
Committee Report explained that ``[t]he amendment is intended to ratify
and strengthen the California waiver provision and to affirm the
underlying intent of that provision, i.e., to afford California the
broadest possible discretion in selecting the best means to protect the
health of its citizens and the public welfare.'' \79\
---------------------------------------------------------------------------

    \79\ MEMA I, 627 F.2d at 1110 (citing H.R. Rep. No. 294, 95th
Cong., 1st Sess. 301-02 (1977)). Congress amended section
209(b)(1)(A) regarding California's determination that its standards
are as at least as protective as applicable Federal standards so
that such determination may be done ``in the aggregate'' looking at
the summation of the standards within the vehicle program.
---------------------------------------------------------------------------

    SAFE 1 was a departure from congressional intent and EPA's typical
practice of deference to California on matters of state public policy
regarding how best to address its serious air quality problems. In SAFE
1, EPA adopted a new interpretation of section 209(b)(1)(B) more than
five years after the initial grant of the ACC program waiver and
applied it to CARB's GHG standards and ZEV sales mandate. Specifically,
EPA premised its finding on a consideration of California's ``need''
for the specific standards, instead of the ``need'' for a separate
motor vehicle emission program to meet compelling and extraordinary
conditions, stating that ``such State standards'' in section
209(b)(1)(B) was ambiguous with respect to the scope of the Agency's
analysis. EPA further determined that California did not need the ZEV
sales mandate to meet compelling and extraordinary conditions by
relying on a single statement in the ACC program waiver support
document taken out of context, where it noted that the ZEV sales
mandate had no criteria emissions benefits in terms of vehicle
emissions and its LEV III criteria pollutant fleet standard was
responsible for those emission reductions. In response to the SAFE 1
proposal, California had provided further context and additional data
on net upstream emissions benefits of the ZEV sales mandate, but EPA
did not consider them in arriving at the findings and conclusions in
SAFE 1. The final decision in SAFE 1 was not based on the third waiver
prong.\80\ EPA also explained in SAFE 1 that the task of interpreting
section 209(b)(1)(B) required no deference to California.\81\
---------------------------------------------------------------------------

    \80\ 84 FR at 51322-33. EPA notes that when reviewing
California's standards under the third waiver prong, the Agency may
grant a waiver to California for standards that EPA may choose not
to adopt at the federal level due to different considerations. See
78 FR at 2133.
    \81\ 84 FR at 51339-40.
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C. Standard and Burden of Proof

    In Motor and Equipment Manufacturers' Association v. EPA, 627 F.2d
1095 (D.C. Cir. 1979) (MEMA I), the U.S. Court of Appeals for the
District of Columbia stated, with regard to the standard and burden of
proof, that the Administrator's role in a section 209 proceeding is to
``consider all evidence that passes the threshold test of materiality
and . . . thereafter assess such material evidence against a standard
of proof to determine whether the parties favoring a denial of the
waiver have shown that the factual circumstances exist in which
Congress intended a denial of the waiver.'' \82\ The court in MEMA I
considered the standards of proof under section 209 for the two
findings necessary to grant a waiver for an ``accompanying enforcement
procedure'' (as opposed to the standards themselves): (1)
Protectiveness in the aggregate and (2) consistency with CAA section
202(a) findings. The court instructed that ``the standard of proof must
take account of the nature of the risk of error involved in any given
decision, and it therefore varies with the finding involved. We need
not decide how this standard operates in every waiver decision.'' \83\
The court upheld the Administrator's position that to deny a waiver,
there must be clear and compelling evidence to show that the proposed
procedures undermine the protectiveness of California's standards. The
court noted that this standard of proof also accords with the
congressional intent to provide California with the broadest possible
discretion in setting regulations it finds protective of the public
health and welfare.\84\ With respect to the consistency finding, the
court did not articulate a standard of proof applicable to all
proceedings but found that the opponents of the waiver were unable to
meet their burden of proof even if the standard were a mere
preponderance of the evidence.
---------------------------------------------------------------------------

    \82\ MEMA I, 627 F.2d at 1122.
    \83\ Id.
    \84\ Id.
---------------------------------------------------------------------------

    Although MEMA I did not explicitly consider the standards of proof
under section 209 concerning a waiver request for ``standards,'' as
compared to accompanying enforcement procedures, there is nothing in
the opinion to suggest that the court's analysis would not apply with
equal force to such determinations. EPA's past waiver decisions have
consistently made clear that: ``[E]ven in the two areas concededly
reserved for Federal judgment by this legislation--the existence of
compelling and extraordinary conditions and whether the standards are
technologically feasible--Congress intended that the standard of EPA
review of the State decision to be a narrow one.'' \85\ Although EPA
evaluates whether there are compelling and extraordinary conditions in
California, the Agency nevertheless accords deference to California on
its choices for how best to address such conditions in light of the
legislative history of section 209(b).
---------------------------------------------------------------------------

    \85\ See, e.g., 40 FR at 23102-03. See also MEMA I, 627 F.2d at
1109 (``Congress had an opportunity to restrict the waiver provision
in making the 1977 amendments, and it instead elected to expand
California's flexibility to adopt a complete program of motor
vehicle emissions control. Under the 1977 amendments, California
need only determine that its standards will be `in the aggregate, at
least as protective of public health and welfare than applicable
Federal standards,' rather than the ``more stringent'' standard
contained in the 1967 Act.'') (citing H.R. Rep. No. 294, 95th Cong.,
1st Sess. 301-02 (1977), U.S. Code Cong. & Admin. News 1977, p.
1380).
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    As noted earlier, the burden of proof in a waiver proceeding is on
EPA and the opponents of the waiver. This is clear from the statutory
language stating that EPA ``shall . . . waive'' preemption unless one
of three statutory factors is met. This reading was upheld by the D.C.
Circuit in MEMA I, which concluded that this obligation rests firmly
with opponents of the waiver in a section 209 proceeding, holding that:
``[t]he language of the statute and its legislative history indicate
that California's regulations, and California's determinations that
they must comply with the statute, when presented to the Administrator
are presumed to satisfy the waiver requirements and that the burden of
proving otherwise is on whoever attacks them. California must present
its regulations and findings at

the hearing and thereafter the parties opposing the waiver request bear
the burden of persuading the Administrator that the waiver request
should be denied.'' \86\
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    \86\ MEMA I, 627 F.2d at 1121.
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    The Administrator's burden, on the other hand, is to make a
reasonable evaluation of the information in the record in coming to the
waiver decision. As the court in MEMA I stated, ``Here, too, if the
Administrator ignores evidence demonstrating that the waiver should not
be granted, or if he seeks to overcome that evidence with unsupported
assumptions of his own, he runs the risk of having his waiver decision
set aside as `arbitrary and capricious.' '' \87\ Therefore, the
Administrator's burden is to act ``reasonably.'' \88\
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    \87\ Id. at 1126.
    \88\ Id.
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    In this instance, EPA has withdrawn a previously granted waiver and
is now reconsidering whether that withdrawal was an appropriate
exercise of authority, whether the reinterpretation of the second
waiver prong was appropriate, and whether EPA's evaluation and findings
of fact under the second waiver prong meet the applicable burden of
proof in the context of deference to California's policy choices. EPA
believes that the same burden that is applicable to those opposed to an
initial waiver request from CARB (this applies to any party including
the Administrator as explained in MEMA I) is also applicable to EPA's
actions in SAFE 1 (e.g., the burden of proof of whether California does
not need its standards to meet compelling and extraordinary conditions
rests on those opposing a waiver for California).\89\
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    \89\ In EPA's 2009 evaluation of the 2008 GHG waiver denial the
Agency applied a similar test. See 74 FR at 32745 (``After a
thorough evaluation of the record, I am withdrawing EPA's March 6,
2008 Denial and have determined that the most appropriate action in
response to California's greenhouse gas waiver request is to grant
that request. I have determined that the waiver opponents have not
met their burden of proof in order for me to deny the waiver under
any of the three criteria in section 209(b)(1).''). In the context
of 2009 GHG waiver that reconsidered the Agency's 2008 GHG waiver
denial, EPA determined it was appropriate to apply the same burden
of proof during the reconsideration as would apply at the time of
the initial waiver evaluation. EPA received comment suggesting that
the entire burden of proof shifts to California in order for the
prior 2008 denial to be reversed. EPA, in response, stated that ``.
. . regardless of the previous waiver denial, once California makes
its protectiveness determination the burden of proof falls on the
opponents of the waiver . . . . This is consistent with the
legislative history, which indicates that Congress intended a narrow
review by EPA and to preserve the broadest possible discretion for
California.'' Id. at 32749. EPA acknowledges that in SAFE 1 the
Agency not only adopted an interpretation of the second waiver prong
which was similar to the previously rejected interpretation, but
that in doing so also questioned its previous position that the
burden of proof in evaluating the need for standards at issue
resides with those that oppose the waiver, including EPA. See 84 FR
at 51344 n.268. In this action, however, EPA now finds that the
historical deference provided to California regarding its policy
choices on how best to address its serious air quality conditions
also requires that the burden of proof should reside in those
seeking to demonstrate that standards are not needed under the
second waiver prong regardless of whether the rationale is
characterized as a new interpretation or not. The language of
section 209(b)(1) requires California to make a protectiveness
finding under the first waiver prong. Moreover, nothing in section
209(b) could be read as support for drawing a distinction between
the burden of proof when the Agency considers an initial waiver
request and one where the Agency reconsiders a waiver decision based
on a new interpretation of the statutory criteria. That burden
properly resides with opponents of the waiver.
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IV. EPA Did Not Appropriately Exercise Its Limited Authority To
Reconsider the ACC Program Waiver in SAFE 1

    The first question this final action tackles is whether the agency
properly exercised its reconsideration authority to withdraw its
previously-granted waiver in SAFE 1. EPA concludes that it did not, and
on that independent basis rescinds SAFE 1's waiver withdrawal.
    Section 209 does not provide EPA with express authority to
reconsider and withdraw a waiver previously granted to California.
EPA's authority thus stems from its inherent reconsideration authority.
For several reasons, in the context of reconsidering a waiver grant,
that authority may only be exercised sparingly. First, EPA believes its
inherent authority to reconsider a waiver decision is constrained by
the three waiver criteria that must be considered before granting or
denying a waiver request under section 209(b). A contrary approach,
which treats reconsiderations as more broadly appropriate, would
undermine Congress' intent that California be able to exercise its
policy judgments and develop motor vehicle controls programs to address
California's air pollution problems, and make advances which could be
built on by EPA or adopted by other states. Second, EPA believes it may
only reconsider a previously granted waiver to address a clerical or
factual error or mistake, or where information shows that factual
circumstances or conditions related to the waiver criteria evaluated
when the waiver was granted have changed so significantly that the
propriety of the waiver grant is called into doubt. Even when EPA is
acting within the appropriate bounds of its authority to reconsider,
during that reconsideration EPA should exercise its limited authority
within a reasonable timeframe and be mindful of reliance interests.
    The Agency's reconsideration in SAFE 1 was not an appropriate
exercise of authority; there was no clerical error or factual error in
the ACC program waiver, and SAFE 1 did not point to any factual
circumstances or conditions related to the three waiver prongs that had
changed so significantly that the propriety of the waiver grant is
called into doubt. Rather, the 2019 waiver withdrawal was based on a
change in EPA's statutory interpretation, an incomplete and inaccurate
assessment of the record, and another agency's action beyond the
confines of section 209(b). EPA erred in reconsidering a previously
granted waiver on these bases. Moreover, in considering the passage of
time between the initial waiver and the SAFE 1 action, and the
development of reliance interests based on the waiver, EPA finds those
factors do not support the reconsideration of the ACC program waiver
that occurred in SAFE 1. Accordingly, as explained in detail below, EPA
is rescinding SAFE 1's withdrawal of its 2013 ACC program waiver
because it was an inappropriate exercise of reconsideration authority.

A. Comments Received

    EPA received several comments in the reconsideration proceeding on
the Agency's authority to reconsider waivers. Comments on explicit
authority focused on whether any language in section 209(b)(1), on its
face, permits EPA to reconsider a previously granted waiver. Some of
these commenters also distinguished between the denial of the 2008
waiver and the reconsideration and grant of the GHG waiver in 2009, and
EPA's grant of the ACC program waiver in 2013 and the reconsideration
and withdrawal of the ACC program waiver in 2019.
    EPA received comments in support of and against the view that EPA
has inherent authority to reconsider waivers. As support for EPA's
implied authority to reconsider, one commenter cited relevant language
from the Senate Committee Report from 1967 that stated, ``implicit in
[Sec.  209] is the right of [EPA] to withdraw the waiver [if] at any
time after notice and an opportunity for public hearing he finds that
the State of California no longer complies with the conditions of that
waiver.'' \90\ According to the commenter because ``the waiver
authorizes future regulation, which always remains open to change,''
EPA must have the authority to reconsider a

waiver. Otherwise, EPA would be unable to monitor CARB's continued
compliance with the waiver conditions in light of updated
information.\91\ The same commenter also argued that an agency
generally retains the authority to reconsider and correct any earlier
decision unless Congress acts to displace the authority with a process
to rectify the Agency's mistakes and that explicit statutory authority
to withdraw a waiver is therefore not necessary, because ``the power to
reconsider is inherent in the power to decide.'' \92\ The commenter
claimed that, under Chevron, ``[a]n agency has a `continuing' statutory
obligation to consider the `wisdom of its policy.' '' \93\
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    \90\ Urban Air Initiative (Urban Air), Docket No. EPA-HQ-OAR-
2021-0257-0223 at 22 (quoting S. Rep. 90-403, at 34 (1967)).
    \91\ Id. at 21 (``A determination that California's state
standards are technologically feasible and appropriate requires
complex technical projections at the frontiers of science, which
must be continually updated `if the actual future course of
technology diverges from expectation.' '' (quoting NRDC Inc. v. EPA,
655 F.2d 318, 329 (D.C. Cir. 1981))).
    \92\ Urban Air at 20 (citing Ivy Sports Med., LLC v. Burwell,
767 F.3d 81, 86, 93 (D.C. Cir. 2014)). This commenter also notes
that, in EPA's 2009 action to reconsider its prior denial of a GHG
waiver in 2008, CARB submitted a letter to EPA stating that
``California believes EPA has inherent authority to reconsider the
denial and should do so in order to restore the interpretations and
applications of the Clean Air Act to continue California's
longstanding leadership role in setting emission standards.'' Id.
    \93\ Id. at 21.
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    In contrast, several commenters maintained that section 209(b)
strongly indicates that EPA's authority to withdraw a previously issued
waiver is, at most, limited. Several commenters argued that, absent
language in a statute, administrative agencies lack inherent authority
to reconsider adjudicatory decisions.\94\ These commenters noted that
courts highly scrutinize administrative revocations and are
``unwilling[ ] to wrest a standardless and open-ended revocation
authority from a silent statute.'' \95\ Instead, these commenters
argued, EPA may act only with the authorities conferred upon it by
Congress, and thus the Agency may only act if the CAA explicitly or
implicitly grants it power to do so.\96\ According to these commenters,
section 209(b) is silent on waiver withdrawal, its text indicates that
EPA may only consider 209(b)'s three factors before either granting or
denying a waiver, and its purpose and structure affords broad deference
to California's standards. ``Taken together, these factors indicate
that EPA may not withdraw a previously-issued waiver based solely upon
a reconsideration of its initial judgment.'' \97\ Commenters suggested
that Congress, by listing the three waiver criteria and directing that
EPA evaluate such criteria prior to granting the waiver, only
authorized EPA to perform the evaluation once and that it ``cannot
later second-guess the wisdom of legal and policy judgments made as
part of that evaluation.'' \98\ Similarly, commenters noted that
section 209 does not textually ``provide'' EPA any authority nor
specify any process by which EPA might revoke the rights given by an
earlier-granted waiver.\99\ In response to SAFE 1's claim of inherent
reconsideration authority and the other commenters' reliance on the
relevant excerpt from the 1967 Senate Report, these commenters argued
that this ``single sentence . . . does not establish any withdrawal
authority,'' either generally or for the SAFE 1 withdrawal
specifically.\100\ That statement, commenters argued, ``predate[s] the
creation of the NAAQS program and Congress's invitations to development
of numerous state reliance interests.'' \101\ Moreover, according to
these commenters, the statement only discusses authority in the case
that ``California no longer complies with the conditions of the
waiver,'' which commenters believe means California's ``compliance with
waiver conditions and, specifically, its cooperation with EPA
concerning enforcement and certification procedures,'' not ``redefined
waiver criteria.'' \102\
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    \94\ Institute for Policy Integrity Amicus Brief at 4 (``Lacking
textual support, EPA invokes so-called `inherent authority'--`more
accurate[ly] label[ed] . . . `statutorily implicit' authority,' HTH
Corp. v. NLRB, 823 F.3d 668, 679 (D.C. Cir. 2016)--to justify its
action. 84 FR at 51,331. But this Court is `unwilling[ ] to wrest a
standardless and open-ended revocation authority from a silent
statute,' Am. Methyl, 749 F.2d 826, 837 (D.C. Cir. 1984), and EPA
fails to justify the implicit authority it claims.''); Twelve Public
Interest Organizations app 1 at 32 (citing Am. Methyl for
``rejecting `implied power' as `contrary to the intention of
Congress and the design of' the Act and quoting HTH Corp.'s
statement that agencies, as creatures of statute, lack inherent
authority); States and Cities at 16 (also citing Am. Methyl).
    \95\ Institute for Policy Integrity at 1 (citing Am. Methyl).
    \96\ States and Cities at 15 (citing HTH Corp. v. NLRB, 823 F.3d
668, 679 (D.C. Cir. 2016)); Twelve Public Interest Organizations,
Docket No. EPA-HQ-OAR-2021-0257-0277 app. 1 at 28 (``The Clean Air
Act preserves state authority to regulate emissions unless expressly
`provided' otherwise. 42 U.S.C. 7416. In statutes like this where
preemption is the exception, only Congress's `precise terms' can
produce preemption. CTS Corp. v. Waldburger, 573 U.S. 1, 12-13
(2014).''); National Coalition for Advanced Transportation (NCAT),
Docket No. EPA-HQ-OAR-2021-0257-0131 at 7-8 ; Institute for Policy
Integrity at New York University School of Law (Institute for Policy
Integrity), Docket No. EPA-HQ-OAR-2021-0257-0115 at 2, citing its
Final Brief of the Institute for Policy Integrity at New York
University School of Law as Amicus Curiae in Support of Petitioners
(Institute for Policy Integrity Amicus Brief) at 4, Union of
Concerned Scientists, et al. v. NHTSA, et al., No. 19-1230 (D.C.
Cir. filed Oct. 28, 2019), reprinted in the Institute's comments on
the 2021 Notice of Reconsideration.
    \97\ Institute for Policy Integrity at 2, citing its Amicus
Brief at 6-11.
    \98\ Id. at 7. See also Twelve Public Interest Organizations
app. 1 at 28-29 (``Section 209(b)(1)'s precise terms mandate that
EPA ``shall'' grant California a waiver unless EPA finds one of the
three specified bases for denial. This language charges EPA ``with
undertaking a single review in which [the Administrator] applies the
deferential standards set forth in Section 209(b) to California and
either grants or denies a waiver.'' Ford Motor Co. v. EPA, 606 F.2d
1293, 1302 (D.C. Cir. 1979). It evinces no intent to provide EPA
with the different and greater authority to withdraw a previously
granted waiver, thereby arresting the State's ongoing implementation
of its own laws.'')
    \99\ See South Coast Air Quality Management District (SCAQMD),
Docket No. EPA-HQ-OAR-2021-0257-0228 at 3. This commenter argued
that section 116 of the CAA (which explicitly references section
209) provides that there needs to be a textual basis for any
exercise of authority to deny California the right (which it
achieved via the 2013 waiver) to enforce its emission standards.
Thus, the commenter continued, because there is no language in
section 209 that gives any authority nor specifies any process for
EPA to revoke the rights/waiver previously granted then EPA may not
do so by the terms of section 116.
    \100\ States and Cities at 16. See also Twelve Public Interest
Organizations app. 1 at 33-34.
    \101\ States and Cities at 16; See also Twelve Public Interest
Organizations app. 1 at 33-34.
    \102\ Twelve Public Interest Organizations app. 1 at 34. See
also States and Cities at 16 (arguing that, although EPA proposed to
withdraw the waiver on multiple grounds, such as the third waiver
prong, ``EPA's final action was based entirely on its own changed
policy positions, namely its interpretation of Section 209(b)(1) to
create a categorical bar against state regulation of vehicular GHG
emissions and its decision to rely on another agency's newly
articulated views of a different statute [EPCA].'').
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    In response to the argument made by EPA in SAFE 1 that, given the
``considerable degree of future prediction'' required by the third
waiver prong, ``where circumstances arise that suggest that such
predictions may have been inaccurate, it necessarily follows that EPA
has authority to revisit those predictions,'' \103\ some commenters
claimed that California's standards do not become inconsistent with
federal standards simply because they become more stringent than
federal standards (in other words, a weakening of the federal standards
does not necessarily create an inconsistency). The commenters noted
also that EPA did not in fact revise its section 202(a) standards
between issuing and withdrawing the waiver at issue, nor did EPA in
fact make any final findings under the third waiver prong.\104\
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    \103\ 84 FR at 51332.
    \104\ Institute for Policy Integrity at 2.
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    Many commenters stated that in order to exercise any implied or
inherent authority, an agency must provide a ``detailed justification''
when departing from a policy that has ``engendered serious reliance
interests'' and should not ``rest on mere `policy changes' ''

alone.\105\ Thus, supporters and opponents of SAFE 1 also provided
comments on whether, assuming EPA did have authority to reconsider the
ACC program waiver--either because of language in the CAA or because of
its inherent authority to reevaluate decisions because of changed
conditions--it was appropriate to exercise that authority in SAFE 1.
Some commenters summarized precedent as requiring that the Agency
consider reliance interests that have attached to its original
decision, that reversals of informal adjudications occur within a
reasonable time after the original decision, and that the reversal is
not for the sole purpose of applying some change in administrative
policy.\106\ Opponents and supporters of SAFE 1 did, however, disagree
on the significance of each of these factors.\107\
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