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

CourtEnvironmental Protection Agency
Published date14 March 2022
Record Number2022-05227
Federal Register, Volume 87 Issue 49 (Monday, March 14, 2022)
[Federal Register Volume 87, Number 49 (Monday, March 14, 2022)]
                [Notices]
                [Pages 14332-14379]
                From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
                [FR Doc No: 2022-05227]
                [[Page 14331]]
                Vol. 87
                Monday,
                No. 49
                March 14, 2022
                Part IIEnvironmental Protection Agency-----------------------------------------------------------------------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
                [[Page 14332]]
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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: (202) 343-9256. Email:
                [email protected] or Kayla Steinberg, Office of Transportation
                and Air Quality, U.S. Environmental Protection Agency, 1200
                Pennsylvania Ave. NW. Telephone: (202) 564-7658. 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
                [[Page 14333]]
                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
                [[Page 14334]]
                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
                [[Page 14335]]
                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.
                ---------------------------------------------------------------------------
                 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
                [[Page 14336]]
                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\
                ---------------------------------------------------------------------------
                 \16\ 2012 Waiver Request at 6.
                 \17\ Id. at 15-16.
                ---------------------------------------------------------------------------
                 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\
                ---------------------------------------------------------------------------
                 \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.'').
                ---------------------------------------------------------------------------
                 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.
                ---------------------------------------------------------------------------
                 \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.'').
                ---------------------------------------------------------------------------
                 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).
                ---------------------------------------------------------------------------
                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
                [[Page 14337]]
                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\
                ---------------------------------------------------------------------------
                 \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).
                ---------------------------------------------------------------------------
                 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.
                ---------------------------------------------------------------------------
                 \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.''
                ---------------------------------------------------------------------------
                 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\
                ---------------------------------------------------------------------------
                 \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).
                ---------------------------------------------------------------------------
                 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
                [[Page 14338]]
                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\
                ---------------------------------------------------------------------------
                 \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.''
                ---------------------------------------------------------------------------
                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.
                ---------------------------------------------------------------------------
                 \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.
                ---------------------------------------------------------------------------
                 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
                [[Page 14339]]
                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\
                ---------------------------------------------------------------------------
                 \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.
                ---------------------------------------------------------------------------
                 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\
                ---------------------------------------------------------------------------
                 \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\
                ---------------------------------------------------------------------------
                 \46\ 84 FR at 51338.
                 \47\ Id.
                ---------------------------------------------------------------------------
                 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.
                ---------------------------------------------------------------------------
                 \48\ Id. at 51341-42.
                 \49\ Id. at 51337.
                 \50\ Id. at 51330.
                ---------------------------------------------------------------------------
                 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\
                ---------------------------------------------------------------------------
                 \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
                [[Page 14340]]
                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\
                ---------------------------------------------------------------------------
                 \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
                [[Page 14341]]
                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,
                [[Page 14342]]
                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
                [[Page 14343]]
                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.
                ---------------------------------------------------------------------------
                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).
                ---------------------------------------------------------------------------
                 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
                [[Page 14344]]
                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\
                ---------------------------------------------------------------------------
                 \86\ MEMA I, 627 F.2d at 1121.
                ---------------------------------------------------------------------------
                 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\
                ---------------------------------------------------------------------------
                 \87\ Id. at 1126.
                 \88\ Id.
                ---------------------------------------------------------------------------
                 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\
                ---------------------------------------------------------------------------
                 \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.
                ---------------------------------------------------------------------------
                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
                [[Page 14345]]
                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\
                ---------------------------------------------------------------------------
                 \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.
                ---------------------------------------------------------------------------
                 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\
                ---------------------------------------------------------------------------
                 \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].'').
                ---------------------------------------------------------------------------
                 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\
                ---------------------------------------------------------------------------
                 \103\ 84 FR at 51332.
                 \104\ Institute for Policy Integrity at 2.
                ---------------------------------------------------------------------------
                 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' ''
                [[Page 14346]]
                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\
                ---------------------------------------------------------------------------
                 \105\ States and Cities at 21-22 (quoting FCC v. Fox, 556 U.S.
                502, 515 (2009)).
                 \106\ Id.at 17 (citing Am. Methyl, 749 F.2d at 835; Chapman v.
                El Paso Nat. Gas Co., 204 F.2d 46, 53-54 (D.C. Cir. 1953); DHS v.
                Regents of the Univ. of California, 140 S. Ct. 1891, 1914 (2020);
                United States v. Seatrain Lines Inc., 329 U.S. 424, 429 (1947)).
                 \107\ Urban Air at 21 (arguing that agencies need only provide a
                ``detailed justification'' to overcome reliance interests);
                Competitive Enterprise Institute (CEI), Docket No. EPA-HQ-OAR-2021-
                0257-0398 (correction to an earlier comment by the same commenter,
                which can be found at Docket No. EPA-HQ-OAR-2021-0257-0140) at 9
                (``As for reliance interests, all costly wasteful, or otherwise
                defective government programs create reliance interests. Usurpations
                of power do as well. If the creation of reliance interests is enough
                to legitimize bad or unlawful policies, anything goes.''). Compare
                to States and Cities at 17-18 (citing their comments on SAFE 1 at
                130-31 and citing Ctr. for Sustainable Econ. v. Jewell, 779 F.3d
                588, 595 (D.C. Cir. 2015)) (describing reliance interests as
                ``weighty,'' stating that ``[t]he Clean Air Act and long-standing
                Executive branch policy both place substantial importance on States'
                interests in implementing the plans and laws they have determined
                best meet the needs of their States''--plans and laws such as SIPs,
                which can and do include California standards).
                ---------------------------------------------------------------------------
                 Commenters who argued that reliance interests were relevant to
                EPA's authority to reconsider also offered evidence of reliance
                interests that had accrued over the five years the ACC program waiver
                had been in effect, with several commenters providing specific details
                regarding their reliance on the GHG and ZEV standards. As commenters
                noted, California's standards are incorporated into plans and
                regulations aimed at achieving state and federal air pollution goals.
                These plans can be complex and cannot ``change on a dime.'' \108\
                According to one commenter ``[w]ithout the full Waiver, past decision-
                making was blighted and planned-for reductions to meet Air District
                goals need to be reassessed. The emission reductions are key to
                combatting climate change, curbing ozone formation, preventing
                additional wildlife impacts, and attaining California [air quality
                goals] and [NAAQS].'' \109\ Revoking a waiver and disrupting existing
                air quality plans, they argue, also has ``far-reaching ripple effects''
                because ``businesses operating in California base their own long-term
                plans on the State's policies'' and, if California cannot reduce
                emissions from the automobile sector, it will have to ``consider
                requiring further reductions from other sectors of the economy.'' \110\
                Additionally, they said that by the time of the SAFE proposal, twelve
                states had already adopted at least one or both of the California
                standards under section 177.\111\ Several of these states submitted
                comments attesting to their need for these standards to achieve both
                greenhouse gas and criteria emission reductions.\112\ Like the reliance
                interests of Californian air districts, several of these section 177
                states and other opponents of SAFE 1 claim that ``reliance interests in
                State Implementation Plans are particularly acute'' because ``they set
                expectations for extended periods of time and for many sectors of the
                economy, making it challenging (if not impossible) to change them
                quickly.'' \113\ These commenters note that ``planning failures can
                carry significant consequences, including the imposition of federal
                plans that limit local flexibility and control, as well as penalties
                such as loss of highway funds.'' \114\ Some automakers and industry
                groups also discussed their reliance interests.\115\ For example, the
                National Coalition for Advanced
                [[Page 14347]]
                Transportation, an industry coalition group, stated ``NCAT members have
                invested billions of dollars with the well-founded expectation that
                increased demand for electric vehicles would be propelled by California
                and the section 177 States' continued ability to drive technology
                innovation and emission reductions.'' \116\ EPA also received comment
                from CARB, by and through the comments of the States and Cities, that
                provided data on manufacturer compliance.\117\
                ---------------------------------------------------------------------------
                 \108\ Twelve Public Interest Organizations app. 1 at 29.
                 \109\ Bay Area Air Quality Management District (BAAQMD), Docket
                No. EPA-HQ-OAR-2021-0257-0278 at 2.
                 \110\ Twelve Public Interest Organizations app. 1 at 29.
                 \111\ States and Cities at 17. With these state adoptions, auto-
                manufacturers would then need to meet program requirements in these
                states.
                 \112\ See, e.g., Delaware Department of Natural Resources and
                Environmental Control (Delaware), Docket No. EPA-HQ-OAR-2021-0257-
                0109 at 1 (``The GHG program allowed by the waiver is vitally
                important, as it enables long-term plans and yields critical
                emission reductions that will contribute significantly to Delaware's
                ability to attain and maintain the health-based National Ambient Air
                Quality Standards (NAAQS) for criteria pollutants.''); Connecticut
                Department of Transportation and Connecticut Department of Energy
                and Environmental Protection (Connecticut), Docket No. EPA-HQ-OAR-
                2021-0257-0104 at 2 (``These programs enable long-term planning and
                yield critical emission reductions that are critical to meeting
                Connecticut's climate goals as well as our statutory obligations to
                reach attainment with the ozone NAAQS.''); Minnesota Pollution
                Control Agency and Minnesota Department of Transportation
                (Minnesota), Docket No. EPA-HQ-OAR-2021-0257-0113 at 2 (``The MPCA
                is in the process of adopting the LEV and ZEV standards in Minnesota
                as allowed under section 177 of the CAA. These rules are vitally
                important in helping our state achieve our GHG emission reduction
                goals and reduce other harmful air pollutants. . . .''); Maine
                Department of Environmental Protection (Maine), Docket No. EPA-HQ-
                OAR-2021-0257-0130 at 1, 3 (``While the LEV program was initially
                created to help attain and maintain the health-based [NAAQS] for
                criteria pollutants, the California GHG and ZEV standards will
                contribute significantly to states' abilities to meet their emission
                reduction goals. . . . [T]he transportation sector is the largest
                source of ozone forming pollution in Maine . . . and California's
                ability to set ZEV standards under the [CAA] is an essential tool
                for addressing both criteria pollutants and GHGs.''); Virginia
                Department of Environmental Quality (Virginia), Docket No. EPA-HQ-
                OAR-2021-0257-0112 at 2 (``These standards provide important and
                necessary reductions in both GHG and criteria pollutant emissions
                needed to meet state and local air quality goals and address federal
                CAA requirements.'')
                 \113\ Twelve Public Interest Organizations app. 1 at 30;
                Delaware at 3 (explaining that, without the California standards,
                adopted into Delaware's SIP, the State will not be able to meet air
                quality goals). These reliance interests, one commenter argued, are
                another reason to doubt the implicit authority of EPA to reconsider
                an already granted waiver: ``It would be quite surprising, then, for
                EPA to have implicit authority to upend this multi-actor, multi-step
                scheme by pulling the rug out from under it after the fact.'' States
                and Cities at 16 (citing Am. Methyl, 749 F.2d at 840).
                 \114\ Twelve Public Interest Organizations app. 1 at 30-31
                (citing 42 U.S.C. 7410(c)(1) (establishing triggers for imposition
                of federal plan), 7509 (outlining sanctions for state planning
                failures)).
                 \115\ See Ford Motor Company (Ford), Docket No. EPA-HQ-OAR-2021-
                0257-0028 at 1 (``Ford supports EPA's rescission of its SAFE I
                action, which withdrew California's waiver for zero emission vehicle
                (ZEV) mandate and greenhouse gas (GHG) emission standards within
                California's Advanced Clean Car (ACC) program. Ford does not believe
                this previous action was appropriate. Ford firmly supports
                recognition of California's authority to implement ZEV and GHG
                standards in support of its air quality targets pursuant to its 2012
                waiver application. We have relied on California's actions pursuant
                to the waiver and California's related pronouncements in negotiating
                and agreeing to the California Framework Agreement, and in the
                development of our own product and compliance plans. Ultimately,
                Ford considered EPA's and NHTSA's rationales and California's
                statements regarding SAFE I and took action in the best interests of
                the company and of the environment.''). See also Tesla, Docket No.
                EPA-HQ-OAR-2021-0257-0136 at 4 (``Because of the sizeable
                investments required to develop alternative fuel and advanced
                technology vehicles, regulatory stability is vital for ensuring the
                level of manufacturer and investor confidence necessary to
                facilitate innovation.'') and at n.5 (quoting comments from several
                automakers and auto industry groups about reliance interests on the
                waiver from the MTE). See also Toyota, Docket No. EPA-HQ-OAR-2021-
                0381 (``Should EPA reinstate California's waiver, we request it be
                reinstated as it was originally granted, including the ``deemed-to-
                comply'' provision that was so important in establishing One
                National Program (ONP) over a decade ago. . . . Reinstatement of
                California's waiver for model years 2021 and 2022 poses significant
                lead time challenges considering that 2021 model year is well
                underway, and 2022 model year vehicles are generally already
                designed, sourced, certified to various regulatory requirements, and
                ready to begin production. Some manufacturers may have already begun
                production of 2022 model year vehicles. As a result, a reinstatement
                of California's waiver by EPA should apply prospectively to model
                years 2023 and later.'').
                 \116\ NCAT at 13; Rivian as a member of NCAT (Rivian), Docket
                No. EPA-HQ-OAR-2021-0135.
                 \117\ States and Cities at 55-57, including app. D and app. E.
                ---------------------------------------------------------------------------
                 According to commenters, these reliance interests were compounded
                by the considerable passage of time between the granting of the ACC
                program waiver in 2013 and SAFE 1's withdrawal in 2019. Commenters also
                remarked that the more than five years that had passed was too long a
                delay and well beyond the ``weeks, not years'' sometimes referenced as
                guidance for reasonableness.\118\ SAFE 1, they noted ``comes years
                after the waiver was granted, years after multiple sovereign States
                adopted California's standards, and years into long-term plans States
                developed in reliance on anticipated emission reductions from those
                standards--including, but not limited to, multiple EPA approved State
                Implementation Plans.'' \119\
                ---------------------------------------------------------------------------
                 \118\ Id. at 17 (citing Mazaleski v. Treusdell, 562 F.2d 701,
                720 (D.C. Cir. 1977)). Twelve Public Interest Organizations app. 1
                at 73. In addition, this commenter notes that the time period for
                seeking judicial review of the ACC program waiver had run long ago
                and that no one had sought that review (citing Am. Methyl Corp., 749
                F.2d at 835); NCAT at 14-15.
                 \119\ Twelve Public Interest Organizations app. 1 at 58.
                ---------------------------------------------------------------------------
                 Other commenters argued that SAFE 1 did not upend reliance
                interests and was not untimely. They agreed with the SAFE 1 decision
                that the 2018 Mid-Term Evaluation (MTE), which was agreed to in 2013,
                prevented any reliance interests from accruing.\120\ Although this MTE
                was for the federal GHG standards for MYs 2022-2025, not the California
                GHG standards approved under the ACC program waiver, these commenters
                argued that the two were linked through the ``deemed to comply''
                provision approved in the ACC program waiver, which allowed
                manufacturers to comply with the California standards by meeting the
                federal standards.\121\ They also noted that California separately
                agreed to a 2016 mid-term evaluation of its own state standards for the
                same model years.\122\ Therefore, they argued, because the initial
                grant of the waiver was contingent on two subsequent mid-term
                evaluations, no one could have reasonably believed the ACC program
                waiver was ``set in stone.'' Additionally, at least one commenter
                argued that California and other states' purported reliance interests
                were further undermined because they ``have known for years that
                NHTSA's longstanding position is that state carbon dioxide regulations
                and zero-emissions vehicle mandates are related to average fuel economy
                standards and therefore preempted by CAFE'' and ``could not have
                reasonably believed that EPA would continue to ignore NHTSA's view of
                the law in perpetuity.\123\
                ---------------------------------------------------------------------------
                 \120\ America Fuel & Petrochemical Manufacturers, EPA-HQ-OAR-
                2021-0257-0139 (AFPM) at 26 (``And no reliance interests derive from
                this decision because one could not reasonably expect that the
                standards approved in that waiver would remain untouched. As part of
                the 2013 waiver decision, EPA and CARB committed to a 2018 mid-term
                evaluation of the federal standards for MYs 2022-2025.''); Urban Air
                at 22; NADA at 6 (``as discussed at length repeatedly in EPA's 2013
                CAA preemption waiver rule, a coordinated mid-term evaluation (MTE)
                involving EPA and NHTSA's MY 2022-2025 rules was expected to be
                conducted.'').
                 \121\ AFPM at 26 (``Because California's deemed-to-comply
                provision linked those standards to compliance with its own state
                program, any change in federal standards from the mid-term review
                would have required an equal overhaul of California's emissions
                program for those future MYs.''); Urban Air at 22-23 (``The 2018-re-
                evaluation is relevant because California's deemed-to-comply
                provision allowed a manufacturer to satisfy state GHG standards
                simply by complying with federal standards.''); NADA at 6 (``[A]s
                noted above, CA's GHG mandates included both a ``deem-to-comply''
                rule enabling vehicle manufacturers to meet those mandates by
                complying with applicable federal rules, and a commitment on the
                part of the state to conduct a mid-term evaluation of its own GHG
                standards.'').
                 \122\ AFPM at 26-27; Urban Air at 22; NADA at 6.
                 \123\ Urban Air at 23.
                ---------------------------------------------------------------------------
                 Some commenters also argued that even if reliance interests are
                relevant, automakers and industry groups have reliance interests of
                their own affected by CARB's 2018 deemed to comply amendments and the
                SAFE 1 action itself. One commenter wrote that ``CARB tossed
                automakers' reliance interests out the window when it refused to be
                bound by the results of the EPA and NHTSA's Mid-Term Evaluation (MTE) .
                . . and refused to honor its `deemed to comply' pledge to automakers
                unless they complied with the standards set by the EPA in 2012 and
                2017.'' \124\ Another commenter noted that ``[w]hatever `reliance
                interests' are disturbed when EPA reverses a waiver grant are no more
                real, and no more serious for the parties involved, than the reliance
                interests upended by reversal of a waiver denial.'' \125\
                ---------------------------------------------------------------------------
                 \124\ CEI at 9.
                 \125\ AFPM at 27. See also Urban Air at 20-21 (``And under the
                presumption that `an agency retains authority to reconsider and
                correct an earlier decision,' the grant of a waiver is as liable to
                change as the denial of a waiver. No greater reliance interests
                attach to the grant of a waiver authorizing regulation than to the
                denial of a waiver preventing regulation, so reliance interests
                provide no support for California's ratchet argument.'').
                ---------------------------------------------------------------------------
                 Some commenters also argued that SAFE 1 was timely, disputing
                opponents' claims that a ``reasonable'' amount of time is measured in
                ``weeks, not years.'' Commenters noted that ``courts have not reached
                consensus on the amount of time that is reasonable.'' \126\ Moreover,
                one commenter argued that ``timeliness depends on reliance interests''
                and, because those could not have accrued prior to the MTE, the time
                period at issue is only four months (between the conclusion of the MTE
                and the reconsideration of the ACC program waiver, starting in
                2018).\127\ This ``short time,'' the commenter claimed, ``lies in the
                acceptable range given the intervening events.'' \128\ Another
                commenter argued that, if ``time elapsed'' is a factor to be considered
                in the appropriateness of an action, it cuts in favor of SAFE 1, as
                thirty years passed between EPCA's enactment in 1975 and California's
                first request for a ``waiver implicitly authorizing the State to
                regulate fuel economy.'' \129\ Even if the time period at issue was
                nearly six years between the grant of the ACC program and the final
                SAFE 1 action, that commenter wrote, such a length of time is not
                unreasonable, since ``[i]f six years locks a policy in place and puts
                it beyond revision or repeal by the next administration, elections no
                longer matter.'' \130\
                ---------------------------------------------------------------------------
                 \126\ Urban Air at 23-24.
                 \127\ Id. at 24. Another commenter disagreed with this
                accounting of time, stating that ``timeliness for reconsidering an
                adjudication is measured from the date of the agency's decision, not
                from the date of activity resulting from that decision. E.g., Am.
                Methyl, 749 F.2d at 835 (tethering timeliness to period for appeal
                of agency decision).'' Twelve Public Interest Organizations app. 1
                at 38.
                 \128\ Urban Air at 23-24.
                 \129\ CEI at 8 (calling ``time elapsed'' a ``frivolous
                objection.'').
                 \130\ Id.
                ---------------------------------------------------------------------------
                 In addition to reliance interests and timeliness, some commenters
                claimed that EPA's authority to revoke, if it existed, requires the
                Agency to have a purpose other than ``applying some . . . change in
                administrative policy.'' \131\ SAFE 1, they argued, did not meet this
                requirement. Instead, in SAFE 1, EPA ``chose to sua sponte reconsider
                its 2013 Waiver Grant for the sole purpose of applying new policy
                determinations,'' specifically ``NHTSA's views of EPCA preemption'' and
                ``new interpretations
                [[Page 14348]]
                [of section 209(b)(1)(B)] that served only to categorically bar state
                standards that reduce vehicular GHG emissions.'' \132\ Still, another
                commenter disagreed, arguing that EPA's reconsideration was an
                appropriate reevaluation of the legal interpretation and facts upon
                which the initial waiver determination was based because--
                ``reconsideration determinations do not become `policy' decisions
                simply because they address substantive errors.'' \133\
                ---------------------------------------------------------------------------
                 \131\ States and Cities at 17 (quoting Chapman v. El Paso Nat.
                Gas Co., 204 F.2d 46, 53-54 (D.C. Cir. 1953)).
                 \132\ Id. at 8, 19 (``No statute compelled EPA to reconsider the
                2013 waiver at all, let alone to apply new policies to that long-
                settled decision rather than to new waiver requests.''); Twelve
                Public Interest Organizations app. 1 at 35 (``EPA relied exclusively
                on its purported discretion to reinterpret Section 209(b)(1)(B) of
                the Clean Air Act . . . and its purported discretion to consider
                factors not enumerated in Section 209(b)(1).''). See also SCAQMD at
                3 (``Because the 2013 waiver decision was not pending judicial
                review in 2019 and was a long-closed matter, the EPA could not
                rightfully reopen its adjudication.'').
                 \133\ Urban Air at 24 (citing Civil Aeronautics Bd. v. Delta Air
                Lines, 367 US 316, 321 (1961)).
                ---------------------------------------------------------------------------
                 EPA also received comment on whether EPA's actions were
                inappropriate because the Agency failed to satisfy the ``requirements
                of reasoned decision-making.'' Some commenters noted that EPA had taken
                the position in SAFE 1 that ``reducing criteria pollution is of
                overriding importance'' yet failed to ``consider[ ] the criteria-
                pollution and SIP consequences of its Waiver Withdrawal and Section 177
                Determination.'' \134\ Similarly, EPA received comments claiming that
                the decision to apply a new approach to the ACC program waiver section
                209(b)(1)(B) was both unnecessary and unjustified because, as EPA
                acknowledged in SAFE 1, the Agency has consistently posited that
                section 209(b)(1)(B) calls for determining whether the State needs its
                own regulatory program, separate from that of the federal government,
                not whether the State needs each specific standard or package of
                standards for which it seeks a waiver.\135\ One of these commenters
                pointed out that EPA also acknowledged that the phrase ``such State
                standards'' could reasonably remain the program-level interpretation
                (EPA's traditional interpretation) yet the Agency chose to adopt a new
                interpretation and apply it to the more than five-year old ACC program
                waiver, impacting expectations and reliance interests.
                ---------------------------------------------------------------------------
                 \134\ States and Cities at 8-9, 12.
                 \135\ Id. at 22.
                ---------------------------------------------------------------------------
                 The Agency also received comments on whether NHTSA's finding of
                preemption under EPCA in the joint action granted EPA authority to
                reconsider the ACC program waiver. Commenters argued that NHTSA is
                charged with interpreting and implementing EPCA and that its finding
                ``that Congress prohibited California's standards'' in the same action
                cannot be ignored.\136\ Still other commenters pointed to the language
                of section 209(b)(1) itself, where only three criteria are provided by
                which EPA can deny a waiver. As such, they argued, EPA cannot have
                broad, implicit authority to revoke a waiver on entirely different
                grounds than by which it may deny a waiver.\137\ The commenters also
                argued that the joint context of the action did not grant the Agency
                special authority to reconsider, explaining that ``[w]hat Congress
                directed EPA to consider when it wrote Section 209(b)(1) does not
                change depending on whether EPA acts alone or with another agency.''
                \138\ Some commenters also pointedly noted that SAFE 1's distinction
                between single-agency and joint actions is arbitrary and capricious and
                therefore not a valid basis for reconsideration because EPA stated it
                ``does not intend in future waiver proceedings concerning submissions
                of California programs in other subject areas to consider factors
                outside the statutory criteria in section 209(b)(1)(A)-(C),'' \139\ and
                because NHTSA and EPA now consider SAFE 1 as ``two severable actions.''
                \140\
                ---------------------------------------------------------------------------
                 \136\ See, e.g., CEI at 11.
                 \137\ States and Cities at 16-17.
                 \138\ Id. at 20. See also Twelve Public Interest Organizations
                app. 1 64-65.
                 \139\ Northeast States for Coordinated Air Use Management
                (NESCAUM), Docket No. EPA-HQ-OAR-2021-0257-0126 at 3; Twelve Public
                Interest Organizations app. 1 64-65; States and Cities at 20.
                 \140\ SCAQMD at 7 (citing 86 FR at 22439 n.40).
                ---------------------------------------------------------------------------
                B. Analysis: EPA Inappropriately Exercised Its Limited Authority To
                Reconsider
                 EPA finds it does have authority to reconsider waivers, although
                its reconsideration of previously-granted waivers is limited and
                circumscribed. In the context of adjudicatory decisions (as contrasted
                to rulemakings), administrative law principles and case law support
                limited reconsideration authority for waiver proceedings. For example,
                in Ivy Sports Med., LLC v. Burwell, 767 F.3d 81, 86, 93 (D.C. Cir.
                2014), the D.C. Circuit noted that where a statute ``does not contain
                an express provision granting [the agency] authority to reconsider,''
                ``administrative agencies are assumed to possess at least some inherent
                authority to revisit prior decisions, at least if done in a timely
                fashion,'' noting the baseline limitations of such inherent authority.
                And in Chapman v. El Paso Nat. Gas Co., 204 F.2d 46, 53-54 (D.C. Cir.
                1953), the D.C. Circuit made clear that once concluded, an adjudicatory
                decision granting a right ``may not be repudiated for the sole purpose
                of applying some quirk or change in administrative policy.'' \141\
                These precedents suggest that, while agencies do generally possess some
                inherent authority to reconsider previous adjudicatory decisions, that
                authority is limited in scope.
                ---------------------------------------------------------------------------
                 \141\ See also Am. Methyl, 749 F.2d 826, 835 (D.C. Cir. 1984)
                (``We have held that agencies have an inherent power to correct
                their mistakes by reconsidering their decisions within the period
                available for taking an appeal.''); Mazaleski v. Treusdell, 562 F.2d
                701, 720 (D.C. Cir. 1977) (``We have many times held that an agency
                has the inherent power to reconsider and change a decision if it
                does so within a reasonable period of time.'') (quoting Gratehouse
                v. United States, 512 F.2d 1104, 1109 (Ct. Cl. 1975)); Albertson v.
                FCC, 182 F.2d 397, 399 (D.C. Cir. 1950) (``in the absence of any
                specific limitation,'' reconsideration available ``within the period
                for taking an appeal''). See generally Daniel Bress, Note,
                Administrative Reconsideration, 91 VA. L. REV. 1737 (2005).
                ---------------------------------------------------------------------------
                 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.
                The 1967 legislative history provides some indication of congressional
                intent to preserve some implied authority for EPA to reconsider
                previous waiver decisions, but also to place limitations on it. This
                legislative history explains: ``[i]mplicit in this provision is the
                right of the [Administrator] 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.'' \142\ Thus, from the earliest days of the program it has been
                understood that any withdrawal of a waiver should be tied to the
                statutory criteria and California's compliance with them. This
                legislative history must be taken into account along with Congress's
                intent expressed in the 1977 legislative history, which, as discussed
                previously, sought to ensure deference to California and to strengthen
                that state's role in driving emissions-reducing technological
                innovation. Congress was also mindful to ensure the ability of other
                states to adopt California's standards.\143\ Ultimately, EPA concludes
                it has authority to reconsider previously-granted waivers, but that
                this authority may only be exercised sparingly. As discussed below,
                there are several considerations that support narrow authority to
                reconsider waiver grants.
                ---------------------------------------------------------------------------
                 \142\ S. Rep. No. 90-403, at 34 (1967).
                 \143\ See supra Section III.B.
                ---------------------------------------------------------------------------
                 First and most important, EPA believes its inherent authority to
                reconsider a waiver decision is
                [[Page 14349]]
                constrained by the three waiver criteria that must be considered before
                granting or denying a waiver request under section 209(b). It would be
                inappropriate and inconsistent with congressional intent for EPA to
                reconsider and withdraw a waiver on a ground outside the limited scope
                of those which Congress specified for EPA to consider when reviewing a
                waiver in the first place.\144\ In the few instances where the Agency
                reconsidered prior waiver decisions prior to SAFE 1, EPA focused its
                review on the section 209(b) statutory waiver criteria.\145\
                ---------------------------------------------------------------------------
                 \144\ See MEMA I, 627 F.2d at 1115 (noting that section 209(b)
                creates ``a narrowly circumscribed proceeding requiring no broad
                policy judgments'').
                 \145\ EPA initiated reconsideration of certain motor-cycle
                standards, under the third waiver prong, section 209(b)(1)(C), in
                order to ``vacate that portion of the waiver previously granted
                under section 209(b).'' 47 FR 7306, 7309 (February 18, 1982). EPA
                affirmed the grant of the waiver in the absence of ``findings
                necessary to revoke California's waiver of Federal preemption for
                its motorcycle fill-pipe and fuel tank opening regulations.'' Id. at
                7310.
                ---------------------------------------------------------------------------
                 A circumscribed approach to reconsideration of waivers is
                consistent with the deference to California's policy judgment that
                Congress built into the waiver process.\146\ Congress explicitly
                required that EPA ``shall'' grant the waiver unless one of three
                limited criteria are met. The use of the word ``shall'' (versus
                ``may'') was heavily debated by the enacting Congress, with the
                successful proponents of ``shall'' explaining that such language would
                ``guarantee'' that California could regulate with the burden placed on
                EPA to demonstrate why California should not be allowed to go beyond
                federal limitations.\147\ Congress's legislative enactments since its
                creation of the waiver program--including adding section 177 to allow
                other states to adopt California's standards in 1977 and section
                209(e)(2)(A) to create parallel deference for nonroad engines and
                vehicles in 1990--reinforce the important role it envisioned for, and
                deference it afforded to, California.\148\
                ---------------------------------------------------------------------------
                 \146\ See MEMA I, 627 F.2d at 1124-25 (describing Congress's
                intent to defer to California's judgments regarding its motor
                vehicle program).
                 \147\ H.R. Rep. No 90-728 (``Are we now to tell California that
                we don't quite trust her to run her own program, that big government
                should do it instead?'').
                 \148\ 40 FR 23104; 58 FR 4166.
                ---------------------------------------------------------------------------
                 In SAFE 1, EPA argued instead that deference to California was not
                merited where the Agency was interpreting its ``own statute.'' \149\
                But in Title II of the Clean Air Act, Congress envisioned two
                standards--California and Federal.\150\ Congress recognized
                California's early attempts to address motor vehicle emissions intended
                to address its extraordinary environmental conditions as well as being
                a laboratory for motor vehicle emissions control.\151\ Congress called
                for EPA deference to California in implementing section 209(b) by not
                only limiting EPA review of California waiver requests to three
                specific criteria but also instructing that EPA is ``to afford
                California the broadest possible discretion in selecting the best means
                to protect the health of its citizens and the public welfare.'' \152\
                Similarly, ``[t]he Administrator, . . . is not to overturn California's
                judgment lightly. Nor is he to substitute his judgment for that of the
                State.'' \153\ Additionally, the D.C. Circuit has explained that
                ``Congress consciously chose to permit California to blaze its own
                trail with a minimum of federal oversight'' and ``[t]he statute does
                not provide for any probing substantive review of the California
                standards by federal officials.'' \154\ Further, ``[t]here is no
                indication in either the statute or the legislative history that . . .
                the Administrator is supposed to determine whether California's
                standards are in fact sagacious and beneficial.'' \155\ Thus, early in
                the waiver program's history, EPA explained the deference that Congress
                intended for the Agency's review of waiver requests by noting that it
                would feel constrained to approve a California approach to a problem
                that the EPA Administrator might not feel able to adopt at the federal
                level as a regulator. EPA explained that the balancing of risks and
                costs against potential benefits from reduced emissions is a central
                policy decision for any regulatory agency and substantial deference
                should be provided to California's judgement on such matters.\156\
                ---------------------------------------------------------------------------
                 \149\ 84 FR at 51344 n.268.
                 \150\ Motor vehicles are ``either `federal cars' designed to
                meet the EPA's standards or `California cars' designed to meet
                California's standards.'' Engine Mfrs. Ass'n v. EPA, 88 F.3d 1075,
                1079-80, 1088 (D.C. Cir. 1996) (``Rather than being faced with 51
                different standards, as they had feared, or with only one, as they
                had sought, manufacturers must cope with two regulatory
                standards.'').
                 \151\ 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).
                 \152\ H.R. Rep. No. 95-294, at 301-02 (1977).
                 \153\ H.R. Rep. No. 95-294, at 302 (1977), reprinted in 1977
                U.S.C.C.A.N. at 1381)).
                 \154\ Ford Motor Co. v. EPA, 606 F.3d 1293, 1297, 1300 (D.C.
                Cir. 1979).
                 \155\ Id. at 1302.
                 \156\ 40 FR at 23104.
                ---------------------------------------------------------------------------
                 In addition, limiting reconsideration of waivers undergirds
                Congress' intent that California would be a laboratory for the country
                driving emissions-reducing technological innovation when it created the
                program in the first place. As the D.C. Circuit explained in MEMA I:
                ``The history of congressional consideration of the California waiver
                provision, from its original enactment up through 1977, indicates that
                Congress intended the State to continue and expand its pioneering
                efforts at adopting and enforcing motor vehicle emission standards
                different from and in large measure more advanced than the
                corresponding federal program; in short, to act as a kind of laboratory
                for innovation.'' \157\ Indeed, broad authority to reconsider waiver
                grants could undermine the very structure that Congress built in Title
                II. Specifically, while EPA does not consider section 177 when
                reviewing waiver requests under section 209, Congress built a structure
                wherein EPA must grant California a waiver under section 209 unless one
                of the three statutory criteria are met, and then other states may
                adopt California's standards under section 177 as part of their overall
                air quality programs. Limited inherent authority to reconsider
                previously-granted waivers as described in this action is important to
                the success of Congress's structure.
                ---------------------------------------------------------------------------
                 \157\ MEMA I, 627 F.2d at 110-11.
                ---------------------------------------------------------------------------
                 Finally, even the sentence in the legislative history that suggests
                EPA has inherent reconsideration authority in the first place, and
                which SAFE 1 relied on for its assertion of inherent reconsideration
                authority, lends weight to the view that this authority is limited.
                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.'' \158\ That specific circumstance--where California does not
                comply with the conditions of a waiver--should not be expanded to
                include a gaping hole for discretionary administrative policy changes.
                ---------------------------------------------------------------------------
                 \158\ S. Rep. No. 90-403, at 34 (1967).
                ---------------------------------------------------------------------------
                 Given all of the above considerations, several principles emerge.
                EPA's authority to reconsider a grant of a waiver, which is an
                adjudicatory action by the Administrator, is not open-ended. Any
                reconsideration is constrained to the criteria that Congress set out in
                section 209(b). Even within those statutory criteria, considering all
                of the factors that weigh in favor of a narrow interpretation of the
                Agency's authority and the importance of not disrupting Congress's
                scheme, EPA believes reconsideration is limited to situations where the
                Agency has made
                [[Page 14350]]
                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 if the bases for EPA's reconsideration did satisfy one of the
                foregoing conditions such that reconsideration may be appropriate,
                during that reconsideration EPA believes it should consider the passage
                of time and reliance interests. In the context of CAA waiver grants in
                general, and the 2013 ACC program waiver grant in particular,
                California is relying on its standards to meet short- and long-term
                emission reduction goals.\159\ In addition, by the time the SAFE
                proposal was published, twelve states had already adopted at least one
                or both of the GHG and ZEV standards.\160\ Several of these states
                incorporated these adopted standards into their SIPs.\161\ Several
                automakers and industry groups have also indicated reliance on these
                standards.\162\
                ---------------------------------------------------------------------------
                 \159\ States and Cities at 17-18.
                 \160\ Id. at 17.
                 \161\ Id. at 10; Wisconsin Department of Natural Resources
                (Wisconsin), Docket No. EPA-HQ-OAR-2021-0257-0095 at 1 (``These
                standards provide important and necessary reductions in both GHG and
                criteria pollutant emissions needed to meet state and local air
                quality goals and address federal CAA requirements.''); Connecticut
                at 2 (``These programs enable long-term planning and yield critical
                emission reductions that are critical to meeting Connecticut's
                climate goals as well as our statutory obligations to reach
                attainment with the ozone NAAQs.''); Delaware 2 (``Delaware adopted
                the California LEV regulation and incorporated the LEV and GHG
                standards into the State Implementation Plan. . . . Delaware will
                not meet air quality goals without more protective vehicle emission
                standards.''); Maine at 1 (``[T]he LEV program was initially created
                to help attain and maintain the health-based National Ambient Air
                Quality Standards (NAAQS) . . . The California ZEV and GHG programs
                enable long-term planning for both the states and the regulated
                community and have been drivers of technological change across the
                industry.'').
                 \162\ E.g., Ford at 1; Tesla at n.5, 4; Rivian (as a member of
                NCAT) at 13-14.
                ---------------------------------------------------------------------------
                 Reconsideration thus must carefully consider the factors noted and
                should not be undertaken where immense degrees of uncertainty are
                introduced in settled expectations of California, other states, and
                regulated industry or to allow for the continual questioning of EPA's
                decisions, thus impairing needed finality. Such reconsideration could
                frustrate congressional intent in designing the waiver program and
                ultimately discourage reliance by the recipient of EPA's waiver
                decision (CARB), states that may have adopted CARB's regulations under
                the terms of section 177 (and are permitted to enforce the regulations
                once EPA grants a waiver to California) as well as the regulated
                industry.
                 We now turn to whether the reconsideration in SAFE 1 was a proper
                exercise of EPA's inherent reconsideration authority. As an initial
                matter, SAFE 1 did not assert that any clerical or factual error or
                mistake was made in the 2013 ACC program waiver. Nor did SAFE 1 point
                to any evidence showing 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. For example, SAFE 1 did not assert that California
                was not complying with the terms of the waiver. Instead, SAFE 1's
                reconsideration was premised on retroactive application of
                discretionary policy changes. Therefore, EPA believes it did not
                appropriately exercise its inherent authority in SAFE 1 to reconsider
                the prior ACC program waiver. Upon reconsideration, and as further
                shown in Sections V and VI, EPA now believes that SAFE 1 amounted to an
                improper exercise of the Agency's limited inherent authority to
                reconsider.\163\
                ---------------------------------------------------------------------------
                 \163\ EPA acknowledges that, in the SAFE 1 proceedings, it had
                noted that at the time of proposal that CARB had given notice that
                it was considering amending its ``deemed to comply'' provision and
                that by the time of SAFE 1, California had entered into agreements
                with several automobile manufacturers to accept less stringent
                standards than the California program or the Federal standards as
                promulgated in 2012. As noted in SAFE 1, EPA believed that neither
                of these matters were necessary for EPA's action in SAFE 1, but that
                they provided further support for the action. 84 FR at 51334 n.230.
                By this action, EPA finds that neither of these matters amounted to
                a change in circumstances or conditions associated with the three
                waiver criteria and EPA's evaluation of the criteria in the ACC
                program waiver. EPA did not predicate its ACC program waiver on
                CARB's deemed-to-comply provision or any changes to the deemed-to-
                comply provision. (EPA does not take a position as to whether that
                provision has changed in its purpose as a result of CARB's 2018
                amendment). Further, to the extent CARB utilized a deemed-to-comply
                provision or uses non-regulatory mechanisms to achieve its air
                quality objectives, this had no bearing on EPA's assessment of
                whether CARB has a need for its standards under the second waiver
                prong at the time of SAFE 1 or now.
                ---------------------------------------------------------------------------
                 SAFE 1 gave two primary reasons for withdrawing the 2013 ACC
                program waiver. Neither was an appropriate basis for reconsideration.
                First, SAFE 1 premised the revocation on its interpretation of the
                second waiver prong, section 209(b)(1)(B), that called for the Agency's
                scrutiny of specific standards under the waiver rather than
                California's program as a whole. As explained in detail in Section V of
                this final action, that statutory interpretation is flawed, and EPA
                does not believe a new statutory interpretation should be the basis of
                reconsidering the grant of a waiver.
                 SAFE 1 premised the withdrawal of the ACC program waiver under
                section 209(b)(1)(B) on the perceived lack of record support on the
                causal link between GHG emission standards and air quality conditions
                in California.\164\ Yet, the underlying record from the ACC program
                waiver, and the record of SAFE 1, have shown that CARB's ZEV sales
                mandate and GHG emission standards are designed to address California's
                serious air quality problems, including both its NAAQS pollutants and a
                variety of climate impacts from GHG emissions. As discussed in greater
                detail in Section V, EPA has since at least 2009 recognized that
                greenhouse gas pollution exacerbates criteria pollution, and climate
                change impacts on California's air quality conditions (e.g., heat
                exacerbation of ozone).\165\ The ACC program was especially designed to
                [[Page 14351]]
                address both criteria and GHG pollution, including the effects of GHG
                pollution on criteria pollution in California.\166\ As also further
                discussed in Section V, in SAFE 1 the Agency dismissed the criteria
                pollutant benefits of California's ZEV sales mandate requirements based
                on a snippet from the 2012 waiver request, taken out of context.\167\
                This was also remarkable considering EPA's prior waivers for ZEV sales
                mandate requirements that demonstrated criteria pollutant emissions
                reduction benefits.\168\ The record also includes information that
                demonstrates that a withdrawal of the waiver for the GHG emission
                standards and ZEV sales mandate (and leaving the Federal GHG standards
                at the 2020 levels as proposed in SAFE) would increase NOx emissions in
                the South Coast air basin alone by 1.24 tons per day.\169\ In sum, EPA
                opted to elide the available ample technical support from the ACC
                program waiver proceedings. EPA's factual predicates in SAFE 1--that
                there was no criteria pollutant benefit of the GHG standards and ZEV
                sales mandate--for reconsideration based on the second waiver prong
                were simply inaccurate and inappropriate. Reconsideration was thus
                improper on this basis because there were no factual errors in the ACC
                program waiver and EPA should not be exercising authority to reconsider
                prior valid waivers that present no factual errors based on different
                statutory interpretations.
                ---------------------------------------------------------------------------
                 \164\ ``California's approach in its ACC program waiver request
                differed from the state's approach in its waiver request for MY 2011
                and subsequent heavy-duty tractor-trailer GHG standards, where
                California quantified NOX emissions reductions attributed
                to GHG standards and explained that they would contribute to PM and
                ozone NAAQS attainment.'' 84 FR at 51337 n.252 (citing 79 FR at
                46256, 46257 n.15, 46261, 46262 n.75).
                 \165\ The first HD GHG emissions standard waiver related to
                certain new 2011 and subsequent model year tractor-trailers. 79 FR
                46256 (August 7, 2014). CARB projected, for example, ``reductions in
                NOX emissions of 3.1 tons per day in 2014 and one ton per
                day in 2020'' in California. Id. at 46261. 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).
                 CARB also noted the scientific findings since EPA's 2009 GHG
                waiver including the report titled ``Our Changing Climate 2012
                Vulnerability &Adaptation to the Increasing Risks from Climate
                Change in California.'' The summary report highlights new insights
                for the energy, water, agriculture, public health, coastal,
                transportation, and ecological resource sectors that are vital to
                California residents and businesses. The study also predicts that
                peak concentrations of dangerous airborne particles will increase in
                the San Joaquin Valley because of climate change on wind patterns.
                This study provides further evidence of what is known as the
                ``climate penalty,'' where rising temperatures increase ground-level
                ozone and health-damaging particles, despite the reductions achieved
                by successful programs targeting smog-forming emissions from cars,
                trucks, and industrial sources. Id. at 8-9. See also ``The Impacts
                of Climate Change on Human Health in the United States: A Scientific
                Assessment'' Chapter 3 Air Quality Impacts--Key Finding (``Climate
                change will make it harder for any given regulatory approach to
                reduce ground-level ozone pollution in the future as meteorological
                conditions become increasingly conducive to forming ozone over most
                of the United States. Unless offset by additional emissions
                reductions, these climate-driven increases in ozone will cause
                premature deaths, hospital visits, lost school days, and acute
                respiratory symptoms.'') at https://health2016.globalchange.gov/air-quality-impacts; Chapter 13: Air Quality, Fourth National Climate
                Assessment at https://nca2018.globalchange.gov/chapter/13/.
                 \166\ 2012 Waiver Request at 1, 9-11, 15-17 (``[A]s detailed
                below, the ACC program will result in reductions of both criteria
                pollutants and GHG emissions that, in the aggregate, are more
                protective than the federal standards that exist.''). 78 FR at 2122
                ([T]he ACC program will result in reductions of both criteria
                pollutants and GHG emissions.'').
                 \167\ 84 FR at 51337 (quoting CARB's statement that ``[t]here is
                no criteria emissions benefit from including the ZEV proposal in
                terms of vehicle (tank-to-wheel or TTW) emissions.''). As explained
                in more detail below, this statement merely reflected how CARB
                attributed pollution reductions between its different standards and
                compliance mandates, not the reality of how those standards and
                mandates actually drive pollution reductions.
                 \168\ 58 FR 4156. 71 FR 78190 (December 28, 2006); 75 FR 11878
                (March 12, 2010) and 76 FR 61095 (October 3, 2011).
                 \169\ States and Cities at 10.
                ---------------------------------------------------------------------------
                 Second, SAFE 1 premised its revocation on NHTSA's finding of
                preemption under EPCA. This, too, was an inappropriate ground for
                reconsideration. As earlier noted, 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). Preemption under EPCA is not one of these
                criteria and was not considered in CARB's ACC program waiver request or
                in EPA's granting of that waiver. In fact, in its waiver grant, the
                Agency expressly found that consideration of preemption under EPCA
                would be inappropriate and unnecessary. In SAFE 1, the Agency did not
                premise its consideration of preemption under EPCA on any of the three
                statutory criteria. Therefore, EPA believes that SAFE 1 was not a
                proper exercise of the authority to reconsider on this basis, and any
                subsequent action in SAFE 1 to withdraw the ACC program waiver was
                inappropriate.
                 Although SAFE 1 was an inappropriate exercise of inherent authority
                given that the Agency did not correct a factual error and there was no
                change in factual circumstances so significant that the propriety of
                the waiver would be called into doubt, it is nevertheless relevant to
                note that SAFE 1 did not give appropriate consideration to the passage
                of time and the reliance interests that had developed between the
                granting and the revocation of the ACC program waiver. Several
                automakers and industry groups have also indicated reliance on these
                standards, as previously discussed.\170\ California and section 177
                states were, by the time of the reconsideration, into the long-term
                plans they had developed relying on the ACC program waiver
                standards.\171\ California and other states rely on waivers that EPA
                has approved to meet short- and long-term emission reduction
                goals.\172\ In addition, by the time the SAFE proposal was published,
                twelve states had already adopted at least one or both of the GHG and
                ZEV standards.\173\ Several of these states incorporated these adopted
                standards into their SIPs.\174\
                ---------------------------------------------------------------------------
                 \170\ E.g., Ford at 1; Tesla at n.5, 4; Rivian (as a member of
                NCAT) at 13-14. EPA notes that it received limited comment on
                whether reliance interests had formed since the issuance of SAFE 1
                but nothing to demonstrate error in the findings regarding section
                209(b)(1)(C) made within the ACC program waiver. See Toyota, Docket
                No. EPA-HQ-OAR-2021-0381 (``Reinstatement of California's waiver for
                model years 2021 and 2022 poses significant lead time challenges
                considering that 2021 model year is well underway, and 2022 model
                year vehicles are generally already designed, sourced, certified to
                various regulatory requirements, and ready to begin production.'').
                Further, as discussed elsewhere, the short passage of time since the
                promulgation of SAFE 1 and ongoing litigation over that action has,
                as automakers have noted in that briefing, prevented automakers from
                relying on the waiver revocation. See also Twelve Public Interest
                Organizations at 11 (noting filings by automakers suggesting lack of
                reliance on the waiver withdrawal).
                 \171\ E.g., States and Cities at 17 (the length between the
                waiver grant and reconsideration was too long ``by any measure.'');
                Twelve Public Interest Organizations at app. 36. EPA acknowledges
                the commenter who argued that ``timeliness depends on reliance
                interests'' and, because the standards were not final before the
                MTE, the time period at issue is the four months between the MTE and
                the SAFE 1 proposal. Urban Air at 24. EPA also received comment that
                disagreed with this accounting of time stating that timeliness for
                reconsidering an adjudication is measured from the date of the
                agency's decision, not from the date of activity resulting from that
                decision. E.g., Am. Methyl, 749 F.2d at 835 (tethering timeliness to
                period for appeal of agency decision).'' Twelve Public Interest
                Organizations app. 1 at 38. EPA believes it is not necessary to
                resolve the permissible amount of time, or the existence or lack of
                a bright line, that may pass before reconsideration of its prior
                adjudication is no longer appropriate. However, EPA did not
                ``condition'' its ACC program waiver on any subsequent actions,
                including the MTE, which explicitly applied to the federal
                standards. See 78 FR at 2137. EPA expects its waiver adjudications
                to be final and that appropriate reliance may flow to affected
                parties. Moreover, in this instance EPA did not make any final
                determination regarding the third waiver prong at section
                209(b)(1)(C). EPA notes that it has administered the California
                waiver program for a number of decades and acknowledges that
                emission standards continue to evolve at the California and the
                federal levels. This evolution in the standards has rested on
                regulatory certainty and the enforceability of CARB's emission
                standards once a waiver has been issued by EPA under section 209(b)
                of the CAA. As for the inclusion of the deemed-to-comply provision
                in the California standards, California provided documentation
                demonstrating that the deemed-to-comply provision was reliant upon
                the federal standards having a certain level of stringency, a fact
                that EPA had recognized. See States and Cities at 18-19 n. 14, 57-
                60. EPA found that the California standards were feasible even
                without the deemed-to-comply provision, 78 FR at 2138, making it
                irrelevant to the waiver grant. California's own actions with
                respect to its standards, such as its independent review of the ACC
                program, cannot disturb California's or other state's reliance on
                the federal waiver.
                 \172\ States and Cities at 17-18.
                 \173\ Id. at 17.
                 \174\ Id. at 10; Wisconsin Department of Natural Resources
                (Wisconsin), Docket No. EPA-HQ-OAR-2021-0257-0095 at 1 (``These
                standards provide important and necessary reductions in both GHG and
                criteria pollutant emissions needed to meet state and local air
                quality goals and address federal CAA requirements.''); Connecticut
                at 2 (``These programs enable long-term planning and yield critical
                emission reductions that are critical to meeting Connecticut's
                climate goals as well as our statutory obligations to reach
                attainment with the ozone NAAQs.''); Delaware 2 (``Delaware adopted
                the California LEV regulation and incorporated the LEV and GHG
                standards into the State Implementation Plan. . . . Delaware will
                not meet air quality goals without more protective vehicle emission
                standards.''); Maine at 1 (``[T]he LEV program was initially created
                to help attain and maintain the health-based National Ambient Air
                Quality Standards (NAAQS) . . . The California ZEV and GHG programs
                enable long-term planning for both the states and the regulated
                community and have been drivers of technological change across the
                industry.'').
                ---------------------------------------------------------------------------
                 SAFE 1 barely mentioned these reliance interests, explaining only
                that the Agency ``will consider whether and how to address SIP
                implications of this action, to the extent that they exist, in separate
                actions; EPA believes that it is not necessary to resolve those
                implications in the course of this action.'' \175\ EPA now believes
                that,
                [[Page 14352]]
                when exercising its inherent authority to reconsider the 2013 waiver
                decision, it was inappropriate to ignore these possible reliance
                interests and to ``resolve'' any potential implications at a later
                time. In the SAFE 1 context, while it was not necessary to resolve the
                status of every SIP, it was inappropriate to not even consider the
                reliance interests raised by the adoption of California standards by
                section 177 states (including, but not limited to, their adoption into
                SIPs). EPA has consistently recognized the importance of long-term
                planning in the attainment and maintenance of NAAQS.\176\ Given the
                long-term nature of these plans, it is ``challenging (if not
                impossible) to change them quickly,'' and any changes in one part of a
                SIP can affect multiple sectors of the economy.\177\
                ---------------------------------------------------------------------------
                 \175\ Id. at 51324 n.167.
                 \176\ EPA is responsible for approving SIPs and SIP amendments,
                which span years. See, e.g., 82 FR 42233 (September 7, 2017)
                (approval of Maine's SIP revision including updates to be consistent
                with California's updated LEV program); 80 FR 13768 (March 17, 2015)
                (approval of Connecticut's SIP revision, including the adoption of
                elements of California's LEV program). For example, states with
                areas that achieve attainment for any air pollutant must submit for
                EPA approval a revised SIP that sets out the State's plan for
                maintaining attainment for at least ten years after the
                redesignation. At the end of that ten-year period, the State must
                submit another ten-year maintenance plan to EPA for approval. 42
                U.S.C. 7505a.
                 \177\ Twelve Public Interest Organizations app. 1 at 29, 30.
                Several states also commented, during this reconsideration, that
                they rely on the California GHG standards and ZEV sales mandate to
                reach their own state emission reduction goals. E.g., Connecticut at
                2 (``Reducing GHG emissions from the transportation sector is
                required to achieve Connecticut's economy-wide targets of at least
                45 percent below 2001 levels by 2030 and 80 percent below 2001
                levels by 2050, as required by the 2008 Global Warming Solutions Act
                (GWSA) and the 2018 Act Concerning Climate Change Planning and
                Resiliency.''); Minnesota at 2 (``[California's standards] are
                vitally important in helping our state achieve our GHG emission
                reduction goals and reduce other harmful air pollutants, especially
                in communities of color and lower-income communities, which are
                disproportionately impacted by vehicle pollution. The MPCA found
                that these rules are needed to address GHG emissions in our state
                and take steps towards achieving Minnesota's statutory Next
                Generation Energy Act GHG reduction goals. On May 7, 2021, an
                independent Administrative Law Judge affirmed the MPCA findings.'');
                Maine at 1 n.3 (``Maine statute at 38 M.R.S 576-A establishes tiered
                GHG emission reduction requirements culminating in gross annual
                reductions of at least 80% from 1990 baseline levels.'').
                ---------------------------------------------------------------------------
                 As noted above, EPA also received other comments regarding reliance
                interests, including those noting that the midterm evaluation (MTE) was
                an indication that the technological feasibility of the GHG emission
                standards was not a settled matter and hence no certainty or reliance
                could accrue. EPA, however, did not ``condition'' its ACC program
                waiver on any subsequent actions, including the MTE.\178\ EPA expects
                its waiver adjudications to be final and that appropriate reliance may
                flow to affected parties. Moreover, in this instance EPA did not make
                any final determination regarding the third waiver prong at section
                209(b)(1)(C). EPA notes that it has administered the California waiver
                program for a number of decades and acknowledges that emission
                standards continue to evolve at the California and the federal levels.
                This evolution in the standards has rested on regulatory certainty and
                the enforceability of CARB's emission standards once a waiver has been
                issued by EPA under section 209(b) of the CAA.
                ---------------------------------------------------------------------------
                 \178\ See 78 FR at 2137.
                ---------------------------------------------------------------------------
                 EPA's historic practice of properly affording broad discretion to
                California has meant that in almost fifty years of administering the
                California waiver program the Agency had never withdrawn any waiver
                prior to SAFE 1. And while SAFE 1 cited prior reconsideration actions
                as support for the Agency's authority to reconsider prior waiver
                decisions, as previously noted, EPA has historically limited
                reconsideration of prior waived standards to statutory criteria and
                most important, none of these prior reconsideration actions resulted in
                a revocation.\179\ As further shown in Sections V and VI, SAFE 1 was
                the result of a ``probing substantive review of the California
                standards,'' with the Agency substituting its own judgment for
                California's contrary to both congressional exhortation of deference to
                California and the Agency's review practice.
                ---------------------------------------------------------------------------
                 \179\ See, e.g., 43 FR at 7310 (affirming the grant of the
                waiver in the absence of ``findings necessary to revoke California's
                waiver of Federal preemption for its motorcycle fill-pipe and fuel
                tank opening regulations.'').
                ---------------------------------------------------------------------------
                 This present reconsideration is an appropriate exercise of the
                Agency's reconsideration authority. It is not at all clear that the
                reasons for limiting reconsideration of waiver grants apply to the same
                degree to reconsideration of waiver denials and withdrawals. However,
                EPA need not resolve the question in this action, because this action
                falls well within the bounds of even the limited authority this action
                concludes the Agency possesses for reconsideration of waiver grants.
                First, this action corrects factual errors made in the SAFE 1 waiver
                withdrawal. Specifically, even under SAFE 1's flawed interpretation of
                section 209(b)(1)(B), SAFE 1 ignored facts demonstrating that
                California does need the specific standards at issue to meet compelling
                and extraordinary conditions. Second, in this reconsideration EPA
                properly constrains its analysis to whether SAFE 1 made one of the
                three statutory findings necessary to deny a waiver. Third, this
                reconsideration is timely with respect to the finalization of SAFE 1
                and limited, if any, reliance interests have developed as a result of
                SAFE 1 (which has been subject to judicial review since its
                promulgation).
                C. Conclusion
                 In SAFE 1, EPA inappropriately exercised its limited inherent
                authority to reconsider the ACC program waiver for several reasons. EPA
                believes its exercise of reconsideration authority to reinterpret the
                language of section 209(b)(1)(B) was not taken to correct any factual
                or clerical error or based upon factual circumstances or conditions
                related to the waiver criteria evaluated when the waiver was granted
                that have changed so significantly that the propriety of the waiver
                grant is called into doubt. Rather, as discussed in detail in Section
                V, it was based upon a flawed statutory interpretation and a
                misapplication of the facts under that interpretation. Likewise, EPA's
                decision to reconsider the ACC program waiver based on NHTSA's
                rulemaking within SAFE 1, which raised issues beyond the statutory
                waiver criteria, was inappropriate. For these reasons EPA now believes
                it is appropriate to rescind its actions within SAFE 1.
                V. The SAFE 1 Interpretation of Section 209(b)(1)(B) was Inappropriate
                and, in any Event, California met its Requirements
                 Even if SAFE 1's reconsideration of the 2013 program waiver grant
                was appropriate, EPA concludes for two independent reasons that its
                waiver withdrawal in SAFE 1 based upon its new statutory interpretation
                was flawed. First, EPA concludes that the SAFE 1 interpretation of the
                second waiver prong was not an appropriate reading of that second
                waiver prong, section 209(b)(1)(B). It bears noting that the
                traditional interpretation is, at least, the better interpretation.
                Informed by but separate from the factual analysis discussed next, the
                Agency finds that the new interpretation set out in SAFE 1 was
                inconsistent with congressional intent and contrary to the purpose of
                section 209(b). Under the traditional interpretation of the second
                waiver prong, California's need for its own motor vehicle program,
                including its GHG emission standards and ZEV sales mandate, to meet
                compelling and extraordinary conditions is clear and the
                [[Page 14353]]
                waiver should not have been withdrawn.
                 Second, even if the interpretation in SAFE 1 were appropriate, EPA
                concludes that SAFE 1 incorrectly found that California did not have a
                need for its specific standards. EPA has evaluated California's need
                for both requirements by applying both the traditional and the SAFE 1
                interpretations of section 209(b)(1)(B). In doing so, EPA reviewed the
                record from the ACC program waiver proceedings, including CARB's ACC
                program waiver request and supporting documents, as well as the
                comments received as part of the SAFE 1 proceeding and the comments
                received under the present reconsideration of SAFE 1.\180\ The record
                review focused on salient pronouncements and findings in the ACC
                program waiver decision, such as the relationship of both criteria and
                GHG pollutants and the impacts of climate change on California's
                serious air quality conditions. For example, the effects of climate
                change and the heat exacerbation of tropospheric ozone is well
                established. California's ACC program is established, in part, to
                address this. California's program, including its GHG emission
                standards, is also designed to address upstream criteria emission
                pollutants. The review did so primarily because SAFE 1 premised the
                withdrawal of the GHG standards at issue on the lack of a causal link
                between GHG standards and air quality conditions in California. The
                review included EPA's prior findings regarding heat exacerbation of
                ozone, a serious air quality issue recognized by EPA as presenting
                compelling and extraordinary conditions under the second waiver prong.
                ---------------------------------------------------------------------------
                 \180\ EPA notes that it reviewed the factual record within the
                ACC program waiver proceeding and finds there was no factual error
                in its evaluation of whether CARB's standards satisfied the second
                waiver prong. EPA also notes, merely as confirming the finding it
                made at the time of the ACC program waiver but not for purposes of
                making a new factual finding from that made at the time of the ACC
                program waiver decision, that the record and information contained
                in the SAFE 1 proceeding as well as the record and information
                contained in the Agency's reconsideration of SAFE 1 (including late
                comments submitted during the SAFE 1 proceeding and, in some cases,
                resubmitted during the Agency's reconsideration of SAFE 1) at each
                point in time clearly demonstrates the need of California's
                standards (whether evaluated as a program or as specific standards)
                to meet compelling and extraordinary conditions within California.
                ---------------------------------------------------------------------------
                 On completion of this review, EPA finds no basis for discounting
                the ample record support on California's need for both the GHG
                standards and the ZEV sales mandate to address compelling and
                extraordinary conditions in California when using both the traditional
                and SAFE 1 interpretation to the second waiver prong. Additionally,
                because of the way CARB's motor vehicle emission standards operate in
                tandem and are designed to reduce both criteria and GHG pollution and
                the ways in which GHG pollution exacerbates California's serious air
                quality problems, including the heat exacerbation of ozone, the Agency
                in SAFE 1 should not have evaluated California's specific ``need'' for
                GHG standards. In sum, in reconsidering SAFE 1, and after having now
                reviewed and evaluated the complete factual record, EPA reaffirms that
                California needs the GHG standards and ZEV sales mandate at issue to
                ``meet compelling and extraordinary conditions.''
                A. Historical Practice
                 Under section 209(b)(1)(B), EPA shall not grant a waiver if
                California ``does not need such State standards to meet compelling and
                extraordinary conditions.'' For nearly the entire history of the waiver
                program, EPA has read the phrase ``such State standards'' in section
                209(b)(1)(B) as referring back to standards ``in the aggregate,'' in
                the root paragraph of section 209(b)(1), which calls for California to
                make a protectiveness finding for its standards. EPA has interpreted
                the phrase ``in the aggregate'' as referring to California's program as
                a whole, rather than each State standard, and as such not calling for
                the Agency's standard-by-standard analysis of California's waiver
                request.\181\ EPA has thus reasoned that both statutory provisions must
                be read together so that the Agency reviews the same standards that
                California considers in making its protectiveness determination and to
                afford California discretion.\182\ The D.C. Circuit has also stated
                that ``[t]he expansive statutory language gives California (and in turn
                EPA) a good deal of flexibility in assessing California's regulatory
                needs. We therefore find no basis to disturb EPA's reasonable
                interpretation of the second criterion.'' \183\
                ---------------------------------------------------------------------------
                 \181\ ``The interpretation that my inquiry under (b)(1)(B) goes
                to California's need for its own mobile source program is borne out
                not only by the legislative history, but by the plain meaning of the
                statue as well.'' 49 FR at 18890.
                 \182\ 74 FR at 32751 n. 44;.32761 n.104. EPA cited Entergy Corp.
                v. Riverkeeper, Inc., 129 S. Ct. 1498 (2009) (``That view governs if
                it is a reasonable interpretation of the statute--not necessarily
                the only possible interpretation, nor even the interpretation deemed
                most reasonable by the courts''), and Chevron U.S.A. Inc. v. Natural
                Resources Defense Council, Inc., 467 U.S. 837, 843-844 (1984).)
                (``It seems to us, therefore, that the phrase ``best available,'''
                even with the added specification ``for minimizing adverse
                environmental impact,''' does not unambiguously preclude cost-
                benefit analysis.''). See also 78 FR at 2126-2127 n. 78.
                 \183\ Am. Trucking Ass'n v. EPA, 600 F.3d 624, 627 (D.C. Cir.
                2010) (ATA v. EPA). See also Dalton Trucking v. EPA, No. 13-74019
                (9th Cir. 2021) (``The EPA was not arbitrary and capricious in
                declining to find that `California does not need such California
                standards to meet compelling and extraordinary conditions,' Sec.
                7543(e)(2)(A)(ii), under the alternative version of the needs test,
                which requires `a review of whether the Fleet Requirements are per
                se needed to meet compelling and extraordinary conditions,' 78 FR at
                58,103. The EPA considered `the relevant factors,' Motor Vehicle
                Mfrs. Ass'n of U.S. v. State Farm Mut. Auto. Ins. Co., Inc., 463
                U.S. 29, 42-43 (1983), including statewide air quality, 78 FR
                58,104, the state's compliance with federal National Ambient Air
                Quality standards for ozone and PM2.5 on a statewide
                basis, id. at 58,103-04, the statewide public health benefits, id.
                at 58,104, and the utility of the Fleet Requirements in assisting
                California to meet its goals, id. at 58,110. Contrary to Dalton's
                argument, the EPA did not limit its review to two of California's
                fourteen air quality regions. The EPA examined the relevant data
                provided by CARB, and it articulated a `satisfactory explanation for
                its action including a rational connection between the facts found
                and the choice made.' See Motor Vehicle Mfrs. Ass'n of U.S., Inc.,
                463 U.S. at 43, 103 S.Ct. 2856 (cleaned up).'').
                ---------------------------------------------------------------------------
                 In addressing the Agency's reading of section 209(b)(1)(B), for
                example, in the 1983 LEV waiver request EPA explained that:
                 This approach to the ``need'' criterion is also consistent with
                the fact that because California standards must be as protective as
                Federal standards in the aggregate, it is permissible for a
                particular California standard or standards to be less protective
                than the corresponding Federal standard. For example, for many
                years, California chose to allow a carbon monoxide standard for
                passenger cars that was less stringent than the corresponding
                Federal standard as a ``trade-off'' for California's stringent
                nitrogen oxide standard. Under a standard of review like that
                proposed by MVMA/AIAM, EPA could not approve a waiver request for
                only a less stringent California standard because such a standard,
                in isolation, necessarily could be found to be contributing to
                rather than helping, California's air pollution problems.\184\
                ---------------------------------------------------------------------------
                 \184\ 58 FR 4166, LEV Waiver Decision Document at 50-51.
                 In 1994, EPA again had cause to explain the Agency's reading of
                section 209(b)(1)(B) in the context of California's particulate matter
                ---------------------------------------------------------------------------
                standards waiver request:
                 [T]o find that the `compelling and extraordinary conditions'
                test should apply to each pollutant would conflict with the
                amendment to section 209 in 1977 allowing California to select
                standards `in the aggregate' at least as protective as federal
                standards. In enacting that change, Congress explicitly recognized
                that California's mix of standards could `include some less
                stringent than the corresponding federal standards.' See H.R. Rep.
                No. 294, 95th Cong., 1st Sess. 302 (1977). Congress could not have
                given this flexibility to California and simultaneously assigned to
                the state the
                [[Page 14354]]
                seemingly impossible task of establishing that `extraordinary and
                compelling conditions' exist for each standard.\185\
                ---------------------------------------------------------------------------
                 \185\ 49 FR at 18887, 18890.
                 Congress has also not disturbed this reading of section
                209(b)(1)(B) as calling for EPA review of California's whole program.
                With two noted exceptions described below, EPA has consistently
                interpreted this provision as requiring the Agency to consider whether
                California needs a separate motor vehicle emission program as compared
                to the specific standards in the waiver request at issue to meet
                compelling and extraordinary conditions.
                 Congress intended to allow California to address its extraordinary
                environmental conditions and foster its role as a laboratory for motor
                vehicle emissions control. The Agency's long-standing practice
                therefore has been to evaluate CARB's waiver requests with the broadest
                possible discretion to allow California to select the means it
                determines best to protect the health and welfare of its citizens in
                recognition of both the harsh reality of California's air pollution and
                to serve as a pioneer and a laboratory for the nation in setting new
                motor vehicle emission standards and developing control
                technology.\186\ EPA notes that ``the statute does not provide for any
                probing substantive review of the California standards by federal
                officials.'' \187\
                ---------------------------------------------------------------------------
                 \186\ 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).
                 \187\ Ford Motor Co., v. EPA, 606 F.2d 1293, 1300 (D.C. Cir.
                1979).
                ---------------------------------------------------------------------------
                 As a general matter, EPA has applied the traditional interpretation
                in the same way for all air pollutants, criteria and GHG pollutants
                alike.\188\ As discussed in Section II, there have only been two
                exceptions to this practice: one in 2008 and one in 2019. In 2008, EPA
                for the first time analyzed California's waiver request under an
                alternative approach and denied CARB's waiver request. EPA concluded
                that section 209(b) was intended to allow California to promulgate
                state standards applicable to emissions from new motor vehicles to
                address air pollution problems that are local or regional, but that
                section 209(b)(1)(B) was not intended to allow California to promulgate
                state standards for emissions from new motor vehicles designed to
                address global climate change problems. Or, in the alternative, EPA
                concluded that effects of climate change in California were not
                compelling and extraordinary compared to the effects in the rest of the
                country.\189\ EPA rejected this view a little over a year later in 2009
                by applying the traditional interpretation in granting California's
                waiver request for the same GHG standard, finding no support in the
                statute or congressional intent for the alternative application of the
                statute.\190\
                ---------------------------------------------------------------------------
                 \188\ 74 FR at 32763-65; 76 FR 34693; 79 FR 46256; 81 FR 95982.
                 \189\ 73 FR at 12160-64.
                 \190\ 74 FR at 32744, 32746, 32763 (``The text of section 209(b)
                and the legislative history, when viewed together, lead me to reject
                the interpretation adopted in the March 6, 2008 Denial, and to apply
                the traditional interpretation to the evaluation of California's
                greenhouse gas standards for motor vehicles. If California needs a
                separate motor vehicle program to address the kinds of compelling
                and extraordinary conditions discussed in the traditional
                interpretation, then Congress intended that California could have
                such a program. Congress also intentionally provided California the
                broadest possible discretion in adopting the kind of standards in
                its motor vehicle program that California determines are appropriate
                to address air pollution problems and protect the health and welfare
                of its citizens. The better interpretation of the text and
                legislative history of this provision is that Congress did not use
                this criterion to limit California's discretion to a certain
                category of air pollution problems, to the exclusion of others. EPA
                concluded that even under this alternative approach California GHG
                standards were intended at least in part to address a local or
                regional problem because of the `logical link between the local air
                pollution problem of ozone and GHG.''').
                ---------------------------------------------------------------------------
                 In evaluating the ACC program waiver in 2013, EPA applied the
                traditional interpretation to the ACC program waiver request and found
                that the Agency could not deny the waiver request under the second
                waiver prong.\191\ Further, without adopting the alternative
                interpretation that had been applied in the 2008 GHG waiver denial, EPA
                assessed California's need for the GHG standards at issue and found
                that the Agency could not deny the ACC program waiver request, even
                applying the alternative interpretation. EPA noted that to the extent
                that it was appropriate to examine the CARB's need for the GHG
                standards at issue to meet compelling and extraordinary conditions, the
                Agency had discussed at length in the 2009 GHG waiver decision that
                California has compelling and extraordinary conditions directly related
                to regulations of GHGs.\192\ Similarly, EPA explained that to the
                extent it was appropriate to examine California's need for the ZEV
                sales mandate, these requirements would enable California to meet both
                air quality and climate goals into the future.\193\ Additionally, EPA
                recognized CARB's coordinated strategies reflected in the technologies
                envisioned to meet the ACC program requirements and in turn addressing
                both criteria pollutants and GHGs and the magnitude of the technology
                and energy transformation needed to meet such goals.\194\
                ---------------------------------------------------------------------------
                 \191\ 78 FR at 2129 (``CARB has repeatedly demonstrated the need
                for its motor vehicle program to address compelling and
                extraordinary conditions in California. As discussed above, the term
                compelling and extraordinary conditions `does not refer to the
                levels of pollution directly.' Instead, the term refers primarily to
                the factors that tend to produce higher levels of pollution--
                geographical and climatic conditions (like thermal inversions) that,
                when combined with large numbers and high concentrations of
                automobiles, create serious air pollution problems. California still
                faces such conditions.'').
                 \192\ Id. at 2129-30.
                 \193\ Id. at 2129 (``[A]s EPA discussed at length in its 2009
                GHG waiver decision, California does have compelling and
                extraordinary conditions directly related to regulations of GHG.
                EPA's prior GHG waiver contained extensive discussion regarding the
                impacts of climate change in California. In addition, CARB has
                submitted additional evidence in comment on the ACC waiver request
                that evidences sufficiently different circumstances in California.
                CARB notes that ``Record-setting fires, deadly heat waves,
                destructive storm surges, loss of winter snowpack--California has
                experienced all of these in the past decade and will experience more
                in the coming decades. California's climate--much of what makes the
                state so unique and prosperous--is already changing, and those
                changes will only accelerate and intensify in the future. Extreme
                weather will be increasingly common as a result of climate change.
                In California, extreme events such as floods, heat waves, droughts
                and severe storms will increase in frequency and intensity. Many of
                these extreme events have the potential to dramatically affect human
                health and well-being, critical infrastructure and natural
                systems.'' (footnotes omitted)).
                 \194\ Id. at 2130-31 (``As CARB notes in its waiver request, the
                goal of the CARB Board in directing CARB staff to redesign the ZEV
                regulation was to focus primarily on zero emission drive--that is
                BEV, FCV, and PHEVs in order to move advanced, low GHG vehicles from
                demonstration phase to commercialization. CARB also analyzed
                pathways to meeting California's long term 2050 GHG reduction
                targets in the light-duty vehicle sector and determined that ZEVs
                would need to reach nearly 100 percent of new vehicle sales between
                2040 and 2050. CARB also notes that the ``critical nature of the LEV
                III regulation is also highlighted in the recent effort to take a
                coordinated look at strategies to meet California's multiple air
                quality and climate goals well into the future. This coordinated
                planning effort, Vision for Clean Air: A Framework for Air Quality
                and Climate Planning (Vision for Clean Air) demonstrates the
                magnitude of the technology and energy transformation needed from
                the transportation sector and associated energy production to meet
                federal standards and the goals set forth by California's climate
                change requirements. . . . The Vision for Clean Air effort
                illustrates that in addition to the cleanup of passenger vehicles
                (at issue here) as soon as possible as required in the LEV III
                regulation, transition to zero- and near-zero emission technologies
                in all on- and off-road engine categories is necessary to achieve
                the coordinated goals. Therefore, EPA believes that CARB's 2018 and
                later MY ZEV standards represent a reasonable pathway to reach these
                longer term goals. Under EPA's traditional practice of affording
                CARB the broadest discretion possible, and deferring to CARB on its
                policy choices, we believe there is a rational connection between
                California ZEV standards and its attainment of long term air quality
                goals. 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.'' (footnote omitted)).
                ---------------------------------------------------------------------------
                [[Page 14355]]
                 The only other exception to the application of the traditional
                interpretation was in SAFE 1, when EPA again used a standard-specific
                level of review and focused on California's need for GHG standards at
                issue under the waiver. There, EPA posited that section 209(b)(1)(B)
                called for a ``particularized nexus'' for California's motor vehicle
                standards: ``Congress enacted the waiver authority for California under
                section 209(b) against the backdrop of traditional, criteria pollutant
                environmental problems, under which all three links in this chain bear
                a particularized nexus to specific local California features: (1)
                Criteria pollutants are emitted from the tailpipes of the California
                motor vehicle fleet; (2) those emissions of criteria pollutants
                contribute to air pollution by concentrating locally in elevated
                ambient levels, which concentration, in turn; (3) results in health and
                welfare effects (e.g., from ozone) that are extraordinarily aggravated
                in California as compared to other parts of the country, with this
                extraordinary situation being attributable to a confluence of
                California's peculiar characteristics, e.g., population density,
                transportation patterns, wind and ocean currents, temperature
                inversions, and topography.'' \195\ As support for the nexus test, EPA,
                for the first time in waiver decisions, relied on section 202(a) and
                its own terms of authority to inform interpretation of the second
                waiver prong.\196\ In addition, EPA relied on legislative history to
                interpret ``compelling and extraordinary'' conditions as a reference to
                ``peculiar local conditions'' and ``unique problems'' in
                California.\197\ Accordingly, EPA reasoned that California must
                demonstrate ``compelling and extraordinary circumstances sufficiently
                different from the nation as a whole to justify standards on automobile
                emissions which may, from time to time, need to be more stringent than
                national standards.'' \198\
                ---------------------------------------------------------------------------
                 \195\ 84 FR at 51339.
                 \196\ Id. at 51339-40.
                 \197\ Id. at 51342 (quoting S. Rep. No. 403, 90th Cong. 1st
                Sess., at 32 (1967)) (``Congress discussed `the unique problems
                faced in California as a result of its climate and topography.' H.R.
                Rep. No. 728, 90th Cong. 1st Sess., at 21 (1967). See also Statement
                of Cong. Holifield (CA), 113 Cong. Rec. 30942-43 (1967). Congress
                also noted the large effect of local vehicle pollution on such local
                problems. See, e.g., Statement of Cong. Bell (CA) 113 Cong. Rec.
                30946. As explained at proposal, Congress focus was on California's
                ozone problem, which is especially affected by local conditions and
                local pollution. See Statement of Cong. Smith (CA) 113 Cong. Rec.
                30940-41 (1967); Statement of Cong. Holifield (CA), id., at 30942.
                See also, MEMA I, 627 F.2d 1095, 1109 (D.C. Cir. 1979) (noting the
                discussion of California's `peculiar local conditions' in the
                legislative history). In sum and as explained at proposal,
                conditions that are similar on a global scale are not
                `extraordinary,' especially where `extraordinary' conditions are a
                predicate for a local deviation from national standards, under
                section 209(b). 83 FR 43247.'').
                 \198\ Id.
                ---------------------------------------------------------------------------
                 In SAFE 1, EPA then posited that the nexus test should be applied
                to California's GHG standards specifically, rather than California's
                program ``as a whole'' under the traditional ``aggregate'' approach,
                ``to ensure that such standard is linked to local conditions that
                giv[e] rise to the air pollution problem, that the air pollution
                problem is serious and of a local nature, and that the State standards
                at issue will meaningfully redress that local problem.'' \199\ As
                support for the GHG-specific scrutiny, EPA reasoned that ``[t]he
                Supreme Court's opinion in UARG v. EPA, 134 S. Ct. 2427 (2014),
                instructs that Clean Air Act provisions cannot necessarily rationally
                be applied identically to GHG as they are to traditional pollutants.''
                \200\
                ---------------------------------------------------------------------------
                 \199\ Id. at 51345.
                 \200\ Id. at 51340.
                ---------------------------------------------------------------------------
                 Applying the nexus test, EPA concluded that California did not need
                its GHG standards to meet ``compelling and extraordinary conditions''
                because they were missing a particularized nexus to specific local
                features. EPA in the alternative posited that ``even if California does
                have compelling and extraordinary conditions in the context of global
                climate change, California does not `need' these standards under
                section 209(b)(1)(B) because they will not meaningfully address global
                air pollution problem of the sort associated with GHG emissions.''
                \201\ EPA also dismissed the 2009 GHG waiver conclusion on deleterious
                effects of GHG emissions on ozone (e.g., how increases in ambient
                temperature are conducive to ground-level ozone formation), stating
                that such a relationship ``does not satisfy this requirement for a
                particularized nexus, because to allow such attenuated effects to fill
                in the gaps would eliminate the function of requiring such a nexus in
                the first place.'' \202\
                ---------------------------------------------------------------------------
                 \201\ Id. at 51349.
                 \202\ Id.
                ---------------------------------------------------------------------------
                B. Notice of Reconsideration of SAFE 1 and Request for Comment
                 In the Notice of Reconsideration of SAFE 1, EPA noted its interest
                in any new or additional information or comments regarding whether it
                appropriately interpreted and applied section 209(b)(1)(B) in SAFE 1.
                The Agency noted that EPA's finding in SAFE 1, that such standards were
                only designed to address climate change and a global air pollution
                problem, led EPA to a new interpretation of section 209(b)(1)(B). EPA
                solicited views on whether it was permissible to construe section
                209(b)(1)(B) as calling for a consideration of California's need for a
                separate motor vehicle program where criteria pollutants are at issue
                as well as California's specific standards where GHG standards are at
                issue.
                 The Notice of Reconsideration also set forth that EPA's decision to
                withdraw the ACC program waiver as it relates to California's ZEV sales
                mandate was based on the same new interpretation and application of the
                second waiver prong and rested heavily on the conclusion that
                California only adopted the ZEV sales mandate requirement for purposes
                of achieving GHG emission reductions. EPA recognized that this
                conclusion in turn rested solely on a specific reading of a single
                sentence in CARB's ACC program waiver request.\203\ EPA requested
                comment on these specific conclusions and readings as well as whether
                the withdrawal of the ACC program waiver, within the context of
                California's environmental conditions and as applied to the GHG
                standards and ZEV sales mandate requirement, was permissible and
                appropriate.
                ---------------------------------------------------------------------------
                 \203\ Id. at 51330 (``Regarding the ACC program ZEV mandate
                requirements, CARB's waiver request noted that there was no criteria
                emissions benefit in terms of vehicle (tank-to-wheel--TTW) emissions
                because its LEV III criteria pollutant fleet standard was
                responsible for those emission reductions.'').
                ---------------------------------------------------------------------------
                C. Comments Received
                 EPA received multiple comments on its decision to evaluate
                California's need for its GHG standards separate from its need for a
                separate motor vehicle emission program as a whole. Some commenters
                agreed that EPA could evaluate waiver requests for the specific GHG
                standards under the waiver along the lines of the Agency's
                pronouncements in SAFE 1. Additionally, commenters pointed to the
                method of EPA's review in SAFE 1--evaluating the standards
                individually, as they are received, rather than in the aggregate--as
                evidence of the flaw in the traditional interpretation.\204\ Some
                commenters also echoed SAFE 1's concern that ``once EPA had determined
                that California needed its very first set of submitted standards to
                meet extraordinary and compelling conditions, EPA would never have the
                [[Page 14356]]
                discretion to determine that California did not need any subsequent
                standards.'' \205\
                ---------------------------------------------------------------------------
                 \204\ CEI at 13-14.
                 \205\ 84 FR at 51341. See, e.g., NADA at 5; Urban Air at 25, 29-
                33; AFPM at 22-23.
                ---------------------------------------------------------------------------
                 Under this analysis of the specific standards at issue under the
                waiver, these commenters continued, California could not demonstrate
                that its GHG and ZEV standards were, on their own, compelling and
                extraordinary. These commenters agreed with SAFE 1's ``particularized
                nexus'' interpretation of ``compelling and extraordinary,'' arguing
                that the words required unique consequences in order to give adequate
                meaning to the words themselves and in order to overcome equal
                sovereignty implications.\206\ Using this interpretation, these
                commenters concluded that, because ``GHG concentrations are essentially
                uniform throughout the globe, and are not affected by California's
                topography and meteorology,'' and because the entire nation would be
                affected by climate change, neither the effects of the regulations on
                climate change, nor the impacts of climate change on California could
                be considered ``compelling and extraordinary.'' \207\ Some commenters
                also argued that these standards were unnecessary given California's
                ``deemed to comply'' provision, which would theoretically allow all
                automobile manufacturers to comply with California's standards by
                meeting the less stringent Federal GHG standards.\208\
                ---------------------------------------------------------------------------
                 \206\ AFPM at 12; Urban Air at 4.
                 \207\ CEI at 14-16 (``The resulting ``global pool'' of GHG
                emissions is not any more concentrated in California than anywhere
                else . . . [E]ven if one assumes ``compelling and extraordinary
                conditions'' can refer to climate change impacts, such as heat
                waves, drought, and coastal flooding, California's vulnerability is
                not ``sufficiently different'' from the rest of the nation to merit
                waiving federal preemption of state emission standards. Thus,
                California is not ``extraordinary'' in regard to either the
                ``causes'' of the ``effects'' of global climate change.''); NADA at
                5 (``while vehicle GHG emissions also were, by definition, local,
                their impact on serious local air quality concerns could not be
                shown.''); AFPM at 11-14 (``Neither the causes nor effects of GHG
                emissions are compelling and extraordinary conditions, as they are
                global rather than local conditions, and California's GHG standards
                and ZEV mandate will not meaningfully address the causes or effects
                of these GHG emissions.'').
                 \208\ NADA at 4-5; Urban Air at 33.
                ---------------------------------------------------------------------------
                 In contrast, other commenters asked that EPA reverse its SAFE 1
                section 209(b)(1)(B) determination by reverting to EPA's long-standing
                ``program-level'' approach to the ``need'' inquiry, where ``EPA
                considers California's need for its own mobile-source-emissions program
                as a whole, not whether California needs a particular standard for
                which it has requested a waiver.'' \209\ These commenters noted the
                long tradition of interpreting California's need in the aggregate, an
                interpretation that SAFE 1 acknowledged was reasonable.\210\ This
                interpretation, they argued, best aligned with the text, legislative
                history, and purpose of the waiver program.\211\ For example, some
                commenters argued that, because feasibility was evaluated under an
                aggregate approach, it would be unreasonable for California's need for
                the program to be evaluated under a more restrictive approach.\212\
                These commenters also argued that Congress had expressed approval of
                this aggregate approach, citing legislative history from 1977 and
                1990.\213\ This approach, they continued, aligns with the Waiver
                Program's broad deference to California to create an entire regulatory
                program, which is comprised of regulations that interact with and
                affect each other.\214\ One commenter also responded directly to the
                question EPA posed in its Notice of Reconsideration, whether it was
                ``permissible for EPA to construe section 209(b)(1)(B) as calling for
                consideration of California's need for a separate motor vehicle program
                where criteria pollutants are at issue and consideration of
                California's individual standards where GHG standards are at issue.''
                \215\ According to the commenter, ``The Supreme Court has rejected this
                `novel interpretive approach' of assigning different meanings to the
                same statutory text in the same provision, depending on the
                application, because it `would render every statute a chameleon.' ''
                \216\
                ---------------------------------------------------------------------------
                 \209\ States and Cities at 22 n.16.
                 \210\ Twelve Public Interest Organizations at 7 (``The Trump EPA
                in turn acknowledged that this longstanding interpretation of
                Section 209(b)(1)(B) was a reasonable one, 84 FR at 51,341 . . . .
                '').
                 \211\ States and Cities at 22 (citing 84 FR at 51341); Tesla at
                11 (``The plural reference to `such State standards' requires that
                the standards be considered in the aggregate as a group. This
                language stands in stark contrast to alternate phrasing that was
                available to Congress and that would have permitted a non-aggregate
                determination, such as: `such State does not need a State standard
                to meet compelling and extraordinary conditions.' Indeed,
                alternative language referencing individual standards is present in
                subsection (b)(2), which references `each State standard.' '').
                 \212\ States and Cities at 25-26; Twelve Public Interest
                Organizations at 8 (``An aggregate approach to the consistency
                inquiry also makes sense under Section 209(b)(1)(C) because
                technological feasibility is effectively evaluated on a program
                basis. The feasibility of a new standard cannot be evaluated on its
                own if there are interactions with pre-existing standards. Such
                interactions between standards are what prompted Congress to add the
                ``in the aggregate'' phrase to section 209 in the first place.'').
                 \213\ States and Cities at 26-27; Ozone Transport Commission
                (OTC), Docket No. EPA-HQ-OAR-2021-0257-0283 at 4.
                 \214\ States and Cities at 27-28.
                 \215\ 86 FR at 22429.
                 \216\ States and Cities at 24 (quoting Clark v. Martinez, 543
                U.S. 371, 382 (2005) and citing U.S. v. Santos, 553 U.S. 507, 522
                (2008); U.S. Dep't of the Treasury v. FLRA, 739 F.3d 13,21 (D.C.
                Cir. 2014)). The commenter notes that in the SAFE 1 brief, EPA
                claimed that its new approach to section 209(b)(1)(B) would apply
                ``for all types of air pollutants'' but EPA could point to nowhere
                in SAFE 1 decision where this was said. Id. at 25. And ``only two
                sentences later,'' EPA acknowledged that its review under this
                second prong would change ``depending upon which `air quality
                concerns' were implicated.'' Id.
                ---------------------------------------------------------------------------
                 These commenters also asked EPA to revert to the traditional
                interpretation of ``compelling and extraordinary'' instead of SAFE 1's
                ``particularized nexus'' formulation. Commenters noted the SAFE 1
                requirement appears nowhere in the text of the statute.\217\ Because of
                this absence, they continued, EPA's references to the legislative
                history from 1967 have no ``tether'' to the statutory text and cannot
                justify the nexus requirement.\218\ Further, commenters argued that
                EPA's reliance on the equal sovereignty doctrine improperly informed
                how EPA should interpret the phrase ``compelling and extraordinary
                conditions'' in the second waiver prong, and therefore requiring such
                conditions to be sufficiently different or unique among states, was
                inappropriate.\219\ Commenters argued that the equal sovereignty
                doctrine was inapplicable to the second waiver prong. They explained
                that the Supreme Court has only applied the ``rarely invoked'' doctrine
                of equal sovereignty in the ``rare instance where Congress undertook `a
                drastic departure from basic principles of federalism' by authorizing
                `federal intrusion into sensitive areas of state and local
                policymaking.' '' \220\ Congress's exercise of its Commerce Clause
                power in regulating air pollution from new motor vehicles, commenters
                continued, is not such an ``intrusion.'' Moreover, they wrote, applying
                the equal sovereignty doctrine in this instance would actually
                ``diminish most States' sovereignty'' because it would ``reduce the
                regulatory options available to California and to other [section 177]
                States.'' This diminished sovereignty, they argued, would not
                ``enhance[e] the sovereignty of any State'' or ``alleviate'' any
                unjustified burden because ``Section 209(b)(1) imposes no such
                burden.'' \221\
                ---------------------------------------------------------------------------
                 \217\ States and Cities at 34 (noting the lack of the words
                ``nexus,'' ``particularized,'' ``peculiar,'' and ``local'' anywhere
                in sections 209(b) or 202(a)(1)).
                 \218\ Id. at 35.
                 \219\ Id. at 41-43; Twelve Public Interest Organizations at 4-6.
                 \220\ States and Cities at 42 (quoting Shelby Cnty. v. Holder,
                570 U.S. 529, 535, 545 (2013)).
                 \221\ Id. at 43; Twelve Public Interest Organizations at 5
                (``Clean Air Act Section 209(b) places no extraordinary burden or
                disadvantage on one or more States. Rather, the statute benefits
                California by allowing the exercise of its police power authority to
                address its particular pollution control needs'').
                ---------------------------------------------------------------------------
                [[Page 14357]]
                 Similarly, commenters rebutted SAFE 1's use of words like
                ``peculiar'' and ``unique'' to further define ``compelling and
                extraordinary.'' These words, they noted, appear nowhere in the text of
                section 209(b)(1)(B) and do not align with the plain meaning of the
                word ``extraordinary.'' \222\ Further, they argued, this narrow
                interpretation ``would render the waiver provision unworkable'' as,
                ``for any given air pollutant, it is possible to identify other areas
                of the country that suffer from a similar pollution problem.'' \223\ In
                fact, they continued, this argument was rejected in the 1967
                legislative history and in 1984, ``when EPA thoroughly rebutted the
                assertion that California could not receive a waiver if individual
                pollutant levels were `no worse than some other areas of the country.'
                '' \224\ Moreover, they argued, the existence of section 177
                necessarily acknowledges that other states may have the same or similar
                air pollution problems as California.\225\
                ---------------------------------------------------------------------------
                 \222\ States and Cities at 38-39 (explaining that the existence
                of those words in the legislative history ``simply highlight that
                Congress did not codify [them] in Section 209(b)(1)(B)'' and that
                plain meaning of ``extraordinary'' is ``out of the ordinary'');
                Twelve Public Interest Organizations app. 1 at 49 (``Congress
                understood, even in 1967, that `[o]ther regions of the Nation may
                develop air pollution situations related to automobile emissions
                which will require standards different from those applicable
                nationally.' S. Rep. No. 90-403, at 33.'').
                 \223\ Tesla at 9.
                 \224\ Id. (quoting 49 FR at 18887, 18891) (stating that EPA
                explained that ``there is no indication in the language of section
                209 or the legislative history that California's pollution problem
                must be the worst in the country, for a waiver to be granted.'')).
                 \225\ Twelve Public Interest Organizations app. 1 at 49; States
                and Cities at 38-39.
                ---------------------------------------------------------------------------
                 Other commenters argued that California needed GHG standards to
                address ``compelling and extraordinary'' conditions in California even
                under the SAFE 1 interpretation of the second waiver prong. These
                commenters argued that GHG and ZEV standards produce both GHG and
                criteria pollution benefits, pointing to language in the ACC program
                waiver that acknowledged these dual benefits and to subsequent SIP
                approvals that incorporated the California standards in order to
                achieve criteria emission reductions.\226\ In particular, commenters
                explained that the 2012 California waiver request established that the
                ZEV standard would reduce criteria pollution both ``by reducing
                emissions associated with the production, transportation, and
                distribution of gasoline'' and ``by driving the commercialization of
                zero-emission-vehicle technologies necessary to reduce future emissions
                and achieve California's long-term air quality goals.'' \227\ As for
                the GHG standards, commenters noted that, as acknowledged in the ACC
                program waiver, ``global warming exacerbates criteria pollution and
                makes it harder to meet air pollution standards.'' \228\ Thus, they
                argue, ``EPA expressly and improperly limited its Determination to
                consideration of the `application of section 209(b)(1)(B) to
                California's need for a GHG climate program.'' \229\ Given EPA's
                consistent acceptance that ``California's criteria pollution
                `conditions' are `extraordinary and compelling' and that the record
                demonstrates that California's GHG and ZEV standards reduce criteria
                emissions in California,'' EPA should ``reverse its SAFE 1 section
                209(b)(1)(B) determination and the waiver withdrawal that rested on
                it--regardless of whether EPA reverts to its traditional, program-level
                approach.'' \230\
                ---------------------------------------------------------------------------
                 \226\ States and Cities at 9-14, 30-31; Center for Biological
                Diversity, Docket No. EPA-HQ-OAR-2021-0257-0358 at 2 (``The Trump
                EPA improperly separated California's need for greenhouse gas
                regulations from its need for criteria pollutant standards. In
                reality, these two goals are tightly linked, and both are critical
                to the Clean Air Act's goals of safeguarding public health and
                welfare.''); San Joaquin Valley Air Pollution Control District
                (SJVAPCD), Docket No. EPA-HQ-OAR-2021-0257-0105 at 3 (``The
                District's 2016 Plan for the 2009 9-Hour Ozone Standard adopted June
                16, 2016, and 2018 Plan for the 1997, 2006, and 2012 PM 2.5
                Standards, adopted November 15, 2018, both rely on emission
                reductions from California's Advanced Clean Cars regulation and
                other mobile source measures to support the Valley's attainment of
                the federal health-based NAAQS.''); NCAT at 11 (``In addition,
                California's ZEV standards are intended to and do achieve
                significant incremental reductions of NOx and other non-GHG
                emissions.''); Tesla at 10-11 (``In comments submitted to the EPA in
                2009 regarding a preemption waiver, [California] explained that it
                `specifically designed its GHG standards for criteria pollutants.'
                It also emphasized that it has `frequently referenced the science to
                support GHG standards as a necessary method for controlling ozone
                and particulate matter pollution' and has `consistently recognized
                that the State's ability to reduce nonattainment days for ozone and
                wildfire-caused particulate matter depends on its ability to reduce
                GHG emissions. . . . EPA also has repeatedly expressed its own
                understanding that GHG standards should be viewed as a strategy to
                help control criteria pollutants to address National Ambient Air
                Quality Standards nonattainment.'''); Twelve Public Interest
                Organizations at 5 (``For example, atmospheric heating due to global
                warming can increase the production of ground-level ozone in
                California, which suffers from extraordinary amounts of locally
                reacting nitrogen oxides and volatile organic compounds.'').
                 \227\ Center for Biological Diversity at 2-3. In contrast, some
                commenters, echoing SAFE 1, argued that these upstream emission
                benefits should not be considered in determining the criteria
                pollutant benefits of these standards. CEI at 16 (``Although NHTSA
                and EPA are required to consider all relevant factors when
                determining CAFE and tailpipe CO2 standards, it is inappropriate to
                elevate stationary source criteria pollutant emissions into a make-
                or-break factor in waivers for mobile source programs. The Clean Air
                Act already provides the EPA with ample authorities to regulate
                stationary sources, including the NAAQS program, New Source
                Performance Standards program, Prevention of Significant
                Deterioration of Air Quality program, Acid Rain program, and
                Regional Haze program. If Congress wanted NHTSA's CAFE program and
                EPA's mobile source program to prioritize reductions of indirect
                stationary source emissions, it could easily have said so. The
                indirect effects on stationary source emissions are not even
                mentioned.'').
                 \228\ Center for Biological Diversity at 3.
                 \229\ States and Cities at 28 (citing 84 FR at 51339 (emphasis
                added)) (limiting section 209(b)(1)(B) consideration to ``the case
                of GHG emissions.'').
                 \230\ States and Cities at 29. The commenter notes that EPA
                never considered whether California needed those criteria emission
                reductions from its ZEV and GHG standards because it refused to
                consider those criteria reductions at all: ``EPA attempted to
                justify disregarding record evidence and its own prior findings
                concerning the criteria emission benefits of these California
                standards by mischaracterizing CARB's 2012 waiver request. . . .
                But, having chosen to sua sponte reopen the question whether
                California continues to need standards it has been implementing for
                six years, . . . ., EPA could not limit its consideration to what
                the standards were intended to achieve when they were originally
                designed or presented. . . . . CARB (and others) asserted clearly in
                SAFE 1 comments that both the GHG and ZEV standards produce criteria
                pollution benefits upon which California and other States rely to
                improve air quality.'' Id. at 29-30.
                ---------------------------------------------------------------------------
                 Regardless of the emissions benefits of the standards, some
                commenters argued that California's plan to address both long-term and
                short-term climate and criteria pollutant reduction goals is entitled
                to deference. Thus, even if ``the mandate truly added nothing to the
                emission benefits of California's standards for vehicular emissions of
                criteria and greenhouse gas pollutants,'' commenters claimed, ``the
                mandate would simply constitute the State's choice of means for
                automakers to comply with its standards.'' \231\ These commenters
                further argued that section 209(b)(1)(B) ``does not authorize EPA to
                inquire into whether the means to comply with California emission
                standards, as opposed to the actual standards themselves, are needed to
                meet compelling and extraordinary conditions.'' \232\ Commenters also
                claimed that EPA's argument, that California cannot need the GHG and
                ZEV standards because those standards alone would not ``meaningfully
                address global air pollution problems'' posed by climate change,
                ``lacks merit'' and ``is illogical.'' \233\ Such an approach, they
                [[Page 14358]]
                explained ``amounts to a conclusion that California is forbidden from
                acting precisely because climate change is a global threat--when in
                fact the global aspect of this problem demonstrates the need for
                California to take action,'' a conclusion, they noted, that was
                rejected by the Supreme Court in Massachusetts v. EPA.\234\ Even if
                there was some merit to the argument, one commenter argued, SAFE 1's
                assertion that the regulations ``would have only a de minimis effect on
                climate change understates the impact that collective action by
                California and the Section 177 states can have on GHG emissions.''
                \235\ The commenter noted that ``[w]ith a total population of over 140
                million people, these 19 jurisdictions collectively account for more
                than 42 percent of the U.S. population . . . and more than 40 percent
                of the U.S. new car market.'' \236\
                ---------------------------------------------------------------------------
                 \231\ Twelve Public Interest Organizations at 9-10.
                 \232\ Id. (citing MEMA I, 627 F.2d 1095, 1111-14 (D.C. Cir.
                1979)).
                 \233\ States and Cities at 40, 49-50; NCAT at 11 (``EPA's
                argument that California does not `need' vehicle standards that
                reduce GHG emissions because such standards alone cannot
                meaningfully reduce the impacts of climate change in California
                lacks merit. 84 FR at 51,346-47. EPA's approach in SAFE 1 read
                requirements into the statute that Congress did not choose to
                impose: That a single standard be sufficient to resolve an
                environmental problem caused by multiple and diverse sources.
                Instead, need should be defined by reference to the underlying
                problem, and California's standards are one important element of the
                broader response.''); Tesla at 8-9 (citing Massachusetts v. EPA, 549
                U.S. 497, 525-26 (2007)) (`` `Nor is it dispositive that developing
                countries such as China and India are poised to increase greenhouse
                gas emissions substantially over the next century: A reduction in
                domestic emissions would slow the pace of global emissions
                increases, no matter what happens elsewhere.' '').
                 \234\ Tesla at 8-9 (``Indeed, the Supreme Court rejected this
                logic in Massachusetts v. EPA, 549 U.S. 497 (2007), explaining:
                ``Because of the enormity of the potential consequences associated
                with man-made climate change, the fact that the effectiveness of a
                remedy might be delayed during the (relatively short) time it takes
                for a new motor-vehicle fleet to replace an older one is essentially
                irrelevant.''); States and Cities at 41.
                 \235\ NESCAUM at 7.
                 \236\ Id.
                ---------------------------------------------------------------------------
                 Finally, these commenters also argued that climate change and its
                impacts are, themselves, ``extraordinary and compelling'' conditions.
                They provided evidence of increased weather events, agricultural
                effects, and wildfires, amongst other impacts of climate change, which
                have already begun to severely affect California.\237\
                ---------------------------------------------------------------------------
                 \237\ States and Cities at 43-48; Twelve Public Interest
                Organizations at 5; Center for Biological Diversity at 3; Tesla at
                8-9. States and Cities at 43-48; Twelve Public Interest
                Organizations at 5-6; Center for Biological Diversity at 3
                (``California also experiences uniquely dangerous effects from
                increases in greenhouse gases. For example, the California
                legislature has found that global warming will cause adverse health
                impacts from increased air pollution and a projected doubling of
                catastrophic wildfires. Many of the state's most extreme weather
                events have occurred in the last decade, including a severe drought
                from 2012-2016, an almost non-existent Sierra Nevada winter snowpack
                in 2014-2015, three of the five deadliest wildfires in state
                history, and back-to-back years of the warmest average temperatures
                on record. These ongoing disasters demonstrate California's status
                as `one of the most `climate-challenged' regions of North America.'
                '').
                ---------------------------------------------------------------------------
                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)
                 In this action, EPA first finds that the Agency should not have
                reinterpreted section 209(b)(1)(B) in evaluating California's ``need''
                for GHG standards and ZEV sales mandate requirements at issue. The
                analysis below walks through the statutory language and history
                associated with this provision. As part of this discussion, the
                relationship of this provision and California's authority and deference
                is highlighted. The two interpretations of the waiver prong are then
                reviewed, presenting the Agency's rationale for its findings of the
                inappropriate SAFE 1 interpretation and support for its conclusion
                about the better interpretation. Second, as shown below, the factual
                record before the Agency at the time of SAFE 1 supports the GHG
                standards and ZEV sales mandate requirements at issue under either the
                traditional or SAFE 1 interpretation of section 209(b)(1)(B).
                1. EPA Is Withdrawing the SAFE 1 Section 209(b)(1)(B) Interpretation
                 Except for two short-lived exceptions in the context of the 2008
                waiver denial and SAFE 1, EPA has consistently recognized that reading
                the ``needs'' test of the second waiver prong as calling for a
                standard-specific evaluation would be inconsistent with congressional
                intent given the text of section 209(b)(1) legislative history, as well
                as the way the different standards in the ACC program work together to
                reduce criteria and GHG pollution and spur innovation. As further
                explained below, all of these aspects lend support to the Agency
                practice of not subjecting California's waiver requests to review of
                the specific standards under the second waiver prong, and we agree that
                the traditional interpretation of section 209(b) is, at least, the
                better interpretation.
                 Under section 209(b)(1)(B), EPA must grant a waiver request unless
                the Agency finds that California ``does not need such State standards
                to meet compelling and extraordinary conditions.'' EPA has historically
                read the phrase ``such State standards'' in section 209(b)(1)(B) as
                referring back to standards ``in the aggregate'' in section 209(b)(1),
                which addresses the protectiveness finding that California must make
                for its waiver requests. In addition, as EPA has explained in the past,
                reading the provision otherwise would conflict with Congress's 1977
                amendment to the waiver provision to allow California's standards to be
                ``at least as protective'' as the federal standards ``in the
                aggregate.'' This amendment must mean that some of California's
                standards may be weaker than federal standards counterbalanced by
                others that are stronger. If, however, a waiver can only be granted if
                each standard on its own meets a compelling need, then California could
                never have a standard that is weaker than the federal standard,
                rendering Congress's 1977 amendment inoperative. Congress would not
                have created the option for California's individual standards to be at
                least as protective ``in the aggregate'' and then taken that option
                away in the second waiver prong's ``compelling need'' inquiry.
                 In addition, EPA has reasoned that giving effect to section
                209(b)(1) means that both subparagraph (b)(1)(B) and paragraph (b)(1)
                must be read together such that the Agency reviews the same standards
                that California considers in making its protectiveness determination.
                ``Sec. 209 (formerly Sec. 208) was amended to require the U.S.
                Environmental Protection Agency (EPA) to consider California's
                standards as a package, so that California could seek a waiver of
                preemption if its standards `in the aggregate' protected public health
                at least as well as federal standards.'' \238\
                ---------------------------------------------------------------------------
                 \238\ Motor Vehicle Mfrs. Ass'n v. NYS Dep't of Env't
                Conservation, 17 F.3d 521, 525 (2d Cir. 1994).
                ---------------------------------------------------------------------------
                 EPA has thus explained the reasoning for the reading of ``such
                State standards'' for instance, as follows:
                 [I]f Congress had intended a review of the need for each
                individual standard under (b)(1)(B), it is unlikely that it would
                have used the phrase ``. . . does not need such state standards,''
                which apparently refers back to the phrase ``State standards . . .
                in the aggregate,'' as used in the first sentence of section
                209(b)(1), rather than to the particular standard being considered.
                The use of the plural, i.e., ``standards,'' further confirms that
                Congress did not intend EPA to review the need for each individual
                standard in isolation.\239\
                ---------------------------------------------------------------------------
                 \239\ 49 FR at 18890.
                 EPA has also explained that ``to find that the `compelling and
                extraordinary conditions' test should apply to each pollutant would
                conflict with the amendment to section 209 made in 1977 allowing
                California to select standards `in the aggregate' at least as
                protective as federal standards. In enacting that change, Congress
                explicitly recognized that California's mix of standards could include
                some less stringent than the corresponding federal standards.'' \240\
                This is in accord with MEMA I, where the D.C. Circuit explained that:
                ---------------------------------------------------------------------------
                 \240\ Id. at 18890 n.24.
                 The intent of the 1977 amendment was to accommodate California's
                particular concern
                [[Page 14359]]
                with oxides of nitrogen, which the State regards as a more serious
                threat to public health and welfare than carbon monoxide. California
                was eager to establish oxides of nitrogen standards considerably
                higher than applicable federal standards, but technological
                developments posed the possibility that emission control devices
                could not be constructed to meet both the high California oxides of
                nitrogen standard and the high federal carbon monoxide
                standard.\241\
                ---------------------------------------------------------------------------
                 \241\ MEMA I, 627 F.2d 1095, 1110 n.32 (D.C. Cir. 1979).
                 EPA has further explained that the crucial consequence of the 1977
                Amendment was to require waiver grants for California's specific
                standards that are part of the State's overall approach to reducing
                vehicle emissions to address air pollution even if those specific
                standards might not be needed to address compelling and extraordinary
                conditions.\242\ For instance, EPA has previously granted a waiver for
                what was then described as ``harmless emissions constituents such as
                methane'' while reminding objectors of ``EPA's practice to leave the
                decisions on controversial matters of public policy, such as whether to
                regulate methane emissions, to California.'' \243\ Similarly, in the
                1984 p.m. standards waiver decision, EPA also discussed California's
                ``need'' for its own standards at length in response to comments that
                California must have worse air quality problems than the rest of the
                country to qualify for a waiver.\244\ There, EPA explained that
                California need not ``have a `unique' particulate problem, i.e., one
                that is demonstrably worse than in the rest of the country [because],
                there is no indication in the language of section 209 or the
                legislative history that California's pollution problem must be the
                worst in the country, for a waiver to be granted.'' \245\ Indeed, the
                word ``unique'' is not contained in the statutory provision. EPA
                further explained that ``even if it were true that California's total
                suspended particulate problem is, as certain manufacturers argue, no
                worse than some other areas of the country, this does not mean that
                diesel particulates do not pose a special problem in California.''
                \246\
                ---------------------------------------------------------------------------
                 \242\ 74 FR at 32761 (``Congress decided in 1977 to allow
                California to promulgate individual standards that are not as
                stringent as comparable federal standards, as long as the standards
                are `in the aggregate, at least as protective of public health and
                welfare as applicable federal standards.'''); ``[T]he 1977
                amendments significantly altered the California waiver provision.''
                Ford Motor Co., 606 F.2d 1293, 1302 (D.C. Cir. 1979).
                 \243\ 43 FR at 25735.
                 \244\ It bears note that these are the same kinds of comments
                that EPA received in the context of the ACC program waiver
                proceedings on California's need for GHG standards.
                 \245\ 49 FR at 18891.
                 \246\ Id.
                ---------------------------------------------------------------------------
                 As explained at length earlier, EPA believes Congress intended the
                Agency to grant substantial deference to California on its choice of
                standards that are appropriate to meet its needs. EPA has explained
                that ``Congress has made it abundantly clear that the manufacturers
                would face a heavy burden in attempting to show `compelling and
                extraordinary conditions' no longer exist: The Administrator, thus, is
                not to overturn California's judgment lightly. Nor is he to substitute
                his judgment for that of the State. There must be ``clear and
                compelling evidence that the State acted unreasonably in evaluating the
                relative risks of various pollutants in light of the air quality,
                topography, photochemistry, and climate in that State, before EPA may
                deny a waiver.'' \247\ Likewise, the House Committee Report explained
                for instance that ``[t]he [1977] 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.'' \248\ EPA's past practice
                prior to SAFE 1, except for one instance, was consistent with this
                deferential stance.
                ---------------------------------------------------------------------------
                 \247\ Id. at 18890 n.25 (citing H.R. Rep. No. 95-294, 95th
                Cong., 1st Sess. 302 (1977)).
                 \248\ MEMA I, 627 F.2d at 1110 (citing H.R. Rep. No. 294, 95th
                Cong., 1st Sess. 301-02 (1977)) (emphasis added). Congress amended
                section 209(b)(1)(A) so that 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.
                ---------------------------------------------------------------------------
                 In enacting section 209(b)(1), Congress struck a deliberate balance
                first in 1967 when it acknowledged California's serious air quality
                problems as well as its role as a laboratory for emissions control
                technology for the country,\249\ and again, in the 1977 Amendments that
                allowed for California to seek and obtain waivers for standards that
                are less stringent than the federal standards (by amending section
                209(b)(1)(A)) and also added section 177 to acknowledge that states may
                have air quality problems similar to California's by allowing states,
                subject to certain conditions, to adopt California's new motor vehicle
                standards once waived by EPA.\250\ These provisions struck a balance
                between having only one national standard and having 51 different state
                standards by settling on two standards--a federal one and a California
                one that other states may also adopt. Since 1967, in various amendments
                to section 209, Congress has also not disturbed this reading of section
                209(b)(1)(B) as calling for the review of the standards as a whole
                program. Likewise, Congress has also not placed any additional
                constraints on California's ability to obtain waivers beyond those now
                contained in section 209(b)(1). The Agency has thus viewed the text,
                legislative history, and structure of section 209(b)(1) as support for
                the program-level review of waiver requests as well for the conclusion
                that California's air quality need not be worse than the rest of the
                country for EPA to grant a waiver of preemption. In addition, to the
                extent that SAFE 1 was intended to preclude California's regulation of
                all greenhouse gases from light-duty vehicles, the SAFE 1
                interpretation creates a structural conflict within the relevant CAA
                provisions and could also create an inability for California to address
                GHG emissions and its contribution to the serious air quality problems
                within the State. There is a fundamental relationship between sections
                209(a) and 209(b). Section 209(a) preempts states from adopting or
                enforcing new motor vehicle emission standards, and section 209(b)
                calls for EPA to waive that preemption for California vehicular
                emission standards unless EPA finds that one or more of the waiver
                criteria set out therein are not met. Nothing on the face of the CAA or
                applicable legislative history indicates that the scope of section
                209(b)--the pollutants for which California may obtain a waiver--is
                more limited than the scope of section 209(a).\251\ The D.C. Circuit
                has
                [[Page 14360]]
                already held as much as to section 209(a): ``whatever is preempted [by
                section 209(a)] is subject to waiver under subsection (b).'' \252\ As
                demonstrated by EPA's review of the record in this decision,
                California's GHG emission standards at issue meet the SAFE 1
                interpretation of the second waiver prong. Nevertheless, to the extent
                that SAFE 1 was intended to preclude all California regulation of
                greenhouse gases, EPA believes it improper to exclude entirely a
                pollutant from a waiver under section 209(b) that is otherwise
                preempted by section 209(a).
                ---------------------------------------------------------------------------
                 \249\ 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.'' General Motors
                Corp. v. United States, 496 U.S. 530, 532 (1990). Motor vehicles
                ``must be either `federal cars' designed to meet the EPA's standards
                or `California cars' designed to meet California's standards.''
                Engine Mfrs., 88 F.3d at 1079-80, 1088 (``Rather than being faced
                with 51 different standards, as they had feared, or with only one,
                as they had sought, manufacturers must cope with two regulatory
                standards.''). See also MEMA II, 142 F.3d at 463.
                 \250\ ``Sec. 177 . . . permitted other states to `piggyback'
                onto California 's standards, if the state's standards `are
                identical to the California standards for which a waiver has been
                granted for such model year.''' Motor Vehicle Mfrs. Ass'n v. New
                York State Dep't of Envtl. Conservation, 17 F.3d 521, 525 (2d Cir.
                1994).
                 \251\ EPA believes that, to the extent the SAFE 1 interpretation
                has the practical effect of defining or implementing the scope of
                section 209(b) differently depending on the pollutants involved, the
                interpretation is contrary to legislative intent and the Agency's
                historic practice given the criteria emission benefits of CARB's GHG
                emission standards and ZEV sales requirements as well as the impacts
                of climate change on California's local and regional air quality.
                 \252\ MEMA I, 627 F.2d 1095, 1106-08 (D.C. Cir. 1979).
                ---------------------------------------------------------------------------
                 In addition, Congress has cited California's GHG standards and ZEV
                sales mandate in subsequent legislation. Federal procurement
                regulations direct the EPA to issue guidance identifying the makes and
                models numbers of vehicles that are low GHG emitting vehicles.\253\ In
                a clear reference to California's motor vehicle GHG standards, Congress
                has required EPA when identifying those vehicles to ``take into account
                the most stringent standards for vehicle greenhouse gas emissions
                applicable to and enforceable against motor vehicle manufacturers for
                vehicles sold anywhere in the United States.'' \254\ And in its State
                Implementation Plan provision regarding fleet programs required for
                certain non-attainment areas relating to issuing credits for cleaner
                vehicles, Congress stated that the ``standards established by the
                Administrator under this paragraph . . . shall conform as closely as
                possible to standards which are established for the State of California
                for ULEV and ZEV vehicles in the same class.\255\ Congress would not
                likely have adopted California's standards into its own legislation if
                it believed those standards to be preempted.
                ---------------------------------------------------------------------------
                 \253\ 42 U.S.C. 13212(f)(3).
                 \254\ Id.
                 \255\ 42 U.S.C. 7586(f)(4).
                ---------------------------------------------------------------------------
                 EPA also disagrees with SAFE 1's related argument that the
                statutory criteria must be interpreted in the context of the
                constitutional doctrine of ``equal sovereignty.'' As explained in
                detail in Section VIII, waiver requests should be reviewed based solely
                on the criteria in section 209(b)(1) and the Agency should not consider
                constitutional issues in evaluating waiver requests.\256\ The
                constitutionality of section 209 is not one of the three statutory
                criteria for reviewing waiver requests. However, because the Agency
                asserted in SAFE 1 that the equal sovereignty doctrine formed a gloss
                on its statutory interpretation of the three criteria, EPA addresses
                that argument here briefly. In short, in SAFE 1, EPA stated that
                because section 209(b)(1) provides ``extraordinary treatment'' to
                California, the second waiver prong should be interpreted to require a
                ``state-specific'' and ``particularized'' pollution problem.\257\ But
                section 177's grant of authority to other states to adopt California's
                standards undermines the notion that the regulatory scheme treats
                California in an extraordinary manner. Indeed, if section 209(b) is
                interpreted to limit the types of air pollution that California may
                regulate, it would diminish the sovereignty of California and the
                states that adopt California's standards pursuant to section 177
                without enhancing any other state's sovereignty. Nor does section
                209(b) impose any burden on any state. For these reasons, EPA agrees
                with commenters who argued that the Supreme Court's decision in Shelby
                County is inapposite. In section 209(b), Congress did not authorize
                ``federal intrusion into sensitive areas of state and local
                policymaking.'' \258\ Rather, it underscored a foundational principle
                of federalism--allowing California to be a laboratory for innovation.
                Nor is section 209(b) an ``extraordinary departure from the traditional
                course of relations between the States and the Federal Government.''
                \259\ To the contrary, it is just one of many laws Congress passes that
                treat States differently, and where, as discussed more fully below,
                Congress struck a reasonable balance between authorizing one standard
                and authorizing 51 standards in deciding to authorize two. SAFE 1's
                invocation of the rarely used equal sovereignty principle as an aid in
                interpreting the second waiver prong simply does not fit section 209.
                ---------------------------------------------------------------------------
                 \256\ 78 FR at 2145.
                 \257\ 84 FR 51340, 51347.
                 \258\ Shelby County v. Holder, 570 U.S. 529, 535, 545 (2013).
                 \259\ Id.
                ---------------------------------------------------------------------------
                 SAFE 1 dismissed the Agency's traditional interpretation of the
                second waiver prong under which EPA reviews the same standards that
                California considers in making its protectiveness determination,
                asserting that the practical implications of reviewing standards in the
                ``aggregate'' compared to specific standards presented in a waiver
                request meant that the Agency would never have the discretion to
                determine that California did not need any subsequent standards. But
                nothing in section 209(b)(1)(B) can be read as calling for scrutinizing
                the specific California standards under the waiver.\260\ Under section
                209(b)(1)(B), EPA is to grant a waiver unless California does not need
                ``such State standards'' (plural). EPA interprets section 209(b)(1)(B)
                to refer back to the phrase ``in the aggregate'' in section 209(b)(1),
                which was added in the 1977 CAA Amendments when Congress removed the
                stringency requirements for waiver of California standards allowing
                instead for standards that are not as stringent as comparable federal
                standards, so long as the standards were ``in the aggregate, at least
                as protective of public health and welfare as applicable Federal
                standards.'' EPA believes that referring back to section 209(b)(1) is
                appropriate given that it precedes the language prior to section
                209(b)(1)(B) and is in accord with the deference Congress intended by
                the 1977 Amendments.\261\ Conversely, EPA believes that under the SAFE
                1 interpretation California would, of necessity, be required to make a
                protectiveness finding for each of the specific standards, and the
                Agency believes this would be an inappropriate outcome from SAFE 1.
                Under the 1977 Amendments, California can ``include some less stringent
                [standards] than the corresponding federal standards.'' \262\ As
                previously explained, ``Congress could not have given this flexibility
                to California and simultaneously assigned to the state the seemingly
                impossible task of establishing that `extraordinary and compelling
                conditions' exist for each standard.'' \263\
                ---------------------------------------------------------------------------
                 \260\ In 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, or a program designed for a particular type of air
                pollution problem, if the underlying specific air pollutant is no
                longer at issue.
                 \261\ EPA had applied the traditional interpretation of the
                second waiver prong prior to the 1977 Amendments.
                 \262\ See H.R. Rep. No. 294, 95th Cong., 1st Sess. 302 (1977);
                ``In further amendments to the Act in 1977, Sec. 209 (formerly
                Sec. 208) was amended to require the U.S. Environmental Protection
                Agency (EPA) to consider California's standards as a package, so
                that California could seek a waiver from preemption if its standards
                `in the aggregate' protected public health at least as well as
                federal standards.'' Motor Vehicle Mfrs. Ass'n v. NYS Dep't of Env't
                Conservation, 17 F.3d at 525.
                 \263\ 49 FR at 18890 n.24.
                ---------------------------------------------------------------------------
                 SAFE 1 further argued that its interpretation read the use of
                ``such standards'' consistently between the second and third waiver
                prongs,
                [[Page 14361]]
                sections 209(b)(1)(B) and (C).\264\ It is true that section
                209(b)(1)(C) employs the same phrase ``such State standards'' as
                employed in section 209(b)(1)(B), and it similarly uses that phrase to
                refer to standards in the aggregate. Indeed, section 209(b)(1)(C)
                involves an analysis of feasibility that can take more than the
                feasibility and impacts of the new standards into account. The
                feasibility assessment conducted for a new waiver request focuses on
                the standards in that request but builds on the previous feasibility
                assessments made for the standards already in the program and assesses
                any new feasibility risks created by the interaction between the
                standards in the petition and the existing standards.\265\
                ---------------------------------------------------------------------------
                 \264\ Section 209(b)(1)(C) provides that no such waiver shall be
                granted if the Administrator finds that ``such State standards and
                accompanying enforcement procedures are not consistent with section
                7521(a) [202(a)] of this title.''
                 \265\ For example, in the 2013 ACC waiver that contains CARB's
                LEV III criteria pollutant standards and GHG emission standards, as
                well as the ZEV sales mandate, EPA assessed information submitted by
                CARB regarding the technological feasibility, lead time available to
                meet the requirements, and the cost of compliance and the technical
                and resource challenges manufacturers face in complying with the
                requirements to simultaneously reduce criteria and GHG emissions. 78
                FR at 2131.
                ---------------------------------------------------------------------------
                 In sum, EPA now views as inconsistent with congressional intent the
                SAFE 1 interpretation, which was a flawed interpretation and also a
                significant departure from the traditional interpretation under which
                the Agency reviews California's need for the same standards as those
                that the State determines are ``in the aggregate'' as protective of
                public health and welfare, under section 209(b)(1).\266\ EPA believes
                the traditional interpretation is, at least, the better reading of the
                statute.
                ---------------------------------------------------------------------------
                 \266\ 84 FR at 51345. EPA notes that in SAFE 1 the following
                rationale was used to interpret both 209(b)(1)(C) and then connect
                it with 209(b)(1)(B): ``[B]ecause both sections 209(b)(1)(B) and (C)
                employ the term `such state standards,' it is appropriate for EPA to
                read the term consistently between prongs (B) and (C). Under section
                209(b)(1)(C), EPA conducts review of standards California has
                submitted to EPA for the grant of a waiver to determine if they are
                consistent with section 202(a). It follows then that EPA must read
                `such state standards' in section 209(b)(1)(B) as a reference to the
                same standards in subsection (C).'' Although the Agency has not
                pointed to 209(b)(1)(C) as a basis of statutory construction to
                support the traditional interpretation of 209(b)(1)(B), EPA
                nevertheless believes it is supportive. EPA notes that the term
                ``such state standards'' in 209(b)(1)(C) allows the Agency, in
                appropriate circumstances, to review the consistency of CARB's suite
                of standards, for a particular vehicle category, with section
                202(a). For example, EPA evaluated all of the standards (LEV III
                criteria pollutant, ZEV sales mandate, and GHG standards) of the ACC
                program in recognition of the aggregate costs and lead time
                associated with CARB's standards as well as technologies that may be
                employed to meet more than one standard. 78 FR 2131-45. EPA's
                assessment under 209(b)(1)(C) is not in practice a standard-by-
                standard review. EPA believes it appropriate to read the entirety of
                209 together, along with its purposes, in order to properly
                interpret its components such as 209(b)(1)(B).
                ---------------------------------------------------------------------------
                 As previously explained, in reviewing waiver requests EPA has
                applied the traditional interpretation in the same way for all air
                pollutants, criteria and GHG pollutants alike.\267\ In SAFE 1, however,
                EPA reinterpreted section 209(b)(1)(B) and further set out a
                particularized nexus test and applied this test separately to GHG
                standards at issue. SAFE 1 then concluded that no nexus exists for GHG
                emissions in California.\268\ SAFE 1 further posited that California
                must demonstrate ``compelling and extraordinary circumstances
                sufficiently different from the nation as a whole to justify standards
                on automobile emissions which may, from time to time, need to be more
                stringent than national standards.'' \269\ This has resulted in
                potentially different practical results depending on whether GHG
                standards or criteria emission pollutants are at issue, a distinction
                neither found in nor supported by the text of section 209(b)(1)(B) and
                legislative history. Specifically, SAFE 1 would have the ACC program
                MYs 2017-2025 criteria pollutants standards subject to review under the
                traditional interpretation while GHG standards at issue would be
                subject to review under the SAFE 1 particularized nexus test or
                individualized scrutiny.\270\ This uneven application is even more
                irreconcilable given that California's motor vehicle emission program
                includes two GHG standards for highway heavy-duty vehicles that EPA
                previously reviewed under the traditional approach.\271\ EPA
                acknowledges that ascribing different meanings to the same statutory
                text in the same provision here, depending on its application, ``would
                render every statute a chameleon.'' \272\ Nothing in either section 209
                or the relevant legislative history can be read as calling for a
                distinction between criteria pollutants and GHG standards and thus, the
                individualized scrutiny under the SAFE 1 particularized nexus
                test.\273\ Nothing in section 209(b) can be read as calling for EPA to
                waive preemption only if California seeks to enforce criteria pollutant
                standards. The Administrator is required to waive the preemption in
                section 209(a) unless California ``does not need such State standards
                to meet compelling and extraordinary conditions.'' \274\ This is in
                stark contrast to, for example, section 211(c)(4)(C), which calls for a
                waiver of preemption only if a state demonstrates that a fuel program
                is ``necessary'' to achieve the NAAQS.\275\ Moreover, as previously
                noted, ``[I]f Congress had intended a review of the need for each
                individual standard under (b)(1)(B), it is unlikely that it would have
                used the phrase ``. . . does not need such state standards'' (emphasis
                in original), which apparently refers back to the phrase ``State
                standards . . . in the aggregate as used in the first sentence of
                section 209(b)(1), rather than the particular standard being
                considered.'' \276\ EPA has also explained that an individualized
                review of standards would mean that Congress ``g[ave] flexibility to
                California and simultaneously assigned to the state the seemingly
                impossible tasks of establishing that `extraordinary and compelling
                conditions' exist for each less stringent standard.'' \277\
                ---------------------------------------------------------------------------
                 \267\ 74 FR at 32763-65; 76 FR at 34693; 79 FR at 46256; 81 FR
                at 95982.
                 \268\ SAFE 1 also relied on UARG v. EPA, 134 S. Ct. 2427 (2014),
                where the Supreme Court disagreed with the Agency's decision to
                regulate all sources of GHG under Titles I and V as the consequence
                of the Agency's section 202(a) endangerment finding for motor
                vehicle GHG emissions. In EPA's view upon reconsideration of SAFE 1,
                UARG is distinguishable because here the Agency is acting under a
                specific exemption to section 202(a) that allows for California to
                set its own standards for motor vehicle GHG standards under
                California state law, and thus, regulate major sources of GHG
                emissions within the State. California's authority to promulgate
                standards is neither contingent nor dependent on the Agency's
                section 202(a) endangerment finding for GHG. See 74 FR at 32778-80;
                79 FR at 46262. Moreover, as discussed above, EPA's waiver authority
                under section 209(b) is coextensive with preemption under section
                209(a). See MEMA I, 627 F.2d at 1107. UARG is inapplicable to the
                scope of preemption under section 209(a).
                 \269\ 84 FR at 51341.
                 \270\ Id. at 51337.
                 \271\ The first HD GHG emissions standard waiver related to
                certain new 2011 and subsequent model year tractor-trailers. 79 FR
                46256 (August 7, 2014). 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).
                 \272\ See States and Cities at 24 (quoting Clark v. Martinez,
                543 U.S. 371, 382 (2005) and citing U.S. v. Santos, 553 U.S. 507,
                522 (2008); U.S. Dep't of the Treasury v. FLRA, 739 F.3d 13, 21
                (D.C. Cir. 2014)). The commenter notes that in the SAFE 1 brief, EPA
                claimed that its new approach to section 209(b)(1)(B) would apply
                ``for all types of air pollutants'' but EPA could point to nowhere
                in SAFE 1 decision where this was said. Id. at 25. And ``only two
                sentences later,'' EPA acknowledged that its review under this
                second prong would change ``depending upon which `air quality
                concerns' were implicated.'' Id.
                 \273\ H.R. Rep. No. 294, 95th Cong., 1st Sess. 302 (1977); 49 FR
                at 18890 n.24.
                 \274\ CAA section 209(b)(1)(B) (emphasis added).
                 \275\ Section 211(c)(4)(C) allows EPA to waive preemption of a
                state fuel program respecting a fuel characteristic or component
                that EPA regulates through a demonstration that the state fuel
                program is necessary to achieve a NAAQS.
                 \276\ 49 FR at 18890.
                 \277\ Id. at 18890 n.24.
                ---------------------------------------------------------------------------
                [[Page 14362]]
                 Similarly, nothing in either section 209 or legislative history can
                be read as requiring EPA to grant GHG standards waiver requests only if
                California's GHG pollution problem is the worst in the country.\278\
                ``There is no indication in either the statute or the legislative
                history that . . . the Administrator is supposed to determine whether
                California's standards are in fact sagacious and beneficial.'' \279\
                And most certainly, nothing in either section 209 or the legislative
                history can be read as calling for EPA to draw a comparison between
                California's GHG pollution problem and the rest of the country (or
                world) when reviewing California's need for GHG standards. Instead, the
                crucial consequence of the 1977 Amendment was to require waiver grants
                for California's specific standards that are part of the State's
                overall approach to reducing vehicle emissions to address air pollution
                even if those specific standards might not be needed to address
                compelling and extraordinary conditions.\280\ Thus, ``even if it were
                true that California's [GHG] problem is, . . . no worse than some other
                areas of the country, this does not mean that [GHG] do not pose a
                special problem in California.'' \281\ Rather, ``EPA's practice [is] to
                leave the decisions on controversial matters of public policy, such as
                whether to regulate [GHG] emissions, to California.'' \282\
                ---------------------------------------------------------------------------
                 \278\ Id. at 18891.
                 \279\ Ford Motor Co., v. EPA, 606 F.2d 1293, 1302 (D.C. Cir.
                1979).
                 \280\ 74 FR at 32761 (``Congress decided in 1977 to allow
                California to promulgate individual standards that are not as
                stringent as comparable federal standards, as long as the standards
                are `in the aggregate, at least as protective of public health and
                welfare as applicable federal standards.' ''); ``[T]he 1977
                amendments significantly altered the California waiver provision.''
                Ford Motor Co., 606 F.2d 1293, 1302 (D.C. Cir. 1979).
                 \281\ 49 FR at 18891.
                 \282\ 43 FR at 25735.
                ---------------------------------------------------------------------------
                 In addition, in Title II, Congress established only two programs
                for control of emissions from new motor vehicles: EPA emission
                standards adopted under the Clean Air Act and California emission
                standards adopted under its state law. And states other than California
                may not ``tak[e] any action that has the effect of creating a car
                different from those produced to meet either federal or California
                emission standards, a so-called `third vehicle.' '' \283\
                ---------------------------------------------------------------------------
                 \283\ Motor Vehicle Mfrs. Ass'n v. NYS Dep't of Env't
                Conservation, 17 F.3d 521, 526, 528 (2d Cir. 1994).
                ---------------------------------------------------------------------------
                 As previously explained, and noted in the Notice of
                Reconsideration, since the grant of the initial GHG waiver request in
                2009, the Agency has applied the traditional interpretation in granting
                two additional waivers for CARB's Heavy-Duty Vehicle GHG emission
                standards and these GHG standards are now part of California's motor
                vehicle program, but EPA did not address these waivers in SAFE 1.\284\
                It also bears note that, given the limited analysis and application of
                the SAFE 1 interpretation of the second waiver prong, it is uncertain
                whether the traditional interpretation remains otherwise applicable to
                earlier model year GHG standards under prior waivers. Ambiguity also
                applies to SAFE 1's interpretation of this prong in respect to all
                criteria pollutant standards in the ACC program. While SAFE 1 stated it
                was only applicable to the GHG standards at issue, in at least one
                instance the Agency indicated that the SAFE 1 interpretation could also
                be applicable to future evaluation of waiver requests for criteria
                pollutant standards.\285\ This uncertainty between these statements in
                SAFE 1 further highlights the inappropriateness of the new
                interpretation of the second prong.
                ---------------------------------------------------------------------------
                 \284\ 79 FR 46256 (August 7, 2014); 81 FR 95982 (December 29,
                2016).
                 \285\ 84 FR at 51341 n.263. ``EPA determines in this document
                that GHG emissions, with regard to the lack of a nexus between their
                State-specific sources and their State specific impacts, and
                California's GHG standard program, are sufficiently distinct from
                criteria pollutants and traditional, criteria pollutant standards,
                that it is appropriate for EPA to consider whether California needs
                its own GHG vehicle emissions program. EPA does not determine in
                this document and does not need to determine today how this
                determination may affect subsequent reviews of waiver applications
                with regard to criteria pollutant control programs.'' (Emphasis
                added). See also id. at 51344 n.268 (``EPA is adopting an
                interpretation of CAA section 209(b)(1)(B), specifically its
                provision that no waiver is appropriate if California does not need
                standards ``to meet compelling and extraordinary conditions,''
                similar to the interpretation that it adopted in the 2008 waiver
                denial but abandoned in the 2009 and 2013 waiver grants, and
                applying that interpretation to determine to withdraw the January
                2013 waiver for California's GHG and ZEV program for model years
                2021 through 2025''), and at 51346 (``EPA therefore views this
                interpretation and application of CAA section 209(b)(1)(B) set forth
                here as, at minimum, a reasonable one that gives appropriate meaning
                and effect to this provision.'').
                ---------------------------------------------------------------------------
                 In sum, for the reasons noted above, EPA is withdrawing the SAFE 1
                interpretation and reinstating certain aspects of the ACC program
                waiver that were earlier granted under the traditional interpretation
                and approach. EPA concludes it erred by not properly evaluating the
                statutory interpretation of section 209, the associated legislative
                history including the policy deference that should be afforded to
                California to address its serious air quality problems and to serve as
                a laboratory for the country, and because the ``need'' for a motor
                vehicle emission program and related standards within the program are
                necessarily better viewed as a comprehensive and interrelated effort to
                address the range of air quality problems facing California.\286\ At
                the same time, EPA notes that the traditional interpretation is
                reasonable and consistent with the text, structure and congressional
                intent and purpose of section 209(b) and EPA is thus confirming that
                the traditional interpretation of section 209(b)(1)(B) was appropriate
                and is, at least, the better interpretation.\287\
                ---------------------------------------------------------------------------
                 \286\ As noted previously, in the context of evaluating the
                ``need'' for California's motor vehicle emission standards the
                Agency is informed by the legislative history from 1967 and 1977,
                whereby California is properly viewed as a laboratory for the
                country and that its policy decisions on how best to address its
                serious air quality issues, and that deference on the question of
                ``need'' is in order. Therefore, EPA believes it misapplied the
                concept of deference in the context of the second waiver prong
                application in SAFE 1. See e.g., 84 FR at 51344 n.268. While EPA
                believes it appropriate to not defer when it is interpreting its own
                statute, the Agency nevertheless determines that California's policy
                choices in term of its ``need'' in how best to address compelling
                and extraordinary conditions in California requires deference by the
                Agency. This is consistent with EPA's longstanding waiver practice
                and its integration of the legislative history behind section 209.
                In any event, EPA would reach the same conclusions regarding the
                second waiver prong even if it did not defer to California regarding
                the nature of its air quality problems. 86 FR at 74489 (``The 2009
                Endangerment Finding further explained that compared with a future
                without climate change, climate change is expected to increase
                tropospheric ozone pollution over broad areas of the U.S., including
                in the largest metropolitan areas with the worst tropospheric ozone
                problems, and thereby increase the risk of adverse effects on public
                health (74 FR 66525).''). See also 86 FR at 74492.
                 \287\ ``The interpretation that my inquiry under (b)(1)(B) goes
                to California's need for its own mobile source program is borne out
                not only by the legislative history, but by the plain meaning of the
                statue as well.'' 49 FR at 18890.
                ---------------------------------------------------------------------------
                2. California Needs the GHG Standards and ZEV Sales Mandate Even Under
                the SAFE 1 Interpretation
                 Even if the SAFE 1 interpretation of section 209(b)(1)(B) was
                appropriate, the record of both the ACC program waiver and SAFE 1
                proceeding demonstrate that California has a need for the GHG standards
                and ZEV sales mandate at issue under the SAFE 1 interpretation as well.
                The opponents of the waiver (including EPA in SAFE 1) did not met their
                burden of proof to demonstrate that California does not need its GHG
                emission standards and ZEV sales mandate, whether individually or as
                part of California's motor vehicle emission program, to meet compelling
                and extraordinary conditions.\288\
                ---------------------------------------------------------------------------
                 \288\ EPA notes that by this action it is rescinding the
                interpretation of section 209(b)(1)(B) as set forth in SAFE 1.
                Nevertheless, EPA believes it appropriate to address comments
                received that suggest the SAFE 1 interpretation was not only
                correct, but that the factual record supported the SAFE 1 withdrawal
                of the ACC waiver based on this interpretation.
                ---------------------------------------------------------------------------
                [[Page 14363]]
                 As previously explained, the 1977 CAA Amendments allow California
                to promulgate standards that might not be considered needed to meet
                compelling and extraordinary circumstances but would nevertheless be
                part of California's overall approach of reducing vehicle emissions to
                address air pollution in California.\289\ Thus, CARB may now design
                motor vehicle emission standards, individually, that might sometimes
                not be as stringent as federal standards but collectively with other
                standards would be best suited for California air quality problems
                because under the 1977 Amendments, California can ``include some less
                stringent [standards] than the corresponding federal standards.'' \290\
                And EPA is ``required to give very substantial deference to
                California's judgments on this score.'' \291\
                ---------------------------------------------------------------------------
                 \289\ See Ford Motor Co., v. EPA, 606 F.2d 1293, 1296-97 (D.C.
                Cir. 1979); See H.R. Rep. No. 294, 95th Cong., 1st Sess. 302 (1977).
                 \290\ 43 FR 25729, 25735 (June 14, 1978). See Ford Motor Co.,
                606 F.2d at 1296-97.
                 \291\ 40 FR at 23104. See also LEV I (58 FR 4166 (January 13,
                1993)) Decision Document at 64.
                ---------------------------------------------------------------------------
                 Indeed, as EPA noted in the ACC program waiver, Congress
                intentionally provided California the broadest possible discretion in
                adopting the kind of standards in its motor vehicle program that
                California determines are appropriate to address air pollution problems
                that exist in California, whether or not those problems are only local
                or regional in nature, and to protect the health and welfare of its
                citizens:
                 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.\292\
                ---------------------------------------------------------------------------
                 \292\ 78 FR at 2128-29. See ``Our Changing Climate 2012
                Vulnerability & Adaptation to the Increasing Risks from Climate
                Change in California.'' Publication # CEC-500-2012- 007. Posted:
                July 31, 2012; available at https://ucanr.edu/sites/Jackson_Lab/files/155618.pdf at 4 (``Higher temperatures also increase ground-
                level ozone levels. Furthermore, wildfires can increase particulate
                air pollution in the major air basins of California. Together, these
                consequences of climate change could offset air quality improvements
                that have successfully reduced dangerous ozone concentrations. Given
                this ``climate penalty,'' as it is commonly called, air quality
                improvement efforts in many of California's air basins will need to
                be strengthened as temperatures increase in order to reach existing
                air quality goals.'').
                 In the context of implementing section 209(b)(1)(B) and assessing
                the ``need'' for California's standards even under the SAFE 1
                interpretation, EPA sees no reason to distinguish between ``local or
                regional'' air pollutants versus other pollutants that may be more
                globally mixed. Rather, it is appropriate to acknowledge that all
                pollutants and their effects may play a role in creating air pollution
                problems in California and that EPA should provide deference to
                California in its comprehensive policy choices for addressing them.
                Again, even if a new interpretation of section 209(b)(1)(B) were
                appropriate in SAFE 1, and EPA believes it is not, it is important to
                note that historically, criteria pollutant reductions have been
                relevant to section 209(b)(1)(B). As previously noted, nothing in
                section 209(b) can be read as calling for EPA to waive preemption only
                if California seeks to enforce criteria pollutant standards. The
                Administrator is required to waive the preemption in section 209(a)
                unless California ``does not need such State standards to meet
                compelling and extraordinary conditions.'' \293\ As also previously
                noted this is in stark contrast to, for example, section 211(c)(4)(C),
                which calls for a waiver of preemption only if a state demonstrates
                that a fuel program will result in criteria pollutant reductions that
                will enable achievement of applicable NAAQS.
                ---------------------------------------------------------------------------
                 \293\ CAA section 209(b)(1)(B) (emphasis added).
                ---------------------------------------------------------------------------
                 The first section below focuses on criteria pollution reduction,
                which has long been relevant to section 209(b)(1)(B). EPA has never put
                in doubt that California's serious criteria air pollution problems
                (such as NAAQS nonattainment and the factors that give rise to those
                conditions, including the geographic and climate conditions in the
                State, the number of motor vehicles in California, and local and
                regional air quality) are ``compelling and extraordinary,'' or that
                California ``needs'' regulations that address such emissions in order
                to achieve every fraction of criteria pollutant emissions it can
                achieve.\294\ The factual record before the Agency in 2013 and again in
                2019 includes ample documentation of criteria emission reductions from
                California's GHG standards and ZEV sales mandate.\295\ Nothing in the
                record is sufficient to demonstrate that California does not need the
                ACC program (or the motor vehicle emission program) or, in the context
                of the SAFE 1 interpretation, the specific GHG emission standards and
                the ZEV sales mandate to meet compelling needs related to criteria
                pollution. These benefits have a clear connection to California's
                ``need'' for its specific GHG standards and ZEV sales mandate, at issue
                under the waiver. The second section below focuses on the GHG reduction
                benefits of California's GHG standards and ZEV sales mandate. EPA
                acknowledges that California is particularly impacted by climate
                change, including increasing risks from record-setting fires, heat
                waves, storm surges, sea-level rise, water supply shortages and extreme
                heat, and that climate-change impacts in California are therefore
                ``compelling and extraordinary conditions'' for which California needs
                the GHG standards and ZEV sales mandate.
                ---------------------------------------------------------------------------
                 \294\ In SAFE 1, EPA found that California's criteria pollution
                conditions remain ``compelling and extraordinary and that California
                needs standards to produce any and all reductions in criteria
                pollutant emissions.'' 84 FR at 51344, 51346.
                 \295\ When California originally adopted a ZEV sales mandate
                into its regulations, a significant factor in support of its action
                was addressing criteria pollutant emissions. In SAFE 1 EPA
                acknowledged that California's ZEV mandate initially targeted only
                criteria pollution. 84 FR at 51329. EPA's 2013 waiver grant
                recognized that with California's ACC program California had shifted
                to relying on the ZEV requirements to reduce both criteria and GHG
                pollution. 78 FR at 2114.
                ---------------------------------------------------------------------------
                a. GHG Standards and ZEV Sales Mandates Have Criteria Emission Benefits
                 As shown below, criteria pollutant reductions are demonstrably
                connected to California's ``need'' for its GHG standards and ZEV sales
                mandate at issue under the waiver.\296\ EPA first concluded that there
                is a ``logical link between the local air pollution problem
                [[Page 14364]]
                of ozone and GHGs'' in the 2009 California GHG waiver by explaining,
                for instance, that ``the impacts of global climate change can
                nevertheless exacerbate this local air pollution problem.'' \297\
                Moreover, as previously explained, in two additional GHG waiver
                requests and associated EPA waiver decisions since the 2009 GHG waiver,
                EPA acknowledged that CARB had demonstrated the need for GHG standards
                to address criteria pollutant concentrations in California. In the 2014
                HD GHG waiver request, CARB projected, for example, ``reductions in
                NOX emissions of 3.1 tons per day in 2014 and one ton per
                day in 2020'' in California.\298\
                ---------------------------------------------------------------------------
                 \296\ In response to comments arguing that upstream emission
                benefits should not be considered in determining the criteria
                pollutant benefits of CARB' standards or that it is inappropriate to
                elevate stationary source criteria pollutant emissions into a make-
                or-break factor in waivers for motor vehicle emission programs, EPA
                believes it appropriate to reiterate the air quality problems facing
                California, as evidenced by NAAQS attainment challenges. Waiver
                practice and applicable case law, as previously noted, afford
                California wide deference in its policy and regulatory approaches in
                addressing these challenges. Therefore, EPA believes that to the
                degree a nexus between CARB's standards and addressing its serious
                air quality problems is required, that it is reasonable to base the
                need on related criteria emission impacts. EPA notes that, in
                setting its federal light-duty vehicle GHG standards, it is afforded
                discretion under the CAA to consider upstream emission impacts and
                does include such consideration in its own rulemakings. 77 FR 62624,
                62819 (October 15, 2012) (taking fuel related upstream GHG emissions
                into account in setting compliance values for vehicle GHG emissions
                standards).
                 \297\ 74 FR at 32763. According to California, ``California's
                high ozone levels-clearly a condition Congress considered-will be
                exacerbated by higher temperatures from global warming . . . [T]here
                is general consensus that temperature increases from climate change
                will exacerbate the historic climate, topography, and population
                factors conducive to smog formation in California, which were the
                driving forces behind Congress's inclusion of the waiver provision
                in the Clean Air Act.'' Id. (quoting comments submitted by CARB
                during the 2009 reconsideration). CARB also explained that ``the
                factors that cause ozone are primarily local in nature and [ ] ozone
                is a local or regional air pollution problem, the impacts of global
                climate change can nevertheless exacerbate this local air pollution
                problem. Whether or not local conditions are the primary cause of
                elevated concentrations of greenhouse gases and climate change,
                California has made a case that its greenhouse gas standards are
                linked to amelioration of California's smog problems . . . . There
                is a logical link between the local air pollution problem of ozone
                and California's desire to reduce GHGs as one way to address the
                adverse impact that climate change may have on local ozone
                conditions.'' Id.
                 \298\ 79 FR at 46261. See also 81 FR at 95985-86 n.27
                (referencing Resolution 13-50's statements supporting California's
                continued need for its own motor vehicle program in order to meet
                serious ongoing pollution problems).
                ---------------------------------------------------------------------------
                 In SAFE 1, EPA distinguished prior GHG waivers from the ACC program
                GHG waiver solely on grounds of how CARB attributed the pollution
                benefits in its waiver request. EPA explained that CARB had linked
                those prior waived GHG standards to criteria pollutant benefits but had
                not done so in the ACC program waiver request: ``California's approach
                in its ACC program waiver request differed from the state's approach in
                its waiver request for MY 2011 and subsequent heavy-duty tractor-
                trailer GHG standards, where California quantified NOX
                emissions reductions attributed to GHG standards and explained that
                they would contribute to PM and ozone NAAQS attainment.'' \299\
                Moreover, how CARB attributes the pollution reductions for accounting
                purposes from its various standards does not reflect the reality of how
                the standards deliver emissions reductions and should not drive whether
                or not a waiver can be withdrawn. EPA believes, based on its historical
                deference to CARB in waiver proceedings, that CARB is entitled to this
                discretion.
                ---------------------------------------------------------------------------
                 \299\ 84 FR at 51337 n.252 (citing 79 FR at 46256, 46257 n.15,
                46261, 46262 n.75).
                ---------------------------------------------------------------------------
                 EPA also believes that prior waiver decisions indicate that the
                ``approach'' taken by California in its waiver requests needs to be
                carefully assessed and understood by the Agency before discounting the
                benefits of its mobile source emission standards. The characterization
                of CARB's ``approach,'' as not calling out criteria emissions benefits
                (such as upstream criteria emission benefits) of GHG standards, was
                incorrect and should not have undermined EPA's findings and grant of
                the initial ACC program waiver request for the following reasons: (1)
                As previously noted, the ACC program standards are interrelated and all
                serve to reduce both criteria and GHG pollution; (2) CARB conducted a
                combined emissions analysis of the elements of the ACC program because
                the program was designed to work as an integrated whole; and (3) EPA
                has always considered California's standards as a whole or ``in the
                aggregate'' under the traditional interpretation of section
                209(b)(1)(B).\300\ EPA noted the associated criteria pollutant and GHG
                emissions benefits for the whole ACC program: ``the ACC program will
                result in reductions of both criteria pollutants and GHG emissions
                that, in the aggregate, are more protective than the pre-existing
                federal standards.'' \301\ EPA also made the requisite finding that
                California's protectiveness finding for the ACC program was not
                arbitrary and capricious, under section 209(b)(1)(A), by explaining
                that ``California's ZEV and GHG emission standards are an addition to
                its LEV program.'' \302\
                ---------------------------------------------------------------------------
                 \300\ ZEV ISOR, EPA-HQ-OAR-2012-0562-0008 at 72; CARB
                Supplemental Comments, EPA-HQ-OAR-2012-0562-0373 at 3.
                 \301\ 74 FR at 2122.
                 \302\ Id. at 2125.
                ---------------------------------------------------------------------------
                 In SAFE 1, EPA further asserted that ``California's responses to
                the SAFE proposal do not rebut the Agency's views that the ZEV
                standards for MY 2021-2025 are inextricably interconnected with the
                design and purpose of California's overall GHG reduction strategy.''
                \303\ For the following reasons, however, EPA was also incorrect in the
                assessment of criteria emission benefits of CARB's ZEV sales mandate.
                EPA focused on only the following snippet from one salient paragraph in
                CARB's 2012 waiver request as support for the lack of criteria
                emissions benefits: ``There is no criteria emissions benefit from
                including the ZEV proposal in terms of vehicle (tank-to-wheel or TTW)
                emissions. The LEV III criteria pollutant fleet standard is responsible
                for those emission reductions in the fleet; the fleet would become
                cleaner regardless of the ZEV regulation because manufacturers would
                adjust their compliance response to the standard by making less
                polluting conventional vehicles.'' \304\ But, as discussed above, that
                was merely an attribution of benefits and did not reflect the practical
                reality of how California's standards work. Moreover, the paragraph in
                its entirety goes on to explain that CARB's ZEV sales mandate would
                achieve criteria emission reductions: ``However, since 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.'' \305\
                ---------------------------------------------------------------------------
                 \303\ 84 FR at 51337.
                 \304\ Id. at 51337, 51330, 51337, 51353-54, 51356, 51358.
                 \305\ 2012 Waiver Request at 15-16. CARB also noted that
                criteria and PM emission benefits will vary by region throughout the
                State depending on the location of emission sources. Refinery
                emission reductions will occur primarily in the east Bay Area and
                South Coast region where existing refinery facilities operate. As
                refinery operations reduce production and emissions, the input and
                output activities, such as truck and ship deliveries, will also
                decline. This includes crude oil imported through the Los Angeles
                and Oakland ports, as well as pipeline and local gasoline truck
                distribution statewide. EPA again notes that in its light-duty
                vehicle GHG rulemaking in 2012 it also noted the upstream emission
                impacts. 77 FR at 62819.
                ---------------------------------------------------------------------------
                 It bears note that this attribution of criteria pollutant
                reductions was similar to the one that CARB made almost a decade ago
                for the 2009 GHG waiver request.\306\ For example, CARB provided
                ``extensive evidence of its current and serious air quality problems
                and the increasingly stringent health-based air quality standards and
                federally required state planning efforts to meet those standards
                firmly.'' \307\ The States and Cities also commented that ``the
                attribution CARB made as part of its waiver request was never intended
                to, and did not, establish the absence of any
                [[Page 14365]]
                vehicular emission benefits from the ZEV standard.'' EPA believes that
                CARB's statement was merely a ``simplification that distinguished the
                standards based on the primary objectives of the two, complementary
                standards.'' \308\ EPA agrees that the record from 2013, and 2019,
                demonstrates that CARB's attribution of short-term emissions benefits
                did not undercut the long-term vehicular emission benefits of the ZEV
                standards. Thus, regardless of how the emissions reductions are
                attributed, the GHG standards and ZEV sales mandate drive reductions in
                criteria pollution.
                ---------------------------------------------------------------------------
                 \306\ ``The establishment of greenhouse gas emission standards
                will result in a reduction in upstream emissions (emission due to
                the production and transportation of the fuel used by the vehicle)
                of greenhouse gas, criteria and toxic pollutants due to reduced fuel
                usage.'' EPA-HQ-OAR-2006-0173-0010.107 at 8.
                 \307\ CARB, EPA-HQ-OAR-2012-0562-0371. CARB estimated benefits
                of the ZEV and GHG standards for calendar years by which the South
                Coast air basin must meeting increasingly stringent NAAQS for ozone:
                2023, 2031, and 2037. States and Cities app. A at 2-4, app. C at 8-
                9.
                 \308\ States and Cities at 31 (original emphasis).
                ---------------------------------------------------------------------------
                 EPA has also consistently explained that ``consideration of all the
                evidence submitted concerning a waiver decision is circumscribed by its
                relevance to those questions . . . consider[ed] under section 209(b).''
                \309\ And so, as earlier noted, any reconsideration of a prior waiver
                decision must comport with criteria in section 209(b)(1) as well as
                have record support. Moreover, in prior waiver requests for ZEV sales
                mandate requirements, CARB has discussed criteria pollutant emissions
                reductions because of the mandate for sale of vehicles that have zero
                emissions.\310\ CARB's 2012 waiver request also indicated the clear
                intent regarding the evolution of the ZEV program and California's
                decision to focus both on criteria pollutant and GHG reductions.\311\
                EPA's reading of and reliance on the snippet from CARB's waiver request
                describing the ZEV sales mandate requirements in the ACC program was
                both incorrect and improper, as well as contrary to congressional
                intent and EPA's historic practice of affording broad discretion to
                California in selecting the best means for addressing the health and
                welfare of its citizens.
                ---------------------------------------------------------------------------
                 \309\ 74 FR at 32748. See also 78 FR at 2115.
                 \310\ 71 FR 78190 (December 28, 2006); 75 FR 11878 (March 12,
                2010) and 76 FR 61095 (October 3, 2011).
                 \311\ See 2012 Waiver Request at 2. At 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.
                ---------------------------------------------------------------------------
                b. California Needs Its Standards To Address the Impacts of Climate
                Change in California
                 Under section 209(b)(1)(B), EPA is to grant a waiver request unless
                California does not need the standards at issue to address ``compelling
                and extraordinary conditions.'' In applying the traditional approach,
                EPA has consistently reasoned that ``compelling and extraordinary
                conditions'' refers primarily to the factors that tend to produce
                higher levels of pollution in California--geographical and climatic
                conditions (like thermal inversions) that, when combined with large
                numbers and high concentrations of automobiles, create serious air
                pollution problems.\312\ These conditions continue to exist in
                California and CARB, since the initial 2009 GHG waiver, has
                consistently drawn attention to the existential crisis that California
                faces from climate change and maintained that air quality issues
                associated with GHG emissions have exacerbated this crisis and have yet
                to attenuate.\313\
                ---------------------------------------------------------------------------
                 \312\ 49 FR at 18890 (citing legislative history).
                 \313\ 2012 Waiver Request at 1.
                ---------------------------------------------------------------------------
                 EPA now recognizes that CARB, as part of its original waiver
                request and in comments in response to SAFE 1, submitted ample evidence
                of multiple ways California is particularly impacted by climate change,
                including increasing risks from record-setting fires, heat waves, storm
                surges, sea-level rise, water supply shortages and extreme heat; in
                other words that GHG emissions contribute to local air pollution, and
                that climate-change impacts in California are ``compelling and
                extraordinary conditions.'' For example, CARB noted that ``[r]ecord-
                setting fires, deadly heat waves, destructive storm surges, loss of
                winter snowpack--California has experienced all of these in the past
                decade and will experience more in the coming decades. California's
                climate--much of what makes the State so unique and prosperous--is
                already changing, and those changes will only accelerate and intensify
                in the future. Extreme weather will be increasingly common as a result
                of climate change. In California, extreme events such as floods, heat
                waves, droughts and severe storms will increase in frequency and
                intensity. Many of these extreme events have the potential to
                dramatically affect human health and well-being, critical
                infrastructure and natural systems.'' \314\ Within the ACC waiver
                request, CARB provided a summary report on the third assessment from
                the California Climate Change Center (2012), which described dramatic
                sea level rises and increases in temperatures in California and
                associated impacts on local air quality and other conditions in
                California.\315\
                ---------------------------------------------------------------------------
                 \314\ CARB supplemental comment at EPA-HQ-OAR-2012-0562-0371.
                CARB notes that EPA's reasoning that the ``compelling and
                extraordinary conditions'' criteria should be viewed as a ``program
                as a whole'' was upheld as ``eminently reasonable'' in ATA v. EPA,
                600 F.3d 624, 627-29 (D.C. Cir. 2010), and that the ACC program
                appropriately integrates the passenger vehicle program to address
                multiple pollutant types, which also reflects the intent of Congress
                in 1977 to broaden California's discretion to adjust its program as
                needed (Ford Motor Co. v. EPA, 606 F.2d at 1294). This comment
                extensively lays out the compelling and extraordinary conditions
                associated with California's air quality challenges and the need to
                reduce criteria emissions and greenhouse gas emissions associated
                with CARB's ZEV sale mandate and GHG standards. Id. at 5 (``The
                critical nature of the LEV III regulation is also highlighted in the
                recent effort to take a coordinated look at strategies to meet
                California's multiple air quality and climate goals well into the
                future. This coordinated planning effort, Vision for Clean Air: A
                Framework for Air Quality and Climate Planning (Vision for Clean
                Air) demonstrates the magnitude of the technology and energy
                transformation needed from the transportation sector and associated
                energy production to meet federal standards and the goals set forth
                by California's climate change requirements.'').
                 \315\ 78 FR at 2129 (``To the extent that it is appropriate to
                examine the need for CARB's GHG standards to meet compelling and
                extraordinary conditions, as EPA discussed at length in its 2009 GHG
                waiver decision, California does have compelling and extraordinary
                conditions directly related to regulations of GHG. EPA's prior GHG
                waiver contained extensive discussion regarding the impacts of
                climate change in California. In addition, CARB has submitted
                additional evidence in comment on the ACC waiver request that
                evidences sufficiently different circumstances in California. CARB
                notes that `Record-setting fires, deadly heat waves, destructive
                storm surges, loss of winter snowpack--California has experienced
                all of these in the past decade and will experience more in the
                coming decades. California's climate--much of what makes the state
                so unique and prosperous--is already changing, and those changes
                will only accelerate and intensify in the future. Extreme weather
                will be increasingly common as a result of climate change. In
                California, extreme events such as floods, heat waves, droughts and
                severe storms will increase in frequency and intensity. Many of
                these extreme events have the potential to dramatically affect human
                health and well-being, critical infrastructure and natural
                systems.'') (``Our Changing Climate 2012 Vulnerability & Adaptation
                to the Increasing Risks from Climate Change in California.
                Publication # CEC-500-2012- 007. Posted: July 31, 2012; available at
                http://www.climatechange.ca.gov/adaptation/third-assessment''). EPA
                also noted that ``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.'' 78 FR at 2128.
                ---------------------------------------------------------------------------
                 To the extent that SAFE 1 relied on the premise that GHG emissions
                from motor vehicles located in California become globally-mixed as part
                of global climate change, and therefore do not pose a local air quality
                issue (placing aside the impacts of heat on ozone as
                [[Page 14366]]
                well as air quality impacts from the dramatic increase in wildfires),
                EPA notes that in addition to the record from the ACC waiver proceeding
                noted above, the SAFE 1 record contains sufficient and unrefuted
                evidence that there can be locally elevated carbon dioxide
                concentrations resulting from nearby carbon dioxide emissions.\316\
                This can have local impacts on, for instance, the extent of ocean
                acidification.\317\ Thus, like criteria pollution, emissions of GHGs
                can lead to locally elevated concentrations with local impacts, in
                addition to the longer-term global impacts resulting from global
                increases in GHG concentrations.
                ---------------------------------------------------------------------------
                 \316\ CARB comment at EPA-HQ-OAR-2018-0283-5054 at 305-06
                (California's Fourth Climate Assessment; https://www.energy.ca.gov/sites/default/files/2019-12/Governance_External_Ekstrom_ada.pdf).
                 \317\ See, for example, reports from California's Fourth Climate
                Change Assessment, ``California Mussels as Bio-indicators of Ocean
                Acidification,'' available at https://www.energy.ca.gov/sites/default/files/2019-12/Oceans_CCCA4-CNRA-2018-003_ada.pdf (``Because
                of the coupling between natural (upwelling-driven) and anthropogenic
                (CO2 emission-driven) processes, California waters are already
                experiencing declines in pH that are not expected in other areas of
                the world's oceans for decades (Feely et al. 2008; Chan et al.
                2017). These perturbations to seawater chemistry join others
                associated with changing seawater temperatures (Garc[iacute]a-Reyes
                and Largier 2010) and reductions in ocean oxygenation (Bograd et al.
                2008; Chan et al. 2008). Therefore, marine communities along the
                coast of California are increasingly subjected to a suite of
                concurrent environmental stressors. Substantial impetus exists to
                understand, quantify, and project biological and ecological
                consequences of these stressors, which current work suggests may be
                pervasive and diverse (Kroeker et al. 2010, 2013; Gaylord et al.
                2015).''). Further, evidence in the record from a 2019 study
                demonstrated that locally enhanced carbon dioxide concentrations
                above Monterey Bay, California, fluctuate by time of day likely
                because of the magnitude of nearby urban carbon dioxide pollution
                and the effects of topography on offshore winds, and that this
                fluctuation increases the expected rate of acidification of the Bay.
                See Northcott, et al., Impacts of urban carbon dioxide emissions on
                sea-air flux and ocean acidification in nearshore waters, PLoS ONE
                (2019). For decades, the monthly average carbon dioxide
                concentrations off California's coast have been consistently higher
                and more variable than those at Mauna Loa (which are commonly used
                as the global measurements). In fact, another more recent study
                shows that the waters of the California Current Ecosystem, off the
                coast of Southern California, have already acidified more than twice
                as much as the global average. E.g., Cal. Office of Environmental
                Health Hazard Assessment, Atmospheric Greenhouse Gas Concentrations
                (Feb. 11, 2019).
                ---------------------------------------------------------------------------
                 Finally, in demonstrating the need for GHG standards at issue, CARB
                attributed GHG emissions reductions to vehicles in California. For
                instance, ``CARB project[ed] that the standards will reduce car
                CO2 emissions by approximately 4.9%/year, reduce truck
                CO2 emissions by approximately 4.1%/year (the truck
                CO2 standard target curves move downward at approximately
                3.5%/year through the 2016-2021 period and about 5%/year from 2021-
                2025), and reduce combined light-duty CO2 emissions by
                approximately 4.5%/year from 2016 through 2025.'' \318\ CARB also
                projected that its GHG emissions standards for MYs 2017-2025 will
                reduce fleet average CO2 levels by about 34 percent from MY
                2016 levels of 251 g/mile down to about 166 g/mile, based on the
                projected mix of vehicles sold in California.'' \319\ CARB further
                noted that there might be a GHG emission deficit if only the Federal
                GHG standards were implemented in California.\320\ The GHG emissions
                from California cars, therefore, are particularly relevant to both
                California's air pollution problems and GHG standards at issue.
                ---------------------------------------------------------------------------
                 \318\ 78 FR at 2139.
                 \319\ Id. at 2135.
                 \320\ Id. at 2122.
                ---------------------------------------------------------------------------
                 In SAFE 1, EPA dismissed California's ``need'' for the GHG
                standards at issue because their impact on GHG emissions would be too
                small to ``meaningfully address global air pollution problems of the
                sort associated with GHG emissions'': ``[T]he most stringent regulatory
                alternative considered in the 2012 final rule and [Final Regulatory
                Impact Analysis] . . . , which would have required a seven percent
                average annual fleetwide increase in fuel economy for MYs 2017-2025
                compared to MY 2016 standards, was forecast to decrease global
                temperatures by only 0.02 [deg]C in 2100.'' \321\ EPA also received
                similar comments in response to the Notice of Reconsideration. But
                since the inception of the waiver program, EPA has never applied a test
                to determine whether a California waiver request under 209(b)(1) would
                independently solve a pollution problem. EPA has never applied a de
                minimis exemption authority to California waiver request under section
                209(b)(1).\322\ EPA believes there is no basis for exercise of such a
                test under section 209(b), considering that CARB continues to maintain
                that emissions reductions in California are essential for meeting the
                NAAQS.\323\ EPA has reiterated that ``California's policy judgment that
                an incremental, directional improvement will occur and is worth
                pursuing is entitled, in EPA's judgment, to great deference.'' \324\ As
                the Supreme Court has recognized, ``[a]gencies, like legislatures, do
                not generally resolve massive problems in one fell regulatory swoop. .
                . They instead whittle away at them over time, refining their preferred
                approach as circumstances change and as they develop a more nuanced
                understanding of how best to proceed.'' \325\ And so, in the ACC
                program waiver decision, EPA also explained that ``[t]he 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.'' \326\
                ---------------------------------------------------------------------------
                 \321\ 84 FR at 51349.
                 \322\ See, e.g., 74 FR at 32766 (``As noted by the Supreme Court
                in Massachusetts v. EPA, while it is true that regulating motor
                vehicle GHG emissions will not by itself reverse global warming, a
                reduction in domestic automobile emissions would slow the pace of
                global emissions increase no matter what happens with regard to
                other emissions.'').
                 \323\ See Alabama Power Co. v. Costle, 636 F.2d 323, 360-66,
                n.89 (D.C. Cir. 1979).
                 \324\ 74 FR at 32766 (``Under this approach, there is no need to
                delve into the extent to which the GHG standards at issue here would
                address climate change or ozone problems. That is an issue
                appropriately left to California's judgment. . . . 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.'').
                 \325\ Massachusetts v. EPA, 549 U.S. 497, 524 (2007).
                 \326\ 78 FR at 2134.
                ---------------------------------------------------------------------------
                 Further, nothing in either section 209 or the legislative history
                could be read as requiring EPA to grant GHG standards waiver requests
                only if California's GHG pollution problem is the worst in the
                country.\327\ CARB further demonstrated a ``need'' for its GHG
                standards by projecting GHG emissions reductions deficits from
                implementation of only the Federal GHG program in California. ``[I]f a
                National Program standard was theoretically applied only to California
                new vehicle sales alone, it might create a GHG deficit of roughly two
                million tons compared to the California standards.'' \328\
                ---------------------------------------------------------------------------
                 \327\ 49 FR at 18891.
                 \328\ 78 FR at 2122 (citing EPA-HQ-OAR-2012-0562-0374 at 3).
                CARB also noted that ``to the extent a manufacturer chooses not to
                exercise their National Program compliance option in California this
                would actually provide additional GHG benefits in California, so
                compliance in California can never yield fewer cumulative greenhouse
                gas reductions from the industry wide fleet certified in
                California.'' Id. at 2122 n.61.
                ---------------------------------------------------------------------------
                3. California's ZEV Sales Mandate as Motor Vehicle Control Technology
                Development
                 Congress also envisioned that California's other role under section
                209(b) would be an innovative laboratory for motor vehicle emission
                [[Page 14367]]
                standards and control technology. California is to serve as ``a kind of
                laboratory for innovation'' \329\ and to ``blaze its own trail with a
                minimum of federal oversight.\330\ California's ``unique [air
                pollution] problems and [its] pioneering efforts justif[ied] a waiver
                of the preemption section.'' \331\ Congress stressed that California
                should serve the Nation as a ``testing area'' for more protective
                standards.'' \332\ In the 2009 GHG waiver, for example, EPA explained
                that ``the basic nature of the compromise established by Congress [is
                that] California could act as the laboratory for the nation with
                respect to motor vehicle emission control, and manufacturers would
                continue to face just two sets of emissions standards--California's and
                EPA's.'' \333\ California's ZEV sales mandates have so far supported
                development of technologies such as battery electric and fuel cell
                vehicles that embody the pioneering efforts Congress envisaged. EPA
                acknowledged this important role in the ACC program waiver by
                explaining that California needs the ZEV sales mandate requirement to
                ensure the development and commercialization of technology required for
                the future, deeper vehicular emission reductions California will have
                to attain to meet its NAAQS obligations as well as achieve other long-
                term emission goals of new vehicle sales between 2040 and 2050.\334\ In
                SAFE 1, however, EPA did not consider this additional role carved out
                in section 209(b)(1) for California as a proven ground for motor
                vehicle control emissions technology.\335\
                ---------------------------------------------------------------------------
                 \329\ MEMA I, 627 F.2d 1095, 1111 (D.C. Cir. 1979).
                 \330\ Ford Motor Co., v. EPA, 606 F.2d 1293, 1297 (D.C. Cir.
                1979).
                 \331\ S. Rep. No. 90-403, at 33 (1967).
                 \332\ Id.
                 \333\ 74 FR at 32763.
                 \334\ 78 FR at 2123, 2130-31.
                 \335\ 84 FR at 51343 (``[I]n a statute designed to address
                public health and welfare, it certainly cannot mean standards that
                allow a state to be ``a laboratory for innovation'' in the abstract,
                without any connection to a need to address pollution problems.'').
                ---------------------------------------------------------------------------
                 In sum, while nothing in section 209 or the legislative history
                limits EPA's waiver authority to standards that reduce criteria
                pollution,\336\ analyses in this section again recognize the way the
                different requirements in the ACC program work together to reduce
                criteria and GHG pollution and spur technological innovation. These
                analyses conclude that GHG pollution exacerbates tropospheric ozone
                pollution, worsening California's air quality problems, and the manner
                in which GHG and criteria pollutant standards work together to reduce
                both forms of pollution. Ample record support exists on California's
                need for both GHG standards and ZEV sales mandate at issue to address
                compelling and extraordinary conditions in California. As noted above,
                in SAFE 1 EPA, however, relied on an excerpt of the ACC program waiver
                record to determine the lack of criteria emission benefits of GHG
                emission standards and ZEV sales mandate at issue. In doing so, EPA did
                not evaluate the complete record from the ACC waiver proceeding and the
                nature of California's air quality problem, including the relationship
                of climate change to California's ability to achieve the ozone NAAQS in
                the assessment of California's need for these requirements.\337\
                ---------------------------------------------------------------------------
                 \336\ The Agency again notes that, unlike provisions of the CAA
                such as section 211(c)(4)(C) which allows EPA to waive preemption of
                a state fuel program respecting a fuel characteristic or component
                that EPA regulates through a demonstration that the state fuel
                program is necessary to achieve a NAAQS, section 209(b) makes no
                mention of NAAQS pollutants or otherwise indicates that air
                pollutants should be treated differently.
                 \337\ For example, CARB's ISOR for its ZEV standards identifies
                at Table 6.2 the well to wheel emission benefits of the ZEV program
                compared to the LEV III program. ZEV ISOR, EPA-HQ-OAR-2012-0562-0008
                at 78. See also 2012 Waiver Request at 16. CARB noted in its
                comments on the SAFE proposal that ``Rising temperatures exacerbate
                California's ozone problem by increasing ground-level ozone
                concentrations.'' CARB, EPA-HQ-OAR-2018-0283-5054 at 371-72 (citing
                the 2012 Waiver Request). In addition, ``Several studies indicate
                that a warming climate is expected to exacerbate surface ozone in
                California's two major air basins: South Coast Air Basin and San
                Joaquin Valley. Id. at 372 (citing Jacob & Winner. Effect of Climate
                Change on Air Quality, 43:1 ATMOS. ENVIRON. 51 (Jan. 2009); Wu, et
                al., Effects of 2000-2050 Global Change on Ozone Air Quality in the
                United States, 113, D06302, J. GEOPHYS. RES.-ATMOS. (Mar. 19, 2008),
                available at https://doi.org/10.1029/2007JD008917; Rasmussen, et
                al., The Ozone-climate Penalty: Past, Present, and Future, 47:24
                ENVTL. SCI. & TECH. 14258 (Dec. 17, 2013), available at https://www.ncbi.nlm.nih.gov/pmc/articles/PMC3990462/).
                ---------------------------------------------------------------------------
                 As noted above, in SAFE 1, EPA established a new test under section
                209, requiring a particularized, local nexus between (1) pollutant
                emissions from sources, (2) air pollution, and (3) resulting impact on
                health and welfare, a test that would exclude GHG pollution from the
                scope of the waiver.\338\ But this test is found nowhere in the text of
                section 209-- the statute does not contain this requirement, or even
                use these terms.
                ---------------------------------------------------------------------------
                 \338\ 84 FR at 51339-40.
                ---------------------------------------------------------------------------
                 EPA's review of the complete record confirms the Agency's
                conclusions in the ACC program waiver that California needs the GHG
                standards at issue to meet a compelling and extraordinary conditions
                regardless of whether the Agency focuses on criteria or greenhouse gas
                pollution reduction. This review also indicates that opponents of the
                waiver (including EPA in SAFE 1) did not meet the burden of proof
                necessary to demonstrate that California did not have a need for the
                GHG standards, including under the nexus test applied in SAFE 1. It
                also bears note that EPA's longstanding practice, based on the
                statutory text, legislative history, and precedent calls for deference
                to California in its approach to addressing the interconnected nature
                of air pollution within the state and is not limited to criteria
                pollutant problems. Critically, EPA is not to engage in ``probing
                substantive review'' of waiver requests,\339\ but rather ``afford
                California the broadest possible discretion in selecting the best means
                to protect the health of its citizens and the public welfare.'' \340\
                ---------------------------------------------------------------------------
                 \339\ Ford Motor Co. v. EPA, 606 F.2d 1293, 1300 (D.C. Cir.
                1979).
                 \340\ MEMA II, 142 F.3d 449, 453 (D.C. Cir. 1998).
                ---------------------------------------------------------------------------
                E. Conclusion
                 Considering the text, legislative history, and precedent that
                support the Agency's historical practice of interpreting section
                209(b)(1)(B) as calling for a program-level evaluation of waiver
                requests, as well as the uncertainty in settled expectations created by
                the SAFE 1 interpretation, EPA rescinds its actions in SAFE 1 regarding
                both the interpretation of section 209(b)(1)(B) and the findings
                regarding California's need for the GHG standards and ZEV sales
                mandate. EPA believes that the burden of proof had not been met in SAFE
                1, based on the complete factual record, to demonstrate that California
                did not have a need for the GHG standards and ZEV sales mandate under
                the SAFE 1 interpretation of the second waiver prong nor had the burden
                been met to support a finding that the ample evidence in the record at
                the time of the ACC waiver decision did not demonstrate that California
                had a need for its standards to meet compelling and extraordinary
                conditions. As noted above, the result of the recission of the SAFE 1
                action is the reinstatement of the ACC program waiver. EPA confirms the
                traditional interpretation of section 209(b)(1)(B) was appropriate and
                continues to be, at least, a better interpretation regardless of the
                recission of the SAFE 1 interpretation of this criterion.\341\
                ---------------------------------------------------------------------------
                 \341\ See 84 FR at 51344 n.269.
                ---------------------------------------------------------------------------
                [[Page 14368]]
                VI. EPA Inappropriately Considered Preemption Under the Energy Policy
                and Conservation Act (EPCA) in Its Waiver Decision
                 SAFE 1's other justification for withdrawing the ACC program waiver
                was that California's GHG standards and ZEV sales mandate were
                preempted under EPCA. As explained in detail in Section IV, EPA
                believes this basis for reconsideration was outside the appropriate
                bounds of EPA's authority to reconsider previously granted waivers. In
                particular, if EPA could reconsider and withdraw a waiver based on a
                factor not contained in the specified criteria for denial in section
                209(b)(1), EPA could circumvent the specified criteria for denial via
                reconsideration of previously granted waiver.
                 Even if it were appropriate for EPA to reconsider a previously
                granted waiver based on non-statutory factors, in this action, EPA
                concludes that it was inappropriate to rely on preemption under EPCA as
                a basis for withdrawing certain aspects of the ACC program waiver. In
                SAFE 1, a joint action between NHTSA and EPA, NHTSA concluded that
                state or local regulations of tailpipe carbon dioxide emissions are
                ``related to fuel economy standards'' and are therefore preempted under
                EPCA.\342\ As a direct result of NHTSA's codified text and
                pronouncements on preemption set forth in SAFE 1, EPA withdrew the ACC
                program waiver for California's GHG standards and ZEV sales mandate on
                grounds that they were preempted under EPCA. In SAFE 1, EPA believed it
                was appropriate to consider the effect of NHTSA's actions, including
                the view that California cannot enforce standards that are void ab
                initio, and thus EPA stated that ``to the extent that administrative
                action is necessary on EPA's part to reflect that state of affairs, EPA
                hereby withdraws that prior grant of a waiver on this basis.'' \343\
                NHTSA has since issued a new final rule that formally repeals the
                codified text and pronouncements regarding preemption under EPCA found
                in SAFE 1. Upon reconsideration, EPA now believes that, given NHTSA's
                repeal of its regulation and pronouncements in SAFE 1, preemption under
                EPCA cannot serve as a basis for the withdrawal of the ACC program
                waiver as it did in SAFE 1--if it could ever legitimately serve as such
                basis. EPA thus believes it is appropriate to rescind the portion of
                the waiver withdrawal that was based on preemption under EPCA.
                ---------------------------------------------------------------------------
                 \342\ 49 U.S.C. 32919(a) (``When an average fuel economy
                standard prescribed under this chapter is in effect, a State or a
                political subdivision of a State may not adopt or enforce a law or
                regulation related to fuel economy standards or average fuel economy
                standards for automobiles covered by an average fuel economy
                standard under this chapter.''). NHTSA noted that a law or
                regulation having the direct or substantial effect of regulating or
                prohibiting tailpipe carbon dioxide emissions from automobiles or
                automobile fuel economy is a law or regulation related to fuel
                economy standards and expressly preempted under 49 U.S.C. 32919(a).
                84 FR at 51317-18. NHTSA's rule was codified at 49 CFR 531.7
                (``Preemption'') and 533.7 (``Preemption''), as well as each
                Appendix B in 49 CFR part 531 (``APPENDIX B TO PART 531--
                PREEMPTION'') and Part 533 (``APPENDIX B TO PART 533--PREEMPTION'').
                 \343\ 84 FR at 51338.
                ---------------------------------------------------------------------------
                 In addition, given the unique consideration of preemption under
                EPCA in SAFE 1 and its effect on an otherwise validly issued waiver
                under the CAA, EPA believes it is helpful to provide additional
                information regarding the Agency's historical practice and views to
                demonstrate why consideration of preemption under EPCA was
                inappropriate. Consideration of preemption under EPCA is beyond the
                statutorily prescribed criteria for EPA in section 209(b)(1).
                Preemption under EPCA was not a factor that California addressed under
                the applicable waiver criteria in its initial request nor was it a
                factor that EPA considered in granting the ACC program waiver. Until
                SAFE 1, the Agency consistently refrained from reviewing waiver
                requests against factors beyond the statutorily listed criteria under
                section 209(b)(1). Thus, EPA also believes that in the reconsideration
                of a waiver where EPA had previously declined to consider preemption
                under EPCA, SAFE 1 was contrary to congressional intent and the
                Agency's historic practice of hewing to section 209(b)(1) statutory
                criteria in reviewing waiver requests. Given this backdrop, EPA
                believes that the joint rulemaking context of SAFE 1 was an improper
                basis to deviate from EPA's long held belief to not consider factors
                outside the scope of section 209(b)(1), especially given that the
                Agency indicated it would only be a singular occurrence. EPA continues
                to view the text and congressional intent of the statute, as well as
                subsequent case law, as best supporting a limited scope of review for
                waiver requests under section 209(b)(1)--irrespective of whether a
                waiver proceeding is undertaken either solely by EPA or in unison with
                another agency. Therefore, based on EPA's historical practice of not
                considering factors outside of the section 209(b)(1) criteria and
                because EPA believes the ``joint-action'' premise was improper, the
                Agency is rescinding its withdrawal of the ACC program waiver based on
                preemption under EPCA.
                A. Historical Practice and Legislative History
                 Historically, in reviewing California's waiver requests, EPA has
                refrained from the consideration of factors beyond those criteria set
                out in section 209(b)(1).\344\ EPA has generally explained that the
                text, structure, and purpose of the California waiver provision
                indicate congressional intent for EPA to provide significant deference
                to California's judgment, especially on ``ambiguous and controversial
                matters of public policy.'' \345\ In section 209(a), Congress generally
                preempted state standards relating to the control of emissions from new
                motor vehicles and engines, but, in section 209(b), Congress carved out
                an exception for California, directing EPA to grant California a waiver
                of section 209(a) unless the Agency can make a finding under section
                209(b). Congress recognized that California's ``compelling and
                extraordinary circumstances,'' and its historical practice of
                regulating in the area, were sufficient ``to justify standards on
                automobile emissions which may, from time to time, need be more
                stringent than national standards.'' \346\ In creating the waiver
                program, Congress intended not only for California to be able to meet
                its own emission reduction needs, but also for California to act as ``a
                kind of laboratory for innovation'' for motor vehicle standards and
                control technology.'' \347\
                [[Page 14369]]
                Thus ``Congress consciously chose to permit California to blaze its own
                trail with a minimum of federal oversight.'' \348\
                ---------------------------------------------------------------------------
                 \344\ See, e.g., 43 FR at 32184 (rejecting objections to the
                procedures at state level, objections that section 207(c)(3)(A)
                establishes field protection, and constitutional objections all as
                beyond the ``narrow'' scope of the Administrator's review); 74 FR at
                32783 (rejecting comments asking for the consideration of EPCA
                because it is not one of the three statutorily prescribed criteria);
                78 FR at 2145 (again rejecting comments asking for the consideration
                of EPCA because it is outside the statutory criteria); 79 FR at
                46265 (rejecting the argument that the HD GHG Regulations
                ``impermissibly regulate fuel economy'' because, like the commerce
                clause and Federal Aviation Administration Authorization Act of 1994
                (FAAAA) issues, this issue is ``outside the proper scope of review
                since it is not among the criteria listed under section 209(b).'').
                 \345\ 78 FR at 2112, 2115; 40 FR at 23103-04; 58 FR 4166.
                 \346\ H.R. Rep. No. 90-728, 90th Cong., 1st Sess. 21 (1967); S.
                Rep. No. 403, 90th Cong., 1st Sess. 33 (1967) (``The waiver of
                preemption is for California's `unique problems and pioneering
                efforts.' '').
                 \347\ MEMA I, 627 F.2d 1095, 1111 (D.C. Cir. 1979); 113 Cong.
                Rec. 30950, 32478 (Statement of Sen. Murphy) (``The United States as
                a whole will benefit by allowing California to continue setting its
                own more advanced standards for control of motor vehicle emissions.
                . . [The] 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.'').
                 \348\ Ford Motor Co. v. EPA, 606 F.2d 1293, 1297 (D.C. Cir.
                1979).
                ---------------------------------------------------------------------------
                 Legislative history makes clear that the Administrator must
                ``presume'' that the California standards ``satisfy the waiver
                requirements'' and that the burden of proving otherwise rests on the
                Administrator or other parties favoring denial of the waiver.\349\
                Further, according to the House Committee Report for the 1977
                amendments that strengthened California's waiver provisions, EPA is
                ``to afford California the broadest possible discretion in selecting
                the best means to protect the health of its citizens and the public
                welfare.'' \350\ According to the House Report, ``The Administrator,
                thus, is not to overturn California's judgment lightly. Nor is he to
                substitute his judgment for that of the State. There must be ``clear
                and compelling evidence that the State acted unreasonably in evaluating
                the relative risks of various pollutants in light of the air quality,
                topography, photochemistry, and climate in that State, before EPA may
                deny a waiver.'' \351\ EPA's historic practice of considering only
                listed criteria is thus in keeping with the highly deferential review
                of waiver requests that Congress intended in carving out the exception
                from preemption of new motor vehicle and engine standards in section
                209(a).\352\
                ---------------------------------------------------------------------------
                 \349\ MEMA I, 627 F.2d at 1121-22 (citing, for example, S. Rep.
                No. 403, 90th Cong., 1st Sess. 33 (1967)).
                 \350\ MEMA II, 142 F.3d 449, 453 (D.C. Cir. 1998) (quoting H.R.
                Rep. No. 95-294, at 301-02 (1977)).
                 \351\ H.R. Rep. No. 95-294, at 302 (1977), reprinted in 1977
                U.S.C.C.A.N. at 1381.
                 \352\ See, e.g., 74 FR at 32783; 78 FR at 2145.
                ---------------------------------------------------------------------------
                 Courts have generally agreed with the Agency's consideration of
                only listed CAA criteria in reviewing waiver requests, also pointing to
                the statute's lack of any indication of the ability to consider non-
                statutory criteria as well as the waiver program's significant
                deference to California. The D.C. Circuit has stated that, under the
                text of the statute, the section 209(b) criteria are ``the only waiver
                standards with which California must comply'' and that, therefore,
                ``[i]f EPA concludes that California's standards [meet section 209(b)],
                it is obligated to approve California's waiver application.'' \353\ The
                D.C. Circuit has repeatedly described EPA's waiver approval role as
                ``limited'' and ``narrow.'' In MEMA I, for example, the court explained
                that ``the Administrator has consistently held since first vested with
                the waiver authority, [that] his inquiry under section 209 is modest in
                scope. He has no `broad and impressive' authority to modify California
                regulations.'' \354\ The court further noted that ``there is no such
                thing as a `general duty' on an administrative agency to make decisions
                based on factors other than those Congress expressly or impliedly
                intended the agency to consider.'' \355\ Similarly, the court has
                stated that ``[t]he statute does not provide for any probing
                substantive review of the California standards by federal officials''
                and that ``EPA's only role is to review California's proposed rules
                under a narrowly defined set of statutory criteria.'' \356\ Thus, the
                court has consistently rejected arguments requiring EPA to consider
                factors outside of the statutory criteria. In MEMA I, the court
                rejected a constitutional objection to a waiver, explaining that,
                because ``the Administrator operates in a narrowly circumscribed
                proceeding requiring no broad policy judgments on constitutionally
                sensitive matters,'' ``[n]othing in section 209 requires him to
                consider the constitutional ramifications of the regulations for which
                California requests a waiver . . . although nothing in section 209
                categorically forbids'' it.\357\ In the same case, the court also
                rejected an antitrust objection as outside the scope of the
                Administrator's review.\358\ The court again upheld EPA's decision to
                not consider constitutional objections in American Trucking Association
                (ATA) v. EPA, stating, ``We agree with EPA that ATA is seeking
                `improperly to engraft a type of constitutional Commerce Clause
                analysis onto EPA's [s]ection 7543(e) waiver decisions that is neither
                present in nor authorized by the statute.'' \359\
                ---------------------------------------------------------------------------
                 \353\ MEMA II, 142 F.3d at 463.
                 \354\ MEMA 1, 627 F.2d at 1119 (internal citations omitted).
                 \355\ Id. at 1116-17.
                 \356\ Ford Motor Co. v. EPA, 606 F.2d 1293, 1300 (D.C. Cir.
                1979), and ATA v. EPA, 600 F.3d 624, 628 (2010), respectively.
                 \357\ MEMA I, 627 F.2d at 1115 (declining to consider whether
                California standards are constitutional).
                 \358\ Id. at 1117 (``[N]othing in section 209 or elsewhere in
                the Clean Air Act can fairly be read to imply a duty on the
                Administrator to deny a waiver on the basis of the antitrust
                implications of California regulations.'').
                 \359\ ATA v. EPA, 600 F.3d at 628.
                ---------------------------------------------------------------------------
                 It is against this backdrop that EPA has reviewed waiver requests
                by evaluating them solely under the criteria of section 209(b). For
                instance, prior to SAFE 1, EPA had solicited comment, in the context of
                the 2008 and 2009 GHG notices for comment on CARB's first waiver
                request for GHG emission standards, as to whether the EPCA fuel economy
                preemption provisions were relevant to EPA's consideration of CARB's
                authority to implement its motor vehicle GHG regulations.\360\ In both
                instances, EPA declined to consider preemption under EPCA.\361\ In the
                2009 waiver, EPA explained that ``section 209(b) of the Clean Air Act
                limits our authority to deny California's requests for waivers to the
                three criteria therein.'' \362\ EPA further pointed to its historic
                practice of ``refrain[ing] from denying California's requests for
                waivers based on any other criteria,'' which had been reviewed and
                upheld by the Court of Appeals for the District of Columbia
                Circuit.\363\ In the 2013 review of the ACC program waiver request, the
                Agency again declined to consider factors outside the statutory
                criteria, explaining that ``EPA may only deny waiver requests based on
                the criteria in section 209(b), and inconsistency with EPCA is not one
                of those criteria.'' \364\ A year later, EPA yet again declined to
                consider constitutionality claims, preemption under EPCA, and the
                implications of the Federal Aviation Administration Authorization Act
                of 1994 (FAAAA).\365\ EPA explained that section 209(b) limits the
                Agency's authority to deny California's requests for waivers to the
                three criteria therein and that the Agency has consistently refrained
                from denying California's requests for waivers based on any other
                criteria.\366\
                ---------------------------------------------------------------------------
                 \360\ 73 FR at 12159.
                 \361\ Id.; 74 FR at 32783.
                 \362\ 74 FR at 32783.
                 \363\ Id. (citing MEMA I, 627 F.2d at 1111, 1114-20, and MEMA
                II, 142 F.3d 449, 466-67 (D.C. Cir. 1998)).
                 \364\ 78 FR at 2145.
                 \365\ HD GHG Regulations for certain model year sleeper-cab
                tractors and dry-van and refrigerated-van trailers. 79 FR at 46256,
                46264.
                 \366\ Id. In rejecting the commerce clause objection, the
                decision cited MEMA I's statement that ``[t]he waiver proceeding
                produces a forum ill-suited to the resolution of constitutional
                claims.'' Id. (citing MEMA I, 627 F.2d at 1114-20). Thus, the
                decision concluded, ``Constitutional challenges to the HD GHG
                Regulations [were] more appropriately addressed by a legal challenge
                directly against the state.'' Id.
                ---------------------------------------------------------------------------
                 In SAFE 1, EPA changed course, reasoning instead that the Agency
                pronouncement in the ACC program waiver decision on factors EPA could
                consider in denying a waiver request ``was 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)-
                [[Page 14370]]
                (C).'' \367\ EPA explained that this statement and EPA's historical
                practice of not considering preemption under EPCA ``were made in the
                context of EPA acting on its own to administer section 209(b) in
                considering such applications.'' \368\ Further, EPA distinguished these
                previous single-agency actions from its SAFE 1 joint action context by
                explaining that ignoring NHTSA's determination of preemption in the
                same action, ``would place the United States Government in the
                untenable position of arguing that one federal agency can resurrect a
                State provision that, as another federal agency has concluded and
                codified, Congress has expressly preempted and therefore rendered void
                ab initio.'' \369\ At the same time, EPA expressed intentions not to
                consider factors outside the statutory criteria in future waiver
                proceedings.\370\ EPA then concluded that NHTSA's determination of
                preemption in the same action ``renders EPA's prior grant of a waiver
                for those aspects of California's regulations that EPCA preempts
                invalid, null, and void'' because ``California cannot enforce standards
                that are void ab initio.'' \371\
                ---------------------------------------------------------------------------
                 \367\ A complete discussion of preemption under EPCA in SAFE 1
                can be found at 84 FR at 51337-38.
                 \368\ Id.
                 \369\ Id. Citing Massachusetts v. EPA, the Agency also asserted
                that the consideration of EPCA was supported by the Supreme Court's
                holding because it ensured consistency between NHTSA and EPA's
                programs. Id.
                 \370\ 84 FR at 51338.
                 \371\ Id.
                ---------------------------------------------------------------------------
                B. Notice of Reconsideration of SAFE 1 and Request for Comment
                 In its April 28, 2021, Notice of Reconsideration, EPA acknowledged
                that SAFE 1's consideration of NHTSA's finding of preemption under EPCA
                deviated from its historic practice of ``declin[ing] to look beyond the
                waiver criteria in section 209(b) when deciding the merits of a waiver
                request from CARB.'' \372\ EPA sought comment on whether ``EPA properly
                considered and withdrew portions of the ACC program waiver pertaining
                to GHG standards and the ZEV sales mandate based on NHTSA's EPCA
                preemption action, including whether EPA had the authority to withdraw
                an existing waiver based on a new action beyond the scope of section
                209.'' \373\ Given EPA's reliance on NHTSA's preemption findings as a
                basis of waiver withdrawal in SAFE 1, EPA also sought comment on how
                the repeal of SAFE 1, should NHTSA take final action to do so, would
                affect its own reconsideration of SAFE 1.
                ---------------------------------------------------------------------------
                 \372\ 86 FR at 22429.
                 \373\ Id.
                ---------------------------------------------------------------------------
                C. Comments Received
                 EPA received comments in support of and against the consideration
                of preemption under EPCA in reviewing requests for waivers by
                California. Multiple comments related to the Agency's use of the joint
                action with NHTSA as a justification for deviating from the Agency's
                practice of reviewing waiver requests under the specific statutory
                criteria. Some commenters agreed that the context of a joint action
                necessitated consideration of preemption under EPCA because NHTSA was
                the agency charged with interpreting and implementing EPCA and so EPA
                must consider its findings in the same action.\374\ One commenter also
                argued that the joint rulemaking of SAFE 1 would be consistent with
                pronouncements in Massachusetts v. EPA (2007) on the agencies'
                respective statutory obligations and the need to avoid inconsistency
                and so, ``[o]nce NHTSA proposed to finalize a determination that EPCA
                preempts California's GHG motor vehicle standards, it would be
                unreasonable for the EPA to refuse to take NHTSA's action into
                account.'' \375\
                ---------------------------------------------------------------------------
                 \374\ See, e.g., CEI at 11-12; AFPM at 2, 6.
                 \375\ CEI at 11.
                ---------------------------------------------------------------------------
                 Other commenters argued that the context of the rulemaking, whether
                joint or not, was irrelevant. One commenter stated emphatically that
                ``what Congress directed EPA to consider when it wrote Section
                209(b)(1) does not change depending on whether EPA acts alone or with
                another agency.'' \376\ Some commenters also argued that the context of
                the rulemaking was a particularly insufficient justification for
                revoking the waiver given language in SAFE 1 that allowed for
                inconsistent consideration of EPCA preemption. Several commenters noted
                that EPA constrained the future applicability of SAFE 1 by explaining
                that the Agency would not consider factors outside statutory criteria
                in future waiver reviews in other subject areas.\377\ Another commenter
                also noted that ``the action purported to be `joint,' and yet as now
                acknowledged, SAFE Part 1 `is properly considered as two severable
                actions, a rulemaking by NHTSA and a final informal adjudication by
                EPA.' '' \378\ These inconsistencies, they argued, made SAFE 1's
                distinction between single-agency and joint actions arbitrary and
                capricious.
                ---------------------------------------------------------------------------
                 \376\ States and Cities at 20. See also Twelve Public Interest
                Organizations app. 1 64-65.
                 \377\ NESCAUM at 3; Twelve Public Interest Organizations at app.
                1 64-65; States and Cities at 20.
                 \378\ SCAQMD at 7 (quoting 86 FR at 22439, n.40).
                ---------------------------------------------------------------------------
                 Commenters also argued for and against consideration of factors
                outside the statutory criteria--including, but not limited to,
                preemption under EPCA--regardless of the kind of agency action,
                although EPA did not make this argument in SAFE 1. Commenters argued
                that EPA's authority to look outside the statutory criteria at EPCA was
                at least permissive, if not mandatory. According to one commenter,
                ``EPA exaggerates the Court's position'' in MEMA I in its
                Reconsideration notice: ``[T]he court did not say that the EPA is
                forbidden to take constitutional ramifications into consideration, only
                that it is not required to do so.'' \379\ Another commenter agreed that
                MEMA I and MEMA II ``do not preclude EPA from considering'' preemption
                under EPCA but then went further, saying that ``EPA is required to
                consider EPCA preemption.'' \380\ The commenter argued that MEMA I
                rejected petitioners' constitutional objections to a waiver under an
                institutional competence line of reasoning, concluding that ``[t]he
                waiver proceeding produces a forum ill-suited to the resolution of
                constitutional claims.'' \381\ In contrast, they continued, the waiver
                proceeding is an appropriate forum for determining whether emission
                standards ``relate to'' fuel economy because this issue is ``within the
                agency's competence, as this relationship is mathematical and based in
                science rather than understandings of Constitutional law and
                precedent.'' \382\ However, the other commenter, who agreed that EPA is
                not ``forbidden'' from considering preemption under EPCA, also noted
                that EPA ``has no special competence to interpret EPCA.'' \383\
                ---------------------------------------------------------------------------
                 \379\ CEI at 10 (original emphasis).
                 \380\ AFPM at 5-6.
                 \381\ Id. at 6 (quoting MEMA I, 627 F.2d 1095, 1114-15 (DC Cir.
                1979)).
                 \382\ Id.
                 \383\ CEI at 11.
                ---------------------------------------------------------------------------
                 Several commenters also argued that EPA could not reinstate the
                waiver because NHTSA concluded that EPCA preempts the standards, such
                standards were void ab initio, and therefore ``the state mandates
                referenced in CA's petition for reconsideration are not even eligible
                to be considered for a CAA waiver of preemption.'' \384\ To ignore
                [[Page 14371]]
                this, they claimed, would violate the Supremacy Clause of the
                Constitution. EPA, therefore, must look outside the statutory criteria
                to consider preemption under EPCA because it cannot ``reasonably claim
                that the lawfulness and constitutionality of state actions over which
                it has supervision are issues outside the scope of its
                responsibility[.]'' \385\
                ---------------------------------------------------------------------------
                 \384\ NADA at 3-4; See also AFPM at 3 (``Since California's GHG
                tailpipe standards and ZEV mandate are related to fuel economy, they
                are not lawfully adopted and void ab initio--and there is nothing
                for EPA to reinstate.''); Urban Air at 47-48; CEI at 2 (``But EPCA
                preemption is the proverbial elephant in the room. If SAFE 1's EPCA
                preemption argument is correct, the EPA could not grant a valid CAA
                preemption waiver for California's tailpipe CO2 standards
                and ZEV mandates, because EPCA had already turned those policies
                into legal phantoms--mere proposals without legal force or
                effect.'').
                 \385\ CEI at 11.
                ---------------------------------------------------------------------------
                 In contrast, other commenters pointed to EPA's historical practice
                of evaluating waiver requests under the section 209 statutory criteria,
                the text of the statute, and the policy implications of looking outside
                the statutory criteria, to support a return to EPA's traditional narrow
                approach. Most commenters argued that EPA's traditional interpretation
                was consistent with the text of section 209(b), which has no reference
                to preemption under EPCA or any other factors outside the three
                statutory criteria.\386\ Not only does EPA have ``no grounds to read
                EPCA preemption considerations into the statute,'' \387\ these
                commenters argued, but to consider non-statutory criteria would
                actually be ``arbitrary and capricious'' \388\ and contrary to
                ``precedent respecting separation of powers and federalism
                principles.'' \389\ Yet another commenter stated that the narrow
                interpretation ``provides a safeguard from the capricious injection of
                outside-the-scope argumentation'' because ``[w]hen the adjudication is
                permitted to stray from the statutory criteria, prospects for a fair
                hearing can be derailed, and the EPA Administrator may be more prone to
                overstep and exert policy preferences that are impermissible.'' \390\
                ---------------------------------------------------------------------------
                 \386\ See, e.g., States and Cities at 20 (``EPA's traditional
                understanding of its limited role is entirely consistent with the
                text of Section 209(b)(1) and precedent interpreting it.''); NCAT at
                12 (``As EPA has stated in several prior waiver decisions, there is
                no reference in Section 209(b) to EPCA preemption nor anything that
                could be construed to address this issue. Section 209(b) is
                unambiguous in this regard, and EPA has no grounds to read EPCA
                preemption considerations into the statute.'').
                 \387\ NCAT at 12.
                 \388\ NESCAUM at 7 (``As the D.C. Circuit has explained in the
                context of Section 209(b), `there is no such thing as a general
                duty' on an administrative agency to make decisions based on factors
                other than those Congress expressly or impliedly intended the agency
                to consider.' It is a basic principle of administrative law that an
                agency action is `arbitrary and capricious if the agency has relied
                on factors which Congress has not intended it to consider.' '').
                 \389\ States and Cities at 20 (``It is likewise entirely
                consistent with precedent respecting separation of powers and
                federalism principles and holding that `a federal agency may pre-
                empt state law only when and if it is acting within the scope of its
                congressionally delegated authority.' Louisiana Pub. Serv. Comm'n v.
                FCC, 476 U.S. 355, 374 (1986).'').
                 \390\ SCAQMD at 7.
                ---------------------------------------------------------------------------
                 Additionally, in their petitions for reconsideration of SAFE 1,
                several states and cities asserted that EPA unlawfully changed course
                in SAFE 1 by considering (and relying on) the purported preemptive
                effect of EPCA, which is outside the confines of section 209(b) and
                argued that this rationale for withdrawing the waiver was flawed.\391\
                ---------------------------------------------------------------------------
                 \391\ 86 FR at 22428.
                ---------------------------------------------------------------------------
                D. Analysis: EPA Is Rescinding Its SAFE 1 Actions Related to Preemption
                Under EPCA
                 Since SAFE 1, NHTSA has formally withdrawn its conclusions (and
                associated regulatory text) that state or local regulations of tailpipe
                carbon dioxide emissions are related to fuel economy standards and
                therefore preempted under EPCA.\392\ Thus the predicate for EPA's
                decision to withdraw the ACC waiver on that basis no longer exists.
                Furthermore, given the context of EPA's reconsideration of the ACC
                program waiver at the time of SAFE 1, the Agency believes it was
                inappropriate to reconsider the validity of the waiver against criteria
                such as preemption under EPCA. In this action, based on the two
                independent grounds noted above, the Agency is rescinding the portion
                of SAFE 1 that withdrew the ACC program waiver based on preemption
                under EPCA.
                ---------------------------------------------------------------------------
                 \392\ 86 FR 74236.
                ---------------------------------------------------------------------------
                1. NHTSA Has Since Repealed Its Findings of Preemption Made in SAFE 1
                 In the Notice of Reconsideration, EPA sought comment on the
                Agency's reliance on NHTSA's preemption findings as a basis for its
                withdrawal of the ACC program waiver in SAFE 1. EPA also sought comment
                on how the repeal of SAFE 1, should NHTSA take final action to do so,
                would affect its own reconsideration of SAFE 1.\393\ NHTSA has since
                withdrawn its findings of preemption and the preemption basis of
                withdrawal is no longer applicable. Specifically, NHTSA has issued a
                new final rule that formally repeals the codified text and additional
                pronouncements regarding preemption under EPCA found in SAFE 1.\394\ In
                SAFE 1, EPA stated that it was appropriate to consider the effect of
                NHTSA's actions, including the view that California cannot enforce
                standards that are void ab initio and thus EPA stated that ``to the
                extent that administrative action is necessary on EPA's part to reflect
                that state of affairs, EPA hereby withdraws that prior grant of a
                waiver on this basis.'' \395\ Since this condition no longer exists,
                EPA believes it is appropriate to rescind the waiver withdrawal that
                was based on preemption under EPCA. EPA believes that, to the extent it
                was ever appropriate for the Agency to base its action on NHTSA's
                finding of preemption under EPCA in SAFE 1, the repeal of the
                preemption rule makes it likewise appropriate to rescind the Agency's
                action in SAFE 1. This would also act to minimize regulatory
                uncertainty as to do otherwise would create further confusion that
                resulted from the joint action in SAFE 1 and would not appropriately
                reflect the current state of affairs under the circumstances of a
                unique federal regulation that had otherwise motivated EPA's actions in
                SAFE 1. NHTSA's recent action also supports EPA's belief that its
                practice of limiting its review of section 209(b) criteria, as
                explained below, remains appropriate in the context of preemption under
                EPCA.
                ---------------------------------------------------------------------------
                 \393\ 86 FR at 22429.
                 \394\ 86 FR 74236. NHTSA notes in this rulemaking that ``the
                Agency is repealing all regulatory text and appendices promulgated
                in the SAFE I Rule. In doing so, the Agency underscores that any
                positions announced in preambulatory statements of prior NHTSA
                rulemakings, including in the SAFE I Rule, which purported to define
                the scope of preemption under the Energy Policy and Conservation Act
                (EPCA), do not reflect the Agency's reconsidered understanding of
                its proper role in matters of EPCA preemption.''
                 \395\ EPA distinguished these previous single-agency actions
                from its joint action context by explaining that ignoring NHTSA's
                determination of preemption in the same action, ``would place the
                United States Government in the untenable position of arguing that
                one federal agency can resurrect a State provision that, as another
                federal agency has concluded and codified, Congress has expressly
                preempted and therefore rendered void ab initio.'' 84 FR at 51338.
                ---------------------------------------------------------------------------
                2. EPA Improperly Deviated From Its Historical Practice of Limiting Its
                Review to Section 209(b) Criteria
                 Section 209(b)(1) of the Act limits the Agency's authority to deny
                California's requests for waivers to the three criteria contained
                therein and the Agency has consistently refrained from reviewing
                California's requests for waivers based on any other criteria. EPA
                acknowledges that California adopts its standards as a matter of law
                under its state police powers, that the Agency's task in reviewing
                waiver requests is limited to evaluating California's request according
                to the criteria in section 209(b), and that it is appropriate to defer
                to litigation brought by third parties in other courts, such as state
                or federal district court, for the resolution of any constitutionality
                claims and assertions of inconsistency with other statutes.
                [[Page 14372]]
                Considering the lack of statutory and precedential support as shown
                below, even if EPA were to have discretion to consider criteria outside
                section 209(b), EPA now views the joint-action context of SAFE 1 as an
                insufficient justification for deviating from its statutory authority
                and the Agency's historical practice and therefore the Agency rescinds
                its actions regarding preemption under EPCA in SAFE 1.
                 Withdrawal of the waiver was premised on NHTSA's preemption
                regulations in what EPA explained was a joint rulemaking action. But
                nothing in section 209(b) can be read as calling for consideration of
                preemption under EPCA in evaluating waiver requests regardless of
                whether EPA engaged in joint rulemaking with another agency or acted
                alone. Specifically, under section 209(b), EPA must grant California a
                waiver of the preemption contained in section 209(a) unless the
                Administrator makes a finding under any one of the listed criteria:
                ``The Administrator shall . . . waive application of the preemption in
                section 209(a) if the Administrator finds any of the following: `(A)
                [California's] determination [that its standards in the aggregate will
                be at least as protective] is arbitrary and capricious, (B)
                [California] 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 [202(a)].' ''
                \396\ Evaluation of preemption under EPCA is not a listed criterion.
                ---------------------------------------------------------------------------
                 \396\ CAA section 209(b)(1)(A)-(C).
                ---------------------------------------------------------------------------
                 Nor did SAFE 1 premise preemption under EPCA on any of the three
                statutory criteria. In the ACC program waiver request, CARB made a
                protectiveness finding that, as a quantitative matter, its standards,
                in the aggregate, were as protective as the Federal standards and did
                not address preemption under EPCA.\397\ In fact, while California might
                opt to respond to comments on preemption under EPCA, California would
                not be expected to take it into account in any protectiveness finding
                made for a waiver request. It bears note that California's practice is
                not unusual because there are other factors and provisions of the CAA
                that California does not account for in making its protectiveness
                finding under section 209(b)(1).\398\ In granting the ACC program
                waiver request, EPA found that California's protectiveness finding was
                neither arbitrary nor capricious.\399\ EPA also responded to comments
                on the consideration of preemption under EPCA in granting the waiver
                but dismissed such objections as outside the scope of its review.\400\
                Historically, EPA draws a comparison between the numerical stringency
                of California and federal standards in making the requisite finding as
                to whether California's protectiveness determination is arbitrary and
                capricious.\401\ Thus, neither California's initial request, nor EPA's
                waiver grant, considered preemption under EPCA and as previously
                explained in the ACC program waiver, EPA declined to consider
                preemption under EPCA viewing it as outside the scope of Agency review.
                ---------------------------------------------------------------------------
                 \397\ 2012 Waiver Request at 15-17.
                 \398\ For example, ``California is not required to comply with
                section 207 to get a waiver.'' MEMA II, 142 F.3d 449, 467 (D.C. Cir.
                1989).
                 \399\ 78 FR at 2125.
                 \400\ Id. at 2145.
                 \401\ Section 209(b)(2) provides that if each State [California]
                standard is at least as stringent as comparable applicable Federal
                standards then such standard shall be deemed to be as protective of
                public health and welfare as such federal standards for purposes of
                section 209(b)(1)(A). EPA acknowledges that in 1977 Congress amended
                the waiver provision to allow for California to address its unique
                combination of air quality problems and that California only be
                required to demonstrate stringency in the aggregate and that
                therefore some pollutant standards may not be as stringent.
                ---------------------------------------------------------------------------
                 SAFE 1 made clear that consideration of and reliance on preemption
                under EPCA was the consequence of regulations promulgated by NHTSA. As
                SAFE 1 also acknowledged, however, EPA does not ``administer'' EPCA;
                that task falls to NHTSA.\402\ Instead, ``[i]f EPA concludes that
                California's standards [meet section 209(b)], it is obligated to
                approve California's waiver application.'' \403\ EPA therefore
                disagrees with the comment that Massachusetts provides the Agency
                special duty to consider preemption under EPCA in a joint rulemaking
                action in reviewing waiver requests. In Massachusetts, the Supreme
                Court recognized the potential overlap between NHTSA's and EPA's
                statutory obligations and concluded that ``there is no reason to think
                the two agencies cannot both administer their obligations yet avoid
                inconsistency.'' \404\As one commenter noted, EPA and NHTSA have
                previously engaged in joint actions that addressed fuel economy and GHG
                emissions. In those actions, NHTSA's role has been to set national fuel
                economy standards and EPA's role has been to set national GHG
                standards.\405\ These roles are complementary, but distinct. The Court
                acknowledged the independence of these roles in Massachusetts: ``EPA
                has been charged with protecting the public's `health' and `welfare,'
                42 U.S.C. 7521(a)(1), a statutory obligation wholly independent of
                DOT's mandate to promote energy efficiency. See Energy Policy and
                Conservation Act, Sec. 2(5), 89 Stat. 874, 42 U.S.C. 6201(5).'' \406\
                ---------------------------------------------------------------------------
                 \402\ 84 FR at 51338 (``EPA agrees with commenters that EPA is
                not the agency that Congress has tasked with administering and
                interpreting EPCA. This is especially so because `[t]he waiver
                proceeding produces a forum ill-suited to the resolution of
                constitutional claims.' MEMA I, 627 F.2d at 1115.'').
                 \403\ MEMA II, 142 F.3d at 463.
                 \404\ Massachusetts v. EPA, 549 U.S. 497, 532 (2007).
                 \405\ In its most recent rulemaking addressing GHG emissions
                from light-duty vehicles, EPA extensively coordinated with NHTSA on
                details of the program but did not conduct it as a joint rulemaking.
                See 86 FR 74434, 74436 (December 30, 2021).
                 \406\ Massachusetts, 549 U.S. at 497, 532.
                ---------------------------------------------------------------------------
                 Regarding the Agency's simultaneous pronouncement that reliance on
                preemption under EPCA would be a singular exercise that would not be
                repeated, statutory support or past precedent for this singular
                consideration was also lacking.\407\ In fact, this singular exercise
                would allow for EPA to evaluate the same waiver request differently and
                depending on EPA's own choice--the choice to act with another agency or
                not--rather than on the merits of the waiver request itself within
                specified criteria in section 209(b). Again, the result of this unique
                application of EPA's authority is unsupported under section 209(b)(1).
                ---------------------------------------------------------------------------
                 \407\ ``EPA does not intend in future waiver proceedings
                concerning submissions of California programs in other subject areas
                to consider factors outside the statutory criteria in section
                209(b)(1)(A)-(C).'' 84 FR at 51338.
                ---------------------------------------------------------------------------
                 As previously noted, EPCA is generally administered by NHTSA and
                consideration of preemption under EPCA in reviewing waiver requests
                would for instance call for EPA to resolve the much debated and
                differing views as to what is a ``law or regulation related to fuel
                economy,'' as contemplated by 39 U.S.C. 32919(a).\408\ Relevant
                judicial precedent would also appear to call into question whether
                California's GHG standards and ZEV sales mandates are indeed preempted
                under EPCA.\409\ But as previously explained, EPA does not implement
                EPCA, and the Agency's review of waiver requests is highly deferential.
                ---------------------------------------------------------------------------
                 \408\ EPA takes no position on any role NHTSA might play under
                42 U.S.C. 32919(a) and acknowledges that NHTSA discusses this in its
                recent final rulemaking. See generally 86 FR 74236.
                 \409\ See, e.g., Cent. Valley Chrysler-Jeep, Inc. v. Goldstene,
                529 F. Supp. 2d 1151, 1153-54 (E.D. Cal. 2007), as corrected Mar.
                26, 2008; Green Mountain Chrysler Plymouth Dodge Jeep v. Crombie,
                508 F. Supp. 2d 295, 300-01 (D. Vt. 2007).
                ---------------------------------------------------------------------------
                 EPA also disagrees with comments that the Agency must generally
                consider factors outside the criteria listed in section 209(b),
                including preemption under EPCA, regardless of the joint- or single-
                agency nature of the action. EPA
                [[Page 14373]]
                has never claimed that it has such broad authority to consider factors
                outside section 209(b) and the decades of waiver practice, as well as
                judicial precedent, are indicative of the Agency's narrow scope of
                review for California waiver requests: ``[T]he Administrator has
                consistently held since first vested with the waiver authority, [that]
                his inquiry under section 209 is modest in scope. He has no `broad and
                impressive' authority to modify California regulations.'' \410\
                Instead, EPA has consistently declined to consider factors outside the
                three statutory criteria listed in section 209(b).\411\ This limited
                scope of review has been repeatedly upheld by the courts. For example,
                in MEMA I, the D.C. Circuit stated that ``there is no such thing as a
                ``general duty'' on an administrative agency to make decisions based on
                factors other than those Congress expressly or impliedly intended the
                agency to consider.'' \412\ In MEMA II, the D.C. Circuit again rejected
                consideration of a factor outside the 209(b) statutory criteria because
                doing so would restrict California's ability to ``exercise broad
                discretion.'' \413\
                ---------------------------------------------------------------------------
                 \410\ MEMA I, 627 F.2d 1095, 1119 (D.C. Cir. 1979).
                 \411\ See, e.g., 43 FR at 32184 (rejecting objections to the
                procedures at state level, objections that section 207(c)(3)(A)
                establishes field protection, and constitutional objections all as
                beyond the ``narrow'' scope of the Administrator's review); 74 FR at
                32783 (declining to consider EPCA preemption, stating that ``section
                209(b) of the Clean Air Act limits our authority to deny
                California's requests for waivers to the three criteria therein.'');
                79 FR at 46264 (reiterating that EPA can only deny a waiver request
                based on the 209(b) statutory criteria, dismissing comments on
                preemption under EPCA, as well as the Constitution and the
                implications of the FAAAA).
                 \412\ 627 F.2d at 1116.
                 \413\ 142 F.3d at 464.
                ---------------------------------------------------------------------------
                 Commenters also claim that ignoring NHTSA's finding of preemption
                would violate the Supremacy Clause of the Constitution because the
                necessary consequence of NHTSA's conclusion in SAFE 1 is that certain
                standards were void ab initio as preempted under EPCA and as such that
                ``the state mandates referenced in [California's] petition for
                reconsideration are not even eligible to be considered for a CAA waiver
                of preemption.'' \414\ EPA disagrees. As the D.C. Circuit has held,
                ``[t]hat [the Administrator] like every other administrative officer
                owes allegiance to the Constitution does not mean that he is required
                to issue rulings of constitutional dimension.'' \415\ Thus, ``[n]othing
                in section 209 requires [the Administrator] to consider the
                constitutional ramifications of the regulations for which California
                requests a waiver.'' \416\
                ---------------------------------------------------------------------------
                 \414\ NADA at 3.
                 \415\ MEMA I, 627 F.2d at 1114-15.
                 \416\ Id. at 1115.
                ---------------------------------------------------------------------------
                 Moreover, consideration of factors beyond those set out in section
                209(b)(1) would subject California and vehicle and engine manufacturers
                to changes in regulatory schemes by other federal agencies not acting
                under the authority of the CAA.\417\ SAFE 1 and subsequent events
                perfectly encapsulate this problem. For instance, NHTSA has since
                finalized the repeal of the regulatory provisions and pronouncements it
                made in SAFE 1 that were the underpinnings for EPA withdrawing certain
                aspects of the ACC program waiver and with that action the Agency's
                basis for revocation of the waiver under EPCA has now evanesced.\418\
                Additionally, this is affirmation of EPA's long held view that waiver
                proceedings are not the appropriate venue for resolving these issues,
                and the joint-rulemaking context is not and should never have been
                justification for deviating from statutory authority and the Agency's
                historical practice.
                ---------------------------------------------------------------------------
                 \417\ ``The manufacture of automobiles is a complex matter,
                requiring decisions to be made far in advance of their actual
                execution. The ability of those engaged in the manufacture of
                automobiles to obtain clear and consistent answers concerning
                emission controls and standards is of considerable importance so as
                to permit economies in production.'' S. Rep. No. 403, 90th Cong., at
                730 1st Sess. (1967).
                 \418\ See 86 FR 74236.
                ---------------------------------------------------------------------------
                 It also bears note that consideration of factors beyond the
                criteria contained in section 209(b) would not be limited to preemption
                under EPCA. Commenters suggested, for instance, that EPA would not be
                able to ``ignore the First Amendment,'' in the hypothetical situation
                where California impos[ed] standards on some manufacturers in
                retaliation for their voiced opposition to California's authority as
                well as criminality such as ``bribery and extortion had been
                instrumental in assembling the legislative majorities.'' \419\ In
                short, under the commenter's view, factors for consideration in waiver
                proceedings would be innumerable. And yet these factors bear little or
                no relation to specific criteria in section 209(b) that would otherwise
                warrant the denial of a waiver request. The D.C. Circuit has already,
                several times, held that EPA is not required to consider factors
                outside of and unconnected to these statutory criteria, especially
                constitutional objections. In fact, regarding the commenter's example,
                the court has already specifically rejected consideration of the First
                Amendment in waiver evaluations. In MEMA I, the court considered and
                upheld EPA's decision declining to consider a First Amendment objection
                to a waiver as beyond the scope of agency review.\420\ Courts have also
                rejected objections based on the applicability of CAA section 207 to
                California waiver requests \421\ and the Commerce Clause.\422\ EPA is
                therefore not persuaded by these arguments. Additionally, courts have
                long held that administrative proceedings for California waiver
                requests are ill-suited for consideration of constitutional issues.
                Nothing precludes commenters from challenging California's standards
                themselves--whether under EPCA, another statute, or the Constitution--
                in other, better-suited fora. According to the D.C. Circuit, for
                instance, [w]hile nothing in section 209 categorically forbids the
                Administrator from listening to constitutionality-based challenges,
                petitioners are assured through a petition of review . . . that their
                contentions will get a hearing.'' \423\ The D.C. Circuit has also
                repeatedly stated that challenges which go to the legality of
                California's standards themselves, are better addressed directly by
                either courts or Congress.\424\ Challenges based on preemption under
                EPCA similarly go to the legality of California's standards themselves
                and are thus more appropriate in court or addressed to Congress.
                ---------------------------------------------------------------------------
                 \419\ CEI at 11.
                 \420\ MEMA I, 627 F.2d 1095, 1115 (D.C. Cir. 1979).
                 \421\ MEMA II, 142 F.3d 449, 467 (D.C. Cir. 1998).
                 \422\ ATA v. EPA, 600 F.3d 624, 628 (D.C. Cir. 2010) (``EPA's
                only role is to review California's proposed rules under a narrowly
                defined set of statutory criteria.''); OOIDA v. EPA, 622 Fed. Appx.
                4, 5 (D.C. Cir. 2015) (rejecting a challenge for lack of
                jurisdiction because challengers objected to California's
                regulations themselves, not EPA's approval of them in a waiver under
                209(b)).
                 \423\ MEMA I, 627 F.2d at 1115.
                 \424\ Id.at 1105. In ATA v. EPA,the D.C. Circuit rejected a
                constitutional challenge to a California waiver, concluding that
                Congress made the decision to give California ``the primary role in
                regulating certain mobile pollution sources'' so the challenger's
                argument was best directed to Congress. 600 F.3d 624, 628 (D.C. Cir.
                2010).
                ---------------------------------------------------------------------------
                E. Conclusion
                 Because the landscape of federal law has changed since SAFE 1 due
                to NHTSA's repeal of its regulatory text, appendix, and pronouncements
                regarding EPCA preemption in SAFE 1, EPA believes that it is
                appropriate to rescind its waiver withdrawal actions in SAFE 1 that
                were predicated on the federal law context created by NHTSA's SAFE 1
                action. On separate grounds, EPA also believes that, based on the
                foregoing, EPA should not have deviated from its practice of limiting
                its waiver review to the criteria in section
                [[Page 14374]]
                209(b)(1). Thus, for the reasons stated above, EPA is rescinding those
                portions of SAFE 1 that withdrew the waiver of the ACC program on the
                basis of preemption under EPCA.
                VII. EPA Inappropriately Set Forth an Interpretive View of Section 177
                in SAFE 1
                 In SAFE 1, EPA provided an interpretive view of section 177 of the
                CAA, stating that states adopting California's new motor vehicle
                emission standards (section 177 states) could not adopt California's
                GHG standards.\425\ In this action, EPA determines that it was both
                inappropriate and unnecessary within a waiver proceeding to provide an
                interpretive view of the authority of section 177 states to adopt
                California standards, as EPA plays no statutory approval role in
                connection with states' adoption of standards identical to those
                standards for which a waiver has been granted to California.\426\
                Rather, if a state chooses to submit such standards for inclusion in an
                SIP, EPA's role with regard to approval of these standards is to review
                them in the same way that EPA reviews all SIP revisions a state
                submits, via a notice and comment process, to ensure that the
                submission meets all statutory and regulatory requirements as part of
                the Agency's decision whether to approve or disapprove the submission.
                Therefore, the Agency is rescinding the interpretive views on section
                177 set out in SAFE 1.
                ---------------------------------------------------------------------------
                 \425\ 84 FR at 51310, 51350.
                 \426\ EPA is aware of instances of States adopting California
                new motor vehicle emission standards and not subsequently including
                such standards in their SIP. In these circumstances EPA has not
                played and would not play an approval role.
                ---------------------------------------------------------------------------
                A. SAFE 1 Interpretation
                 In the SAFE proposal, EPA proposed to conclude that ``States may
                not adopt California's GHG standards pursuant to section 177 because
                the text, context, and purpose of section 177 support the conclusion
                that this provision is limited to providing States the ability, under
                certain circumstances and with certain conditions, to adopt and enforce
                standards designed to control criteria pollutants to address NAAQS
                nonattainment.'' \427\ Additionally, the proposal noted the title of
                section 177 (``New motor vehicle emission standards in nonattainment
                areas'') indicates a limited scope of application.\428\ The proposal
                also suggested that, because ``[a]reas are only designated
                nonattainment with respect to criteria pollutants,'' it would be
                ``illogical'' if states could use their 177 authority ``to adopt
                California standards that addressed environmental problems other than
                nonattainment of criteria pollutant standards.'' \429\
                ---------------------------------------------------------------------------
                 \427\ 83 FR at 43240.
                 \428\ Id.
                 \429\ Id.
                ---------------------------------------------------------------------------
                 In the SAFE 1 decision, EPA finalized its proposed interpretive
                view, reiterating that ``the text (including both the title and main
                text), structural location, and purpose of the provision confirm that
                it does not apply to GHG standards.'' \430\ Because section 177's title
                references nonattainment areas, and because nonattainment designations
                only exist for criteria pollutants, EPA claimed, states could not adopt
                standards for purposes of GHG control under section 177.\431\
                ---------------------------------------------------------------------------
                 \430\ 84 FR at 51350.
                 \431\ Id.
                ---------------------------------------------------------------------------
                 As evidence for this interpretive view, EPA again pointed to the
                text and location of the section, which had been the basis for the
                Agency's interpretation in the SAFE proposal. EPA acknowledged
                commenters who argued that ``CAA section 177 does not contain any text
                that could be read as limiting its applicability to certain pollutants
                only'' and that EPA had ``inappropriately relied on the heading for CAA
                section 177 to construe a statutory provision as well as arrogated
                authority to implement an otherwise self-implementing provision,'' but
                disagreed with these commenters.\432\ In addition to the evidence
                relied on in the proposal, EPA provided examples of legislative history
                from the 1977 amendments to support its interpretive view.\433\
                ---------------------------------------------------------------------------
                 \432\ Id.
                 \433\ In particular, EPA cited legislative history on section
                172(b), which set forth the ``requisite provisions'' for state plans
                for nonattainment areas. Id. at 51350 n.286. According to the
                legislative history, one of the many factors that must be considered
                by a state plan is ``actual emissions of such pollutant resulting
                from in-use motor vehicles.'' Id. (quoting H.R. Rep. No. 294, 95th
                Cong., 1st Sess. 212 (1977), 1977 U.S.C.C.A.N. 1077, 1291, 1997 WL
                16034). Therefore, EPA claimed, this legislative history
                ``identifies section 177 as a means of addressing the NAAQS
                attainment planning requirements of CAA section 172, including the
                specific SIP content and approvals criteria for EPA.'' Id. at 51351.
                ---------------------------------------------------------------------------
                B. Notice of Reconsideration of SAFE 1 and Request for Comment
                 Acknowledging that ``section 177 does not require States that adopt
                California emission standards to submit such regulations for EPA
                review'' and that ``California in previous waiver requests has
                addressed the benefits of GHG emissions reductions as it relates to
                ozone,'' EPA sought comment in the 2021 Notice of Reconsideration on
                whether EPA had the authority in the SAFE 1 context to interpret
                section 177 of the CAA and whether the interpretive view was
                appropriate.\434\ Specifically, EPA sought comment on whether it was
                appropriate for EPA to provide an interpretive view of section 177
                within the SAFE 1 proceeding.\435\ To the extent it was appropriate to
                provide an interpretation, EPA sought comment on whether section 177
                was properly interpreted and whether California's motor vehicle
                emission standards adopted by states pursuant to section 177 may have
                both criteria emission and GHG emission benefits and purposes.\436\
                ---------------------------------------------------------------------------
                 \434\ 86 FR at 22429.
                 \435\ Id.
                 \436\ Id.
                ---------------------------------------------------------------------------
                C. Comments Received
                 In response to SAFE 1, EPA received multiple petitions for
                reconsideration. One petition submitted by several states and cities
                asserted that, in adopting its interpretation of section 177, EPA
                ``relie[d] on information and reasoning not presented in the SAFE
                Proposal,'' particularly the ``superseded version of Section 172 . . .
                and legislative history for that outdated provision.'' \437\ The
                petition noted that the use of this information and reasoning was used
                in the SAFE 1 to conclude that ``section 177 is in fact intended for
                NAAQS attainment planning and not to address global air pollution.''
                \438\ Petitioners argued that because this information and reasoning
                was not presented in the proposal, ``EPA should withdraw and reconsider
                its finalization of the Section 177 interpretation and allow for full
                and fair public comment before proceeding further.'' \439\
                ---------------------------------------------------------------------------
                 \437\ See States and Cities' Petition at 27.
                 \438\ Id. (quoting 84 FR at 51351).
                 \439\ Id.
                ---------------------------------------------------------------------------
                 EPA also received many comments in response to the Notice of
                Reconsideration of SAFE 1, both supporting and opposing EPA's
                statements regarding section 177 in SAFE 1. Supporters of SAFE 1
                reiterated the reasoning from the proposal and final action.\440\ For
                example, one commenter wrote, ``In short, `the text, context, and
                purpose of Section 177 suggest' that the provision is limited to motor
                vehicle standards `designed to control criteria pollutants to address
                NAAQS nonattainment.' '' \441\ Like the SAFE proposal and final action,
                the commenter stated that in addition to the text and context of the
                section, there is ``substantial legislative history showing that
                Congress's purpose in creating the Section 177 program was to address
                [[Page 14375]]
                non-attainment with NAAQS for criteria pollutants, not to address any
                global atmospheric phenomenon.'' \442\
                ---------------------------------------------------------------------------
                 \440\ CEI at 17-18; NADA at 6; AFPM at 12-13.
                 \441\ CEI at 18 (quoting heavily from the SAFE proposal and SAFE
                final action).
                 \442\ Id.
                ---------------------------------------------------------------------------
                 Opponents of SAFE 1 argued both that EPA had no authority to issue
                its 177 statement and that the merits of EPA's argument were wrong. On
                the issue of authority, opponents of SAFE 1 claimed that SAFE 1 failed
                to consider the reliance interests of the stakeholders, particularly
                section 177 states.\443\ SAFE 1, they argued, upset this reliance and
                created uncertainty.\444\ A substantial number of commentors also
                argued that EPA had no authority to make its statements on section 177
                because ``Congress gave EPA no role in implementing Section 177 and no
                authority to constrain States' decisions regarding adoption of
                California emissions standards.'' \445\
                ---------------------------------------------------------------------------
                 \443\ States and Cities at 50-55; Institute for Policy Integrity
                Amicus Brief at 22-26 (``[T]he fact that California and many other
                states have detrimentally relied on this waiver to meet federal and
                state air-pollution mandates resolves any lingering doubt about the
                lawfulness of EPA's Action. . . . Revoking the preemption waiver . .
                . jeopardizes the state's ability to meet federal standards for
                other harmful air pollutants, since the standards covered by the
                waiver would have reduced--directly and indirectly--nitrogen-oxide,
                ozone, and particulate-matter pollution. See 78 FR 2122, 2129, and
                2134.''); Tesla at 11-13; National Association of Clean Air Agencies
                (NACAA), Docket No. EPA-HQ-OAR-2021-0257-0096 at 3. Many of the 177
                states had also provided comments, during the SAFE 1 comment period,
                explaining that they have adopted the ACC program standards to meet
                their public health goals. See, e.g., Maryland Department of the
                Environment, Docket No. EPA-HQ-OAR-2018-0283-5831 at 2-3; Delaware
                Department of Natural Resources and Environment Control, Docket No.
                EPA-HQ-OAR-2018-0283-5066 at 3-5; Massachusetts Department of
                Environmental Protection, Docket No. EPA-HQ-OAR-2018-0283-5476;
                State of California et al., Docket No. EPA-HQ-OAR-2018-0283-5481 at
                130-31 (California was joined by the States of Connecticut,
                Delaware, Hawaii, Iowa, Illinois, Maine, Maryland, Minnesota, New
                Jersey, New Mexico, New York, North Carolina, Oregon, Rhode Island,
                Vermont, Washington, the Commonwealths of Massachusetts,
                Pennsylvania, and Virginia, the District of Columbia, and the Cities
                of Los Angeles, New York, Oakland, San Francisco, and San Jose).
                 \444\ See, e.g., States and Cities at 50-55; Tesla at 11-13.
                 \445\ States and Cities at 51. See also Tesla at 11-13; Twelve
                Public Interest Organizations app. 1 at 2; NESCAUM at 8-9; Southern
                Environmental Law Center (SELC), Docket No. EPA-HQ-OAR-2021-0257-
                0125 at 2-3; NCAT at 12; Class of '85, Docket No. EPA-HQ-OAR-2021-
                0257-0454 (correction to an earlier comment by the same commenter,
                which can be found at Docket No. EPA-HQ-OAR-2021-0257-0388) at 5-6;
                Maine at 2; OTC at 2. Ironically, one supporter of SAFE 1, while
                arguing that EPA cannot consider GHG reductions from section 177
                states in its second prong analysis, acknowledged EPA's lack of an
                oversight role under section 177: ``EPA cannot consider GHG
                reductions, if any, attributable to `opt-in' states under Section
                177, as these are out of the scope of a waiver application. Indeed,
                EPA has no legal role in reviewing opt-in states, as the statute
                grants the agency no role in reviewing opt-in by other states.''
                AFPM at 15.
                ---------------------------------------------------------------------------
                 On the merits of EPA's SAFE 1 argument, opponents of the action
                commented that EPA misinterpreted section 177 and that, even if EPA's
                interpretive view were correct, EPA misapplied it. Multiple commenters
                wrote that the text of section 177 does not limit the types of
                pollutants for which motor vehicle emission standards can be
                authorized.\446\ Commenters also noted that the title of section 177
                refers to geographic areas, not pollutants, and argued that the
                restriction was therefore on which states could adopt California
                standards (states with plan provisions approved under Part D) not on
                the pollutants for which those states could adopt standards.\447\ A few
                commenters also argued that EPA's section 177 interpretive view would
                create a ``third vehicle'' scenario, in contradiction of section 177's
                identicality requirement.\448\ Even if EPA's interpretation were
                correct, opponents continued, California's standards have both criteria
                emission and GHG emission benefits and purposes.\449\ Commenters cited
                the factual record as well as EPA's own past findings as evidence of
                the connection between GHG standards and NAAQS attainment.
                ---------------------------------------------------------------------------
                 \446\ See, e.g., States and Cities at 53; NESCAUM at 9; NCAT at
                12.
                 \447\ See, e.g., States and Cities at 53 (``[T]he reference in
                the title to `nonattainment areas' is not a limitation to
                `nonattainment (i.e., criteria) pollutants' or standards that target
                them'' but rather a limitation on the states that can adopt
                California's standards); NESCAUM at 9; SELC at 2; NCAT at 12.
                 \448\ Commenters feared that EPA's interpretation, which
                ``prevents Section 177 States from adopting California's GHG
                standards, but not any other California standards,'' could require
                states to ``extract just the GHG portion of the Advanced Clean Cars
                rules from their programs, thus potentially creating type of ``third
                vehicle'' forbidden by Section 177 (i.e., a vehicle subject to a
                hybrid combination of the other California standards and the (now
                weakened) federal GHG standards.'' States and Cities at 54. See also
                NESCAUM at 11-12; SELC at 5.
                 \449\ States and Cities at 31-32, 50-55; NESCAUM at 12-13; SELC
                at 5; NCAT at 12; Class of '85 at 4-5.
                ---------------------------------------------------------------------------
                D. Analysis: EPA Is Rescinding SAFE 1's Interpretive Views of Section
                177
                 EPA is withdrawing its non-regulatory and non-binding
                interpretation of section 177 set forth in SAFE 1. EPA plays no
                statutory approval role in connection with states' adoption of
                standards identical to those standards for which the Agency has granted
                a waiver to California.\450\ Rather, if a state chooses to submit such
                standards for inclusion in a SIP, EPA's role with regard to approval of
                these standards is to review them in the same way that EPA reviews all
                SIP revisions a state submits, via a notice and comment process, to
                ensure that the submission meets all statutory and regulatory
                requirements as part of the Agency's decision whether to approve or
                disapprove the submission.\451\
                ---------------------------------------------------------------------------
                 \450\ EPA is aware of instances of States adopting California
                new motor vehicle emission standards and not subsequently including
                such standards in their SIP. In these circumstances EPA has not
                played and would not play an approval role.
                 \451\ EPA notes that although section 177 states that ``. . .
                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 . . .'' the language in section
                177 does not require a state to submit its adopted motor vehicle
                emissions standards for SIP approval.
                ---------------------------------------------------------------------------
                 In reconsidering SAFE 1, EPA now believes that it was inappropriate
                to offer an interpretive view of section 177 in the context of that
                action. EPA believes it acted inappropriately in providing an
                interpretive view in SAFE 1 and that such action was based on an
                inaccurate assessment of the factual record. EPA's interpretive view
                was not compelled by any petition, request, or legislative or judicial
                mandate and was otherwise not final agency action.\452\ EPA is
                therefore rescinding the interpretive views contained in SAFE 1.
                ---------------------------------------------------------------------------
                 \452\ 84 FR at 51338 n.256 (``EPA acknowledges that its actions
                in this document may have implications for certain prior and
                potential future EPA reviews of and actions on state SIPs. . . . EPA
                will consider whether and how to address those implications, to the
                that they exist, is separate actions.''). EPA action on a state plan
                (including application of Section 177) is subject to judicial
                review. 42 U.S.C. 7607(b)(1).
                ---------------------------------------------------------------------------
                 As commenters have noted, section 177 does not describe a direct
                approval role for EPA. Section 177 says that ``any State which has plan
                provisions approved under this part may adopt and enforce'' identical
                California standards and delineates three specific criteria for
                adoption.\453\ Nothing in this language or in the text of the rest of
                the section requires or allows EPA to approve such adoption and
                enforcement or directs EPA to implement the section through regulation;
                EPA plays no statutory approval role in the adoption of California
                standards by other states other than action on a SIP revision, should
                those states include the standards in their plans. In fact, there are
                only three prerequisites to adoption and enforcement by a state: That
                the state has a federally approved SIP, that the standards are
                identical (thus the state standards must not create or have the effect
                of creating a ``third vehicle'') to California standards for which
                California has received a waiver, and that California and the state
                adopt the standards with at least two years lead time.\454\ This
                limited role has been
                [[Page 14376]]
                acknowledged by courts and EPA alike.\455\ Thus, it is well established
                that states have broad discretion to adopt California standards without
                being subject to EPA's approval.\456\
                ---------------------------------------------------------------------------
                 \453\ 42 U.S.C. 7507.
                 \454\ Id.
                 \455\ In 1979, for example, only two years after the adoption of
                section 177, the D.C. Circuit stated that the Act only requires the
                three listed prerequisites, ``not . . . that the EPA administrator
                conduct a separate waiver proceeding for each state that chooses [to
                adopt California standards].'' Ford Motor Co. v. EPA, 606 F.2d 1293,
                1298 (D.C. Cir. 1979). Similarly, in 1994, while enacting rules
                implementing section 209(e)(2)(B), the parallel provision for the
                nonroad vehicle section of the California Waiver program, EPA noted
                that section 177 states had not ``ask[ed] for EPA authorization
                before they adopted the California standards, nor did EPA or the
                automobile industry suggest that they needed such authorization.''
                56 FR 36969, 36983 (1994). See also 77 FR 62637 n.54 (``States are
                not required to seek EPA approval under the terms of section
                177.'').
                 \456\ EPA also notes that there are ample judicial avenues to
                directly challenge state adoption of California standards. For
                example, the First and Second Circuits have already addressed
                objections to the adoption of California standards under section
                177. In both Am. Auto. Mfrs. Ass'n v. Mass. DEP and Motor Vehicle
                Mfrs. Ass'n v. NYSDEC, petitioners argued that the States' adoption
                of California's low emission vehicles standards without the
                associated clean fuels plan violated section 177. 31 F.3d 18 (1st
                Cir. 1994); 17 F.3d 521 (2d Cir. 1994).
                ---------------------------------------------------------------------------
                 States with approved SIPs that have adopted the waived California
                standard into state law may submit a SIP revision that includes that
                adopted standard. In that proceeding, EPA could determine whether the
                statutory criteria for adoption are met for purposes of approving a SIP
                revision. Indeed, in the litigation following SAFE 1, EPA acknowledged
                that its interpretive view of section 177 would have no actual effect
                until applied in a future SIP context.\457\ SIPs are a crucial planning
                tool in helping states reach attainment for NAAQS and California's
                standards are key components of many of these SIPs.\458\ In a SIP
                proceeding, these states and other stakeholders are better able to
                provide specific and comprehensive comments about the intent and effect
                of adopting California standards.\459\
                ---------------------------------------------------------------------------
                 \457\ Several commenters on the Notice of Reconsideration argued
                that SAFE 1 violated conformity rules by interfering with already
                approved SIPs. However, as EPA explained in the litigation over SAFE
                1, the action had no actual effect on ``either existing approvals of
                state plans or the plans themselves for criteria pollutants.'' Final
                Brief for Respondents at 106, Union of Concerned Scientists v.
                NHTSA, No. 19-1230 (D.C. Cir. Oct. 27, 2020). See also 84 FR 51338,
                n.256.
                 \458\ Wisconsin at 1 (``These standards provide important and
                necessary reductions in both GHG and criteria pollutant emissions
                needed to meet state and local air quality goals and address federal
                CAA requirements.''); Connecticut at 2 (``These programs enable
                long-term planning and yield critical emission reductions that are
                critical to meeting Connecticut's climate goals as well as our
                statutory obligations to reach attainment with the ozone NAAQS.'');
                Delaware at 2 (``Delaware adopted the California LEV regulation and
                incorporated the LEV and GHG standards into the State Implementation
                Plan. . . . Delaware will not meet air quality goals without more
                protective vehicle emission standards. ''); Maine at 1 (``[T]he LEV
                program was initially created to help attain and maintain the
                health-based National Ambient Air Quality Standards (NAAQS) . . .
                The California ZEV and GHG programs enable long-term planning for
                both the states and the regulated community and have been drivers of
                technological change across the industry.'').
                 \459\ The Agency has considered whether there may be any
                reliance interests on EPA's previous interpretive view of section
                177 described in the SAFE 1 action. EPA is unaware of any such
                interests, and none were raised in comments.
                ---------------------------------------------------------------------------
                 For these reasons, EPA believes that it was inappropriate to
                provide an interpretive view of section 177 in SAFE 1.\460\ Therefore,
                EPA is withdrawing its SAFE 1 interpretive view of section 177.
                ---------------------------------------------------------------------------
                 \460\ To the extent that EPA's reasoning in its SAFE 1 section
                177 determination lacked fair notice, as the States and Cities'
                Petition claimed, such a contention is rendered moot by this action.
                ---------------------------------------------------------------------------
                E. Conclusion
                 EPA determines that it was both inappropriate and unnecessary,
                within the SAFE 1 waiver proceeding, to provide an interpretive view of
                the authority of section 177 states to adopt California standards.
                Therefore, EPA withdraws its interpretive views that had been set forth
                in SAFE 1.
                VIII. Other Issues
                A. Equal Sovereignty
                 As explained in Section VI, EPA must grant California's waiver
                request unless the Agency makes one of the specified findings in
                section 209(b)(1). In this instance, Congress has made multiple
                determinations through its adoption of section 209 and subsequent
                amendments, dating from 1967 through the 1990 CAA Amendments, regarding
                California's role and its relation to federal standard setting for
                mobile sources. EPA's longstanding waiver practice, consistent with
                case law, has been to refrain from considering factors beyond section
                209(b)(1) criteria as well as constitutional claims in the review of
                California waiver requests.\461\ EPA acknowledges that California
                adopts its standards as a matter of law under its police powers,\462\
                that the Agency's task in reviewing waiver requests is properly limited
                to evaluating California's request according to the criteria in section
                209(b), and that it is appropriate to defer to litigation brought by
                third parties in other courts, such as state or federal court, for the
                resolution of constitutionality claims and inconsistency, if any, with
                other statutes. As further explained this practice flows from the
                statute and legislative history, which reflect a broad policy deference
                that is afforded to California to address its serious air quality
                problems (which are on-going) as well as to drive emission control
                innovation. And so, EPA has historically declined to consider
                constitutional issues in evaluating and granting section 209 waivers.
                In MEMA I, the D.C. Circuit rejected a First Amendment challenge to a
                waiver as outside the scope of review.\463\ In 2009, EPA approved a
                waiver (and authorization) under section 209(e), granting California
                authority to enforce its Airborne Toxic Control Measure, which
                established in-use emission performance standards for engines in
                transport refrigeration units (TRUs) and TRU generator sets.\464\
                Responding to comments that the waiver reached beyond California's
                borders in violation of the Dormant Commerce Clause, EPA stated that
                such considerations are not factors that EPA must consider under
                section 209(e) because ``EPA's review of California's regulations is
                limited to the criteria that Congress directed EPA to review.'' \465\
                This interpretation was upheld by the D.C. Circuit Court of Appeals.
                The Court agreed with EPA that the commenters had sought to
                ``improperly . . . engraft a type of constitutional Commerce Clause
                analysis onto EPA's Section 7543(e) waiver decisions that is neither
                present in nor authorized by the statute.'' \466\
                [[Page 14377]]
                Consistent with the Agency's long standing practice, the decision on
                whether to grant the ACC program waiver was based solely on criteria in
                section 209(b) and the Agency did not either interpret or apply the
                Equal Sovereignty Doctrine or any other constitutional or statutory
                provision in that waiver decision.\467\
                ---------------------------------------------------------------------------
                 \461\ EPA has declined to consider constitutional challenges to
                California Waivers since at least 1976. 41 FR 44212 (Oct. 7, 1976)
                (``An additional argument against granting the waiver was raised by
                the Motorcycle Industry Council and Yamaha, who contended that the
                CARB had violated due process when adopting their standards, by not
                allowing the manufacturers a fair and full opportunity to present
                their views at a State hearing. If this argument has any validity,
                the EPA waiver hearing is not the proper forum in which to raise it.
                Section 209(b) does not require that EPA insist on any particular
                procedures at the State level. Furthermore, a complete opportunity
                was provided at the EPA waiver hearing for the presentation of
                views.''). See also, e.g., 43 FR at 32184 (July 25, 1978) (rejecting
                objections to the procedures at state level, objections that section
                207(c)(3)(A) establishes field protection, and constitutional
                objections all as beyond the ``narrow'' scope of the Administrator's
                review).
                 \462\ Central Valley Chrysler-Jeep, Inc. v. Goldstene, 529
                F.Supp.2d 1151, 1174 (``The waiver provision of the Clean Air Act
                recognizes that California has exercised its police power to
                regulate pollution emissions from motor vehicles since before March
                30, 1966; a date that predates both the Clean Air Act and EPCA.'').
                 \463\ MEMA I, 627 F.2d 1095, 1111, 1114-14 (D.C. Cir. 1979).
                 \464\ 74 FR 3030 (January 16, 2009).
                 \465\ Decision Document, EPA-HQ-OAR-2005-0123-0049 at 67.
                 \466\ ATA v. EPA, 600 F.3d 624, 628 (D.C. Cir. 2010) (quoting
                the U.S. brief). In a footnote to this statement, the Court said ATA
                could attempt to bring a constitutional challenge directly (which
                would argue that the waiver unconstitutionally burdens interstate
                commerce) but ``express[ed] no view on that possibility.'' Id. at
                n.1. See also OOIDA v. EPA, 622 Fed. Appx. 4, 5 (D.C. Cir. 2015)
                (rejecting a challenge for lack of jurisdiction because challengers
                objected to the state regulations themselves, not EPA's approval of
                them in a waiver under 209(b)) (``To the extent there is any tension
                in our case law surrounding whether we might decide a constitutional
                claim brought within a broader challenge to an EPA waiver decision,
                OOIDA does not present us with such a challenge, and we have no
                occasion to resolve that question here.'').
                 \467\ 78 FR at 2145.
                ---------------------------------------------------------------------------
                 Although EPA specified issues that it was seeking comment on within
                the Notice of Reconsideration, commenters nevertheless argued that the
                Equal Sovereignty Doctrine, which was not one of the identified aspects
                in that notice, preempts reinstitution of the relevant aspects of the
                ACC program waiver. According to these commenters, ``Section 209, by
                allowing California and only California to retain a portion of its
                sovereign authority that the Clean Air Act takes from other States, is
                unconstitutional and thus unenforceable.'' \468\ Other commenters
                argued that the Equal Sovereignty doctrine does not apply to the
                California waiver program. One comment maintained that the holding in
                Shelby County v. Holder is distinguishable from the CAA.\469\
                California disagreed with EPA's characterization of the relevance of
                the doctrine, commenting that the Supreme Court has only applied the
                ``rarely invoked'' doctrine of Equal Sovereignty in the ``rare instance
                where Congress undertook `a drastic departure from basic principles of
                federalism' by authorizing `federal intrusion into sensitive areas of
                state and local policymaking.' '' \470\
                ---------------------------------------------------------------------------
                 \468\ Ohio and 15 States, Docket No. EPA-HQ-OAR-2021-0257-0124
                at 1. This commenter also stated that ``The waiver at issue here,
                allowing only California to regulate carbon emissions, is not
                sufficiently related to the problem that Section 209(a) targets,
                Congress enacted that section to permit California to address local
                air pollution. But California seeks special treatment for its
                proposed greenhouse gas targets . . . designed to mitigate climate
                change--an inherently global interest.'' Id. at 8-9. EPA notes that
                this characterization of CARB's standards is addressed in Section V.
                 \469\ Twelve Public Interest Organizations at 5 (``Shelby County
                does not govern here. See Amicus Br. of Prof. Leah Litman 12-17,
                Union of Concerned Scientists v. NHTSA, No. 19-1230 (July 6, 2020)
                (A-0384). First, Clean Air Act Section 209(b) places no
                extraordinary burden or disadvantage on one or more States. Rather,
                the statute benefits California by allowing the exercise of its
                police power authority to address its particular pollution control
                needs. Second, the foundation for reserving California's authority
                has not waned over time. California had in 1967, and continues to
                have, the Nation's absolute worst air quality. For example, the
                South Coast air basin, home to 17 million people, typically leads
                the Nation in ozone (smog) pollution. The American Lung
                Association's 2021 `State of the Air' report on national air
                pollution shows that seven of the ten worst areas for ozone
                pollution in the country are in California, as are six of the worst
                ten for small particulate matter. Am. Lung Ass'n, Most Polluted
                Cities, https://www.lung.org/research/sota/city-rankings/most-polluted-cities (last visited July 2, 2021) (A-0422).'').
                 \470\ States and Cities at 41-42.
                ---------------------------------------------------------------------------
                 As explained in the 2013 ACC program waiver decision, EPA continues
                to believe that waiver requests should be reviewed based solely on the
                criteria in section 209(b)(1) and specifically, that the Agency should
                not consider constitutional issues in evaluating waiver requests.\471\
                As previously noted in Section VI, the constitutionality of section 209
                is not one of the three statutory criteria for reviewing waiver
                requests, and such objections are better directed to either the courts
                or Congress. As the D.C. Circuit reasoned in MEMA I, ``it is generally
                considered that the constitutionality of Congressional enactments is
                beyond the jurisdiction of administrative agencies.'' \472\ Although
                commenters here raise a new constitutional argument--that of Equal
                Sovereignty rather than the First Amendment or the Dormant Commerce
                Clause--EPA is no more well-suited to resolve this constitutional
                objection than it is to resolve previous constitutional
                objections.\473\
                ---------------------------------------------------------------------------
                 \471\ 78 FR at 2145.
                 \472\ MEMA I, 627 F.2d 1095, 1114-15 (D.C. Cir. 1979) (holding
                that EPA did not need to consider whether California's standards
                ``unconstitutionally burden[ed] [petitioners'] right to communicate
                with vehicle purchasers.''). See also Twelve Public Interest
                Organizations at 7 (``As regulatory agencies are not free to declare
                an act of Congress unconstitutional,' Springsteen-Abbott v. SEC, 989
                F.3d 4, 8 (D.C. Cir. 2021), EPA cannot determine whether a statute
                Congress directed it to implement contravenes the equal-sovereignty
                principle. Thus, EPA should proceed to rescind the Waiver Withdrawal
                and leave Ohio's argument for review by an appropriate court.'').
                 \473\ See, e.g., Johnson v. Robison, 415 U.S. 361, 368, (1974)
                (``Adjudication of the constitutionality of congressional enactments
                has generally been thought beyond the jurisdiction of administrative
                agencies''); Springsteen-Abbott, 989 F.3d at 8; Meredith Corp. v.
                FCC, 809 F.2d 863, 872 (D.C. Cir. 1987).
                ---------------------------------------------------------------------------
                 EPA notes that Congress struck a deliberate balance in 1967 when it
                acknowledged California's serious air quality problems as well as it
                being a laboratory for the country, and once again in 1977 when
                Congress continued to acknowledge California's air quality problems as
                well as problems in other states and decided that California's new
                motor vehicle standards, once waived by EPA and subject to certain
                conditions, would be optionally available for all states under section
                177 under specified criteria.\474\ In striking a balance between one
                national standard and 51 different state standards, Congress chose to
                authorize two standards--the federal standard, and California's
                standards (which other states may adopt). EPA believes this balance
                reflected Congress's desire for California to serve as a laboratory of
                innovation and Congress's understanding of California's extraordinary
                pollution problems on the one hand, and its desire to ensure that
                automakers were not subject to too many different standards on the
                other.
                ---------------------------------------------------------------------------
                 \474\ ``Sec. 177 . . . permitted other states to `piggyback'
                onto California 's standards, if the state's standards `are
                identical to the California standards for which a waiver has been
                granted for such model year.' '' Motor Vehicle Mfrs. Ass'n v. New
                York State Dep't of Envtl. Conservation, 17 F.3d 521, 525 (2d Cir.
                1994).
                ---------------------------------------------------------------------------
                 In reconsidering the SAFE 1 action and the appropriateness of
                reinstating the 2013 ACC program waiver, EPA has not considered whether
                section 209(a) and section 209(b) are unconstitutional under the Equal
                Sovereignty Doctrine. As in the 2013 ACC program waiver, the decision
                on whether to grant the waiver and the consequence of a reinstated
                waiver is based solely on the criteria in section 209(b) and this
                decision does not attempt to interpret or apply the Equal Sovereignty
                Doctrine or any other constitutional or statutory provision.
                B. CARB's Deemed-To-Comply Provision
                 EPA received comments arguing that California's 2018 clarification
                to its deemed-to-comply provision ``changed important underlying
                requirements of the original 2012 waiver application'' and ``EPA cannot
                reinstate a Clean Air Act waiver for a program that no longer exists.''
                \475\ These commenters maintain that California has never sought a
                waiver for the 2018 amendments or a determination that the change is
                within the scope of the prior waiver. As such, commenters maintain that
                EPA lacks a necessary predicate to permit California's enforcement of
                its amended GHG standards.
                ---------------------------------------------------------------------------
                 \475\ AFPM at 7; Urban Air at 2, 18-19; NADA at 6.
                ---------------------------------------------------------------------------
                 Other commenters argued that the ``deemed to comply'' provision was
                always conditioned on the federal standards providing GHG reductions
                that were at least equal to or as protective as California's program
                and so the 2018 amendments did not substantively change the provision
                or affect any related reliance interests and instead were designed to
                clarify the
                [[Page 14378]]
                provision.\476\ Commenters maintain that CARB adopted ``non-substantive
                amendments for its LEV III regulations to further clarify that the
                deemed-to-comply provision would only apply if the federal GHG
                standards remained substantially as they were as of the date of the
                2017 Final Determination.'' \477\ According to these commenters,
                California adopted these amendments after EPA's withdrawal of its 2017
                Final Determination that had determined that its Federal GHG standards
                for model years 2022-2025 remained appropriate and instead concluded
                that the federal standards for model years 2022-2025 may be too
                stringent and should be revised. EPA notes that after the January 2017
                MTE CARB subsequently found that compliance with those federal
                standards would result in equivalent or greater GHG benefits than
                originally projected for California.\478\ These commenters further
                maintain that the clarification of the deemed-to-comply provision is
                immaterial to the reversal of the waiver withdrawal in SAFE 1 because
                the SAFE 1 action was expressly based on EPA's decision to rely on
                NHTSA's preemption findings and section 209(b)(1)(B) determination,
                neither of which was based on CARB's 2018 clarification rulemaking. As
                such, the commenters maintain that the clarification of the deemed-to-
                comply provision has no bearing on and does not preclude EPA's SAFE 1
                waiver withdrawal.\479\
                ---------------------------------------------------------------------------
                 \476\ States and Cities at 58-61. (``California always intended
                its standards would `remain an important backstop in the event the
                national program is weakened or terminated.' 78 FR at 2,128.'').
                 \477\ Id. at 60. ``Final Determination on the Appropriateness of
                the Model Year 2022-2025 Light-Duty Vehicle Greenhouse Gas Emissions
                Standards under the Midterm Evaluation'' (2017 Final Determination)
                at https://nepis.epa.gov/Exe/ZyPDF.cgi?Dockey=P100QQ91.pdf.
                 \478\ 82 FR 14671 (March 22, 2017) and 83 FR 16077 (April 13,
                2018).
                 \479\ States and Cities at 60-62.
                ---------------------------------------------------------------------------
                 As previously explained, under section 209(b)(1) EPA is to grant a
                waiver of preemption for California to enforce its own standards that
                would otherwise be preempted under section 209(a). This preemption does
                not extend to federal standards that are adopted under section 202(a).
                EPA explained this in responding to comments on the deemed-to-comply
                provision in the ACC program waiver decision. ``[T]he waiver decision
                affects only California's emission standards, not the federal standards
                that exist regardless of EPA's decision.'' \480\ This preemptive effect
                of section 209(a) does not change even when California chooses to allow
                for compliance with its standards through federal standards as
                envisaged by the deemed-to-comply provision.
                ---------------------------------------------------------------------------
                 \480\ 78 FR at 2124.
                ---------------------------------------------------------------------------
                 It also bears note that in SAFE 1, EPA made clear that the 2018
                amendment was not a ``necessary part of the basis for the waiver
                withdrawal and other actions that EPA finalizes in this [SAFE1]
                document.\481\ In the Notice of Reconsideration, EPA neither reopened
                nor reconsidered elements of the 2013 waiver that were not part of
                EPA's findings in SAFE 1.\482\ As noted in this decision, EPA has
                evaluated the factual and legal errors that occurred in SAFE 1. As part
                of this evaluation, EPA believes it has considered all appropriate and
                relevant information necessary to its review of issues associated with
                the second waiver prong or consideration of preemption under EPCA. The
                Agency also recognizes that it received comments from parties that
                raised non-germane issues to EPA's Notice of Reconsideration. EPA did
                not conduct an analysis of such comments in the context of
                reconsidering the specific actions taken in SAFE 1. EPA also makes
                clear that the result of rescinding its part of SAFE 1 is the automatic
                reinstatement of the waiver granted to California in 2013 for its ACC
                program. That is the result of the action taken herein.\483\
                ---------------------------------------------------------------------------
                 \481\ EPA declined to ``take any position at this point on what
                effect California's December 2018 amendment to its ``deemed to
                comply' provision . . . [may] have on the continued validity of the
                January 2013 waiver.'' 84 FR at 51329, n.208, 51334, n.230. Although
                EPA claimed in SAFE 1 that the deemed to comply clarification
                confirmed and provided further support for the SAFE 1 action, EPA no
                longer makes this claim to the extent it is relevant in its
                reconsideration and rescission of SAFE 1. The consequence of this
                action is the reinstatement of the ACC program waiver issued in 2013
                and does not extend to other regulatory developments in California
                or by EPA that occurred subsequent to that waiver decision.
                 \482\ 86 FR at 22423. In addition to declining to take a
                position on the effect of California's 2018 amendments to its
                ``deemed to comply'' provision, SAFE 1 did not finalize the
                withdrawal of the waiver under the first or third waiver prongs. EPA
                also notes that it has previously responded twice to the comments
                suggesting that CARB's deemed-to-comply provision demonstrates that
                California does not have a need for its own standards. See 78 FR at
                2124-25.
                 \483\ EPA acknowledges that motor vehicle emission standards in
                California as well as federally are periodically clarified, amended,
                or revised. For example, after California issued its first deemed-
                to-comply regulation, EPA determined that the state's GHG standards
                were within the scope of the 2009 waiver. While EPA believes that
                Congress intended regulatory certainty to be attached to the
                Agency's waivers issued under section 209, EPA acknowledges that
                conditions may change over time so significantly that it could merit
                a review of California's motor vehicle emission program and
                applicable standards therein or that would prompt California to
                submit a related waiver request to EPA. As explained in this
                decision, the conditions associated with the analysis of the three
                waiver criteria performed in the ACC waiver decision did not change
                so as to merit the SAFE 1 action. EPA recognizes that federal light-
                duty vehicle GHG emission standards have been modified twice since
                SAFE 1 was issued; the current standards do not change EPA's
                conclusion that SAFE 1 should be rescinded.
                ---------------------------------------------------------------------------
                IX. Decision
                 After review of the information submitted by CARB and other public
                commenters, the SAFE 1 action, and the record pertaining to EPA's 2013
                ACC program waiver, I find that EPA did not appropriately exercise its
                limited inherent authority to reconsider waiver grants in SAFE 1. SAFE
                1 did not correct a clerical or factual error, nor did the factual
                circumstances and conditions related to the three statutory criteria
                change prior to SAFE 1, much less change so significantly as to cast
                the propriety of the waiver grant into doubt. On this basis, I am
                rescinding the SAFE 1 action.
                 Furthermore, after review of both the 2013 ACC program waiver
                record as well as the SAFE 1 record, to the extent that EPA did have
                authority to reconsider the ACC program waiver, I have determined that
                the asserted bases were in error and did not justify the waiver
                withdrawal. With respect to the Agency's first purported basis--its
                discretionary decision to undertake a reinterpretation of the second
                waiver prong--I find that the statutory interpretation adopted in SAFE
                1 is a flawed reading of the statute, and I hereby return to the
                traditional interpretation of the second waiver prong, which is, at
                least, the better interpretation. Under the traditional interpretation,
                which looks at the program as a whole, California clearly had a
                compelling need for the ACC program. Even if SAFE 1's statutory
                reinterpretation, which focuses on California's compelling need for the
                specific standards, were an appropriate reading, EPA did not perform a
                reasonable, accurate, and complete review of the factual record in its
                findings regarding the criteria emission benefits of CARB's ZEV sales
                mandate and GHG emission regulations. Upon review, I find that SAFE 1's
                predicate for concluding that California did not have a compelling need
                for these specific standards was not reasonable given the record at the
                time of the ACC program waiver and once again during the SAFE 1
                proceeding. A reasonable, accurate, and complete review of the record
                supports the need for California's specific GHG emission standards and
                ZEV sales mandate to meet compelling and extraordinary conditions in
                California. This is true whether I look at how these standards reduce
                criteria pollution, GHG pollution, or both. In
                [[Page 14379]]
                sum, although I am not adopting the interpretation of the second waiver
                prong set forth in SAFE 1, I find that the burden of proof necessary to
                demonstrate that CARB's ZEV sales mandate and GHG emission standards
                are not needed to meet compelling and extraordinary conditions has not
                been met under either interpretation of the second waiver prong.
                Therefore, I rescind the Agency's part of the SAFE 1 action to the
                extent it relied upon the second waiver prong to withdraw the ACC
                program waiver.
                 With regard to the applicability of preemption under EPCA, I find
                that, to the extent EPA's authority to reconsider the ACC program
                waiver rested upon NHTSA's joint action at the time as well as the
                applicability of its EPCA interpretation to EPA's review, this statute
                falls clearly outside the confines of section 209(b) where EPA's
                authority to grant, deny, and reconsider waivers resides. In any event,
                the grounds for such action under SAFE 1 no longer exist given NHTSA's
                recent final action withdrawing its EPCA preemption rule in its
                entirety.
                 Each of the decisions and justifications contained in this final
                action is severable.
                 This decision rescinds EPA's SAFE 1 action and therefore, as a
                result, the waiver of preemption EPA granted to California for its ACC
                program ZEV sales mandates and GHG emission standards issued in 2013,
                including for the 2017 through 2025 model years, comes back into force.
                Judicial Review
                 Section 307(b)(1) of the CAA governs judicial review of final
                actions by EPA. This section provides, in part, that petitions for
                review must be filed in the Court of Appeals for the District of
                Columbia Circuit: (i) When the agency action consists of ``nationally
                applicable regulations promulgated, or final actions taken, by the
                Administrator,'' or (ii) when such action is locally or regionally
                applicable, but ``such action is based on a determination of nationwide
                scope or effect and if in taking such action the Administrator finds
                and publishes that such action is based on such a determination.'' For
                locally or regionally applicable final actions, the CAA reserves to EPA
                complete discretion whether to invoke the exception in (ii).
                 This final action is ``nationally applicable'' within the meaning
                of section 307(b)(1). In the alternative, to the extent a court finds
                this action to be locally or regionally applicable, the Administrator
                is exercising the complete discretion afforded to him under the CAA to
                make and publish a finding that this action is based on a determination
                of ``nationwide scope or effect'' within the meaning of section
                307(b)(1).\484\ This action rescinds EPA's final action in SAFE 1,
                which withdrew a waiver for new motor vehicle greenhouse gas emission
                standards and ZEV sales mandate granted to California under section
                209(b) of the CAA. In addition to California, sixteen other states and
                the District of Columbia have already adopted California's motor
                vehicle greenhouse gas standards. The other states are New York,
                Massachusetts, Vermont, Maine, Pennsylvania, Connecticut, Rhode Island,
                Washington, Oregon, Minnesota, New Jersey, Nevada, Maryland, Virginia,
                Colorado, and Delaware.\485\ These jurisdictions represent a wide
                geographic area and fall within eight different judicial circuits.\486\
                In addition, this action will affect manufacturers nationwide who
                produce vehicles to meet the emissions standards of these states. For
                these reasons, this final action is nationally applicable or,
                alternatively, the Administrator is exercising the complete discretion
                afforded to him by the CAA and hereby finds that this final action is
                based on a determination of nationwide scope or effect for purposes of
                section 307(b)(1) and is hereby publishing that finding in the Federal
                Register.
                ---------------------------------------------------------------------------
                 \484\ In deciding whether to invoke the exception by making and
                publishing a finding that this final action is based on a
                determination of nationwide scope or effect, the Administrator has
                also taken into account a number of policy considerations, including
                his judgment balancing the benefit of obtaining the D.C. Circuit's
                authoritative centralized review versus allowing development of the
                issue in other contexts and the best use of agency resources.
                 \485\ The same states have adopted California's ZEV sales
                mandate regulation with the exception of Pennsylvania, Washington,
                and Delaware.
                 \486\ In the report on the 1977 Amendments that revised CAA
                section 307(b)(1), Congress noted that the Administrator's
                determination that the ``nationwide scope or effect'' exception
                applies would be appropriate for any action that has a scope or
                effect beyond a single judicial circuit. See H.R. Rep. No. 95-294 at
                323-24, reprinted in 1977 U.S.C.C.A.N. 1402-03.
                ---------------------------------------------------------------------------
                 Under CAA section 307(b)(1), petitions for judicial review of this
                action must be filed in the United States Court of Appeals for the
                District of Columbia Circuit within 60 days from the date this final
                action is published in the Federal Register.
                X. Statutory and Executive Order Reviews
                 As with past waiver decisions, this action is not a rule as defined
                by Executive Order 12866. Therefore, it is exempt from review by the
                Office of Management and Budget as required for rules and regulations
                by Executive Order 12866.
                 In addition, this action is not a rule as defined in the Regulatory
                Flexibility Act, 5 U.S.C. 601(2). Therefore, EPA has not prepared a
                supporting regulatory flexibility analysis addressing the impact of
                this action on small business entities.
                 Further, Subtitle E of the Small Business Regulatory Enforcement
                Fairness Act of 1996, also known as the Congressional Review Act, 5
                U.S.C. 801, et seq., does not apply because this action is not a rule
                for purposes of 5 U.S.C. 804(3).
                Michael S. Regan,
                Administrator.
                [FR Doc. 2022-05227 Filed 3-11-22; 8:45 am]
                BILLING CODE 6560-50-P
                

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