On June 30, the U.S. Supreme Court issued its decision in West Virginia v. EPA and limited the authority of the Environmental Protection Agency (EPA) to regulate greenhouse gas (GHG) emissions. In the opinion written by Chief Justice Roberts, the Court ruled 6 to 3 that EPA cannot require existing power plants to shift away from fossil fuels to lower-carbon sources of energy, such as nuclear, hydrogen, and renewables. Consistent with the Supreme Court’s 2007 ruling in Massachusetts v. EPA, EPA has authority under the Clean Air Act (CAA) to regulate greenhouse gas emissions. According to this most recent Supreme Court decision, however, that authority does not include requiring existing power plants to switch to lower-carbon sources of energy. The Supreme Court took issue with EPA’s method to regulate greenhouse gas emissions, not its motive or authority to regulate them.

With this decision, the Supreme Court overturned a 2021 ruling by the U.S. Court of Appeals for the DC Circuit that struck down the Trump administration’s Affordable Clean Energy (ACE) rule regulating greenhouse gas emissions from existing power plants. The ACE rule had replaced the Obama administration’s Clean Power Plan rule that called for existing power plants to switch to lower-carbon fuel sources to reduce greenhouse gas emissions. Furthermore, in promulgating the ACE rule, EPA stated that it did not have authority under the Clean Air Act to require fuel switching and relied upon energy efficiency improvements to reduce greenhouse gas emissions. In 2021, the DC Circuit had ruled that EPA misinterpreted the Clean Air Act that no fuel switching was allowed and stated that EPA not only had the authority to regulate greenhouse gas emissions, but a statutory duty to regulate them.
In making its ruling in West Virginia v. EPA to overturn the DC Circuit, the Supreme Court relied on the “major decisions doctrine” that requires explicit congressional authorization for action on issues of broad importance and societal impact. Congress must provide specific legislative authority for these broad policies of national importance and not delegate too much authority to federal agencies to regulate. The recurring constitutional legal question is how much power and authority should be given to federal agencies as the executive branch of the government—where does legislative authority end and executive power begin? It is up to the courts to determine which questions are major enough to require this explicit congressional guidance.

The Supreme Court stated that Congress did not specifically give EPA the authority to implement a rule that requires existing power plants to switch to a more sustainable source of energy to reduce greenhouse gas emissions, which is required under the “major decisions doctrine.”  The decision constrains EPA’s ability to issue any regulation that requires a national shift in energy policy to net zero carbon or renewable energy sources to reduce greenhouse gas emissions for the power sector.  

On a wider policy scope, the use of the “major decisions doctrine” signals that the Supreme Court could be a major obstacle to federal agencies seeking to implement broad policies of national importance, such as rules for healthcare, workplace safety, finance, banking, telecommunications, or possibly even environmental justice.  In such areas, Congress may need to provide explicit authority for federal agencies to issue regulations.  Critics of this application of the “major decisions doctrine” argue that it takes regulatory decisions out of the hands of experts in federal agencies and relies too much on the general knowledge of Congress. 

The decision may limit EPA’s authority to regulate GHG emissions, stymie federal plans to shut down coal-fired power plants, and slow the momentum to net zero carbo emissions.  Nevertheless, not much may change, because multiple market forces will continue to provide opportunities for lower-carbon energy sources and electric vehicles.  The U.S. continues to reduce carbon emissions from the power and industrial sectors, and the transition to lower-carbon fuel sources, renewable energy, and electric vehicles appears to be too firmly established economically and competitively to be turned aside.

What does this opinion mean for the Biden administration’s efforts to address climate change and what will the impact be on the metalcasting industry? Despite the limits on EPA’s authority, the agency can still, and likely will, set specific greenhouse gas emission limits for power plants based on existing emission control technologies. In addition, EPA also could shift its focus to include new greenhouse gas emission limits for industrial sources such as the metalcasting industry. For industry, this could mean higher energy costs as utilities initiate control strategies to meet new emission limits and new requirements to implement energy conservation measures and, possibly, install control equipment to reduce greenhouse gas emissions and carbon footprint at their facilities.  

The question that remains is how far and how fast EPA can go with such new regulations. Will EPA be able to require process changes at metalcasting facilities to reduce greenhouse gas emissions? Only time and future litigation will tell. In the meantime, the metalcasting industry will continue its efforts to reduce carbon emissions, consider innovative technologies to address climate change, and produce castings to support renewable energy technologies, electric vehicles, and other green economy initiatives.