Trump is dismantling climate rules. Industry is worried.

On Thursday, February 12, U.S. President Donald Trump and Administrator of the U.S. Environmental Protection Agency (EPA) Lee Zeldin announced the repeal of the Endangerment Finding for Greenhouse Gases (GHGs). This repeal is the center of the Trump administration’s assault on federal climate policy. Their intention is to remove it, root and branch, in a way that will be much more difficult for a future administration to reverse.

The 2009 finding focused on emissions from motor vehicles, but later regulations of carbon dioxide emissions from power plants and methane emissions from oil and natural gas operations are based on it as well. Thus, repealing the Endangerment Finding pulls the rug out from under federal regulation of GHGs using the Clean Air Act. This is why EPA Administrator Lee Zeldin described its repeal as “the single largest deregulatory action in the history of the United States.”

Clearly this action is bad for the climate and for human welfare, removing a key federal tool for reducing GHG emissions and moving the United States toward a greener economy. However, the repeal is also bad for many U.S. industries, because it leaves a regulatory vacuum. Lawsuits and state actions are likely to fill that vacuum, trading a sense of regulatory certainty for chaos and inconsistency, a situation that could cloud the environment for many long-term investments in the United States. Repeal isn’t just bad for the environment, it’s likely to harm many industries that it was intended to help.

To understand how repeal is likely to play out, it’s helpful to understand the legal history and basis of the Endangerment Finding and subsequent regulation based on it.

What is the Endangerment Finding and how has it changed federal regulation of GHGs?

The story of federal regulation of GHG emissions begins with the 2007 Supreme Court decision in Massachusetts v EPA, which found that GHGs meet the Clean Air Act’s definition of an air pollutant. The decision further stated that “Under the clear terms of the Clean Air Act, EPA can avoid taking further action only if it determines that greenhouse gases do not contribute to climate change or if it provides some reasonable explanation as to why it cannot or will not exercise its discretion to determine whether they do.” It went on to explain that “EPA has offered no reasoned explanation for its refusal to decide whether greenhouse gases cause or contribute to climate change.” Therefore, the decision required EPA to evaluate the science of climate change, or provide a legal reason not to do so. This decision was focused on emissions from new motor vehicles as described in Section 202(a) of the Clean Air Act.

The December 2009 Endangerment Finding provides the scientific basis for GHG regulation. EPA stated that six GHGs, including carbon dioxide and methane, “threaten the public health and welfare of current and future generations.” This finding triggered a duty for EPA to regulate motor vehicle emissions. Section 202(a)(1) says that if the EPA Administrator finds that emissions of an air pollutant from new motor vehicles “cause, or contribute to, air pollution which may reasonably be anticipated to endanger public health or welfare,” EPA must issue emissions standards for those pollutants from new vehicles and engines.

To support the 2009 Endangerment Finding, the EPA compiled scientific evidence that rising concentrations of GHGs in the atmosphere are warming the earth’s climate, with the effect of rising sea levels, shrinking snowpack, ocean warming and acidification, and shifts in precipitation patterns. EPA then demonstrated that these changing conditions were detrimental to human health and welfare. The ruling acknowledged scientific uncertainties, but noted that they did not undermine evidence that GHG emissions posed serious risks.

Section 111 of the Clean Air Act concerns regulation of new and existing stationary sources of air pollution, like industrial facilities, power plants, or oil and gas wells. It contains similar language to Section 202, considering whether pollution “may reasonably be anticipated to endanger public health or welfare.” Based on the scientific evidence gathered to support the 2009 Endangerment Finding for emissions from vehicles, EPA determined that the finding’s conclusion that GHGs are pollutants enabled it to regulate emissions from stationary sources as well.

As a result, EPA promulgated regulations of GHG emissions from new and existing power plants in 2015. The first Trump administration repealed and replaced them, and the Biden administration promulgated new power plant rules in 2024. The Biden administration also directly regulated methane emissions from the oil and gas industry in 2024, although volatile organic compounds, including methane, have been regulated for natural gas facilities since 2012, based on concerns about local air pollution rather than climate.

How is EPA justifying the repeal of the Endangerment Finding?

The administration makes two primary legal arguments to justify the Endangerment Finding repeal. First, they claim that two recent Supreme Court cases clarify that EPA does not have the statutory authority to regulate GHG emissions from vehicles. Second, they claim that GHG emissions from the U.S. vehicle fleet are not large enough to warrant regulation.

Claim of no statutory authority

In Massachusetts v EPA, the Supreme Court noted the Clean Air Act’s definition of “air pollutant” is broad enough to include GHGs. In the repeal, the administration cites two more recent Supreme Court decisions, West Virginia v EPA (2022) and Loper Bright Enterprises v Raimondo (2024), to argue the opposite.

In the first case, the Supreme Court invoked the “major questions doctrine,” which requires agencies to have explicit authorization from Congress before regulating matters of large political or economic significance. It found that, because the Clean Air Act did not directly allow regulation to shift electricity production from higher-emitting to lower-emitting facilities, EPA could not regulate emissions in this way.

In the second case, the Supreme Court found that courts must uphold the “best” reading of an ambiguous statute, not defer to the regulatory agency’s reading of the statute.  The overall theme in these two cases is that since the Clean Air Act does not mention GHGs or climate change specifically, Congress did not intend for it to allow regulation of GHGs.

In referencing these two cases, EPA takes clear aim at Massachusetts v EPA. This issue will certainly end up in court. Two class action suits have already been filed, American Public Health Association v EPA and Venner v EPA, with different legal arguments. Several states have announced their intention to bring suits as well, including California and Massachusetts. Given the controversial nature of the issue, it is highly likely that it will be brought before the Supreme Court once more—but a Supreme Court that is both more conservative and more polarized than it was in 2007 when Massachusetts v EPA was decided.

Claim that GHG emissions from vehicles are too small to regulate

A secondary justification given by the repeal is that GHG emissions from the U.S. vehicle fleet are too small to bother with. The repeal states that “even the complete elimination of all GHG emissions from all new and existing vehicles in the U.S. would have only de minimis impacts that fall well within the standard margin of error for global temperature and sea level measurement.”

Yet, the logic of the de minimis argument falls apart under scrutiny. The United States is the world’s second largest emitter of GHGs. The transportation sector was the largest source of U.S. GHG emissions in 2023, at 30%, and also the fastest growing sector. (EPA did not publicly release its annual greenhouse gas emissions inventory in 2025. The data cited here are from the final version of that inventory that the Environmental Defense Fund obtained through a Freedom of Information Act request.)

The climate warming effect of GHG emissions is globally cumulative. The text of the repeal states that one sector of the economy of the world’s second-largest emitter isn’t large enough to regulate. However, one could cut the emissions pie into smaller and smaller slices to make this argument about any emissions source, be it a nation’s emissions or those from a particular sector or facility. Cutting the emissions into smaller pieces doesn’t change their cumulative impact, nor the imperative to reduce emissions to preserve human welfare.

Moreover, this rationale stands in direct opposition to the majority opinion in Massachusetts v EPA. That case rejects EPA’s argument against regulating GHGs in this way: “Its [EPA’s] argument rests on the erroneous assumption that a small incremental step, because it is incremental, can never be attacked in a federal judicial forum. Yet accepting that premise would doom most challenges to regulatory action. Agencies, like legislatures, do not generally resolve massive problems in one fell regulatory swoop… They instead whittle away at them over time.”

Repeal does not challenge climate science

Equally notable is what the repeal did not do: It did not question the climate science underpinning the Endangerment Finding. During the summer of 2025, such an argument seemed likely. In an effort to refute the science of climate change, the U.S. Department of Energy (DOE) assembled the five-scientist Climate Working Group. The Group issued its report in July 2025 and it was cited in the EPA’s August 2025 initial proposal to reconsider the Endangerment Finding.

The work of this group has been widely criticized, both on scientific and legal grounds. For example, a group of 86 scientists from academia, business, government, and non-profits came together to refute the report’s findings, point by point. Additionally, a federal judge ruled that the DOE violated the Federal Advisory Committee Act, which requires advisory committees that provide advice to federal agencies to be formally chartered, hold open meetings, provide public notice and access to records, and maintain a fairly balanced membership. The judge found that the group was instead chosen specifically for the purpose of calling into question the scientific basis for EPA’s GHG endangerment finding, rather than neutrally reviewing climate science.

The administration backed away from using science as a justification for repeal. The repeal states, “Although the Administrator continues to harbor concerns regarding many of the scientific inputs and analyses underlying the Endangerment Finding,” EPA found it unnecessary to argue against climate science to accomplish its goal.

Since 2009, the evidence for current and future harm from GHG emissions has only become stronger, as described, for example, in a 2025 report from the National Academies of Sciences, Engineering, and Medicine, the Fifth National Climate Assessment published in 2023, and in the Sixth Assessment Report from Intergovernmental Panel on Climate Change, also published in 2023.

What does repeal mean in practice?

Investors want policy certainty when they consider where to build a new factory or facility, or when they decide what sorts of vehicles to produce. They want to know that the rules won’t drastically change during the life of their investment, which typically lasts much longer than the U.S. political cycle—roughly a decade for vehicle models and multiple decades for many industrial facilities. Wiping out federal regulation of GHG emissions leaves a vacuum that will likely be filled with lawsuits and state actions—all unwelcome sources of uncertainty to investors.

Although the Endangerment Finding focuses on motor vehicles, it underpins all federal regulation of GHG emissions. The Trump administration has already announced its intention to repeal GHG emissions regulation from fossil-fuel-fired power plants and delay implementation of methane emissions from oil and gas operations. Without the Endangerment Finding, these actions will be much easier, especially for power plants. (Regulation of methane from oil and gas operations as a local pollutant might continue, without consideration of methane’s role as a GHG.)

The lawsuits that have already been filed challenging the repeal could take years to work their way through the court system. The administration clearly has the goal of overturning Massachusetts v EPA and eliminating regulation of GHGs under the Clean Air Act. Uncertainty about whether they will achieve that goal is one source of uncertainty for businesses.

In addition to legal challenges to the repeal itself, repeal opens up GHG emitters to federal public nuisance lawsuits—a longer-term source of uncertainty. Plaintiffs cannot currently sue GHG emitters in federal courts to seek damages or emissions reductions, as decided in a 2011 Supreme Court decision (AEP v Connecticut) that said that GHG regulation under the Clean Air Act preempts such lawsuits. (Current climate lawsuits are brought in state courts, rather than federal.) If Clean Air Act regulation goes away, so does protection from federal lawsuits seeking relief from the effects of GHG emissions.

An additional legal consequence of repeal is the potential for states to enact their own GHG regulations, for vehicles and other sources. Up to now, federal regulation of GHG emissions from vehicles has superseded any state efforts. With the federal EPA abandoning this authority, states might be able to step in. The EPA argues in the repeal that states could not set their own GHG standards for vehicles, as federal preemption still applies even if EPA does not regulate. Some legal scholars disagree. That could be good news for those who want to reduce emissions, but difficult for large companies that would need to comply with varying laws across jurisdictions. This is the exact problem the Trump administration sought to prevent in the AI industry by preempting state AI regulations and threatening to restrict state funding if regulations were onerous.

Industry understands the uncertainty caused by repeal

Although reducing regulations on vehicles is the immediate effect of the repeal, some auto companies have expressed concerns. Jim Kliesch, the director of regulatory affairs at American Honda Motor Company, said that repeal of the regulation would cause regulatory instability and “prolonged legal battles, possible market fragmentation, and technological stagnation.” Ford has also commented that while revisions to GHG regulations are needed, a full repeal is “not likely to provide the industry with the long-term stability we need to make historic investments in America and compete globally.”

The electric power industry understands the challenge that “regulation” based on lawsuits would bring. The Edison Electric Institute, a trade association representing investor-owned utilities, made this argument in an amicus brief filed in another Supreme Court case. In this “Wild West” world of climate lawsuits, outcomes could vary across emitters, lack an understanding of the costs and technological feasibility of solutions, and depend upon the judges deciding the cases.

Additionally, reputational effects are important for U.S. companies that sell products abroad, especially oil and gas. The American Petroleum Institute (API), which represents roughly 600 members of the oil and natural gas industries, stated that while it supports the rollback of some GHG regulations on cars, it also supports the “continued direct federal regulation of methane emissions from new and existing oil and natural gas sources.”

A key reason for API’s support of methane regulations is that the EU is moving toward regulating the upstream methane emissions of liquified natural gas (LNG) bought within the bloc. The United States is the largest supplier of LNG to the EU and the EU is the largest customer of U.S. LNG. The United States backing away from GHG regulations will put a strain on a trade relationship that is beneficial to both parties, especially after Trump extracted a promise from the EU to buy $750 billion in energy products by 2028 in exchange for lower tariffs. (Given the recent Supreme Court decision blocking many of Trump’s tariffs, this deal is uncertain, but the supplier relationship remains.) EPA Administrator Lee Zeldin attended the Munich Security Conference immediately after the repeal, explaining that the repeal is based on a legal argument that Congress, not the EPA, has the responsibility to deal with GHG emissions. This is an unusual visit for an EPA administrator, and shows the administration is cognizant of the potential blowback on U.S. energy companies.

Regulations have a purpose

The Trump administration touts its deregulatory agenda. An executive order issued shortly after Trump’s second inauguration, titled Unleashing Prosperity through Deregulation, stated that for every regulation promulgated during his administration, ten existing regulations must be repealed. The notion that regulation “imposes massive costs on the lives of millions of Americans, creates a substantial restraint on our economic growth and ability to build and innovate, and hampers our global competitiveness” misses the fact that many regulations serve useful purposes. Environmental regulations in particular have brought us cleaner air and water, safer drinking water, and furthered human health by reducing exposures to toxins like lead. Industries don’t object to all regulations—they just want regulations they can comply with and certainty that their investments in compliance will pay off.

The Trump administration’s zeal for dismantling environmental policy goes far beyond eliminating GHG emissions regulation. Trump often refers to environmental efforts as part of the “Green New Scam” and his administration has been busy undoing the work of prior administrations. On February 19, 2026, the administration loosened regulation of air pollution from coal- and oil-fired power plants, including potent toxins like mercury and arsenic. The administration is finalizing a reduction of the jurisdiction of the Clean Water Act, eliminating many wetlands and streams from protection. It has also rolled back or frozen implementation of many aspects of the Inflation Reduction Act and the Bipartisan Infrastructure Law, with the largest impacts in industrial decarbonization and in hydrogen and other clean fuels. Renewable energy has been a key target of administration action, rolling back tax credits, making it more difficult to build renewables on public land, and even attempting to cancel permits for offshore wind projects already under construction.

Eliminating regulation should not be an end in itself. Sensible, consistent regulation can achieve policy goals while providing businesses with a supportive environment in which to make long-term investment decisions. The wild swings in U.S. environmental and climate policy over the past two decades aren’t just bad for human health and welfare and the health of the natural world. The U.S. investment environment is harmed by near-term legal uncertainty and the longer-term likelihood that the United States will remain out of step with its friends and trading partners abroad.

Ultimately, the U.S. Congress could pass a law to directly regulate greenhouse gas emissions. The Clean Air Act wasn’t designed for this purpose, and a more specific legal tool could end the wrangling in the courts.  However, the two political parties differ not just on how to deal with climate change, but on whether the science of climate change is real, and whether environmental policy is worth the cost and effort. So long as that is the case, uncertainty around U.S. climate and environmental policy will continue, making the United States a less inviting place for investment.