CEQ To Rescind NEPA Rules: Implications for Permitting and Environmental Review

The Council on Environmental Quality (CEQ) has announced plans to revoke its National Environmental Policy Act (NEPA) regulations following a recent court decision that found CEQ lacked the authority to issue them. These regulations, in place since the 1970s, have played a key role in guiding federal environmental reviews. The recission was further prompted by a February 2025 executive order, which also directs federal agencies to revise their own NEPA regulations within a year. In this post, we address common questions about CEQ’s decision and its potential impact on environmental review processes.

What is NEPA?

• The National Environmental Policy Act (or NEPA) is a federal law that was signed into law in 1970 that requires federal agencies to evaluate the environmental impacts of their actions. 42 U.S.C. § 4321 et seq.
• NEPA’s purpose is “to promote efforts which will prevent or eliminate damage to the environment and biosphere and stimulate the health and welfare of man; to enrich the understanding of the ecological systems and natural resources important to the Nation; and to establish a Council on Environmental Quality.” 42 U.S.C. § 4321.
• Among other things, NEPA requires the preparation of an environmental impact statement for an agency action “that has a reasonably foreseeable significant effect on the quality of the human environment.” 42 U.S.C. § 4336(b).
• NEPA also created the Council on Environmental Quality (CEQ) to, among other things, advise the president on implementing NEPA and consult with federal agencies as they develop procedures to implement NEPA.

What are the CEQ NEPA regulations?

• CEQ’s NEPA regulations establish uniform procedures for federal agencies to implement the requirements of NEPA.
• At a high level, CEQ’s NEPA regulations identify procedures for selecting and conducting the appropriate level of environmental review (environmental impact statement, environmental assessment, categorical exclusion, etc.).
• The regulations were initially promulgated in 1978.
• Other federal agencies have also adopted their own agency-specific NEPA regulations, many of which incorporate or rely upon CEQ’s NEPA regulations.

Why is CEQ proposing to revoke its NEPA regulations?

• CEQ is proposing to revoke its NEPA regulations because of a court decision and subsequent executive order.
• Court decision: Marin Audubon Society v. Federal Aviation Administration, 121 F.4th 902 (D.C. Cir. 2024). At issue in the case was whether federal agencies complied with the CEQ NEPA regulations. However, unexpectedly, the court offered an extended analysis of the validity of the regulations themselves. The court traced the CEQ’s purported authority to issue binding regulations under NEPA not to NEPA itself, but to a longstanding executive order from then President Jimmy Carter, Executive Order 11514 of Mar. 5, 1970, as amended by Executive Order 11991 of May 24, 1977. However, the court held that an executive order cannot substitute for Congressional authority. Because the court held that CEQ “had no lawful authority to promulgate” its nearly 50-year-old regulations, the court held the rules are ultra vires and thus invalid. Both petitioners and respondents filed petitions for rehearing en banc of the panel’s decision, which were denied.
• Executive order: Following the court’s decision, President Trump issued Executive Order 14154 of Jan. 20, 2025, the Unleashing American Energy directive, which among other decisions, revoked President Carter’s Executive Order 11514.
• On February 19, 2025, CEQ issued a pre-publication interim final rule that would revoke all of CEQ’s NEPA regulations. The rule provides a 30-day comment period and will become effective 45 days after publication.
• Also on February 19, 2025, CEQ issued a memorandum providing guidance to other federal agencies on NEPA implementation in light of the proposed recission of CEQ’s NEPA rules (referred to herein as the 2025 CEQ Memo).

If CEQ’s NEPA regulations are rescinded, will NEPA review still be required?

• The NEPA statute is still in effect. That statute requires federal agencies to evaluate the environmental impacts of their actions. Federal agencies continue to be required to comply with NEPA.
• Even though CEQ proposes to rescind its NEPA regulations, CEQ is nonetheless advising other federal agencies to continue to voluntarily follow those regulations and not delay federal permitting.

Does this impact other federal agencies’ NEPA regulations?

• CEQ has directed other federal agencies to revise agency-specific NEPA regulations within 12 months. Federal agencies are supposed to provide CEQ with a proposed schedule for updating those regulations by March 21, 2025 (within 30 days from the 2025 CEQ Memo).

Does recission of the CEQ NEPA regulations impact state environmental review requirements?

• It could. Many states have their own environmental review statutes and rules (sometimes referred to as mini-NEPA statutes). Recission of the CEQ NEPA regulations does not directly impact state statutes and rules.
• However, state environmental review may be affected to the extent state regulations refer to or rely upon federal law. For example, Wisconsin’s statute states that environmental review should substantially follow CEQ’s guidelines. See Stat. § 1.11(2)(c). More broadly, case law interpreting state mini-NEPA statutes has looked to federal law for guidance.
• State environmental review could also be affected if the review is part of joint federal-state environmental review.

Will recission of the CEQ NEPA regulations delay federal permitting?

• Although the Executive Order and CEQ Guidance direct agencies to continue to review federal actions without delay, there are practical difficulties.
• Federal agencies will need to assess what procedures they will use to implement NEPA. A change in procedure could result in delay in agency review and decision-making, and could result in additional post-decision-making litigation.

What does this mean for projects currently going through NEPA review?

• It is unclear. In practice, the 2025 CEQ Memo directs federal agencies to continue to follow their existing practices and procedures for implementing NEPA. However, the recission of those rules raises uncertainty regarding the legal status of those rules.

What does this mean for projects that already went through NEPA review?

• According to the 2025 CEQ Memo, CEQ does not intend for the recission to apply retroactively. However, to the extent a project approval is challenged in litigation, it is unclear what version of the regulations would apply, if any.

What does this mean for projects that will undergo NEPA review in the future?

• CEQ has directed other federal agencies to update agency-specific NEPA regulations within 12 months. It is possible that different federal agencies will diverge in their approaches to updating their NEPA regulations. We anticipate there will be lawsuits challenging updated NEPA regulations.

What’s next?

• Deadline for comments on interim rule: March 21, 2025 (30 days after publication in Federal Register).
• Effective date of interim rule: April 5, 2025 (45 days after publication in Federal Register).
• There is a pending case before the U.S. Supreme Court that may result in that court weighing in. Specifically, in Seven County Infrastructure Coalition v. Eagle County (Docket No. 23-975), the issue on appeal is whether NEPA and its regulations require a federal agency to evaluate impacts beyond the scope of the agency’s regulatory authority. Oral argument was held in December 2024, with a decision expected in several months.
• We anticipate that federal agencies will begin reviewing and updating their NEPA regulations, with associated notices and comment periods.
• Fredrikson is continuing to track executive orders and their impacts through its Executive Brief, which aggregates Fredrikson’s executive-action-related resources into a single place.