The Environmental Protection Agency (EPA) said on Monday it is preparing to restore California's right to set its own vehicle emissions standards, in a widely anticipated reversal of Trump-era policies.
The decision, which will take several months to be finalized, reaffirms the Golden State's powerful position as an environmental regulator after the Trump administration had in 2019 sought to remove California's powers to set its own emissions standards.
It also sets the stage for negotiations over how strict federal vehicle standards will be under President Biden.
"I am a firm believer in California's long-standing statutory authority to lead," EPA administration Michael Regan said in a statement.
"The 2019 decision to revoke the state's waiver to enforce its greenhouse gas pollution standards for cars and trucks was legally dubious and an attack on the public's health and wellbeing," he added.
The EPA will be accepting public comment until July 6 as part of the process of reversing the Trump-era rule.
The populous, car-loving state has been waging a battle against smog for decades.
And in recognition of that history, the EPA has long granted a waiver giving the state the authority to set its own standards for vehicle emissions, as long as they're more stringent than the national regulations.
That's an unusual exemption — other states can't set their own policies, although they can choose to adopt California's standards as their own.
Between California and the states that follow suit, about a third of the U.S. new car market is covered by the Golden State's policies, giving California regulators a remarkable amount of sway over the auto industry.
However, when the Trump administration weakened federal clean car standards, it also sought to revoke the waiver allowing California to set a higher bar.
That triggered a legal battle and divided the auto industry, with some carmakers choosing to side with California and voluntarily accept somewhat stricter vehicle emissions standards while the rest backed the Trump administration.
After Biden won the White House, every major automaker eventually dropped their support for the now-doomed Trump position.
The EPA has now started the process of reversing Trump's decision. The Department of Transportation last week also proposed to "wipe clean the regulatory slate," indicating that the National Highway Traffic Safety Administration would no longer seek to block state emissions standards, as it had under Trump.
It's still not clear what federal regulations on vehicle emissions and fuel economy will be under the Biden administration. Some environmental groups and progressive lawmakers are pushing for the reinstatement of the Obama-era standards, with more ambitious targets to follow.
The auto industry, meanwhile, is calling for standards midway between the Obama-era and Trump-era policies.
The EPA says it will propose new fuel economy rules in July.