Council on Environmental Quality Rescinds NEPA Regulations

This rollback follows the D.C. Circuit’s November 2024 holding in Marin Audubon Society v. FAA that CEQ lacks rulemaking authority under NEPA, and the District of North Dakota’s February 2025 decision in Iowa v. CEQ vacating CEQ’s 2024 NEPA Implementing Regulations (the “2024 rule”) on similar grounds​. The rescission is a direct response to the Trump administration’s Executive Order (EO) 14154, “Unleashing American Energy,” directing CEQ to propose revoking its NEPA regulations. With CEQ’s regulations no longer in place, federal agencies must now determine their own NEPA compliance procedures, creating uncertainty and opportunity regarding how each agency will conduct its environmental reviews moving forward.

Background: Legal Challenges and Executive Action
Since its enactment in 1970, NEPA has served as a foundation of federal environmental review, requiring agencies to assess significant environmental impacts before undertaking or approving major projects and other actions. CEQ first issued implementing regulations in 1978 under President Carter’s EO 11991, which directed federal agencies to comply with CEQ’s rules.

The legal landscape shifted last fall with Marin Audubon, in which the D.C. Circuit held that NEPA does not grant CEQ authority to issue legally binding regulations. Instead, the court determined that CEQ’s role is purely advisory​—a departure from decades of NEPA implementation.

The Marin Audubon ruling, which remains in place following the court’s recent denial of en banc review, set the stage for Iowa v. CEQ, in which 20 states challenged CEQ’s 2024 rule, arguing that it exceeded the agency’s authority and imposed costly and legally questionable requirements on project sponsors. On February 3, 2025, the North Dakota district court vacated the 2024 rule, holding that CEQ lacks statutory authority to issue binding NEPA regulations.

One week later, on February 19, 2025, President Trump signed EO 14154, which rescinded EO 11991 and directed CEQ to “expedite and simplify the [federal] permitting process” and to “provide guidance on implementing [NEPA] … and propose rescinding CEQ’s NEPA regulations” within 30 days. EO 14154.

CEQ responded by immediately revoking its NEPA regulations, leaving agencies to rely on their own procedures or, as suggested in CEQ’s accompanying memorandum, to voluntarily rely on the rescinded regulations. CEQ also encouraged agencies to use its 2020 rule, “Update to the Regulations Implementing the Procedural Provisions of the National Environmental Policy Act,” as a reference framework in developing new NEPA implementing procedures.

Implications for Federal Agencies and Project Sponsors
The rescission of CEQ’s NEPA implementing regulations marks a significant shift in how federal environmental reviews will be conducted. Without a mandatory uniform regulatory framework, agencies must now independently interpret NEPA’s requirements and develop their own NEPA procedures. This change creates short-term uncertainty for some projects but also longer-term opportunities for agencies to tailor their NEPA reviews to better fit the types of major federal actions each agency reviews. Though, the current regulatory uncertainty may lead to delay for some projects as agencies navigate compliance obligations and procedural requirements despite CEQ’s guidance directing federal agencies to continue processing pending NEPA documents without delay. In addition, legal challenges to NEPA documents could escalate, leading to uncertainty about how courts will evaluate divergent agency approaches, particularly in light of the Loper Bright decision, as agencies will not receive judicial deference of their interpretations of NEPA.

What Comes Next?
While CEQ’s interim final rule is immediately effective, the agency has requested public comments and may consider modifications before issuing a final rule​. Additionally, ongoing litigation could further reshape the implementation of NEPA. As agencies begin the process of revising their own regulations, the coming months will be critical for federal agencies and project sponsors in assessing how NEPA compliance evolves in the absence of a uniform CEQ framework. Pillsbury will continue to monitor these developments and provide updates as the regulatory picture evolves.