After years of increased EV adoption, battery technology advancement, and many supportive policies across all levels of government, the Trump administration has begun rolling back federal clean transportation regulations and funding. During the next four years, it’s clear that states must fill the policy gaps left by the federal government and continue transforming our highest emitting sector by enacting strong clean vehicle policies.
We invited a panel of experts to explore how federal clean vehicle policy is changing and what state opportunities exist to fill the gaps. We provided an overview of clean vehicle policy rollbacks across federal agencies and Congress, and identified high-impact state-level policy opportunities and lessons learned, including spotlights on California’s vehicle emissions waivers and state-level clean fuel standards.
Our expert panel included:
- Jordan Gerow, Policy & Research Director at Climate XChange
- Kathy Harris, Director of Clean Vehicles for NRDC
- Jane Sadler, Senior Associate, US Program at RMI
- Kayleigh Rubin, Associate, US Program at RMI
Jordan Gerow, Climate XChange – Setting the Stage on Federal Transportation Rollbacks and State Policy Opportunities
Learn more by watching the webinar at 05:26
Jordan provided an overview of federal clean transportation policy and rollbacks across EPA, DOT, FHWA, and Congress:
- In late May, the Senate overruled their own Parliamentarian and the U.S. Government Accountability Office to rescind California’s waivers under the Clean Air Act related to regulating tailpipe emissions standards. This is an unprecedented use of the Congressional Review Act (CRA). The three resolutions (H.J. Res 87, 88, and 89) now await President Trump’s signature, which will likely be followed by lawsuits led by California and other states. More on this CRA action below, from Kathy Harris.
- The budget reconciliation bill, currently under consideration in the Senate, includes:
- Phaseouts for federal EV tax credits by 2026,
- Implementation of an annual EV registration fee with no revenue going toward transit,
- Winding-down of various federal clean transportation grant programs, including the Low Carbon Transportation Materials program and multiple pots of unobligated IRA funding.
- The EPA is reconsidering three rules for vehicle emissions standards: the Heavy Duty Truck Nox Rule, the Multi-Pollutant Rule, and Phase 3 of the GHG rules for Heavy Duty Vehicles.
- DOT is reconsidering Corporate Average Fuel Economy (CAFE) Standards, which would have raised efficiency requirements for passenger cars and light trucks. DOT also repealed the GHG Measure requiring state DOTs and MPOs to report transportation emissions and establish reduction targets.
- The Federal Highway Administration (FHWA) rescinded National Electric Vehicle Infrastructure (NEVI) program guidance, halting billions of dollars of funding to states.
While states have many opportunities to ramp up their own clean transportation goals and policies, it’s important to note that the revocation of California’s CAA waivers would mean that states are almost entirely federally preempted from regulating tailpipe emissions. However, the CAA does include Indirect Source Review, which allows states to regulate certain vehicle emissions standards as a byproduct of stationary sources — efforts to take advantage of this rule are already underway in California, New York, and New Jersey.
Setting aside tailpipe emissions, states can still regulate fuels and their carbon intensity, the EV charging network, charging rates, taxes and rebates, government fleet procurement, building and zoning codes, and more. Read more about state-level clean transportation policy.
Kathy Harris, NRDC – California’s Waivers and How States Can Move Forward
Learn more by watching the webinar at 16:16
Kathy reviewed the history and current status of the CAA waivers for California’s latest Clean Car and Truck programs, including Congress’s recent illegal and unprecedented revocation of the waivers under the Congressional Review Act, and lessons learned around misinformation about EVs and the CRA. California has announced plans to sue the federal government if the President revokes the waivers.
States have many options for moving forward, even if California’s waivers are revoked. Eleven states have launched the Affordable Clean Cars Coalition, and state leadership can look to remove barriers to the transition to zero-emission vehicles.
State strategies include:
- Incentivizing and requiring the buildout of EV charging infrastructure.
- Developing incentives for EVs through taxes, rebates, and non-punitive registration fees.
- “Kicking the tires” to overcome hesitancy and a lack of familiarity with EVs today by facilitating ride-and-drives, training and encourageing dealerships to promote EVs, and promoting state fleet conversion to EVs.
Jane Sadler and Kayleigh Rubin, RMI – Clean Fuel Standards as Strong, Smart State Policy
Learn more by watching the webinar at 33:10
Jane provided a deep dive into clean fuel standards (CFSs), also known as low carbon fuel standards (LCFS), including how a CFS is designed, why states should enact a CFS, and best practices for policy design. Clean fuel standards have been enacted in California, New Mexico, Oregon, and Washington.
A clean fuel standard aims to reduce the GHG emissions and air pollution from transportation. It is a market-based mechanism to cap the carbon intensity (CI), or amount of lifecycle GHG emissions, of transportation fuels over time. CFSs do not require federal approval, are relatively inexpensive for states to implement, and are customizable to state-specific economic priorities.
Important considerations for CFS policy design include:
- Prioritizing real, state-specific emissions reductions,
- Interim targets to support early and innovative action,
- Market controls to provide assurance to participants by stabilizing credit prices,
- Leveraging some of the benefits toward frontline and environmental justice communities.
Kayleigh walked through RMI’s recently-launched, publicly accessible CFS Calculator, developed to support policymakers and advocates in designing and estimating the impacts of a CFS in any of the 48 contiguous states. The CFS Calculator allows the user to select a specific state, timeline, and percentage reduction in CI, which then creates a carbon intensity benchmark schedule. These inputs then automatically calculate the annual number of anticipated credits and deficits by fuel type.
Q&A
Tune into the Q&A by watching the webinar at 49:05
Q: Do Clean Fuel Standards require a special refinery and does that raise the price of fuel?
Jane Sadler: Typically, the way gasoline and diesel lower their carbon intensity scores to comply is by fuel-mixing with lower-carbon feed stocks. So that would require a special refinery on behalf of fuel producers and importers, essentially creating a new fuel mixture. On the point of raising the price of fuel, this is actually a pretty contentious subject in California. The California Air Resources Board (CARB), which is the operator of the program in California, their calculations show that it’s roughly a $0.06 increase per gallon of fuel for gasoline in California due to the LCFS. Those who are against the program have a very different number, as you can imagine. So this has been vehemently debated and is unclear, but I lean towards trusting a little bit higher than the CARB number. If I had to guess based on all the modeling I’ve seen, I’d probably say $0.10 per gallon, but that’s just me reading a lot of numbers and not having run them myself.
Q: If the EV tax credits are phased out by 2026, would someone who qualified for the tax credit in 2025 still be able to claim it when filing their taxes in 2026?
Jordan Gerow: Yes, the language is clear about vehicles acquired no later than December 31 2025, so in that hypothetical, the purchaser should be good.
Q: Are there any interesting and exciting things to look forward to in the coming months, spaces where there’s more momentum, the start of a new idea taking root, new policies taking place, or interesting advocacy and communications tactics?
Jane Sadler: So I did mention that California has one of these [CFS] programs. It is the biggest and oldest program, and then Oregon and Washington also have them. But New Mexico actually is the newest entrant to this group. They passed the bill last year and are in the process of writing the rules for the program. So it’s going to go into effect, hopefully, in February 2026. It’s been really exciting to watch the process of them writing rules in real time. They’re accepting comments and doing community outreach right now, and thus far, I’ve been super impressed by the thoughtfulness they’ve written these rules with. It’s also great to see a state that’s not one of the the big West Coast three to go after this kind of program, and I think it’ll be really interesting and a great framework for other states that don’t look like Washington or California to pass these policies. So that’s something I’m really excited about right now
Q: Presuming that the legal defense of the waivers is not successful, California went out of their way before Trump was elected to try and reach settlements with major automakers that would have them respect the same effective rules. Do you think that might have legs if we end up actually losing those waivers and there’s no real legal recourse?
Kathy Harris: I’d love to see a new round of these frameworks or agreements, which were, as you said, commitments to continuing to make progress. I will say that last year, Stellantis, which was not originally part of the framework agreements, did sign a new agreement with California that actually commits to maintaining standards until 2030, not just in California, but across the [Section] 177 states. In addition, providing incentives to dealerships and for charging infrastructure build out. Stellantis is the only company that I’m aware of that has done that so far, but I would love to see that replicated through other automakers as well. And to your point, not just being California, but also supporting the transition across all of the states that are committed to this transition.
Q: What are the trade offs and best practices with integrating ethanol into a clean fuel standard design, especially in a state with a large farming community?
Jane Sadler: You’ve really hit the nail on the head on one of the biggest issues with these programs. There are some current concerns about over incentivizing biofuels that are going to end up like the federal RFS, where it’s not moving cars to electrification, but just getting us hooked on biofuels and ethanol. So there are some ways that some states have addressed these challenges. Some are very tight, indirect land-use changes in their carbon intensity calculations. That’s your first step. There’s also been proposed options of limiting the amount of bio-feed stocks into programs. Some programs also have really interesting rules around traceability of the bio-feed stocks into things like ethanol and other bio-based fuels. These are all the things to start with. I think there could be a lot more done to push more vehicles towards electrification, which is essentially the end goal. So on the other end of that, you can also add greater incentivization for things like capacity charging and crediting for electricity. So you want a push pull design, where you push away from ethanol and you pull towards electrification. There’s a ton of other options for these kinds of things, but it is one of the most important things for lawmakers to consider, especially in states where they have a very powerful interest in ethanol.
* The views and opinions expressed by our guest speakers during the webinar and summarized in this article are their own and do not necessarily reflect the views or positions of Climate XChange.
