Environmental Vanguard is a quarterly newsletter from McGuireWoods, sharing key insights from our leading environmental attorneys and consultants at the forefront of regulatory, litigation and policy developments. This issue covers several major developments in federal environmental and energy law, including President Donald Trump’s executive order replacing the Obama-era framework for restoring the Chesapeake Bay, proposed updates to the definition of “waters of the United States,” the National Highway Traffic Safety Administration’s (NHTSA) final rule “resetting” federal fuel economy standards, and EPA’s repeal of its greenhouse gas rule for power plants.
On the appellate litigation front, we preview the U.S. Supreme Court’s upcoming decision on whether federal law preempts state tort claims in climate change cases, and we report on a petition for review of the U.S. Court of Appeals for D.C. Circuit’s decision on EPA’s fine particulate matter rule. Finally, we discuss a Fifth Circuit decision vacating EPA’s methylene chloride ban under the Toxic Substances Control Act.
Look for new editions every quarter, and feel free to reach out to the McGuireWoods team with questions about litigation, regulatory, enforcement or other issues in environmental law.
I. Trump Executive Order Replaces Obama Chesapeake Bay Restoration Framework
On Sept. 16, 2026, President Donald Trump signed an executive order titled “Providing Meaningful Water Quality Improvements Through Collaboration and Oversight of Federal Support,” revoking President Barack Obama’s 2009 Executive Order 13508, “Chesapeake Bay Protection and Restoration.”
The new order dissolves the EPA-chaired Federal Leadership Committee that coordinated multi-agency bay restoration efforts and redirects federal resources toward “more direct, on-the-ground projects” in areas of “highest need.” It does not, however, repeal the 2010 Chesapeake Bay Total Maximum Daily Load (TMDL) or EPA’s Clean Water Act authority to enforce it, so binding load allocations for nitrogen, phosphorus and sediment remain applicable.
Notably, the order targets stormwater management fees, characterizing them as imposing “hundreds of dollars in annual financial burdens on residents and small businesses” with “little to no measurable benefits” to the bay. It directs EPA to coordinate with the bay states and Washington, D.C., to assess those burdens, explore initiatives that do not increase costs on residents and encourage repeal or rescission of such fees. Agencies must also prioritize strategies grounded in “objective metrics and proven water management practices.”
For regulated entities and watershed stakeholders, the TMDL and state Watershed Implementation Plans remain in effect, but the loss of interagency coordination and the order’s stance on stormwater fees — a term broad enough to potentially reach land development fees — may signal a shift in EPA’s enforcement posture.
II. EPA and U.S. Army Corps of Engineers Propose “Perennial” Options for Defining “Waters of the United States”
On Sept. 9, 2026, EPA and the U.S. Army Corps of Engineers (the Agencies) published a Supplemental Notice of Proposed Rulemaking (SNPRM) seeking comment on additional regulatory alternatives for defining “waters of the United States” (WOTUS) under the Clean Water Act (CWA). The Agencies will weigh these alternatives alongside their November 2025 proposed rule. The 30-day comment period on the SNPRM closed on Oct. 9, 2026.
Defining WOTUS has been a core regulatory objective of the Agencies since the U.S. Supreme Court’s 2023 decision in Sackett v. EPA, in which the Court held that WOTUS includes surface waters that are “relatively permanent, standing or continuously flowing,” and that wetlands are jurisdictional only if they have “a continuous surface connection” to WOTUS. The SNPRM sets out two options for defining “perennial streams,” which would, in turn, supply the definition of “relatively permanent” waters. The Agencies anticipate that both of the supplemental options would narrow CWA jurisdiction compared with the regulatory regimes now in effect. They expect most intermittent streams and most wetlands currently treated as “adjacent” would not meet the perennial stream standards and thus would not be considered WOTUS.
A. Background: The November 2025 Proposed Rule
On Nov. 20, 2025, the Agencies published a proposed rule to revise the WOTUS definition and fully implement Sackett v. EPA. The proposal would define key terms such as “relatively permanent,” “continuous surface connection” and “tributary.” It would treat waters as “relatively permanent” if they have flow year-round, or at least during the wet season. For wetlands to qualify as WOTUS, it proposed a two-part test: (1) the wetland abuts (touches) a jurisdictional water; and (2) the wetland contains surface water at least during the wet season. Other changes in the proposal include deleting interstate waters as a stand-alone category, revising the exclusions for waste treatment systems, prior converted cropland and certain ditches, and adding a groundwater exclusion.
B. The SNPRM
Under the SNPRM, “relatively permanent” waters would cover only “perennial” bodies of water. One proposed option would be to define “perennial” as “having standing or continuously flowing water every day of the year during ordinary conditions.” Under the alternative definition, “perennial” would mean “surface water flowing continuously year-round.” Exceptions would apply for (a) anomalous events such as drought or a dry spell, and (b) a non-anomalous event, such as low tide or a regularly occurring dry spell, that temporarily interrupts flow for no more than 30 consecutive days in a year. Tributaries, lakes and ponds generally would be jurisdictional only if they hold water year-round. The preamble also contemplates treating only extreme (D3) and exceptional (D4) droughts on the U.S. Drought Monitor as anomalous.
Additionally, the SNPRM proposes defining “continuous surface connection” to mean perennial surface water in a wetland that is continuously connected with the surface water in the jurisdictional water, such that it is difficult to determine where the jurisdictional water ends and the wetland begins. Similar exceptions would apply for anomalous events and for interruptions of no more than 30 consecutive days caused by non-anomalous events. Physical touching alone would not be enough without a perennial surface water connection.
As an alternative — which appears only in the preamble, and not in the proposed regulatory text — the Agencies propose limiting the adjacent-wetlands category to wetlands that are indistinguishably part of a traditional navigable water, the territorial seas, a jurisdictional impoundment or a jurisdictional tributary (i.e., when surface water in a wetland is continuously connected with the surface water in the jurisdictional water such that it is difficult to determine where the jurisdictional water ends and the wetland begins). The definition of “adjacent” would be deleted.
Until a final rule takes effect, the two separate WOTUS regimes will continue to apply throughout the country due to ongoing litigation. Where the January 2023 “Revised Definition of ‘Waters of the United States’” rule is not enjoined, the Agencies implement that rule as amended by the September 2023 conforming rule. In states where the 2023 rule is enjoined, the Agencies apply the pre-2015 regulatory regime consistent with Sackett.
III. NHTSA Finalizes “Reset” of Federal Fuel Economy Standards; Several States and Environmental Groups Promptly Sue
On Sept. 28, 2026, the U.S. Department of Transportation (DOT) and NHTSA announced a final rule that replaces the Biden-era Corporate Average Fuel Economy (CAFE) standards for passenger cars and light trucks. The administration calls it the “Freedom Means Affordable Cars” initiative. The rule was published in the Federal Register on Sept. 30, 2026, and takes effect Nov. 30, 2026.
The rule amends CAFE standards for model years 2022-2026 and 2027-2031. NHTSA projects that the industry-wide requirement will average about 34.9 mpg by model year 2031, compared with about 49.3 mpg under the 2024 standards it replaces. Under the new rule, passenger car standards rise 0.90% per year and light truck standards rise 0.51% per year through model year 2029. Both then rise 1% per year through model year 2031. In setting the new standards, NHTSA did not consider the fuel economy of electric vehicles (EVs) or plug-in hybrid vehicles, explaining that federal law prohibits considering them. The agency also excluded EVs from the baseline; however, automakers can still earn compliance credit for the EVs they sell. Additionally, while credits earned beginning in model year 2028 cannot be traded between manufacturers, credits earned through model year 2027 continue to be tradable and usable for up to five model years. Manufacturers can still move credits between their own fleets and carry them forward or back. Finally, starting in model year 2030, vehicles designed mainly to carry people, including many crossovers, will be classified as passenger cars rather than light trucks.
In justifying the move, NHTSA says the prior Biden-era standards were set above the “maximum feasible” level because they relied on factors the statute prohibits. It also says the U.S. now needs to conserve energy less urgently, since domestic oil production has grown. NHTSA estimates that the new standards will reduce per-vehicle costs by approximately $1,300 for model year 2031. DOT believes the new standards will save lives by encouraging people to buy newer, safer vehicles.
On Oct. 2, 2026, a coalition of 26 states, counties and cities sued, and a separate coalition of environmental and consumer groups filed its own challenge to the new standards. The state coalition argues that the new standards violate the Energy Policy and Conservation Act’s requirement to set “maximum feasible” standards, because leaving the EVs already on the road out of the baseline produces a “dramatically distorted analysis” of what automakers can actually achieve. The challengers also contend that NHTSA’s cost-benefit analysis is flawed, arguing that NHTSA glossed over nearly $220 billion in lost fuel savings.
NHTSA, supporting automakers and consumer groups say the reset frees money that the earlier standards pushed toward EV production lines ahead of consumer demand. Opponents warn that weaker standards will undermine EV investment, global competitiveness and job growth in the EV sector. While both sides seek long-term stability, they will have to settle for uncertainty as the new standards are litigated.
IV. SCOTUS to Determine Whether Federal Law Preempts State Tort Claims in Climate Change Litigation
On Oct. 5, 2026, the U.S. Supreme Court heard oral arguments in Suncor Energy, Inc. v. County Commissioners of Boulder County.
The lawsuit began when Boulder sued energy companies in Colorado state court, bringing state-law claims for public nuisance, private nuisance, trespass and unjust enrichment. Boulder seeks damages for what it describes as local climate-related harms, such as wildfires and extreme weather. The Colorado Supreme Court held that federal law did not preempt Boulder’s state-law claims.
The question before the U.S. Supreme Court is whether federal law, namely the Constitution and the Clean Air Act, bars state-law claims seeking relief for injuries allegedly caused by the effects of interstate and international greenhouse gas emissions on the global climate. The U.S. Supreme Court also asked the parties to address whether it has statutory and Article III jurisdiction to hear the case at all, based on concerns that the Colorado Supreme Court’s decision was not a final judgment subject to review because a trial has not been held and the companies have not been found liable.
Justice Samuel Alito recused himself from the case. A decision is expected before July 2027. A ruling for the companies could cut off dozens of similar suits nationwide.
V. EPA Repeals Power Plant Greenhouse Gas Rule and Proposes to Exit the Field Entirely
On Sept. 14, 2026, EPA finalized the repeal of most of the Biden administration’s 2024 greenhouse gas (GHG) emission standards for fossil fuel-fired power plants, finding that they exceed the agency’s authority under the Clean Air Act (CAA). The final rule, titled “Partial Repeal of the Carbon Pollution Standards for Fossil Fuel-Fired Electric Generating Units,” was published in the Federal Register on Sept. 17, 2026. The final rule removes the emission guidelines for existing coal-, oil- and gas-fired steam generating units, along with the carbon capture and sequestration (CCS)-based standards for certain gas- and oil-fired combustion turbines. EPA projects the repeal will save $310 billion.
On the same day, EPA issued a supplemental proposal to repeal all remaining GHG emission standards for power plants. In that proposal, EPA takes the position that CAA Section 111 does not authorize it to regulate power plant emissions in response to global climate change concerns. It also proposes that regulating the power sector’s GHG emissions falls outside its scope altogether. EPA maintained the conclusion from its June 2025 proposed rule that power sector GHG emissions do not significantly endanger public health. It also relied on its February 2026 repeal of the 2009 endangerment finding, which it applied to vehicle emissions and is now being challenged in court. Comments on the supplemental proposal were due Nov. 2, 2026.
EPA says its proposal does not require overturning Massachusetts v. EPA (2007), in which the U.S. Supreme Court held that GHGs are “air pollutants” under the CAA. Instead, EPA points to later decisions that narrowed its CAA authority, including Utility Air Regulatory Group v. EPA (2014) and West Virginia v. EPA (2022). In EPA’s words, Massachusetts “necessarily does not reflect consideration of these precedents or additional legislative and regulatory developments since that time.”
This is the fourth turn in a long cycle of power plant GHG regulation. The Supreme Court struck down the Obama administration’s Clean Power Plan, and the Biden administration rescinded the first Trump administration’s replacement rule (the Affordable Clean Energy (ACE) Rule) in 2024. In addition, the 2024 rule adopted guidelines for existing steam generating units and revised standards for combustion turbines, which would have required (among other things) combustion turbines operating at an annual capacity factor of more than 40% to meet, by 2032, a carbon dioxide standard equivalent to what CCS at 90% efficiency would achieve.
For power generators and developers, the final rule removes the most expensive and unworkable near-term compliance obligations. However, the remaining standards for new combustion turbines remain in effect until the supplemental proposal is finalized. Both actions are likely to be challenged, and the endangerment-finding litigation could affect whether a complete repeal survives judicial review.
VI. Appeal to Supreme Court Sought for D.C. Circuit’s Decision Retaining the 2024 Fine Particulate Matter Ambient Standards
On June 26, 2026, the D.C. Circuit left intact strict National Ambient Air Quality Standards (NAAQS) for fine particulate matter (PM2.5) set in 2024, rejecting an attempt by the current administration to invalidate the rule. The agency argued the rule was issued off-cycle (i.e., earlier than when the statute would have normally required review of the PM2.5 NAAQS) outside its statutory authority after failing to fully consider available scientific studies and the costs of the stricter standards to businesses. The nationwide NAAQS rule, which ultimately regulates (or leads to regulation of) all emission sources, including power plants, factories and other industrial sources, brought the annual standard of PM2.5 down from 12 micrograms per cubic meter of air to 9 micrograms. This is a 25% cut to the annual limit and the strictest level ever set.
Major industry groups and 25 states asked the Supreme Court to review the D.C. Circuit decision. They argue the CAA requires EPA to complete a “thorough review” of the science before changing fine particulate matter standards, even if EPA revises a standard early. They also argue that EPA must weigh costs and determine whether the standard can realistically be met before choosing to act early.
Stricter standards may push more areas out of compliance and could require costly pollution-control plans. New construction and plant expansions may immediately be subject to tightened permit requirements. Additionally, some nearby sources of PM2.5 emissions are difficult (if not impossible) to control or quantify, such as from wildfires.
The Supreme Court has not yet said whether it will take the case. An extension of time to file a response to the petition was granted in part, and the deadline was extended to Nov. 17, 2026.
VII. Fifth Circuit Vacates EPA’s Methylene Chloride Ban Under TSCA
On Sept. 15, 2026, a unanimous Fifth Circuit panel issued its decision in East Fork Enterprises, Inc. v. EPA. The court vacated the EPA’s 2024 rule banning nearly all uses of methylene chloride (MC) under the Toxic Substances Control Act (TSCA). MC is a liquid solvent used in consumer and commercial products, and overexposure can cause injury, death and cancer. The 2024 rule banned all consumer uses and most industrial uses.
The panel granted the petitions of East Fork Enterprises and Epic Paint Co., in which the American Chemistry Council intervened. Its key holdings were:
- Use-by-use evaluation. TSCA requires EPA to evaluate unreasonable risk separately for each condition of use. EPA erred by assessing MC “as a whole chemical substance,” contrary to the agency’s own regulations in effect at the time.
- Not a “zero-risk statute.” EPA improperly set exposure limits far below the levels the Occupational Safety and Health Administration allowed for decades. The court also held that “unreasonable risk” is a statutory standard for courts to interpret, not a factual finding.
- PPE assumptions. EPA departed from its prior practice and from the available evidence by assuming workers do not use personal protective equipment.
- “To the extent necessary.” EPA sought a near-total ban without considering available alternatives or the rule’s “economic feasibility and impact.” The agency also improperly shifted the burden to companies to prove they could comply. As the panel put it, “[a]t every juncture of its scientific analysis, EPA has gone with the most extreme position.”
The court rejected the Sierra Club’s argument that EPA did not do enough to protect “fenceline” communities. Because of TSCA’s statutory deadlines, EPA could not “stop the clock” to gather more data, so it was allowed to exclude exposure pathways it could not reliably assess. The court also found the Sierra Club lacked standing on its ozone-layer claim.
Counsel for the industry petitioners said the ruling requires EPA to account for negative studies and “puts teeth into the TSCA requirement to use the ‘weight of the scientific evidence.’” EPA said it is reviewing the decision.
The environmental team at McGuireWoods helps clients navigate complex regulatory challenges, permitting, enforcement actions, litigation, and crisis response across air and climate, water, waste, and natural resources. McGuireWoods Consulting adds critical depth with lobbying, policy advocacy and site selection and incentive negotiations, helping businesses manage risk and capitalize on opportunities in a shifting regulatory landscape. For questions or to discuss these topics in more detail, contact the authors or your McGuireWoods or McGuireWoods Consulting contact.
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