On July 1, 2024, the Council on Environmental Quality’s (CEQ) final rule implementing the revised National Environmental Policy Act (NEPA) Phase II regulations came into effect. This rule represents the culmination of the Biden Administration’s efforts to update and revise the Trump Administration’s 2020 modifications to NEPA.

The Phase II rulemaking aimed to rearticulate key policies underpinning NEPA and integrate climate change and environmental justice considerations into NEPA reviews. The proposed rule, which we previously covered on this blog, was published in July 2023. CEQ received approximately 920 unique public comments on the proposed rule. In large part, the final version of the rule remained unchanged. One notable revision was changing the requirement from agencies using the “best available science” to “reliable data and resources,” to address concerns about impediments to energy development projects. However, CEQ retained the requirements for climate change and environmental justice impact analyses, as well as enforceable mitigation measures.

As previously discussed and outlined below, the final rule introduces a series of noteworthy changes to the NEPA process. These changes not only restore much of the language from the 1978 NEPA regulations, but also seek to encourage more robust and streamlined environmental analyses under NEPA.

Fiscal Responsibility Act of 2023

The final rule implements amendments to NEPA that were  originally made within the Fiscal Responsibility Act of 2023 (FRA). Per the final rule, Environmental Assessments (EAs) are limited to 75 pages, and Environmental Impact Statements (EISs) to 150 pages. For projects of “extraordinary complexity,” EISs may not exceed 300 pages. EAs and EISs are now also subject to filing deadlines of one and two years, respectively. Furthermore, agencies must set forth minimum requirements for applicants to prepare documents during the NEPA process.  While applicants cannot prepare a Record of Decision (ROD) or Finding of No Significant Impact (FONSI) themselves, they are empowered by the final rule to prepare EAs and EISs. To facilitate this, the final rule requires agencies to adopt procedures for evaluating such documents.

Public Engagement and Transparency

To improve transparency within NEPA’s environmental review process, CEQ confirmed that mitigation measures proposed by an agency are enforceable, despite some comments advocating the contrary. As such, agencies must commit to a mitigation plan if one was relied upon in their ROD or mitigated FONSI. Furthermore, agencies must publish a monitoring and compliance plan for proposed actions involving mitigation, which must identify responsible parties for monitoring and implementation. These changes help ensure that mitigation plans will be implemented. The revisions also require that agencies explain assumptions, incorporate projections (including climate change-related projections), and identify any limitations of their models and methods, aiming to improve the scientific foundation and transparency of the decision-making process.

Efficient Process & Regulatory Certainty

Seeking to balance efficiency and rigorous review under NEPA, the final rule encourages agencies to adopt programmatic reviews and categorical exclusions. Programmatic reviews are encouraged for projects that share similarities. Additionally, agencies may now establish categorical exclusions in collaboration with one another and through land use plans, which set land management objectives. The final rule also allows agencies to adopt other agencies’ categorical exclusions, provided they consult the original agency and notify the public about the exclusion and any “extraordinary circumstances” that may apply. CEQ has noted that potential significant effects on communities with environmental justice or climate change concerns can override categorical exclusions.

Environmental Justice Outcomes & Tribal Sovereignty

One of the final rule’s most significant changes is its codification of environmental justice considerations within NEPA review. The rule requires that agencies evaluate any “disproportionate and adverse effects on communities with environmental justice concerns” when completing the NEPA review process. Accordingly, agencies are now encouraged to adopt mitigation measures to limit such potential effects. Furthermore, at the request of some commenters, the final rule elevates “indigenous knowledge” as a source of “high-quality data” that may be relied on in preparing environmental documents.

Environmental & Climate Change Outcomes

The final rule also requires agencies to consider the greenhouse gas emissions from and the effects that climate change may have on proposed actions and potential alternatives. The explicit inclusion of climate change considerations within the final rule marks a significant first for NEPA. Additionally, agencies must now evaluate conflicts that their proposed actions have with federal, regional, state, tribal and local climate change objectives. Such analyses regarding the effects of climate change and conflicts with pre-existing policies will likely be time intensive for agencies. This is especially true given the lack of guidance on how to conceptualize the causation of “effects,” notwithstanding concerns aired by commenters. Without that reference point, agencies will be encouraged to think broadly about the effects of their proposed actions, likely resulting in more time-consuming and thorough environmental analyses.

Informed Decision Making Within NEPA

Finally, the final rule attempts to encourage more informed decision making within NEPA. The final rule does so first by reincorporating the original NEPA requirement that agencies “rigorously explore and objectively evaluate” reasonable alternatives to proposed actions. Second, the final rule requires that agencies utilize “high-quality information, including reliable data and resources[.]” As noted above, “reliable data and resources” was changed from “best available science” in the proposed rule, apparently out of concern that the latter would be too difficult to comply with. While CEQ showed some restraint in its choice of language, these changes demonstrate a clear effort to incorporate objective, reliable data in the NEPA decision-making process.

Implications

Agencies must develop procedures to implement the requirements of the final rule by July 1, 2025. As such, applicants will soon be able to better tailor their expectations to individual agencies. In the meantime, applicants should prepare for what will be a more in-depth NEPA analysis going forward.

Applicants should also be aware that the rulemaking was recently challenged in federal court, with twenty states asserting violations of NEPA and the Administrative Procedure Act. While this case has no immediate implications for current applicants, such challenges may threaten the longevity of the above-mentioned changes.

SPR thanks its summer associate Cameron Bonnell for his work on this blog post.