Iowa v. Wright

The Eighth Circuit Court of Appeals vacated a 2024 final U.S. Department of Energy (DOE) rule that changed the methodology for determining the equivalent petroleum-based fuel economy values for electric vehicles (EVs). The rule preserved and then gradually phased out a “fuel content factor” that “artificially inflates” EVs’ fuel economy to increase adoption of EVs. The Eighth Circuit first found that state petitioners had standing based on allegations that the rule would result in increased energy consumption and greenhouse gas emissions because inflating EV fuel economy values would allow car manufacturers to continue to produce less efficient gasoline-powered vehicles while still meeting the fuel economy standards for their fleets. The states alleged that increased greenhouse gas emissions would result in rising sea levels that would erode the sovereign territory of state petitioners with coastlines (Florida, Mississippi, and Texas). The Eighth Circuit found that the alleged injury was particularized and concrete, imminent, traceable to the rule, and redressable by the court. The Eighth Circuit also found that the challenge to the DOE rule was not mooted by the U.S. Environmental Protection Agency’s adoption of new, more stringent emissions standards. On the merits, the Eighth Circuit ruled that DOE lacked statutory authority to retain and then phase out the fuel content factor. In addition, the Eighth Circuit ruled that the rule’s methodology for calculating cumulative equivalent fuel economy violated notice-and-comment procedures.