The U.S. Supreme Court has issued a 7-2 decision holding that that fuel producers and their trade associations have standing to challenge waivers granted by the Environmental Protection Agency to the California Air Resources Board allowing CARB to impose more stringent emissions standards for automobiles.

Under those CARB regulations, automakers must manufacture more electric vehicles and fewer gasoline powered vehicles. The goal is to decrease emissions from the use of gasoline and other liquid fuels. Producers of gasoline and other liquid fuels sued EPA, arguing that EPA's approval of the California regulations violated the Clean Air Act.

The petitioners argued EPA lacked authority to approve the California regulations because they target global climate change rather than local California air quality problems as required by the Clean Air Act. They submitted standing declarations explaining that California's regulations depress demand for liquid fuel by requiring vehicles that use less or no liquid fuel, causing the fuel producers monetary injury. California's own estimates indicated the regulations would cause substantial reductions in demand for gasoline exceeding $1 billion beginning in 2020 and increasing to over $10 billion in 2030.

The court of appeals held that the fuel producers lacked standing to bring the case, finding they failed to establish that automakers would likely respond to invalidation of the regulations by producing fewer electric vehicles and more gasoline-powered vehicles. California had argued that the fuel producers lacked standing because automobile manufacturers would not change course if EPA's decision were vacated given the "surging consumer demand" for electric vehicles.

The Supreme Court reversed and held the fuel producers had standing to challenge the waiver. The court concluded that California's argument on surging consumer demand is undermined by their own actions – if invalidating the regulations would change nothing, why are they enforcing and defending them? The whole point of the regulations is to increase electric vehicles beyond what consumers would otherwise demand and manufacturers would otherwise produce.

The record showed that California stated in 2021 that the regulations are "critical" for future emissions reductions and submitted expert declarations in 2022 stating that without the regulations, fewer electric vehicles would be sold and more gasoline-fueled vehicles would be sold. In addition, EPA affirmed that California "needs" its standards and credited California's estimates that the regulations would continue reducing emissions through at least 2037. Also, five automakers who invested heavily in electric vehicles intervened to defend the regulations and predicted that without California's regulations, other automakers would seek a competitive advantage by selling fewer electric vehicles and more gasoline-powered vehicles.

Thus, the court concluded that the petitioners had met the requirements for standing to bring the case. This is not a final decision, however. The case will now go back to the district court for consideration of the petitioners' claims.