In California Natural Gas Vehicle Coalition v. State Air Resources Board (2024)___Cal.App.5th___, the Fifth District Court of Appeal upheld the State Air Resources Board’s (CARB) decision to not implement a low-Nitrous Oxide (low-NOx) vehicle credit within its Advanced Clean Trucks Regulation. The court affirmed the trial court’s ruling that CARB did not violate CEQA or the Administrative Procedure Act (APA) in rejecting this proposed alternative.

Background

In 2018, CARB issued a notice of preparation regarding the Advanced Clean Trucks Regulation, which aimed to transition the class of medium- and heavy-duty trucks in California to zero-emission capable technology over time. Despite input urging for the inclusion of a low-NOx vehicle credit throughout multiple rounds of public comment, the suggested alternative was not considered and ultimately rejected in the Regulation’s Final EIR. CARB reasoned that this alternative ran counter to the goals of the Regulation, as promoting the sale of low-emitting vehicles would not advance the transition of the vehicle market to electric, zero-emission vehicles.

The California Natural Gas Vehicle Coalition, an association of companies and other interested parties that utilize natural gas (low-NOx fuel) technologies, filed a petition for writ of mandate alleging that CARB violated CEQA and the APA. Regarding CEQA, the Coalition alleged that the low-NOx vehicle credit was not sufficiently considered as an alternative or mitigation measure. It also argued that the EIR failed to consider a reasonable range of alternatives and did not adequately respond to public comments. The Coalition’s APA claim also revolved around the failure to consider a low-NOx vehicle credit alternative; however, it also contended that CARB’s economic impact analysis failed to consider the Regulation’s impact on those that invested in low-NOx technologies. The trial court denied the petition. The Coalition appealed.

The Court of Appeal’s Decision

CEQA

The Court of Appeal concluded that CARB’s decision not to discuss the low-NOx vehicle credit option as an alternative or mitigation measure was supported by substantial evidence.

CARB argued that a low-NOx alternative was not feasible as it undercut the regulation’s objective—encouraging the sale of lower-emitting vehicles subverted its goal of enhancing zero-emission vehicle sales. The Coalition, in contrast, asserted that the alternative was at least “potentially feasible,” and that CARB could not reject a project alternative merely because it did not meet one or several of the project’s goals. Rejecting the Coalition’s argument, the court found the alternative did not just fail to meet a single project goal; it ran counter to the Regulation’s underlying objective. As the court explained, CEQA allows agencies to reject alternatives that are infeasible or cannot achieve a project’s fundamental purpose. Here, as the goals of the Project and the low-NOx vehicle credit were contradictory, the alternative could be deemed “infeasible,” and thus, CARB was justified in rejecting it.

The Coalition also argued that the low-NOx option should have been considered as a mitigation measure because the Regulation would cause an increase in the use of electric vehicles—leading to short-term air quality impacts from increased manufacturing of these vehicles and the construction of new charging stations. The court ruled, however, that CARB was not required to look to mitigation measures that hampered its Regulation’s objectives. Because the vehicle credits were properly deemed infeasible as an alternative, CARB properly rejected them as a mitigation measure as well.

Finally, the Coalition alleged that CARB failed to respond to comments regarding the implementation of a low-NOx vehicle credit in the Final EIR. The court found, however, that CARB implemented the public’s suggestions into its analysis when it rejected the low-NOx vehicle credit option as an alternative. The court found that this was sufficient to “put the public on notice” that the comments were considered, and thus, the failure to directly respond was not prejudicial to public participation.

APA

The court also rejected the Coalition’s argument that CARB violated the APA. The Coalition first argued that CARB failed to consider the economic impact of the Regulation on businesses and individuals that have already adopted or invested in low-NOx emitting technologies. Under the APA, the economic impact assessment of a regulation must sufficiently cover all known cost impacts that California’s businesses and private individuals could incur by complying with the regulation. The Coalition argued that CARB’s analysis was too limited because those who invested heavily in low-NOx technologies would suffer from a regulation that encouraged the use of zero-emission vehicle technology but were not assessed as a group. The court disagreed, finding that this “group” was not impacted by the Regulation because they were not mandated by the Regulation to adopt and purchase zero-emission technologies, and therefore, did not need to be considered in the analysis. The court sided with CARB again regarding its rejection of the low-NOx vehicle credit as an alternative under the APA using similar reasoning to its CEQA analysis. The low-NOx vehicle credit alternative undercut the objectives of the Regulation and was therefore ineffective in implementing a zero-emission sales requirement.

– Adam Nir