Major Changes in National Environmental Policy Act Process

The Council for Environmental Quality’s (“CEQ”) published an interim final rule yesterday repealing all of its implementing regulations for the National Environmental Policy Act (“NEPA”). The interim final rule becomes effective on April 11, 2025. In the meantime, CEQ is accepting public comments until March 27, 2025. CEQ states that it will respond to comments and provide any changes in a future final rule.

As federal agencies scramble to realign their NEPA procedures, businesses considering potential NEPA review in the short- and long-term face some significant uncertainty. As part of Womble Bond Dickinson’s effort to help you navigate change in the federal government, we unpack where this rule and CEQ’s accompanying guidance to federal agencies leave us in terms of permitting and NEPA review and what we can expect going forward.

Where We Are – CEQ’s Interim Final Rule and Guidance to Agencies

CEQ’s interim final rule repeals NEPA regulations issued since 1978, including NEPA’s implementing regulations at 40 C.F.R. Parts 1500-1508. However, the repeal does not get rid of NEPA review. NEPA, signed into law by President Nixon in 1970 and recently amended by the Fiscal Responsibility Act of 2023, is still congressionally-enacted law.

NEPA review will continue to be governed by processes and procedures specific to each federal agency. But those agency-specific processes and procedures will change. Under CEQ guidance issued on February 19 to the heads of federal departments and agencies, agencies must revise their NEPA implementing procedures (or establish procedures if they don’t have any) by February 19, 2026. One focus of those revisions will be to expedite permitting approvals. In the meantime, CEQ provides the following guidance for how those agencies will proceed with NEPA review while NEPA implementing regulations are revised:

• Federal agencies should follow their existing practices and procedures for implementing NEPA consistent with:
  1. the text of NEPA as revised by the Fiscal Responsibilities Act of 2023;
  2. President Trump’s January 20, 2025, Executive Order on Unleashing American Energy, and;
  3. CEQ’s February 2025 guidance.
•  Agencies are directed not to delay pending or ongoing NEPA analyses while revising their NEPA procedures.

It’s not clear from these directives whether and how agencies will tweak (or wholly up-end) existing practices and procedures to be consistent with the authorities cited in this list. This compounds existing uncertainties, such as how an increasing shortage of qualified staff at federal agencies will continue to process existing NEPA reviews while revising NEPA procedures under the guidance’s short timeline.

CEQ’s guidance mandates certain considerations for agencies in revising their NEPA implementing procedures, including a caution that NEPA does not employ the term “cumulative impacts” and that NEPA documents should not include environmental justice analysis.

We’ll be watching this process closely at the U.S. Forest Service and the Bureau of Land Management, as these agencies are clear leaders in implementing NEPA:

• U.S. Forest Service (Department of Agriculture): The Department of Agriculture codified the U.S. Forest Service’s NEPA procedures at 36 C.F.R. Part 220 in 2008 through notice and comment, with amendments finalized in 2020. The U.S. Forest Service provides additional NEPA information in its Handbook 1909.15. The procedures in these regulations and handbook will be subject to the CEQ guidance review process.
• Bureau of Land Management (Department of Interior): The Department of the Interior’s NEPA regulations were also promulgated in 2008 through notice and comment rulemaking and are codified at 40 C.F.R. Part 46. The Department’s NEPA process is also outlined in Departmental Manual Part 516. The procedures in these regulations and manual will be subject to the CEQ guidance review process.

How We Got Here – The Political Pendulum and Questioning CEQ’s Authority

The recent history of CEQ’s NEPA regulations will be important to how these changes will play out at federal agencies and in federal courts. The CEQ NEPA regulations were revised during the first Trump administration in 2020, only to be rescinded and again revised in the Biden administration in a multi-phase regulatory process ending in 2023. Both the 2020 rule and the subsequent 2023 rule (the “Phase 2” rule) were challenged in litigation.

President Trump’s Unleashing American Energy Executive Order in January revoked a 1977 President Carter Executive Order directing the CEQ to issue regulations to federal agencies for NEPA implementation. The Unleashing American Energy Executive Order directed CEQ to provide guidance on implementing NEPA and propose rescinding CEQ’s NEPA regulations, all in an effort to expedite and simplify the permitting process.

Adding to the potential confusion about the status of NEPA regulations, recent court decisions have also questioned CEQ’s authority to issue regulations in the first instance. For example, the D.C. Circuit in 2024 in a matter unrelated to the CEQ’s rules and the North Dakota district court ruling this month in the Phase 2 rule litigation—stated that CEQ does not have the legal authority to issue binding regulations. In forthcoming publications, Womble Bond Dickinson will unpack these cases and how they may influence near-term agency actions.

In part to stem this confusion, CEQ opted to proceed directly to an interim final rule rather than a proposed rule in an effort to bring regulatory stability faster. In the rule, CEQ also concludes it may not have the authority to maintain its NEPA regulations in the absence of the Carter-era Executive Order. More to come on that topic.

What we can expect going forward – Rapid Regulatory Processes and Litigation

While this process plays out across federal agencies, this much is clear:

1. In order to finalize changes by next February, agencies will need to move quickly to propose changes for any required public comment. Affected businesses will need to be alert to changes and involved in the process if they want their interests considered.
2. If the past is prologue, CEQ’s interim final rule and regulatory changes across agencies will likely result in litigation, potentially prolonging a period of regulatory instability and process uncertainty.

While these changes will happen quickly over the next year, this road to permitting efficiency might continue to be a long one.

The experienced environmental team at Womble Bond Dickinson has decades of NEPA experience and continuously reviews developments in permitting and NEPA processes. We can help navigate these changes, advocate for your interests, and guide you successfully through the environmental review process. For more on permitting see our recent article on permitting reform in the Trump Administration and our seven-part series on the impacts of permitting delays on the energy transition.