A recent regulatory shift by the Environmental Protection Agency is poised to reshape the permitting landscape for construction projects across the United States — potentially speeding approvals while introducing new legal uncertainties for contractors and developers.
Earlier this year, the administration of Donald Trump moved to rescind the agency’s 2009 greenhouse gas endangerment finding, a decision that had long served as the legal foundation for federal climate regulations. EPA Administrator Lee Zeldin described the move as the largest deregulation in U.S. history.
While the rollback could ease compliance burdens on large infrastructure and industrial projects, construction attorneys caution that it also creates a more complex and uncertain regulatory environment.
“The most important takeaway is that EPA has removed the legal foundation upon which more than a decade of federal climate regulation was built,” said Tyler Fry, a construction attorney at Pacific Legal Foundation. “The 2009 Greenhouse Gas Endangerment Finding was not merely one rule, it was the statutory mandate that made an entire architecture of downstream regulation legally possible.”
The immediate impact of the rollback is expected to be felt in project permitting, particularly under the Prevention of Significant Deterioration (PSD) program, which previously required greenhouse gas emissions analysis for major developments.
“If the repeal holds, greenhouse gas emissions could largely exit that analysis, which would streamline PSD reviews for many project types,” Fry said. “Permitting timelines are the area where contractors are most likely to see tangible change first.”
Jack Luellen, special counsel at Buchalter, said the shift signals a broader change in federal oversight.
“The change in the regulatory environment means that the federal government will be much less intrusive in permitting and environmental review,” Luellen said. “A question looking ahead is whether state and local governments will step in to fill the regulatory void.”
Despite potential federal relief, permitting requirements will remain uneven across the country. States such as California and New York, which maintain independent climate regulations, are expected to continue enforcing stricter standards.
“State-level permitting requirements, particularly in California, New York and other states with independent climate regulatory frameworks, remain fully in force,” Fry said. “Project owners operating across multiple jurisdictions should not assume that federal regulatory relief translates to state-level relief. For those projects, a careful state-by-state analysis remains essential.”
While reduced federal oversight may benefit project timelines, attorneys warn that the rollback introduces a different kind of risk tied to legal challenges and policy reversals.
“The important caveat is that until that litigation is resolved surrounding the repeal, the long-term regulatory picture remains unsettled,” Fry said. “Businesses and project owners should treat this as a meaningful development, not a final one.”
Legal challenges to the repeal are already underway, raising the possibility that courts could reinstate the endangerment finding. Such a reversal could disrupt projects that moved forward under a more lenient regulatory framework.
“I think the changed regulatory environment raises the specter of increased litigation risk because projects will no longer be insulated from liability,” Luellen said. “There may be additional issues of potential liability if a subsequent administration reverses the repeal. Such a back-and-forth between administrations could leave projects in a legal limbo that could be exploited by environmental groups and other litigants.”
At the same time, the rollback could reduce certain avenues for legal challenges if it withstands scrutiny. Greenhouse gas-related permitting requirements have historically provided a basis for environmental litigation against construction projects.
“Fewer regulatory hooks generally means fewer grounds for legal challenges,” Fry said. “Overall, the trajectory here is positive for the construction industry.”
Even so, contractors and project owners are being advised to proceed cautiously, balancing potential short-term gains in permitting efficiency against longer-term legal and regulatory uncertainty.
Originally reported by Sebastian Obando, Senior Reporter in Construction Dive.
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