Federal Agencies Roll Out New NEPA Regulations

Several federal agencies have released modified National Environmental Policy Act (NEPA) implementing regulations. Some of these changes were in progress under the previous administration but were expedited by two recent developments: (1) the U.S. Court of Appeals for the D.C. Circuit decision concluding that the Council on Environmental Quality (CEQ) lacked the legal authority to issue binding regulations, and (2) Executive Order 14154, Unleashing American Energy, which directed CEQ to propose guidance on rescinding its regulations and directing federal agencies to expedite permitting approvals.

Key Provisions of the Builder Act and Expedited NEPA Review

In 2023, Congress amended NEPA through the Builder Act, Pub. L. No. 118-5, § 321, enacted as part of the larger Fiscal Responsibility Act of 2023. The Builder Act imposes page and time limits for NEPA review documents: 75 pages and one year for environmental assessments (EAs), and 150 pages (300 pages if the project is extraordinarily complex) and two years for environmental impact statements (EISs). Other amendments directed agencies to analyze only “reasonably foreseeable” impacts and “reasonable” alternatives to the proposed action, permitted project sponsors to prepare EAs and EISs with agency supervision, and explicitly authorized adopting other agencies’ categorical exclusions and use of programmatic reviews. The Builder Act also adopted a more constrained definition of “major federal action” (narrowing the types of federal actions subject to NEPA review). The amendments largely codified case law, agency practices, and portions of CEQ’s regulations, modernizing NEPA without significant changes.

CEQ revised its regulations to reflect the Builder Act on May 1, 2024, 89 FR 35442, and issued a memorandum on June 28, 2024, directing federal agencies to update their NEPA regulations consistent with the revised CEQ regulations.

Legal Developments: Court Decisions and Executive Orders Impacting NEPA

Federal agency regulation updates were in progress when the U.S. Court of Appeals for the D.C. Circuit issued an opinion in November 2024 concluding that CEQ lacks the legal authority to issue any binding regulations.¹ Using similar reasoning, in February, the U.S. District Court for North Dakota invalidated the CEQ’s 2024 regulatory revisions.²

Following Executive Order 14154, CEQ published an interim final rule in the Federal Register removing its regulations, effective March 27, 2025. 90 FR 10610 (Feb. 25, 2025), corrected at 90 FR 11221 (March 5, 2025) and 90 FR 12690 (March 19, 2025). In the now-final rule, CEQ stated “agencies will remain free to use or amend [CEQ’s] procedures, and agencies should, in defending actions they have taken, continue to rely on the version of CEQ’s regulations that was in effect at the time that the agency action under challenge was completed.” 90 FR 10610, 10614. CEQ also published a memorandum on Feb. 19, 2025, directing federal agencies, again, to modify their regulations consistent with the 2023 Builder Act.

At the beginning of July, the Department of Agriculture (USDA), Department of the Interior (DOI), Department of Energy, Federal Energy Regulatory Commission (FERC), Department of Transportation, Department of Commerce, and Department of Defense (DoD) (including the Department of the Army, Army Corps of Engineers, and Department of the Navy), released interim final rules (or in one, case a final rule) revising their NEPA implementing regulations. The interim final rules are effective immediately, and comment deadlines are Aug. 4, 2025 (with the exception of USDA, which is July 30, 2025). The FERC rules are final and take effect on Aug. 18, 2025. The revised regulations incorporate the Builder Act’s NEPA amendments and remove references to the now invalid CEQ regulations.

Agencies have adopted different streamlining approaches to implement the directives of Executive Order 14154. For example, the revised DOI regulations are significantly trimmed down because, the agency said, it favors relying on guidance to comply with NEPA since it is more flexible and faster to update. 90 FR 29498, 29500–501 (July 3, 2025). The USDA and DoD rescinded most individual NEPA regulations of the agencies and bureaus under their respective purviews in favor of department-level NEPA regulations only. 90 FR 29632, 29635 (July 3, 2025); 90 FR 27857 (June 30, 2025). Perhaps the most significant changes are those relating to public participation in the NEPA process. With the CEQ’s public participation requirements no longer in place, the agencies are revising their public participation requirements based on the statutory language, which does not explicitly require public review of and comment on draft NEPA documents. See 42 U.S.C. § 4332(C). The Builder Act amended NEPA to require public notice and public comment on an agency’s intention to prepare an EIS, but not on the document itself. See 42 U.S.C. § 4336a(c). Practitioners should pay careful attention to how and to what extent the new rules contemplate public participation in the NEPA process. 

While the flurry of revised regulations have been in progress for more than a year, the preambles speak to more recent developments, particularly Executive Order 14154’s goals and the Supreme Court’s landmark decision in Seven County Infrastructure Coalition v. Eagle County, 145 S. Ct. 1497 (2025). Additionally, the newly enacted “One Big Beautiful Bill Act,” Pub. L. No. 119-21, provides statutory support for the administration’s ambition to expedite NEPA reviews. Section 60026 amends NEPA to provide for expedited environmental reviews in return for a payment of 125% of the projected preparation costs. EAs for which the fee is paid must be completed no later than 180 days, and EISs within one year. The statute provides no limit on the number of project proponents who can pay for expedited reviews.

Potential Implications for Project Developers

Streamlined regulations, expedited NEPA reviews, and guardrails on the scope and time for environmental reviews present opportunities for project developers seeking more predictable timelines and reduced regulatory burden. However, success in navigating this new framework may depend on agencies’ ability to implement these changes effectively despite reductions to the federal workforce responsible for NEPA reviews and permit processing.