The Council on Environmental Quality (CEQ) has finalized revisions to portions of the agency’s National Environmental Policy Act (NEPA) implementing regulations (Phase I Regulations), which had been revised in 2020 under the Trump Administration (2020 Regulations). CEQ received more than 90,000 public comments in response to its proposal to revise the 2020 Regulations. In its final Phase I Regulations, CEQ declined to make substantial changes to the version proposed.

CEQ has indicated that the Phase I Regulations represent a “narrow” set of changes to address the Biden Administration’s overarching goals of improving our nation’s resilience to the impacts of climate change, prioritizing environmental justice, and addressing “interpretive and implementation problems” with the 2020 Regulations. The Administration has also indicated a second phase of NEPA regulatory revisions that will be “broader” in nature, which are anticipated later this year.

The Phase I Regulations addressed three primary issues: (1) how to prepare a purpose and need statement in NEPA documentation; (2) the scope of agency-specific NEPA implementation regulations; and (3) the definition of “effects” and “cumulative impacts.” Each of these issues is addressed briefly below.

Crafting a purpose and need statement. The 2020 Regulations clarified that an agency reviewing an application for a permit or other authorization must consider the purpose and need of the applicant when undertaking NEPA review (40 C.F.R. § 1502.13), and added conforming language to a new definition of “reasonable alternatives,” which indicated “reasonable alternatives” are those that are “technically and economically feasible, meet the purpose and need of the proposed action and, where applicable, meet the goals of the applicant” (40 C.F.R. § 1508.1(z)). The Phase I Regulations remove specific references to the purpose and need of an applicant in both 40 C.F.R. § 1502.13 and 40 C.F.R. § 1508.1(z), and revert both to NEPA regulatory language that was adopted by CEQ in 1978.

Agency NEPA procedures. The 2020 Regulations mandated that CEQ’s NEPA rules were the maximum requirements an agency could include in its agency-specific NEPA procedures (40 C.F.R. § 1507.3). The Phase I Regulations take the approach adopted in 1978, which indicate agency-specific NEPA procedures may go beyond those required under CEQ regulations.

Definition of “effects” or “impacts.” CEQ regulations adopted in 1978 defined “effects” of an action to include direct and indirect effects, and also required consideration of cumulative impacts. The 2020 Regulations removed the distinction between direct and indirect effects and required consideration only of those changes to the human environment that are reasonably foreseeable and have a reasonably close causal relationship to the proposed action or alternatives. The 2020 Regulations also removed references to cumulative impacts. Changes to the definition of “effects” and “cumulative impacts” were among the more controversial changes made by the 2020 Regulations. Pursuant to the Phase I Regulations, CEQ has reinstated the distinction between direct, indirect, and cumulative effects as they existed prior to the 2020 Regulations. However, in response to comments received during the public comment period, CEQ has clarified that “effects” and “impacts” include only those changes to the human environment from the proposed action or alternatives that are reasonably foreseeable.

Finally, the Phase I Regulations made final the previously issued interim final rule granting an extension for agencies to update their agency-specific NEPA implementation regulations. Pursuant to the Phase I Regulations, agencies have until September 14, 2023 to finalize agency-specific rules.