Much ado is being made of recent amendments to the Clean Air Act (CAA) contained in the Biden administration’s budget reconciliation law passed in mid-August, commonly referred to as the Inflation Reduction Act (IRA). And with good reason, as the law includes the most significant changes to the CAA since 1990, and the new sections formally define greenhouse gases (GHGs) as an “air pollutant,” consistent with the Supreme Court’s 2007 decision in Massachusetts v. EPA.

However, the IRA amendments to the CAA do not in fact make significant substantive changes in law. Legally speaking, they can’t, given that the IRA is merely a reconciliation bill through which Congress may only assign funding. More to the point, none of the IRA amendments to the CAA address in any way the limitations the Supreme Court recently placed on EPA’s authority to adopt climate change regulation in West Virginia v. EPA, notwithstanding some characterizations to the contrary.

The new provisions, contained in Sections 132 through 137 of the CAA, focus exclusively on grant programs. The grant programs established by the law are contained in the following new sections, which have been inserted into Title I the CAA:

  • Section 132 Clean Heavy-Duty Vehicles
  • Section 133 Grants to Reduce Air Pollution at Ports
  • Section 134 Greenhouse Gas Reduction Fund
  • Section 135 Low Emissions Electricity Program
  • Section 136 Methane Emissions and Waste Reduction Incentive Program for Petroleum and Natural Gas Systems
  • Section 137 Greenhouse Gas Air Pollution Plans and Implementation Grants

While these new sections of the CAA expressly define GHGs as an “air pollutant,” adopting the definition into these grant programs does not change the legal landscape in other sections of the CAA that authorize EPA to directly address air quality concerns by regulating sources of air pollutant emissions.

Despite not moving the needle on EPA’s legal authority to regulate GHG emissions, the new amendments have the potential to make a big impact, as they provide billions of dollars in funding that EPA can dispense to further GHG reductions, including money for the continued development of nascent control strategies, such as carbon capture and sequestration. Meanwhile, EPA has promised to release a new proposed rule to address GHG emissions from power plants early next year, and EPA is already overdue on promises to clarify its proposed GHG rule for the oil and gas industry. These anticipated rulemakings will be the focus of much scrutiny and near-certain legal challenges, which will require EPA to contend with the holding in West Virginia, but the CAA amendments contained in the IRA are unlikely to influence the ultimate outcome.