ELR Citation: 55 ELR 20080
No(s). 24-60209 (5th Cir. Jun 24, 2025)

The Fifth Circuit granted industry groups' challenge to EPA's 2024 rule that revised the equation for calculating vehicle fuel economy for purposes of the Corporate Average Fuel Economy (CAFE) standards and required manufacturers to certify fuel economy using E10 test fuel, containing 10% ethanol, beginning in model year 2027, but allowed carryovers of results for E0 test fuel, containing no ethanol, for certain model year 2027-2029 vehicles. The groups argued the rule set one part of the equation—a sensitivity factor that measures how much a fuel's economy changes in response to an alteration on the test fuel's energy content—arbitrarily low, artificially increasing the stringency of the CAFE standards and decreasing demand for their gasoline products. The court found EPA violated the APA by ignoring comments during the rulemaking process that flagged fundamental flaws in its determination of the sensitivity factor, including that the Agency had tested too few vehicles, had used unrepresentative vehicle technologies, and had arbitrarily analyzed data from the test program that it had conducted itself instead of using manufacturing certification data as previously planned. It granted the petition and vacated the rule to the extent that it set a sensitivity factor of 0.81 and implemented that factor by shifting the test fuels from E0 to E10 for fuel economy compliance.