The New NEPA: Federal Agencies Overhaul Procedures for Environmental Reviews

On July 3, 2025, the Federal Energy Regulatory Commission (“FERC” or the “Commission”), the U.S. Army Corps of Engineers (“Army Corps”), and the Departments of Energy (“DOE”), Interior (“DOI”), Transportation (“DOT”), Agriculture (“USDA”), and Defense (“DOD”) released sweeping updates to their regulations and procedures implementing the National Environmental Policy Act (“NEPA”). These changes come on the heels of the Council on Environmental Quality’s (“CEQ”) interim final rule in February 2025 rescinding its agency-wide NEPA regulations. These changes also follow the Supreme Court’s decision in Seven County Infrastructure Coalition vs. Eagle County, Colorado (“Seven County”) on May 29, 2025, which reinforced the ability of agencies to establish reasonable limits on the scope of their environmental reviews. The procedures as a whole are more concise than the regulations they replace and hew closely to the first Trump administration’s 2020 NEPA reforms and reflect a government-wide preference for a guidance-based approach to implementing NEPA. Whether projects will actually benefit from the narrowed scope of effects that must be considered during environmental review and the focus on a quicker overall process will ultimately depend on how courts respond in the inevitable challenges to the initial wave of agency actions done under these new procedures. These new procedures largely narrow the scope of effects that must be considered during, and seek to shorten the time period for preparing, environmental reviews, which may help streamline permitting but come at the cost of additional litigation risk.

The following article covers the comprehensive overhaul of federal NEPA procedures announced on July 3, 2025. We examine the narrowing scope of NEPA review, the shift towards guidance-driven NEPA implementation, and the increased agency discretion and case-by-case analysis permitted under these new procedures. We also explore the implications of these changes for permitting efficiency and litigation risk, as well as CEQ’s evolving role. In addition, we highlight the new treatment of mitigation and benefits analysis under the revised NEPA framework, the current status of NEPA rulemaking and projects already undergoing environmental reviews, and notable agency-specific approaches.

The Changing Scope of NEPA Reviews

An important issue teed up by the Supreme Court’s recent decision in Seven County is how much deference agencies are entitled in establishing their new NEPA policies and procedures. Some of the abovementioned agencies tackled this issue head-on: for example, DOE cites Seven County directly multiple times throughout its new NEPA implementing procedures, underscoring that, under that case, the agency is owed “substantial deference” in NEPA cases. USDA and DOI echo this “substantial deference” point from Seven County in their interim final rules. As we discussed previously, agencies’ efforts to expressly incorporate principles espoused in Seven County likely foreshadow a narrower basis for success in challenges to the sufficiency and scope of an agency’s NEPA review.

The revised NEPA procedures lean into the Supreme Court’s holding in Seven County, allowing agencies to narrow the scope of activities and impacts that need to be considered in their environmental reviews. Under the prior CEQ regulations, agencies were required to evaluate the direct, indirect, and cumulative effects of the proposed action, which caused, in some instances, agencies to consider potential effects that were very far afield of those related to the proposed project. The revised NEPA procedures do not preserve this framework. Instead, citing to Seven County, agencies are signaling that they need not consider impacts that are “remote in time, geographically remote, or the product of a lengthy causal chain,” or are those that “the agency has no ability to prevent due to the limits of its regulatory authority, or that would occur regardless of the proposed action, or that would need to be initiated by a third party.” These measures also build on Congress’s efforts to streamline environmental reviews. While provisions that would have curtailed judicial review ultimately did not make it into the final version, the “One, Big, Beautiful Bill,” signed into law on July 4, 2025, allows project proponents to pay a fee in exchange for expedited NEPA review. Once paid, an agency has six months to prepare an environmental assessment and one year for an environmental impact statement.¹

Seven County’s pronouncements likewise impact the cumulative impacts analysis, which is frequently a core claim in NEPA litigation and has been a matter of controversy across recent presidential administrations. NEPA does not expressly mandate consideration of cumulative impacts. Prior to 2020, agencies needed to consider the cumulative effects — the incremental effects of an action when considering other past, present, and reasonably foreseeable future actions — on the environment. When the first Trump administration overhauled CEQ’s NEPA regulations in 2020, it removed the definition of “cumulative effects,” instead directing agencies to assess the “reasonably foreseeable environmental trends and planned actions in the area(s).” The Biden administration returned to the old definition, which the current Trump administration has repealed as part of the February 2025 rescission of all CEQ regulations.

Now, similar to the 2020 rule, nearly every agency’s guidance documents are devoid of any mention of cumulative impacts.² Whether agencies and project proponents can focus solely on a project’s direct effects, viewed in isolation, will be tested in litigation, with the closest calls being where project challengers can identify those other impacts (e.g., indirect impacts) that may occur at the same time and place as the project at hand and are within the agency’s power to regulate. Litigants have argued that an agency’s evaluation of the effects of an action should be viewed in context, not a vacuum, and some reviewing courts may be sympathetic to similar claims based on a general sense of how they think NEPA should operate, or based on a remnant understanding of NEPA reviews under the now-rescinded CEQ regulations or case law based upon those rescinded regulations.

The Pivot from Regulations to Guidance and Case-by-Case Analysis

While each agency has taken a slightly different approach to NEPA procedures, the government-wide overhaul of NEPA-implementing regulations is representative of a pivot from reliance on regulations promulgated through notice-and-comment rulemaking to a guidance-based approach. DOE, DOI, and DOD repealed nearly all of their regulations implementing NEPA in favor of concise guidance documents. Others, like FERC and DOT, retain some formal regulations supplemented by new guidance documents. This approach may, in part, reflect a ruling by the Court of Appeals for the District of Columbia that CEQ lacked authority to issue NEPA regulations that are binding on agencies.

Agencies relying on guidance documents rather than notice-and-comment rulemaking has important implications for NEPA reviews beyond the current administration. To be sure, a guidance-only approach provides an agency with greater discretion that can be used to streamline permitting, especially for large infrastructure projects whose environmental reviews have been delayed. This aligns with the Trump administration’s Unleashing American Energy executive order that, as we discussed previously, directs agencies to identify ways to reduce delay. However, future administrations with different policy priorities can use this same flexibility to re-expand the scope of reviews and re-encumber the NEPA process with minimal formal process and public engagement. Indeed, several agencies noted the “flexibility to respond to new developments” and the ability to “rapidly update [guidance] in response to future court decisions . . . or Presidential directives”³ as justification for adopting a guidance-based approach. This may result in a much more pronounced swing of the pendulum by giving future administrations an easier pathway to revising how an agency implements NEPA to accommodate different policy priorities, such as by assessing the effects of climate change and impacts on environmental justice communities.

As with other aspects of these new NEPA policies, the agencies have different approaches to establishing the scope of their case-by-case NEPA flexibility. Some guidance documents indicate substantial latitude in deviating from the guidance and assessing NEPA matters on an individual basis. For instance, DOE describes its new procedures as “non-binding guidance,” and under those procedures, “DOE retains the discretion to adopt approaches on a case-by-case basis that differ from those described in the[] procedures where appropriate.” Page 1 of FERC’s new staff guidance manual, meanwhile, indicates that seemingly-mandatory language like “will” actually means something is “routine practice” rather than something that will definitely occur. On the other hand, some agency materials appear to offer less flexibility; DOI, for instance, plainly states that its guidance establishes the procedures it “will” follow in undertaking NEPA reviews.

CEQ’s Changing Role

CEQ has historically played a central role in shaping the NEPA process, primarily by promulgating regulations that federal agencies would incorporate and supplement to accommodate their various programs and procedures. With the repeal of CEQ’s NEPA regulations, individual agencies are now responsible for developing their own NEPA procedures. Despite this additional step toward decentralization, CEQ remains influential: Section 102 of NEPA still requires agencies to consult with CEQ when developing their regulations, and many agencies continue to rely heavily on CEQ’s guidance, particularly when establishing categorical exclusions or revising procedures during emergencies.

Recent developments underscore CEQ’s continued, albeit more consultative, influence. The impact of CEQ’s guidance is evident in the structure and language of new agency procedures, many of which closely mirror leaked CEQ draft guidance released in April of this year. DOI and DOD adopted this guidance almost verbatim, while others, such as FERC, DOE, and USDA, produced similar but more detailed or tailored procedures. In addition to the leaked guidance document, many of the revised NEPA procedures closely resemble the CEQ regulations as they existed in 2020 under the first Trump administration, though there are some interesting differences. For example, FERC’s new guidance document does not discuss the concept of “connected action,” which has been the subject of many disputes over the scope of agency review, and whether two actions need to be considered in the same document. In contrast, DOI, DOE, DOT, and DOD still retain the concept of “connected actions” in their guidance. Overall, this approach delivers quicker clarity in the short-term but adds potential longer-term uncertainty, as a new administration could more easily replace that guidance to advance its own policy priorities.

Mitigation and Benefits Under the New Procedures

The treatment of mitigation and the benefits of proposed actions have also evolved under the revised NEPA procedures. One of the controversial revisions in the Biden-era NEPA Phase 2 revisions to CEQ’s regulations was a prohibition on an agency considering any mitigation measures that were not enforceable — typically through permit conditions or binding agreements. The new procedures allow agencies to once again consider voluntary or otherwise foreseeable mitigation measures in their environmental documents, even if those measures are not enforceable.

Similarly, the approach to evaluating the benefits of proposed actions has shifted. Under the prior CEQ regulations, agencies were required to identify an “environmentally preferred alternative” that maximized environmental benefits, including those related to climate change or environmental justice. The revised procedures eliminate this requirement, instead directing agencies to consider both beneficial and adverse effects or impacts in their analysis.

What’s Next for NEPA Rulemaking?

The federal agencies took varying approaches to engaging with the public in issuing their new NEPA policies and procedures. For instance, some agencies (including DOI, DOE, USDA, and DOT) issued interim final rules (or, in the case of DOT, a notice of availability) on their new NEPA policies and are soliciting public comments — a procedure which they have emphasized is voluntary and not required. Comments to DOI, DOE, DOT, and the Army Corps are due on August 4, 2025, while USDA is accepting comments until July 30, 2025. With the exception of FERC, whose rule changes go into effect on August 18, 2025, and DOD, whose guidance became effective on June 30, 2025, changes from all other agencies were effective on July 3, 2025.

In justifying their decisions to not go through full notice and comment rulemaking, these agencies largely rely on Seven County’s statement that NEPA is not a substantive statute, as well as several exceptions and exemptions under the Administrative Procedure Act (“APA”), including for “rules of agency organization, procedure, or practice,” interpretative rules, policy statements, and “good cause.”

Meanwhile, other agencies, including DOD and FERC, issued a public notice or final rule for which no public comment period was provided. Similar to the first group of agencies, FERC relied on the APA’s “good cause” exemption. This expansive use of APA exceptions to notice-and-comment rulemaking — particularly on the basis that NEPA is a procedural statute with no substantive constraints on agency action — signals that agencies will likely continue to make full use of APA exceptions to incorporate new directives and policy priorities. However, transitioning away from more formal notice-and-comment rulemaking procedures creates additional litigation risk for projects which may be permitted under such rules and procedures, but also allows a future administration to more easily change these procedures to suit its own policy objectives.

These changes have important implications for projects currently undergoing NEPA review. DOI and DOT have affirmed that the new procedures will not apply to projects that are “sufficiently advanced,” and the Army Corps stated that its revised procedures will have “no effect” on ongoing NEPA reviews where the Army Corps “has determined [its existing procedures] will continue to apply to existing applications.”⁴ For others, however, changes may impact ongoing projects — DOE, for instance, stated that its policy considerations “drastically outweigh[]” any claimed reliance interest in preexisting procedures.⁵ FERC’s updates are silent on the impact to ongoing projects.

Agency Highlights

Although there is significant overlap among each agency’s NEPA procedures, we’ve highlighted below some of the interesting nuances from each:

• Federal Energy Regulatory Commission:
  • FERC retains all of its existing NEPA regulations with only minor revisions aimed at removing references to the now-repealed CEQ regulations and replacing them with references to statutory language. FERC is also the only agency whose changes do not go into effect immediately.
  • Neither FERC’s rulemaking nor its procedures reference Seven County or implement the Supreme Court’s holding into the scope of effects the Commission must analyze. FERC also retains its requirement that staff should assess a project’s cumulative effects.
  • FERC also emphasized that staff will generally not require “the development of new methodologies” to inform its analyses unless essential. This may be seen as addressing the dispute about whether an agency must use methodologies like the social cost of greenhouse gases, which the Trump administration has moved to eliminate.
• Army Corps of Engineers:
  • The Army Corps took somewhat of a different approach to its NEPA updates. Instead of publishing a guidance document, the Army Corps used an interim final rule to rescind its NEPA regulations for permit applications under the Clean Water Act and Rivers and Harbors Act (including those in 33 C.F.R. Part 325, Appendix B) and to replace them with a new part in its regulations — Part 333. Notably, the Army Corps will also conduct its reviews under Section 14 of the Rivers and Harbors Act (known as “Section 408”) under the new regulations governing the Army Corps’ regulatory program.
  • The Army Corps also separately took action to rescind nearly all regulations implementing its civil works program while maintaining the regulations related to categorical exclusions. Instead, the Army Corps stated that it will proceed according to DOD’s NEPA procedures.
• Department of Energy:
  • DOE explains that, as part of its process for “evaluating significance” (e.g., for establishing categorial exemptions, determining whether to prepare an environmental assessment or EIS), DOE “should evaluate environmental effects in context,” which may provide an avenue for the agency to consider the cumulative impacts of an action. DOE Implementing Procedures § 3.2(e).
• Department of the Interior:
  • Despite being labeled as guidance, DOI’s NEPA handbook uses mostly mandatory language and reads much like a rule rather than non-binding guidance. This, combined with DOI’s statement that the handbook governs the way bureaus under the DOI will implement NEPA, may leave DOI’s environmental review open to challenges under the APA on the grounds that it constitutes rulemaking without notice and comment.
  • While DOI rescinded most of its NEPA regulations, it retained those related to emergency responses, categorical exclusions, and applicant- and contractor-prepared NEPA documents.
• Department of Transportation:
  • DOT’s NEPA-related actions encompass multiple actions, including: publishing its new NEPA order, see generally DOT Order 5610.1D; revising several operating administrations’ (“OA”) NEPA regulations together, see generally 90 Fed. Reg. at 29,426; separately rescinding one OA’s NEPA regulations, see 90 Fed. Reg. at 29,507; and separately publishing policies and procedures for NEPA compliance for another OA, the Federal Aviation Administration, see FAA Order 1050.1G. While some agencies undertook single, more unified actions (e.g., DOE), these DOT efforts constitute multiple actions that range from single-OA specific regulations to an agency-wide order.
• Department of Agriculture:
  • Like the Army Corps, USDA chose to approach its NEPA updates by rescinding all of its existing NEPA regulations and promulgating new ones via an interim final rule. This also included rescinding all of the NEPA regulations for the subcomponents at USDA, such as the U.S. Forest Service. This new approach allows USDA to establish consistency across its various subcomponents. USDA did not release guidance along with its interim final rule like the other agencies.
  • For environmental review regarding the disbursement of funds, USDA requires that the agency complete its environmental review process prior to issuing the funding, except for infrastructure projects where USDA determines that it is necessary to assure the funds will be available for community health, safety, or economic development.
• Department of Defense:
  • The Army, Navy, and Air Force all rescinded their NEPA implementing regulations via separate interim final rules.
  • Unlike FERC and USDA, DOD’s NEPA guidance still retains the definition of “connected action” from previous CEQ NEPA regulations. However, DOD’s guidance states that a federal action must be within the authority of DOD to be considered a “connected action,” and thus does not reach non-DOD, cross-agency actions.

¹ By contrast, the Fiscal Responsibility Act amendments to NEPA, incorporated into the agencies’ procedures, set a deadline of one year for environmental assessments and two years for environmental impact statements.

² FERC’s regulations still require the Commission to assess cumulative impacts. 18 C.F.R. § 380.12(b)(3).

³ DOE Interim Final Rule, 90 Fed. Reg. at 29,679; DOI Interim Final Rule, 90 Fed. Reg. at 29,500.

⁴ DOI Interim Final Rule, 90 Fed. Reg. at 29,500; DOT Interim Final Rule, 90 Fed. Reg. at 29,622; Army Corps Interim Final Rule, 90 Fed. Reg. at 29,466.

⁵ DOE Interim Final Rule, 90 Fed. Reg. at 29,623.

This information is provided by Vinson & Elkins LLP for educational and informational purposes only and is not intended, nor should it be construed, as legal advice.