On July 31, 2023, the Council on Environmental Quality (“CEQ”) published proposed changes to the National Environmental Policy Act (“NEPA”) regulations. These proposed changes are “Phase 2” of the Biden Administration’s response to 2020 changes promulgated by the Trump Administration.  Among other changes such as simplified documentation requirements and consolidated decision-making, the Phase 2 changes focus on environmental justice (“EJ”), community engagement, climate change, and ease of permitting for renewable energy projects.[1] Significantly, these changes, for the first time, specifically include “environmental justice” in the NEPA process and provide a definition. If promulgated, these regulations would codify the Biden Administration’s emphasis on EJ, and they could provide greater stability and clarity for persons preparing NEPA analyses.  

While EJ has been a requirement in NEPA reviews since Executive Order 12898 was signed in 1994, it has not been specifically included in or defined by regulations. These proposed regulations change that. CEQ proposes to define “environmental justice” as: 

(k) Environmental justice means the just treatment and meaningful involvement of all people, regardless of income, race, color, national origin, Tribal affiliation, or disability, in agency decision-making and other Federal activities that affect human health and the environment so that people: 

(1) Are fully protected from disproportionate and adverse human health and environmental effects including risks and hazards, including those related to climate change, the cumulative impacts of environmental and other burdens, and the legacy of racism or other structural or systemic barriers; and 

(2) Have equitable access to a healthy, sustainable, and resilient environment in which to live, play, work, learn, grow, worship, and engage in cultural and subsistence practices. 

40 C.F.R. 1508.1(k) (proposed). This definition matches the definition used in Executive Order 14096, signed April 21, 2023, which directed an all-of-government approach to incorporate EJ, including incorporating it into the NEPA process. Of note, because it adds Tribal affiliation and disability to the list of EJ indicators, explicitly provides for protection from disproportionate and adverse human health and environmental effects, and states that those effects include those from climate change, as well as cumulative impacts, this definition is more expansive than the current working definition used by the Environmental Protection Agency.[2]

In addition to defining “environmental justice,” CEQ is seeking input on whether to define “communities with environmental justice concerns” in the regulations. This phrase is used throughout the proposed regulations, but CEQ did not include a proposed definition. CEQ explains that the term means “communities that do not experience environmental justice as defined in § 1508.1. (k),” and CEQ is specifically asking for comments on whether and how the regulations should define the term.

The proposed regulations also specifically incorporate EJ in the major steps of the NEPA process:

• Policy. CEQ proposes to repromulgate Section 1500.2 (Policy). The new section would add language that NEPA’s policy of encouraging and facilitating public involvement should specifically include communities with environmental justice concerns, 40 C.F.R. § 1500.2(d) (proposed) and that the policy of identifying and assessing reasonable alternatives should include “alternatives that will reduce climate change-related effects or address adverse health and environmental effects that disproportionately affect communities with environmental justice concerns.” § 1500.2(e) (proposed).
• Determining the Appropriate Level of NEPA Review. Under Section 1501.3, agencies are directed to determine whether an Environmental Assessment or Environmental Impact Statement is required for the federal action based on whether the federal action is likely to have significant effects. CEQ proposes to add the following factor when analyzing the intensity of the effects of a federal action: “The degree to which the action may have disproportionate and adverse effects on communities with environmental justice concerns.” § 1501.3(d)(2)(ix) (proposed). In the preamble to the proposed regulations, CEQ explains that this factor was listed because “communities with environmental justice concerns often experience disproportionate environmental burdens such as pollution or urban heat stress, and often experience disproportionate health and other socio-economic burdens that make them more susceptible to adverse effects.” 88 Fed. Reg. 49936. Additionally, in the proposed definition for “effects” or “impacts,” CEQ clarifies that the effects include cumulative effects and they include “disproportionate and adverse effects on communities with environmental justice concerns, whether direct, indirect, or cumulative.” 40 C.F.R. § 1508.1(g)(4) (proposed).

• Environmental Impact Statement. In the proposed regulations, CEQ clarifies that the discussion of environmental consequences in an EIS must include “[t]he potential for disproportionate and adverse human health and environmental effects on communities with environmental justice concerns.” 40 C.F.R. § 1502.16(a)(14).
• Mitigation. The proposed regulations also provide that the lead agency should consider mitigation for adverse effects on communities with environmental justice concerns. Id. § 1505.3(b). Specifically, the lead agency should:

where relevant and appropriate incorporate mitigation measures that address or ameliorate significant adverse human health and environmental effects of proposed Federal actions that disproportionately and adversely affect communities with environmental justice concerns.

These changes largely codify the Biden administration’s current practice of including EJ in the NEPA analysis. If promulgated, however, EJ’s incorporation will not be dependent on an Executive Order, which could be subject to change based on the administration. These changes signal an upcoming first, a fixed place for EJ in federal law. This will create a lasting need for the industry to consider EJ concerns and potential mitigations when seeking or renewing permits, including under a potentially expanded definition of environmental justice. Comments on the proposed regulations are due by September 29, 2023.

[1]        The Phase 1 changes were published on April 20, 2022, and then were implemented on May 20, 2022. The substantial revisions made were: (1) the definition of “effects” used for the purpose of environmental impact statements was amended; (2) additional detail of the purpose and need of a project or action was required; (3) the agency review process as a minimum standard for environmental review procedures was established.

[2]        EPA has defined EJ as “the fair treatment and meaningful involvement of all people regardless of race, color, national origin, or income, with respect to the development, implementation, and enforcement of environmental laws, regulations, and policies.”

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