FHWA Final Rule Repeals CO₂ Emission Target Mandate for State DOTs and MPOs

The Federal Highway Administration (FHWA), under the U.S. Department of Transportation, has issued a final rule repealing the requirement for State Departments of Transportation (DOTs) and Metropolitan Planning Organizations (MPOs) to set and report on declining carbon dioxide (CO₂) emission targets for the National Highway System (NHS). The rule, published under 23 CFR Part 490 [Docket No. FHWA-2025-0001], becomes effective May 19, 2025.

Key Takeaway:

The rule removes a performance measure aimed at reducing tailpipe CO₂ emissions from on-road sources on the NHS—essentially nullifying a regulation that had never taken effect due to ongoing litigation and questions of statutory authority.

Background and Purpose

The repealed requirement stemmed from a 2023 FHWA rule that attempted to reintroduce a greenhouse gas (GHG) measure originally proposed in 2017 and repealed in 2018. The GHG measure mandated State DOTs and MPOs to:

• Set progressively lower (declining) CO₂ emission targets.

• Measure annual on-road CO₂ emissions.

• Report progress and develop corrective plans if targets were unmet.

FHWA now states that repealing this measure is not only consistent with judicial rulings, but also a necessary action to align federal regulations with existing statutory authority and remove regulatory burdens without measurable benefit.

Judicial and Legal Context

The 2023 GHG rule was challenged in court by 22 states, leading to rulings in Texas and Kentucky that concluded the rule:

• Exceeded FHWA’s authority under 23 U.S.C. 150(c)(3).

• Was arbitrary and capricious.

• Could not be legally enforced.

With those rulings now final and unappealable, FHWA determined it had no discretion to maintain the GHG measure, eliminating the need for public comment under the Administrative Procedure Act.

Implications for States and MPOs

• No Requirement to Set CO₂ Targets: States and MPOs are no longer obligated to track or reduce CO₂ emissions under federal performance metrics.

• Voluntary Participation Permitted: They may still choose to assess emissions and set their own targets independently.

• Regulatory Relief: FHWA describes the repeal as a deregulatory action, aligning with Executive Orders promoting reduced federal oversight and streamlined governance.

Policy and Environmental Considerations

FHWA reiterated that:

• The statutory framework of 23 U.S.C. 150(c) does not explicitly include GHGs in its performance measure requirements.

• Including such a measure would require clear Congressional authority, which FHWA believes is currently absent.

• This repeal helps return the Code of Federal Regulations to its proper scope, without unintended or unauthorized expansions.

Despite environmental concerns around transportation emissions, the repeal signals a shift in focus back to traditional infrastructure performance metrics such as safety, pavement condition, and freight movement.

Administrative and Procedural Notes

The rule was issued without the standard notice and comment process due to a “good cause” finding. FHWA asserted that:

• The repeal has no effect on the public, since the 2023 rule never took effect.

• Courts have already invalidated the rule, making its implementation legally impossible.

Conclusion

This latest rulemaking represents a significant development in the ongoing debate over the role of federal transportation agencies in climate policy. While the GHG measure’s repeal removes a federal mandate, it leaves room for state-led or voluntary initiatives to monitor and reduce CO₂ emissions from transportation sources.

For further information, stakeholders can contact:

• Gary A. Jensen, FHWA Office of Natural Environment – (202) 366-2048

• Lev Gabrilovich, FHWA Office of the Chief Counsel – (202) 366-3813

Read the full document here.