CA Court of Appeal Issues First Decision on CEQA and Greenhouse Gas Emissions

The California Court of Appeal issued its first decision on the analysis and mitigation of greenhouse gas emissions (GHGs) under the California Environmental Quality Act (CEQA). The Court ruled that the mitigation of GHGs for a large refinery project was inadequate under CEQA and set aside the environmental impact report (EIR) prepared for the project.

In Communities For A Better Environment v. City of Richmond, several environmental groups challenged the City’s adoption of a mitigation measure which required the development of a mitigation plan, within one year after the Project approval, to completely reduce the refinery project’s new GHG emissions. The Court ruled the mitigation violated CEQA because no specific measures were required, and there was no evidence of the amount of GHG reductions that would result from the proposed measures. The Court found that, in situations where the feasibility of the mitigation is not known, the mitigation must be reviewed and analyzed as part of the CEQA public process, not deferred to the future. In addition, the Court was critical of the analysis of GHGs in the EIR which did not articulate a clear standard for determining the significance of Project impacts. The Court also ruled that the EIR’s project description violated CEQA, but rejected a challenge based on “piecemealing” of the Project.

The Court invalidated the EIR’s analysis and mitigation of GHG impacts. The EIR originally found GHG impacts to be “speculative” and made no determination on whether they were significant. However, in response to comments from the public and the CA Attorney General criticizing this approach, the City belatedly issued a new EIR volume that stated that the Project’s GHG emissions “would most likely be a significant effect on the environment”. The new EIR volume also provided a mitigation measure under which Chevron would submit to the City, no later than one year after approval of the Project, a plan for achieving zero net increase in GHG emissions. The mitigation measure included a brief description of types of GHG reduction measures that could be included in the future plan, but none was required.

The Court rejected the GHG mitigation plan as an invalid deferral of the City’s duty to formulate feasible mitigation measures in the EIR. The Court noted that where mitigation is known to be feasible, an agency may defer selection of specific mitigation measures, provided that it has “articulated specific performance criteria that would ensure that adequate mitigation measures [are] eventually implemented.” However, the Court ruled that the EIR’s future development of a mitigation plan did not meet this standard. The mitigation merely listed “a handful of cursorily described mitigation measures for future consideration” in the Project’s yet-to-be developed plan. The Court criticized the list of potential measures as “nonexclusive, undefined, untested and of unknown efficacy.” The EIR treatment of GHGs was held to be inadequate since it “divulged little or no information about how it quantified the Project’s greenhouse gas emissions, offered no assurance that the plan for how the Project’s greenhouse gas emissions would be mitigated to a net-zero standard was both feasible and efficacious, and created no objective criteria for measuring success.”

The Court recognized “the ever-changing nature of [the] complex scientific field” of GHG analysis, and further noted that it was only during pendency of the appeal that the EPA made an official finding that GHGs are endangering human health and must be regulated. Nevertheless, the Court held that “difficulties caused by evolving technologies and scientific protocols do not justify a lead agency’s failure to meet its responsibilities under CEQA by not even attempting to formulate a legally adequate mitigation plan.” The Court further opined that “the novelty of greenhouse gas mitigation measures is one of the most important reasons ‘that mitigation measures timely be set forth, that environmental information be complete and relevant, and that environmental decisions be made in an accountable arena.’” The Court stated that, if the City had concluded that it was too early in the EIR process to gather information about specific feasible GHG mitigation measures, “[t]he solution was not to defer the specification and adoption of mitigation measures until a year after Project approval; but, rather, to defer approval of the Project until proposed mitigation measures were fully developed, clearly defined, and made available to the public and interested agencies for review and comment.”

The Court also stuck down the EIR because its project description was “fundamentally inadequate and misleading” on whether the Project would increase the refinery’s capacity to process heavier grades of crude oil. The Court found the City evasively and inconsistently responded to public inquiries about whether the Project would increase the processing of heavy crude oil. The Court further held that the EIR’s failure to clearly define that aspect of the Project was not remedied by an expert report on whether this processing capacity would be increased. The report, based on confidential information from Chevron, was not disclosed to the public, although it was shared with the City. The Court emphasized that, if the EIR is revised in the future, it must compare the refinery’s capacity to process heavy crude under the Project to historically “established levels of a particular use,” and not to “merely hypothetical conditions allowable” under previous permits, consistent with the recent CA Supreme Court CEQA case on environmental baseline – Communities for a Better Environment v. South Coast Air Quality Management District.

However, the Court ruled that the EIR had not improperly “segmented” or “piecemealed” the Project by not evaluating a proposed hydrogen pipeline. CEQA requires an EIR to consider “the whole of an action” which is proposed for approval, including effects that are a “reasonably foreseeable consequence” of project approval. The Court observed that, although the pipeline was proposed to be located at the refinery, its purpose to transport excess hydrogen from the refinery to other hydrogen consumers was independent of the purpose of the Project. The purpose of the Project was to “improve the Refinery’s ability to process crude oil and other feed stock from around the world”. The Court held that the Project did not “depend on” approval of the hydrogen pipeline, nor was the pipeline a “reasonably foreseeable consequence” of the Project. Therefore, the Court held, CEQA did not require the pipeline to be evaluated in the same EIR as the Project.

Finally, the Court upheld the trial court’s decision not to decide certain other challenges to the EIR. The Court held that, since it had already concluded that the EIR must be revised and recirculated prior to approval of the Project, it was not also necessary to determine whether the addition of “significant new information” to the original EIR had required that it be recirculated. The Court also stated that it was reluctant to decide claims that the cumulative impacts analysis in the original EIR was inadequate, since such claims “may be rendered moot by any subsequent CEQA review.”

The most important aspect of this case is that it establishes legal authority on CEQA requirements for the analysis of GHGs. The Court stated that recent scientific information on GHGs and their cumulative impact on climate change should be analyzed in the revised EIR. Specific mitigations and an analysis of their efficacy should be included in the revised EIR and subject to public comment and review. The Court acknowledged the difficulties presented by “evolving technologies and scientific protocols” regarding GHGs, but found that these did not excuse the City from its obligation under CEQA to analyze and mitigate environmental impacts. The combination of this case and the recent adoption of the new CEQA Guidelines requiring the analysis of GHGs, makes clear that GHGs must be addressed in CEQA documents. The one important area that awaits further legal guidance is the proper standard for determining whether a project’s GHG emissions are a significant cumulative impact. Local air districts are providing guidance on this issue, but the legal adequacy of a significance threshold has not yet been addressed by the courts.

For more information about this case and how it could impact your development projects or other GHG and CEQA matters, please contact Tim Cremin or Amrit Kulkarni at 800.464.3559.