Environmental Justice Regulatory Update: Federal EJ Rollbacks, State EJ Laws, and Compliance Risks for Businesses in 2026

Environmental justice (EJ) requirements are moving in two different directions at once: federal programs are being scaled back, while many states are pressing ahead with their own EJ laws, screening tools, and permitting expectations. For companies with operations in multiple jurisdictions, that means compliance may depend less on a single federal framework and more on a state-by-state analysis. This update breaks down the most important federal rollbacks, state responses, and litigation trends shaping the EJ landscape in 2026. It also highlights practical steps businesses can take now to monitor risk and prepare for continued regulatory change.

Highlights:

• Federal EJ Rollbacks: The administration has rescinded major EJ executive orders, closed federal EJ offices, narrowed enforcement tools, and shifted EPA policy away from prior EJ priorities.
• State-Level Momentum: California, New York, New Jersey, Colorado, Maryland, Pennsylvania, and other states continue to advance EJ statutes, screening tools, cumulative impact reviews, and permitting requirements.
• Litigation and Grant Uncertainty: Court challenges involving EPA grant cancellations, state EJ permitting authority, and citizen suits may shape the next phase of EJ-related compliance and enforcement risk.
• Business Compliance Priorities: Companies should evaluate state-specific EJ obligations, monitor preemption disputes, and plan for a more fragmented regulatory environment.

For previous coverage on this topic, please see our April 2024 Environmental Justice Update and our Alert on President Trump's Executive Orders to Eliminate Federal Environmental Justice Programs.

The EJ regulatory landscape has shifted significantly over the past year. At the federal level, the administration has rescinded the executive orders (EOs), offices, and enforcement policies that formed the foundation of federal EJ programs. At the same time, state governments—led by California, New York, and New Jersey, but also extending to Colorado, Maryland, Pennsylvania, and others—have continued to develop and implement their own statutes, screening tools, permitting standards, and enforcement practices that embed both procedural and substantive EJ requirements. This divergence is reshaping the regulatory environment for businesses operating across jurisdictions, creating a patchwork of obligations that in many cases differs from, and in some states exceeds, what existed under the prior federal framework. Concurrently, nonprofit organizations and citizen groups have brought suits under alternative authorities seeking damages and injunctive relief for actions that impact economically disadvantaged communities. This Alert surveys the key federal and state developments over the past twelve months and identifies the practical implications for companies navigating this evolving landscape.

Federal Developments

As detailed in our prior Alert, the Trump administration has rescinded many EOs aimed at promoting federal environmental justice policy—including Clinton’s EO 12898, Biden’s EO 14096, and the Justice40 Initiative (EO 14008)—and directed the termination of all federal EJ offices and programs. Our prior Alert also flagged uncertainty about the future of Environmental Protection Agency (EPA)-administered Inflation Reduction Act (IRA) grant programs. Since then, those changes have taken effect, and the Trump administration has taken additional actions extending into enforcement policy, civil rights, regulations, and Clean Air Act authority. The following is a consolidated timeline of the most significant developments since our last Alert:

Elimination of Federal EJ Programs

Since our last Alert, the US Department of Justice (DOJ), EPA, and other agencies have taken additional steps to eliminate federal EJ programs and narrow the scope of EJ-related considerations in federal permitting activities:

• February 2025: DOJ terminated its Office of Environmental Justice and rescinded the joint EJ enforcement strategy with EPA.
• March 2025: EPA terminated the National Environmental Justice Advisory Council (NEJAC).
• March 2025: EPA formally eliminated the Office of Environmental Justice and External Civil Rights (OEJECR).
• May 2025: EPA closed its air pollution/human studies research facility in Chapel Hill, North Carolina.
• September 2025: The Federal Transit Administration withdrew its EJ guidance.
• December 2025: DOJ amended its Title VI implementing regulations to eliminate disparate impact liability.
• December 2025: EPA adopted a “Compliance First” policy halting the use of Supplemental Environmental Projects (SEPs).
• January 2026: EPA proposed a rule limiting state authority to block infrastructure projects under the Clean Water Act.
• February 2026: EPA rescinded the 2009 endangerment finding for greenhouse gas emissions under the Clean Air Act and repealed related motor vehicle GHG regulations.
• March 2026: EPA closed its Office of Research and Development.
• May 2026: EPA issued Clean Air Act Title V guidance aimed at expediting the permitting process for major sources of air pollution.

Federal Grant Programs

EPA has now canceled dozens of EJ-related contracts and grants that made up a significant portion of the US$3 billion that Congress appropriated through the IRA for the Environmental and Climate Justice (ECJ) Program. Multiple groups filed suit, and on June 11, 2026, a federal court granted partial summary judgment in favor of the plaintiffs, declaring EPA's termination of the ECJ Program "arbitrary and capricious" and vacating the agency's guidance closing the program. The court denied injunctive relief requiring EPA to restart the program, citing practical difficulties, but noted that the plaintiffs may pursue individual grant claims in the Court of Federal Claims. Companies and grantees affected by the cancellations should monitor whether EPA appeals or takes further action before the September 30, 2026 statutory deadline for awarding the grant funds.

State Developments

As the federal government has continued to eliminate its EJ programs, states have accelerated the development and implementation of their own EJ requirements. Several notable developments illustrate this trend:

• In California, in September 2025, SB 352 was signed into law codifying a Bureau of Environmental Justice within the state Department of Justice and strengthening community air monitoring requirements.
• In New York, in April 2026, the New York State Department of Environmental Conservation (NYSDEC) adopted amendments to its State Environmental Quality Review Act (SEQRA) regulations requiring lead agencies to evaluate whether proposed actions may cause or increase a disproportionate pollution burden on disadvantaged communities (effective June 12, 2026).
• In New Jersey, in January 2026, an appellate panel upheld the state’s authority to impose EJ-based permitting requirements.
• Other states—including Colorado, Maryland, and Pennsylvania—have introduced or advanced EJ screening tools, cumulative impact requirements, and enhanced permitting standards. 

Key Takeaways

The elimination of federal EJ programs has triggered a growing patchwork of state-level requirements—each with their own definitions of "overburdened communities," their own screening tools, and their own permitting and enforcement consequences. For companies operating in multiple jurisdictions, the result is a more complex compliance landscape. Companies should consider the following:

Evaluate state-level exposure. Businesses should assess their operations in states with active EJ programs—particularly California, New York, New Jersey, Colorado, Maryland, and Pennsylvania—and ensure that their practices account for state-specific requirements.

Monitor the litigation landscape. EJ-related litigation, such as the challenge to EPA's cancellation of IRA-funded grants (which must be awarded by September 30, 2026) and the recent decision upholding New Jersey’s state EJ rules, will continue to shape the boundaries of both federal and state regulatory authority. Judicial outcomes may have cascading effects on permitting timelines, compliance obligations, and potential exposure to enforcement actions. Groups like the National Association for the Advancement of Colored People (NAACP) and Earthjustice have also sought to use alternative means to achieve EJ goals. For example, in April, these organizations filed an action in the Northern District of Mississippi under the citizen suit provision of the Clean Air Act seeking to enjoin construction of the Colossus Data Center gas plant in a majority-Black community. 

Prepare for potential preemption conflicts. EPA's proposed repeal of the endangerment finding for greenhouse gases, its proposed limitations on state authority to block infrastructure projects, and the elimination of disparate impact regulations all signal a federal posture that may create tension with state-level EJ requirements. Companies operating in jurisdictions where federal and state approaches diverge should monitor preemption developments and formulate compliance strategies that account for both potential outcomes.

We will continue tracking developments in this space, including future changes to federal and state EJ policies.

This memorandum is a summary for general information and discussion only and may be considered an advertisement for certain purposes. It is not a full analysis of the matters presented, may not be relied upon as legal advice, and does not purport to represent the views of our clients or the Firm. Eric Rothenberg, an O'Melveny of counsel licensed to practice law in New York and Missouri; John D. Renneisen, an O'Melveny senior counsel licensed to practice law in the District of Columbia; and Chris Bowman, an O’Melveny counsel licensed to practice law in California, contributed to the content of this newsletter. The views expressed in this newsletter are the views of the authors except as otherwise noted.

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