In keeping with the Trump Administration's goals of permitting reform, the Council on Environmental Quality (CEQ) on Sept. 29, 2025, issued an updated guidance memorandum to the heads of federal agencies regarding implementation of the National Environmental Policy Act (NEPA), which supersedes and replaces CEQ's prior NEPA guidance. This Holland & Knight Alert provides a brief summary of the relevant background and breaks down the new guidance to highlight the most significant updates.

NEPA requires federal agencies to create a "detailed statement" for "major Federal actions significantly affecting the quality of the human environment." 42 U.S.C. §§ 4321 et seq. Federal agencies are also directed to adopt their own NEPA implementing regulations specific to actions that they have the authority to perform. Generally, NEPA is conducted through a sliding-scale approach. Proposed actions with the potential for "significant" environmental effects normally require an environmental impact statement (EIS), and projects with lesser potential effects can be addressed through an environmental assessment (EA). If an EA determines that impacts can be avoided or mitigated, the agency issues a finding of no significant impact (FONSI) along with the EA. Categorical exclusions (CatEx) – categories of actions that the reviewing agency has determined would not normally, individually or cumulatively have potential for significant environmental impacts absent extraordinary circumstances – can also be applied to satisfy NEPA.

As originally enacted, NEPA creates the CEQ and generally directs the agency to "assist and advise the President." 42 U.S.C. § 4343. Subsequently, former President Jimmy Carter issued executive order (EO) 11991 on May 24, 1977, which directed CEQ to "issue regulations [regarding NEPA] to Federal agencies" and further directed agencies to "comply with regulations issued by the Council." Under this authority, CEQ promulgated NEPA regulations in 1978 and multiple amendments to those regulations during the Trump and Biden Administrations. (See Holland & Knight's previous alert that examined the 2024 amendments, "Council on Environmental Quality Substantially Rewrites NEPA Regulations," June 6, 2024.) CEQ's regulations dominated the NEPA landscape for more than 40 years.

In 2024, however, a decision from the U.S. Court of Appeals for the District of Columbia Circuit held that CEQ had no authority to issue binding regulations in the first place. (See Holland & Knight's previous alerts discussing these decisions, "Adding Fuel to the Fires Calling for Permitting Reform," Nov. 26, 2024, and "Court's Denial of Review Leaves Open Questions of CEQ Authority," Feb. 3, 2025.) And on his first day in office, President Donald Trump issued EO 14154, "Unleashing American Energy," which directed CEQ to consider rescission of the 2024 amendments to the NEPA regulations, issue nonbinding NEPA guidance to agencies and form a NEPA taskforce to coordinate revision of each federal agency's NEPA implementing regulations. President Trump also expressly revoked President Carter's EO 11991 that had directed CEQ to promulgate regulations.

Consistent with President Trump's orders, on Feb. 25, 2025, CEQ issued an interim final rule revoking CEQ's NEPA regulations effective April 11, 2025, as well as a corresponding memorandum to the heads of all federal departments regarding NEPA implementation (February Guidance). (See Holland & Knight's previous alert covering the rescission and memorandum, "Seismic Changes in Federal Environmental Reviews: CEQ to Rescind NEPA Regulations," Feb. 25, 2025.) The February Guidance largely focused on efficiency and certainty, urging agencies to avoid delays and ambiguity in their NEPA processes despite the uncertainty presented by the significant shifts in the NEPA landscape. CEQ also directed agencies to revise their own NEPA regulations within 12 months to be consistent with the statutory amendments to NEPA enacted through the Fiscal Responsibility Act of 2023.

CEQ published a Notice of Availability in the Federal Register on Sept. 29, 2025, advising that it had issued new guidance for NEPA implementation (New Guidance) that updates and replaces the February Guidance. The notice makes clear that the New Guidance is "not mandatory or binding" but rather is intended to "expedite and simplify the permitting process and promote consistency." 90 FR 47734 (Sept. 29, 2025).

The New Guidance updates the "initial" February Guidance to incorporate recent case law and statutory amendments, along with the efforts of the NEPA taskforce directed by President Trump in EO 14154. The key updates are:

CEQ summarizes the recent U.S. Supreme Court decision in Seven County Infrastructure Coalition v. Eagle County, Colorado, 145 S. Ct. 1497 (2025), characterizing the decision as a call for "NEPA implementation reform." (See Holland & Knight's previous alert covering the Seven County decision, "U.S. Supreme Court Grapples with Loper Bright in the Context of NEPA Reviews," June 2, 2025.) In particular, the New Guidance emphasizes that agencies conducting NEPA review must consider the proposed action and "that action's effects," which does not include environmental effects from other projects separate in time or place, that fall outside of the agency's authority or that would have to be initiated by a third party. Though recognizing that courts must accord agencies "substantial deference" in determining the appropriate scope of review, CEQ advises agencies to explain in their NEPA review where they have drawn a "reasonable and manageable line" with respect to this analysis. In other words, even though the Supreme Court recognized that agencies have broad discretion to look beyond an action's effects, agencies that choose to do more than the bare minimum NEPA requires are encouraged to explain themselves.

The New Guidance incorporates these concepts the principles and holdings from Seven County throughout the document and in the recommended NEPA procedure framework (discussed below).

Section 60026 of the One Big Beautiful Bill Act (OBBB), Pub. L. 119-21 (July 5, 2025), enacted a new Section 112 to NEPA, which permits a project sponsor to pay a fee, set by CEQ on a project-specific basis, to receive shortened NEPA review periods. Specifically, if the project sponsor pays the amount determined by CEQ, then the review periods are cut in half – from two years to one year for an EIS and from one year to 180 days for an EA. 42 U.S.C. §§ 4336, 4336e. The New Guidance explains CEQ's expectation that project sponsors will coordinate with the government before submitting a request to opt in to this process and that federal agencies may address this process in their own NEPA implementing procedures.