The Environmental Protection Agency (EPA) hit a major milestone today in its move to roll back auto emissions standards that would have had a major impact in lowering the nation's greenhouse gas emissions. At the same time, the EPA's move reportedly sets it up for conflict with California, the only state in the nation that has an exemption from the EPA's greenhouse gas rules under the Clean Air Act.

According to The New York Times , today the EPA formally submitted to the White House Office of Management and Budget its proposal to roll back the fuel economy rules that former President Obama signed off on in the last months of his presidency. The rules would have pushed automakers to keep reducing the greenhouse gas emissions of their vehicles out to 2025.

Soon after President Trump took office, automakers complained to the administration that complying with the EPA's greenhouse gas standards would be too costly, despite having taken part in the negotiations that led to the Obama administration's fuel economy standards. But critics said the auto industry was overplaying the potential harm. A third-party study from the International Council on Clean Transportation found that the technology needed to achieve the 2025 fuel economy standards was even more cost-effective than it had been when the Obama-era standards were negotiated.

The Times noted that sending the proposed rules to the White House is generally "the final step before a proposed rule is published in the Federal Register. The rules are then open for public comment before taking effect, during which the terms could still be modified."

In April, EPA Administrator Scott Pruitt announced that he had made a final determination to roll back the fuel emissions standards. At the time, no new rules were proposed, but Pruitt indicated that new rules might be made in conjunction with the National Highway Traffic Safety Administration (NHTSA), which manages a parallel set of rules called the Corporate Average Fuel Economy (or CAFE) standards.

The Times spoke to a number of sources within the EPA who had seen a draft proposal for new fuel economy rules from the agency. The draft has not been made public yet, but the sources said that the EPA's preferred option is to freeze auto emissions standards at 2020 levels.

According to the Times, the proposal sent to the White House today also challenges California's exemption from the EPA's vehicle pollution standards (the Golden State was granted its exemption in the 1970s as a way for the state to rein in its notorious smog problem). Recently, California has said that it would continue to enforce Obama-era rules. Given the size of the state's market, such a move would threaten to undercut the EPA's authority. Twelve other states currently follow California's standards.