The U.S. Department of Energy (DOE) on June 30, 2025, finalized an overhaul of its procedures for complying with the National Environmental Policy Act (NEPA), a move aimed at reducing permitting delays for energy infrastructure and federally supported projects. Through an interim final rule and a new set of agency procedures, DOE has rescinded its long-standing NEPA regulations and replaced them with a more flexible, guidance-based framework.
According to DOE, these changes are designed to simplify environmental reviews, clarify interagency responsibilities and support the timely development of energy infrastructure. The reforms implement several recent developments: the Fiscal Responsibility Act of 2023 (which included the BUILDER Act), President Donald Trump's executive order on "Unleashing American Energy" and a recent Supreme Court decision that narrows the scope of environmental review under NEPA.
New Procedures Replace Prior Regulations
Historically, DOE's NEPA procedures were codified in regulations under 10 CFR Part 1021. Under the new rule, most of that regulatory text has been rescinded. What remains are select provisions necessary to maintain basic NEPA compliance. Specifically, DOE retains:
- a limited set of routine administrative categorical exclusions for low-impact activities such as planning assistance, personnel training and minor repairs
- DOE's existing list of categorical exclusions for frequently conducted activities with predictable environmental impacts, including equipment upgrades in existing buildings, small-scale renewable installations, transmission line improvements in existing corridors, and lab-based research and development
- procedures for emergency actions, allowing DOE to respond to urgent circumstances and document impacts after the fact
All other procedures have been moved into a new NEPA implementation guidance document, which DOE will update outside of the rulemaking process. That guidance now governs NEPA compliance across the agency and takes effect immediately.
Key Procedural Changes
DOE's revised procedures incorporate several structural changes intended to speed up environmental reviews and reduce unnecessary analysis:
- Firm Deadlines and Page Limits. Environmental Impact Statements (EISs) are now subject to a two-year maximum timeline and Environmental Assessments (EAs) to a one-year maximum. Page limits of 300 for EISs and 150 for EAs will apply, unless otherwise justified.
- Lead Agency Coordination. For projects involving multiple federal agencies, DOE will coordinate with other agencies to designate a lead and prepare a single environmental document – an effort to eliminate duplicative reviews.
- Expanded Use of Categorical Exclusions. DOE is encouraging broader reliance on categorical exclusions for projects that fit known, low-impact profiles. This could shorten review timelines for many applications, particularly those with similar prior projects or mature technologies.
- Greater Project Sponsor Participation. Project sponsors may now assist in preparing environmental documentation under DOE oversight – potentially improving alignment between the NEPA process and project development timelines.
- Limitations on Speculative or Indirect Analysis. The new guidance discourages reviewers from analyzing remote or hypothetical effects beyond DOE's statutory authority. Instead, DOE will focus on foreseeable, project-specific impacts supported by existing scientific data.
- Clarified Approach to Greenhouse Gas (GHG) Emissions. The revised procedures reflect the U.S. Supreme Court's decision in Seven County Infrastructure Coalition v. Eagle County, which held that federal agencies are not required to evaluate upstream or downstream GHG emissions from activities beyond their jurisdiction. DOE's guidance now reinforces this narrower scope of analysis.
These updates also follow the Council on Environmental Quality's (CEQ) decision to rescind key portions of its 2020 NEPA implementing regulations. The CEQ rulemaking marked a major shift in how federal agencies define and evaluate environmental impacts under NEPA. (See Holland & Knight's previous alert, "Seismic Changes in Federal Environmental Reviews: CEQ to Rescind NEPA Regulations," Feb. 25, 2025.)
DOE's interim final rule acknowledges that its prior NEPA procedures relied on now-revoked CEQ language, particularly around "reasonably foreseeable effects" and cumulative impacts, and updates its internal policies to align with CEQ's current framework.
Exemptions for Certain Energy Authorization
DOE's new procedures also identify specific DOE actions that are categorically excluded from NEPA review altogether. These include:
- emergency orders issued under Section 202(c) of the Federal Power Act
- presidential permits for cross-border energy infrastructure
- natural gas import authorizations from any country, as well as exports to countries with which the U.S. has a free-trade agreement
These exclusions may simplify the permitting pathway for certain reliability- and natural gas-related energy projects.
Clarifying When NEPA Applies
In addition to streamlining its procedures, DOE's new NEPA guidance clarifies when environmental review is required at all. Though NEPA typically applies to "major federal actions" that significantly affect the environment, the guidance emphasizes that not all DOE financial assistance awards meet this threshold.
Under the updated framework, NEPA does not apply if:
- DOE's action is not considered "final" under the Administrative Procedure Act
- the agency has no discretion over the proposed activity
- compliance with NEPA would conflict with another legal obligation
- the activity does not qualify as both "major" and "federal" under NEPA
In practical terms, DOE may determine that NEPA does not apply to certain grants, loans or loan guarantees where the agency lacks sufficient authority to influence the project's environmental outcomes. Examples include:
- minimal federal funding used solely for project design or planning
- reimbursements or incentive payments for projects that are already complete
- activities where DOE provides funding but not compliance or enforcement oversight
- projects conducted entirely outside U.S. jurisdictions
These determinations are made on a case-by-case basis and may be particularly relevant for applicants combining DOE support with other sources of capital. In some cases, it may allow DOE to determine that NEPA review is not required at all, based on limited agency control or timing of the financial assistance. However, many projects receiving substantial DOE assistance will still trigger NEPA and require a full environmental review.
Implications for LPO Applicants
For developers seeking financing through the DOE Loan Programs Office (LPO), the updated NEPA framework could offer a clearer, more predictable permitting process, especially for projects with tight development timelines or capital stack deadlines. Key implications include:
- Faster Reviews. DOE's firm deadlines and greater use of categorical exclusions may reduce delays in project approvals, particularly for applicants pursuing familiar or lower-risk technologies.
- More Predictable Scope. Projects involving fossil energy, hydrogen, liquified natural gas (LNG) or carbon capture may benefit from the revised GHG analysis framework, which limits review to impacts within DOE's control.
- Streamlined Coordination. Applicants engaged with multiple agencies may benefit from DOE's efforts to establish a single environmental review, rather than managing multiple NEPA processes in parallel.
- Opportunity for Early Engagement. With sponsors now able to play a more active role in shaping environmental documents, early alignment with DOE NEPA staff will be critical for ensuring efficient review.
Though these changes are expected to streamline DOE's internal processes, applicants should continue to monitor developments across other permitting agencies. Projects involving other federal agencies such as the Federal Energy Regulatory Commission (FERC), U.S. Environmental Protection Agency (EPA) or U.S. Department of the Interior (DOI) will still need to navigate their respective NEPA processes. Early engagement with DOE and interagency partners remains critical.
Looking Ahead
DOE's new NEPA guidance took effect immediately upon its July 3, 2025, publication in the Federal Register as an interim final rule, and the agency is now soliciting public comments through Aug. 4, 2025. Stakeholders, including project developers, state and local agencies, and other interested parties, are encouraged to submit comments that address how revised categorical exclusions, documentation requirements and environmental review thresholds may impact project planning and permitting timelines.
Applicants with ongoing NEPA reviews should consult with DOE to determine whether aspects of the new framework can be applied retroactively and whether any efficiencies can be gained through rescoping or streamlining documentation.
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