News

U.S. department of energy’s NEPA regulatory reform and implementing guidance

07 August 2025

Key takeaways

NEPA Rules Shift to Guidance - DOE moved most NEPA procedures from regulations to non-binding guidance, giving itself more flexibility.

Categorical Exclusions Prioritized -DOE encourages broad use of categorical exclusions and now allows project segmentation to qualify.

Federal Funding ≠ Federal Action - Federal funding alone may no longer trigger NEPA if DOE lacks direct control over the activity.

The purpose of the summary is twofold: To cover the key points the reader needs to know; and To entice the reader to want to read more. Journalists call this paragraph a nutgraph. It's the story in a nutshell .If someone reads only the summary, they should still feel informed about the topic. On July 3, the U.S. Department of Energy issued an interim final rule significantly revising its NEPA regulations to speed up project approvals. Key procedural requirements were removed from the Code of Federal Regulations and placed into non-binding guidance, giving DOE more discretion. The changes emphasize categorical exclusions, ease project segmentation, and limit when federal funding triggers NEPA review. These reforms are expected to impact permitting timelines and compliance strategies across DOE-funded projects.

Background

On July 3, the Department of Energy (“DOE”) published an interim final rule (“IFR”)in the Federal Register to “substantially revise Department of Energy's (DOE) regulations containing its National Environmental Policy Act (NEPA) implementing procedures.” The revisions align with the broader changes across government to create a New NEPA that is, in the language of the DOE federal register notice “faster, more flexible, and more efficient.”¹ The changes delete all references to prior Council on Environmental Quality (“CEQ”) regulations, strip away the procedural requirements from the prior regulations and move them into a non-binding and non-codified DOE guidance document (“Implementing Procedures”). These changes are tailored to reduce the number of times DOE conducts NEPA reviews, to take advantage of categorical exclusions wherever possible, and to expedite the NEPA process.

What did DOE take out?

DOE drastically reworked its implementing regulations. It removed all references to CEQ regulations, environmental assessments, environmental impact statements², and all of subparts B, C and all of D from the prior regulations except for appendices A and B. DOE moved the majority of the remaining substance from 10 CFR part 1021 to the Implementing Procedures guidance document that is attached to the IFR but will not to be part of the Code of Federal Regulations.³

What is left in 10 CFR Part 1021?

DOE left two substantive regulations in 10 CFR part 1021 dealing with the application of categorical exclusions and emergency actions. These sections stayed largely consistent with the prior language, however, DOE made one significant change by removing “segmentation” language from what is now 10 CFR § 1021.102 relating to categorical exclusions. The previous required that DOE not partition projects into segments such that each segment could fit within a categorical exclusion. DOE moved all discussion of segmentation into the Implement Procedures and removed “connecting and cumulative actions” from its advisory language. The result is that applicants will now be able to segment projects in order to fit each segment within a categorical exemption – particularly relevant in situations where the project as a whole would otherwise have to undergo NEPA review.

What's in the Procedures Guidance Document?

The DOE NEPA Implementing Procedures guidance document is “intended to be non-binding guidance” on agency decision makers and the changes are designed to expedite the NEPA process and closely align with the Seven County decision, previously analyzed here. The procedures direct agency officials how to determine what DOE actions are subject to NEPA review, the level of NEPA review required, the type of environmental information relevant for the decision-making process, and the best way to remove unnecessary burdens and delays. The procedures also define agency roles, set page and time limits, and spell out applicant options in preparing environmental documents. The procedures emphasize that NEPA is purely a procedural statute, and DOE has broad discretion when conducting its decision making.

The procedures outline many instances where NEPA does not apply. Some highlights include: applications to import or export natural gas; actions that are not both “major” actions and “Federal actions”; and financial assistance where a Federal agency does not exercise sufficient control over the use of the assistance. In this last case, DOE specifically stated that that federal funding was not enough to convert private activities into a Federal action, which is a shift from how DOE has historically conducted NEPA reviews for its financial assistance awards.

Where NEPA does apply, DOE's procedures contain a strong preference toward categorical exclusion. DOE officials are advised to make use of, create new, or adopt other agency's categorical exclusions.

When a categorical exclusion does not apply, DOE will be responsible for analyzing reasonably foreseeable environmental effects of the proposed action and alternatives. However, DOE shall only analyze the reasonably foreseeable environmental effects that have a reasonably close causal relationship to the action, and DOE should not consider the environmental effects of separate projects related to the agency action under consideration. This is again in keeping with Seven County. Whether an environmental impact of an action rises to the level of “significant” is a matter of DOE's judgment.

Authored by Stewart Forbes, Samantha Marshall, and Phil Sandick.

Next steps/Insights

These NEPA changes are one more example of the Administration's efforts to expedite project development by removing oft-complained about “permitting requirements”. By moving many of the prior NEPA rules into a non-binding guidance document, DOE provides its program offices flexibility in the implementation of their NEPA approach.

The DOE NEPA changes took immediate effect upon publication of the interim final rule in the Federal Register on July 3, 2025 and nearly 1,700 entities submitted comments by the August 4, 2025 deadline. DOE is not required to make any changes to the interim final rule in response to the comments. Accordingly, the rule immediately affects parties working with the DOE, including contractors, entities working under laboratory agreements, and recipients of DOE support. These entities, along with those preparing applications for various DOE pending efforts—including participants in DOE's new Reactor Pilot Program and DOE's new Fuel Line Pilot Project for Advanced Nuclear Fuel Lines—should consult with legal counsel and with DOE to carefully review these changes. The Hogan Lovells's team will continue to monitor changes to the DOE NEPA landscape and is prepared to assist contractors, recipients of DOE assistance, and participants in DOE's new programs in talking to DOE and in navigating this New NEPA landscape. Please contact us with any questions.

References

Revision of National Environmental Policy Act Implementing Procedures, 90 FR 29676, 29679 (July 3, 2025).
Except as undefined acronyms in the title of the new 10 CFR 1021.102, Application of categorical exclusions (categories of actions that normally do not require EAs or EISs).
DOE also removed references to NEPA in its 10 CFR part 205 regulations. These regulations govern presidential permitting for international boundary transmission projects. DOE explains in the IFR that these actions are done under presidential authority, which is not subject to NEPA review, thus making the application of NEPA to those actions inapposite.