Supreme Court Voids Biden Gas Appliance Rule

WASHINGTON — The U.S. Supreme Court on Monday vacated a ruling upholding Biden-era efficiency rules for furnaces and commercial water heaters, ordering an appeals court to reconsider after the Trump administration disavowed the regulations.

In a short order in American Gas Association v. Department of Energy, the justices directed the U.S. Court of Appeals for the District of Columbia Circuit to take a second look at its decision “in light of the position” of the Trump administration, E&E News by POLITICO reported. The procedural step, known as a grant-vacate-remand, or GVR, wipes out the appeals court’s earlier ruling.

The move hands a win to the American Gas Association and other industry groups that had challenged the standards, which they said would push noncondensing appliances out of the market.

Trump administration switched sides

The reversal followed an April brief from Solicitor General D. John Sauer urging the justices to act. Sauer said the Department of Energy now holds that the rules “rest on a legal error” and that the agency is reviewing the standards to determine whether they impose an “undue burden” on “domestic energy resources,” according to E&E News.

“The Department has determined that the rules at issue are factually and legally flawed, and the agency is considering a new rulemaking in which it would correct those errors,” Sauer wrote in the brief, The Center Square reported.

A GVR, Sauer argued, would let the appeals court “take account of those developments” and potentially pause the case pending a new rulemaking. The shift marks a sharp turn from the prior administration, which had defended the standards.

What the rules required

The standards at the center of the case targeted furnaces and water heaters that vent residual heat, often through a chimney. Industry groups argued the rules effectively barred consumers from buying noncondensing appliances compatible with existing venting systems, forcing what the AGA called “significant structural modifications” to switch to condensing models.

The Daily Caller News Foundation, in a report carried by AOL, said the DOE rules set a 95% efficiency benchmark for natural gas furnaces and commercial water heaters, citing Utility Drive. Standard noncondensing appliances can reach roughly 80% efficiency, while condensing units generally achieve 90% to 95%, that report said. E&E News reported the Biden rules would make noncondensing furnaces illegal to manufacture in 2028.

The trade groups said the standards violated a provision of the Energy Policy and Conservation Act that bars DOE from eliminating products with distinct “performance characteristics.”

“The Department may not adopt standards that effectively eliminate from the market products that have distinct ‘performance characteristics,’” Sauer wrote, according to The Center Square.

Echoes of the end of Chevron deference

The dispute also drew on the Supreme Court’s 2024 decision in Loper Bright v. Raimondo, which overturned the Chevron doctrine that had directed courts to defer to agencies’ reasonable readings of ambiguous statutes. The new standard requires judges to “exercise independent judgment” when reviewing agency action.

Industry groups argued the appeals court’s divided ruling upholding the DOE rules effectively revived the Chevron approach, both E&E News and AOL reported. States and advocacy groups defending the standards countered that the ruling did not conflict with Loper Bright, describing the matter as a “fact-bound” dispute that had not divided lower courts and did not require the justices’ intervention.

The clash over agency authority follows other recent high-court action testing the limits of federal power, including a decision in which the Supreme Court upheld the SEC’s power to recoup illegal gains. The gas case adds to a docket that this term has also included a ruling letting Alabama use a disputed congressional map.

Industry claims victory

“We welcome the Supreme Court’s decision to protect the American people from this unlawful regulation that would increase costs for families and businesses and ban an entire class of appliances,” said Karen Harbert, president and CEO of the American Gas Association, in a statement reported by E&E News. “We will continue to work to ensure all Americans can make choices about the energy and appliances in their homes.”

Reports differ on the precise lower court at issue: E&E News and AOL identified it as the U.S. Court of Appeals for the District of Columbia Circuit, while The Center Square referred to a District of Columbia district court. AOL reported the vacated ruling was issued in November 2025. An attorney for the rules’ proponents could not immediately be reached for comment on Monday’s order, E&E News reported.

The case now returns to the appeals court, which is expected to weigh the government’s revised position as the DOE considers a fresh rulemaking.

Frequently Asked Questions

What did the Supreme Court actually decide?

The justices issued a grant-vacate-remand order. They did not rule on the merits; instead they erased the lower court’s ruling that had upheld the DOE rules and sent the case back for reconsideration in light of the Trump administration’s changed position.

What is a GVR?

A grant-vacate-remand is a procedural step in which the Supreme Court grants a petition, vacates the decision below and remands the case to the lower court. Here, it lets the D.C. Circuit reconsider the dispute and potentially pause it pending new DOE action.

Why did the Justice Department change its position?

In an April brief, Solicitor General D. John Sauer said DOE now views the rules as resting on “a legal error” and that the agency considers them “factually and legally flawed,” with a new rulemaking under consideration to correct the errors.

How does Loper Bright factor in?

Industry groups argued the lower-court ruling revived Chevron deference, which the Supreme Court ended in its 2024 Loper Bright v. Raimondo decision. Defenders of the rules said the case was a fact-bound dispute that did not conflict with that precedent.

Sources

Reporting compiled from court records and the cited source outlets.