Regulatory Outlook for Vehicle & Engine Emissions Standards Following the 2024 Presidential Election

Client Alert  |  November 12, 2024


In this update, we explore the possible impacts of the 2024 presidential election on emissions regulations for light- and heavy-duty motor vehicles and on- and off-road engines, known collectively as “mobile sources.”

Based on actions during President-elect Trump’s previous term, we anticipate that the second Trump Administration will move swiftly to rescind and replace federal rules regarding mobile source emissions and seek to limit California’s authority to regulate such emissions. Below we outline the anticipated implications for industry of forthcoming changes to the existing federal and California regulations, related anticipated litigation, and potential compliance and enforcement considerations for industry.  

The key takeaways for industry are:

  • The second Trump Administration is likely to deny pending requests by California for authorization to adopt and enforce its own mobile source emissions regulations and to revoke existing preemption waivers allowing California to issue mobile source greenhouse gas (GHG) standards in particular.
  • If these waivers are later restored, manufacturers may face retroactive enforcement by the California Air Resources Board (CARB), which has recently stated in other contexts that it will seek to enforce its regulations back to the state law effective date upon the receipt of a preemption waiver or authorization.
  • New litigation surrounding the denial or revocation of California’s waivers is likely to arise, but any cases seeking to restore California’s waivers will be heard by a judiciary—including a Supreme Court—shaped by the appointees of the first Trump Administration.
  • From an enforcement perspective, the U.S. Environmental Protection Agency (EPA) will retain primacy for mobile source enforcement even if the next Trump Administration moves back to a policy focused on state-first enforcement. If the EPA de-prioritizes GHG enforcement, the balance of the enforcement docket may shift to criteria pollutant cases, such as enforcement related to NOx or PM emissions.

Federal Rules

During the first Trump Administration, the U.S. Environmental Protection Agency (EPA) undertook efforts to change mobile source emission rules, in particular by replacing an increasingly strict GHG emissions regime from the Obama Administration with rules that did not become more stringent year-over-year. We anticipate that during President-elect Trump’s second term, his administration may move again to reduce the stringency of the previous administration’s emissions regulations pertaining to GHGs.

First Trump Administration Recission of Federal Rules

In August 2018, the EPA, along with the National Highway Traffic Safety Administration (NHTSA), initiated a rulemaking to amend the existing tailpipe emissions standards and fuel economy requirements for passenger cars and light trucks and establish new standards for model years 2021 through 2026.[1] This action, which was finalized in April 2020, froze the federal GHG emissions and fuel economy standards at model year 2020 levels through 2026.[2]  

Lessons for the Second Trump Administration

During the second Trump Administration, we anticipate that the EPA will again take action to rescind the previous administration’s vehicle and engine emissions standards, particularly GHG standards. Based on campaign statements and Project 2025, an extensive suite of policy proposals from major conservative groups including many appointees from President-elect Trump’s first administration,[3] the EPA will likely rescind the Biden EPA’s model year 2027 through 2032 light- and medium-duty vehicle emissions standards.[4] The Trump Administration’s replacement rule will likely slow the rate at which the GHG standards ramp up.[5] We also anticipate that the Trump Administration’s replacement rule will significantly reduce the pressure on manufacturers to meet emissions standards through the sale of electric vehicles (although this seems less certain given the anticipated role that Tesla CEO Elon Musk will have in the second Trump Administration).[6]

Project 2025 also contemplates that NHTSA will amend its fuel economy standards and return to the minimum average fuel economy standards specified by Congress for model year 2020 vehicles, including levels aimed at achieving a fleet-wide average of 35 miles per gallon.[7] NHTSA may also reconsider existing fuel economy credits for electric vehicles.[8]

California Rules

Outlook for Section 209 Waivers

Under the Clean Air Act, states are expressly preempted from adopting or enforcing emissions standards for new motor vehicles and engines.[9] However, a statutory exemption exists for California: EPA has authority under Section 209 to issue a preemption waiver to California to establish, and enforce, its own standards for new motor vehicle and engine emissions that are at least as strict as the federal standards, if certain statutory criteria are met.[10] Currently, eight California rules are under waiver or authorization review by EPA, including the following CARB rules with significant compliance implications and costs for the regulated industry:

California Rule

Federal Register Notice

Heavy-Duty Omnibus Low NOx Waiver Request

87 Fed. Reg. 35765 (Jun. 13, 2022)

Commercial Harbor Craft Authorization Request

88 Fed. Reg. 25636 (Apr. 27, 2023)

Advanced Clean Car II Waiver Request

88 Fed. Reg. 88908 (Dec. 26, 2023)

In-Use Locomotive Authorization Request

89 Fed. Reg. 14484 (Feb. 27, 2024)

Advanced Clean Fleets Waiver Request

89 Fed. Reg. 57151 (Jul. 12, 2024)

In addition, for some other recent rules, such as the Zero-Emissions Forklift Rule, which mandates a complete transition to powertrains with no tailpipe emissions, CARB has not yet submitted a waiver application to the EPA.

If these waiver and authorization requests are not finalized during President Biden’s lame-duck period, they likely will be denied by a Trump EPA. Based on the Trump EPA’s approach during the first administration, it is likely that President-elect Trump’s EPA will revoke existing waivers granted to California. The ability of California to secure waivers or authorizations from the EPA during the second Trump Administration based on new requests is also questionable.

In particular, campaign statements and Project 2025 indicate that the next Administration will revoke any Section 209(b) waiver that does not apply only to California-specific issues such as ground-level ozone, including any waiver to issue vehicle GHG standards.[11] President-elect Trump campaigned on a platform that no state should have the authority to ban gasoline-powered cars, which implicates California’s waiver that has been used to order the phase-out of gas-powered vehicles and transition to electric vehicles beginning in model year 2026 through model year 2035.[12]

CARB Response to Waiver Recission and Restoration During the First Trump Administration

Looking back to the first Trump Administration may provide a preview of future conflict between CARB and the Trump EPA regarding Section 209 waivers. During the first Trump Administration, in August 2018, the EPA proposed to withdraw CARB’s previously granted Section 209(b) waiver for its Advanced Clean Cars regulation.[13] In September 2019, the EPA finalized this rule, revoking California’s Section 209(b) waiver to enforce unique state motor vehicle GHG standards for model years 2021 through 2025.[14]

During the interim period between the Trump EPA’s initial proposal to revoke California’s waiver and the actual revocation, CARB modified its existing GHG rules for model years 2021 through 2026 to state that, should the EPA change federal emission standards, vehicle and engine manufacturers who complied with the federal standards would no longer be considered in compliance with the significantly differing California standards.[15] In other words, CARB declared that it would no longer accept compliance with federal emissions standards as a safe harbor if the EPA were to revise the federal rules. In doing so, California departed from a prior deal struck with industry and EPA in promulgating the first harmonized GHG program at the outset of the Obama Administration (which, in turn, resolved years of litigation relating to state regulation of GHGs from motor vehicles).[16]

Next, in the summer of 2019, CARB and four automakers announced their entry into “Framework Agreements.”[17] The Framework Agreements imposed alternative GHG standards for model year 2021 through 2026 light-duty vehicles, and were described by the Trump EPA as “a voluntary agreement with four automobile manufacturers that amongst other things, requires the manufacturers to refrain from challenging California’s GHG and [Zero-Emission Vehicle] programs, and provides that California will accept automobile manufacturer compliance with a less stringent standard” than either the existing California program or the federal regulations promulgated in 2012.[18]

As a result, during the period when CARB’s waiver was revoked, manufacturers were subject to significant regulatory uncertainty. Some manufacturers complied with the federal regulations, which EPA and NHTSA maintained were the only lawful regulations. Other manufacturers entered into agreements with CARB to comply with the requirements of the Framework Agreement. Overlaying all of this, CARB’s own original GHG emissions standards remained the law in California, and CARB maintained that their waiver was improperly revoked, raising the specter of retroactive enforcement should it be restored.[19]

In March 2022, under President Biden, the EPA reinstated California’s Section 209(b) waiver to issue and enforce motor vehicle GHG standards.[20] OEMs expressed concern that CARB could seek to retroactively enforce its separate standards for the period during which California’s waiver had been revoked.[21] This was particularly challenging because, during the period where CARB’s waiver was withdrawn, many manufacturers followed the federal regulations and made decisions that fixed their vehicle production strategies for model years 2021 and 2022, leaving them with a lack of lead time to comply with CARB’s regulations after its waiver was reinstated.

Potential CARB Retroactive Enforcement in the Second Trump Administration

The potential for retroactive enforcement will remain a challenge in the new Trump Administration. CARB has indicated in several contexts that it will seek to enforce state law retroactively upon the receipt of EPA waiver or authorization. For example, CARB’s Advanced Clean Fleets (ACF) waiver request is still pending with EPA,[22] but in December 2023, CARB issued an “Enforcement Notice” stating that it “reserves all of its rights to enforce the ACF regulation in full for any period for which a waiver is granted” including back to the effective date of the rule under California law.[23] In comments on the EPA waiver proceeding on this rule, one comment rightfully pointed out that “to apply the waiver retroactively violates both the [Clean Air Act] and basic principles of due process” and observed that CARB has increasingly sought to assert this position for its rules pending waiver determinations.[24] In October 2024, CARB clarified that it would not retroactively enforce certain aspects of the ACF regulation, but this clarification did not comprehensively address all ACF requirements.[25] Notably, CARB has not provided similar clarifications for other rules.    

During a second Trump Administration, CARB may renew its threats of retroactive enforcement for regulations between the period of a regulation becoming California law and receipt of a waiver or authorization from EPA. This would lead to significant regulatory uncertainty (and due process concerns) for automakers and engine manufacturers, as a Trump EPA is likely to delay or deny California’s waiver and authorization requests. Furthermore, if existing waivers are rescinded and then restored by a later administration, manufacturers may again face the situation where federal regulations were technically the sole law of the land, but California alleges the waiver revocation was improper, its regulations were still valid, and that it can retroactively enforce following the restoration. This Damocles’ sword could hang over industry’s head until the issue of California’s authority is decided by the U.S. Supreme Court or the next Democratic Administration.  

Waiver Litigation

EPA’s decision to reinstate CARB’s waiver is also currently being challenged in federal court by a group of states and fuel producers. Petitioners argue that the EPA exceeded its authority under the CAA and violated a constitutional requirement to treat states equally in terms of their sovereign authority.[26] The DC Circuit held that the Petitioners did not have standing to raise the statutory claims, and it rejected Petitioners’ constitutional claim on the merits.[27] Although the petition for certiorari remains pending before the Supreme Court, a Trump Administration revocation could render this case moot by again revoking the California waiver.

However, even if the existing litigation is mooted, new waiver litigation is likely to arise. Specifically, in the event that the Trump EPA denies or revokes any of California’s waivers, new litigation will almost certainly commence to challenge such decisions, including litigation brought by the State of California.[28]

In those cases—or if the existing waiver litigation proceeds to the Supreme Court—the second Trump Administration will have an advantage that the first Trump Administration did not: the benefit of a federal judiciary, and a Supreme Court, shaped by President-elect Trump’s first term.[29] In addition, the Supreme Court’s 2024 decision in Loper Bright provides the courts with greater latitude to question agency decisions that previously may have received the benefit of Chevron deference.[30] As a result, cases trying to restore California’s waivers may face more of an uphill battle during the second Trump Administration than during the first.

Implications for Enforcement

Federal Enforcement

During the first Trump Administration, EPA policy emphasized coordination with states and allowing state agencies to take the lead in enforcement. Even under a state-focused enforcement policy, EPA remains the lead for any enforcement pursuant to Title II of the Clean Air Act relating to mobile sources and fuels, especially if California’s waivers to enforce its own mobile source emission standards are delayed, denied, or revoked. Thus, EPA’s Office of Enforcement and Compliance Assurance (OECA) will retain primacy for Title II enforcement even if the next Trump Administration moves back to a policy focused on state-first enforcement.

Furthermore, where GHG enforcement becomes less of a priority, OECA may then seek to fill its enforcement docket with criteria pollutant cases. For vehicle and engine manufacturers, this could include enforcement related to NOx or PM emissions, for example. Enforcement actions under the first Trump Administration included three major mobile source cases focused on criteria emissions all of which were focused on non-U.S. manufacturers.

CARB Enforcement

As discussed above, the recission and reinstatement of CARB’s Advanced Clean Cars waiver created significant uncertainty for manufacturers regarding enforcement risks, as the fundamental issues of which regulations were in effect, and when, were in question. To date, this dilemma and the related due process concerns created by this positioning have not been squarely addressed in the context of enforcement or an as-applied constitutional challenge.

Should a similar situation develop during the second Trump Administration, another potential method for manufacturers to seek certainty on enforcement is to enter into an agreement with CARB where CARB agrees to exercise its enforcement discretion with respect to certain regulatory terms in exchange for support for CARB’s legal positions and regulations. CARB has taken this approach not only on a manufacturer-by-manufacturer basis as mentioned above, but also entered into an agreement with a trade association and a coalition of manufacturers in the association’s membership.[31] But such an approach could face retaliation by the Trump Administration: during President-elect Trump’s first term, the U.S. Department of Justice briefly sought to investigate the manufacturers involved in these agreements for violations of antitrust law.[32]

Conclusion

In his second term, President-elect Trump is likely to target California’s authority to regulate mobile source emissions, and especially GHG emissions. Lessons from the first Trump Administration indicate that CARB may respond by taking an aggressive position on retroactive enforcement to induce manufacturers to comply with California regulations during any waiver revocation period. The question of CARB’s authority to retroactively enforce mobile source emissions regulations, and the related due process concerns, has not been decided by a court or squarely addressed in litigation.

Meanwhile, even if EPA’s enforcement program shifts Title I enforcement to the states, Title II mobile source emissions enforcement will remain a federal concern. In particular, mobile source criteria pollutant cases, and especially those targeting foreign manufacturers, are likely to continue to remain part of OECA’s docket throughout President-elect Trump’s second administration.

[1] See The Safer Affordable Fuel-Efficient (“SAFE”) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks, 83 Fed. Reg. 42986 (proposed Aug. 24, 2018).

[2] See The Safer Affordable Fuel-Efficient (“SAFE”) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks, 85 Fed. Reg. 24174 (Apr. 30, 2020). Under the direction of the Biden Administration, in March 2022, EPA instituted stricter GHG standards for model years 2023 through 2026. Revised 2023 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions Standards, 86 Fed. Reg. 74434 (Dec. 30. 2021). In April 2024, the Biden EPA promulgated model year 2027 through 2032 light- and medium-duty vehicle emissions standards, including GHG standards. Multi-Pollutant Emissions Standards for Model Years 2027 and Later Light-Duty and Medium-Duty Vehicles, 89 Fed. Reg. 27842 (Apr. 18, 2024). Currently, no major federal rules are pending for non-road engines or vehicles, or other Title II sources.

[3] BrieAnna J. Frank, Project 2025 is an effort by the Heritage Foundation, not Donald Trump | Fact check, USA TODAY (July 10, 2024, 12:05 PM ET), https://www.usatoday.com/story/news/factcheck/2024/07/10/trump-project-2025-heritage-foundation-fact-check/74340278007/.

[4] See Mandy M Gunasekara, Environmental Protection Agencyin Project 2025: Presidential Transition Project, 417, 426 (Paul Dans and Steven Groves, eds., 2023), static.project2025.org/2025_MandateForLeadership_CHAPTER-13.pdf.

[5] Id.

[6] See Ryan Hanrahan, Trump Vows to ‘End the Electric Vehicle Mandate’ in GOP Acceptance Speech, Farm Policy News (July 22, 2024), https://farmpolicynews.illinois.edu/2024/07/trump-vows-to-end-the-electric-vehicle-mandate-in-gop-acceptance-speech/.

[7] See Diana Furchtgott-Roth, Project 2025 Chapter 19 Department of Transportation 627 (2024), static.project2025.org/2025_MandateForLeadership_CHAPTER-19.pdf.

[8] See id.

[9] See 42 U.S.C. § 7543. 

[10] 42 U.S.C. §§ 7543(b), (e). Clean Air Act Section 209(b), 42 U.S.C. § 7543(b), pertains to preemption waivers for on-road vehicles and engines. Under Section 209(e), 42 U.S.C. § 7543(e), EPA may issue authorization for California to adopt and enforce its own non-road vehicle or engine emission standards.

[11] See Gunasekara, supra note 3.

[12] Alexandra Ulmer and David Shepardson, Trump says no state would be allowed to ban gasoline-powered cars if he is elected, Reuters (Oct. 4, 2024), https://www.reuters.com/business/autos-transportation/trump-says-no-state-would-be-allowed-ban-gas-powered-cars-if-he-is-elected-2024-10-03/.

[13] See The Safer Affordable Fuel-Efficient (“SAFE”) Vehicles Rule for Model Years 2021-2026 Passenger Cars and Light Trucks83 Fed. Reg. at 42999.

[14] See The Safer Affordable Fuel-Efficient Vehicles Rule Part One: One National Program, 84 Fed. Reg. 51310, 51337 (Sept. 27, 2019).

[15] See In re Air Resources Board, OAL Matter No. 2018-1114-03, Cal. Office of Admin. Law, (Dec. 12, 2018), https://www.arb.ca.gov/regact/2018/leviii2018/form400dtc.pdf.

[16] See Letter from Mary D. Nichols, Chairman, CARB, to U.S. EPA and U.S. Dep’t of Transp. (July 28, 2011), https://www.epa.gov/sites/default/files/2016-10/documents/carb-commitment-ltr.pdf (“California commits to propose to revise its standards on GHG emissions from new motor vehicles for model-years MYs 2017 through 2025, such that compliance with the GHG emissions standards adopted by EPA for those model years that are substantially as described in the July 2011 Notice of Intent, even if amended after 2012, shall be deemed compliance with the California GHG emissions standards . . . .”).

[17] Press Release, CARB, California and major automakers reach groundbreaking framework agreement on clean emission standards (July 25, 2019), https://ww2.arb.ca.gov/news/california-and-major-automakers-reach-groundbreaking-framework-agreement-clean-emission. Later, CARB also agreed to allow an additional OEM to enter into a Framework Agreement. See CARB, Framework Agreements on Clean Carshttps://ww2.arb.ca.gov/resources/documents/ framework-agreements-clean-cars (last visited Nov. 11, 2024).

[18] The Safer Affordable Fuel-Efficient Vehicles Rule Part One: One National Program, 84 Fed. Reg at 51329  n.211. In contemporaneous public statements, CARB explained that they offered the Framework Agreements to manufacturers that “support[ed] . . . California’s authority to set vehicle emissions standards” after EPA had indicated its intent to revoke CARB’s Section 209(b) waiver. Media Advisory, CARB, Mary Nichols to Explain Why CARB Is Not Attending the 2019 Los Angeles Auto Show (Nov. 20, 2019), https://ww2.arb.ca.gov/news/media-advisory-mary-nichols-explain-why-california-air-resources-board-not-attending-2019-los. The Framework Agreements were finalized in August 2020 after the revocation of California’s waiver under Section 209(b) of the Clean Air Act to regulate GHG emissions.

[19] See Letter from CARB Regarding Revised 2023 and Later Model Year Light-Duty Vehicle Greenhouse Gas Emissions Standards, Docket ID No. EPA-HQ-OAR-2021-020, to Michael Regan, EPA Administrator, at 9 (Sept. 27, 2021), https://ww2.arb.ca.gov/sites/default/files/2021-10/2021-9-27-final-carb-my-2023-26-usepa-ghg-stds-ccessible.pdfsee also Union of Concerned Scientists v. Nat’l Highway Traffic Safety Admin., No. 19-1230, consolidated with Nos. 19-1239, 1241, 1242, 1243, 1243, 1246, 1249, 1174, and 1178, (D.C. Cir., filed Dec. 26, 2019).

[20] California State Motor Vehicle Pollution Control Standards, 87 Fed. Reg. 14332 (Notice of Decision, Mar. 14, 2022).

[21] See, e.g., Toyota Motors North America, Comment Letter on California State Motor Vehicle Pollution Control Standards; Advanced Clean Car Program; Reconsideration of a Previous Withdrawal of a Waiver of Preemption, Docket No. EPA-HQ-OAR-2021-0257(July 6, 2021 at 4–5) (raising concerns of retroactive enforcement in public comments to EPA’s proposed reconsideration of California’s waiver).

[22] See Opportunity for Public Hearing and Public Comment; California State Motor Vehicle Pollution Control Standards, 89 Fed. Reg. 57151 (Jul. 12, 2024).

[23] CARB, Advanced Clean Fleets Regulation, Enforcement Notice (Dec. 28, 2023) https://ww2.arb.ca.gov/sites/default/files/2023-12/231228acfnotice_ADA.pdf.

[24] Truck and Engine Manufacturers Association, Comment Letter on California State Motor Vehicle Pollution Control Standards; Advanced Clean Fleets Regulation; Request for Waiver of Preemption and Authorization; Opportunity for Public Hearing and Comment, EPA-HQ-OAR-2023-0589 (Sept. 12, 2024) (“. . . to apply the waiver retroactively violates both the CAA and basic principles of due process. The Due Process Clause of the U.S. Constitution requires a government to provide individuals with “an opportunity (1) to know what the law is and (2) to conform their conduct accordingly. Landgraf v. USI Film Prods., 511 U.S. 244, 265 (1994). Retroactive laws contravene “the bedrock due process principle that the people should have fair notice of what conduct is prohibited.” PHH Corp. v. CFPB, 839 F.3d 1, 46 (D.C. Cir. 2016), reinstated in relevant part, 881 F.3d 75, 83 (D.C. Cir. 2018) (en banc). . . . Accordingly, applying CARB’s regulations retroactively would undermine due process generally and as specifically incorporated into the CAA’s preemption waiver provisions. As a result, it is clear that California has no authority to apply its mobile source standards until after a waiver is granted.”).

[25] CARB, Advanced Clean Fleets Regulation, Enforcement Notice (Dec. 28, 2023, updated Oct. 25, 2024) https://ww2.arb.ca.gov/sites/default/files/2024-10/241025acfnotice_ADA.pdf (stating CARB has “decided to exercise its enforcement discretion” to refrain from enforcement action as to certain aspects of the rule “until U.S. EPA grants a preemption waiver . . . or[]determines a waiver is not necessary.”).

[26] See Ohio v. EPA, 98 F.4th 288, 293 (DC Cir. 2024), petition for cert. filed, No. 24-450 (U.S. Oct. 22, 2024).

[27] Id. at 294.

[28] See Press Release, Office of Governor Gavin Newsom, Governor Newsom convenes a special session of the Legislature to protect California values (Nov. 7, 2024), https://www.gov.ca.gov/2024/11/07/special-session-ca-values/ (calling for the California Legislature to allocate additional funding for state agencies “to pursue robust affirmative litigation against any unlawful actions by the incoming Trump Administration, as well as defend against federal lawsuits aimed at undermining California’s laws and policies.”).

[29] See Blanca Begert and Alex Nieves, It’s Already Trump’s World. California Is Just Living In It., Politico (Oct. 15, 2024 5:00 AM EDT), https://www.politico.com/news/2024/10/15/trump-california-environment-supreme-court-00183585.

[30] Loper Bright Enterprises v. Raimondo, 603 U.S. ___, 144 S. Ct. 2244 (2024).

[31] Press Release, CARB, CARB and truck and engine manufacturers announce unprecedented partnership to meet clean air goals (July 6, 2023), https://ww2.arb.ca.gov/news/carb-and-truck-and-engine-manufacturers-announce-unprecedented-partnership-meet-clean-air.

[32] See, e.g., Timothy Puko and Ben Foldy, Justice Department Launches Antitrust Probe Into Four Auto Makers” Wall St. J. (Sept. 6, 2019, 5:55 PM ET), https://www.wsj.com/articles/justice-department-launches-antitrust-probe-into-four-auto-makers-11567778958.


The following Gibson Dunn lawyers prepared this update: Stacie Fletcher, Rachel Levick, and Veronica J.T. Goodson.

Gibson Dunn’s lawyers are available to assist in addressing any questions you may have regarding these developments. To learn more about these issues, please contact the Gibson Dunn lawyer with whom you usually work, the authors, or any leader or member of the firm’s Environmental Litigation and Mass Tort practice group:

Environmental Litigation and Mass Tort:

Stacie B. Fletcher – Washington, D.C.
(+1 202.887.3627, [email protected])

Rachel Levick – Washington, D.C.
(+1 202.887.3574, [email protected])

Raymond B. Ludwiszewski – Washington, D.C.
(+1 202-955-8665, [email protected])

Veronica J.T. Goodson – Washington, D.C.
(+1 202.887.3719, [email protected])

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