WASHINGTON (Reuters) - A U.S. appeals court on Tuesday upheld the Environmental Protection Agency's decision to grant California a waiver to set its own tailpipe emissions limits and electric vehicle requirements.

The three-judge panel of the U.S. Court of Appeals for the District of Columbia rejected a legal challenge from 17 Republican-led states and entities that sell or produce liquid fuels. The EPA in March 2022 under President Joe Biden restored California's ability to set its own zero-emission vehicle sales mandate and tailpipe emissions limits, reversing a 2019 decision by then-President Donald Trump.