The Environmental Protection Agency announced Monday a long-expected decision to begin scaling back mileage and carbon emissions rules for cars and light trucks.

Why it matters: The regulations were a pillar of President Obama's climate change agenda. The move may also set up a major battle with California, which currently has authority to maintain tougher mileage rules, and roughly a dozen states that follow California's lead.

Details: The Obama-era rules for model years 2022-2025 would have required a fleet-wide average of over 50 miles per gallon (though it comes out to roughly 36 mpg under real-world conditions).

What they're doing: EPA, in announcing the move, said Administrator Scott Pruitt had determined that "in light of recent data, the current standards are not appropriate and should be revised."

• The Obama administration "made assumptions about the standards that didn’t comport with reality, and set the standards too high," Pruitt said in a statement.
• What's next: The EPA and the Transportation Department, which jointly set federal rules, will begin a rule-making process to set "more appropriate" standards, the EPA said. California's waiver to set tougher standards under the Clean Air Act is also being "reexamined."

What they're saying: The Alliance of Automobile Manufacturers, a trade and lobbying group that represents GM, Ford and several other car companies, applauded the move.

• "We appreciate that the Administration is working to find a way to both increase fuel economy standards and keep new vehicles affordable to more Americans," said spokeswoman. Gloria Bergquist.
• But environmentalists attacked the decision: “We should be racing toward a cleaner, healthier transportation future. Instead, the Trump administration is steering us onto a dead end road," said Environmental Defense Fund President Fred Krupp.

Go deeper: Bloomberg breaks down the announcement here.