The Maine Board of Environmental Protection has voted against the proposal to align the state with California's latest clean car rules.
SEMA and industry members sent the EPA more than 5,000 letters detailing the impact ICE bans would have on small businesses.
The move to withdraw the regulation came after bipartisan opposition from state lawmakers.
The EPA will now require a 25% reduction in the allowable fine particulate matter but will retain the previous regulations for all other 'soot rule' standards.
The Connecticut General Assembly will address the proposed regulation during the 2024 regular session.
If passed, the SEMA-supported legislation would prevent any government unit from restricting the use or sale of motor vehicles based on the energy source.
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The ruling prohibits state or local governments from restricting the use or sale of cars based on their power source, like internal combustion engines.