"The days of Washington dragging its heels are over. My administration will not deny facts. We will be guided by them."
The department of transport must also now produce guidelines to ensure US vehicles reach average fuel efficiency of 35 miles per gallon by 2020.
Fighting global warming
California's request was controversially denied by George Bush's administration, but if the EPA favours California's proposal the move could permit 12 more US states to follow suit and set their own stricter emission limits.
The initiatives signalled the new US president's first attempt to act on campaign pledges to join the campaign against global warming and reduce US dependence on foreign energy sources.
The Bush administration had faced strong criticism for refusing to allow US states to set their own emission standards.
Meanwhile, the US state department is expected to name Todd Stern, a senior White House official under Bill Clinton, the former US president, as its new envoy on climate change, officials told Reuters news agency on Monday.
Stern oversaw the Clinton administration's initiative on global climate change from 1997 to 1999 and acted as senior White House negotiator in the Kyoto negotiations on climate change.