In his statement, Obama told the head of the EPA, Lisa Jackson, to withdraw the proposal to tighten standards.
The EPA’s independent panel of advisers earlier this year unanimously agreed that public health would benefit from the introduction of higher standards. Jackson had said the changes would have helped prevent as many as 12,000 premature deaths a year and save $100bn (£61.6bn) in health costs.
The new rules would have forced companies to reduce emissions of certain chemicals that help create smog.
Dow Chemical said the changes would cost as much as $90bn.
Earthjustice, which has launched legal actions aimed at tackling smog-producers, expressed disappointment. Martin Hayden, the group’s vice-president, said: “The Obama administration knows the heavy cost of smog pollution but has made the terrible decision to leave outdated, weak standards in place, leaving thousands of Americans who suffer from lung and breathing problems at the mercy of this dirty air.”
Gene Karpinski, president of the League of Conservation Voters, said: “The Obama administration is caving to big polluters at the expense of protecting the air we breathe. This is a huge win for corporate polluters and huge loss for public health.”