Speaking Sustainability

Beginning on Monday, there have been a flurry of executive orders from the Trump administration reversing Biden-era energy policies, emphasizing oil and gas production, lifting the liquified natural gas (LNG) export permitting pause and withdrawing from all accords and commitments under the United Nations Framework Convention on Climate Change (UNFCCC) including the Paris climate agreement. The orders also target electric vehicles (EVs), wind energy, international climate aid and the use of the social cost of carbon in agency decision making. For close tracking of these orders and more to come, visit the Akin Trump Executive Order tracker. Concurrently, President Trump’s nominees for the Department of the Interior (DOI), Department of Energy (DOE) and Environmental Protection Agency (EPA) have each passed their initial rounds of committee confirmation votes, and now await votes before the Senate floor.

The twilight hours of the Biden administration and the 118th Congress have been marked by intense legislative and regulatory activity, underscored by President-elect Trump’s derailment of last-minute congressional budget talks, and stalled progress on energy permitting reforms.

The Biden administration’s environmental policies and the future of infrastructure projects are facing pivotal legal challenges and political shifts. The U.S. Court of Appeals for the D.C. Circuit questioned the viability of the Environmental Protection Agency’s (EPA) 2024 power plant emissions rule, particularly its reliance on carbon capture technology, while the 6th Circuit overturned the EPA’s rejection of Kentucky’s smog plan, which comes only three days after the EPA issued its defense of its “good neighbor” smog control plan responding to the Supreme Court’s decision to halt its implementation in June. Meanwhile, the Supreme Court’s handling of the first National Environmental Policy Act (NEPA) case in some time, Seven County Infrastructure Coalition v. Eagle County, could substantially alter the scope of environmental reviews, with potential immediate implications for the oil & gas industry. These judicial reviews may be influenced by a potential change in administration and Congress, as Trump-era officials, including Vivek Ramaswamy, advocate for scaling back NEPA regulations to expedite infrastructure projects. Additionally, the Department of Energy’s recent clarity on liquified natural gas (LNG) export authorizations underscores the broader tension between expanding fossil fuel infrastructure and adhering to environmental regulations amidst a polarized political and legal landscape.

The Department of the Treasury published new guidance on securing bonus tax credits within the Inflation Reduction Act (P.L. 117-169; IRA) for offshore wind projects. Before the Virginia legislative session expired, lawmakers passed numerous bipartisan environmental bills. Governor Glenn Younkin (R-VA) must decide on the bills’ fate by April 8, 2024. Finally, the United Nations (U.N.) announced that it plans to finalize stricter greenhouse gas emissions penalties for the international shipping sector by 2027.

On February 20, 2024, European Union (EU) legislators reached a provisional political agreement on a regulatory framework for the certification of carbon dioxide removals (CDR). CDR encompasses a wide range of nature- and technology-based activities that permanently or temporarily remove carbon dioxide from the atmosphere. While CDR is a part of the EU’s plan to reach net zero greenhouse gas emissions by 2050, it has not yet been incorporated into many of the EU’s climate policy vehicles, such as its Emissions Trading Scheme (EU ETS). The Carbon Removal Certification Framework (CRCF) paves the way for the EU to incorporate CDR into its climate policies in practice, and to eventually establish a registry allowing a market-based trading of CDR “units.”

The Council on Environmental Quality recently released a notice of proposed rulemaking for Phase II of the National Environmental Policy Act (NEPA) rulemaking process, titled the “Bipartisan Permitting Reform Implementation Rule.” The proposed rule deletes the current regulation’s focus on NEPA as a procedural statute and instead emphasizes the Act’s “action forcing” devices to consider the environmental effects of federal decision-making, to even include global effects as they relate to climate change. If finalized, the proposal also would broaden NEPA’s focus on environmental justice while limiting some aspects of NEPA review to align with NEPA updates authorized in the Fiscal Responsibility Act and BUILDER Act of 2023.