Insights

On February 26, the European Commission presented its Clean Industrial Deal (CID). As a follow-up to the European Green Deal, the CID aims to strengthen the competitiveness of European industry while at the same time accelerating the decarbonization of the economy.

Following a directive from President Trump,[1] and in the wake of two court decisions concluding the Council on Environmental Quality (“CEQ”) had no authority to promulgate them in the first place, CEQ’s National Environmental Policy Act (“NEPA”) regulations are being removed from the Code of Federal Regulations.

On February 18, President Trump issued an Executive Order titled “Ensuring Accountability for All Agencies” that directs independent agencies (as well as Cabinet Departments and their sub-agencies) to route all “proposed and final significant regulatory” and budgetary actions through the White House and the Office of Management and Budget. If implemented to its full extent, this action will significantly strengthen the authority of the White House by weakening the political autonomy of these independent agencies. As an assertion of the President’s inherent powers under Article II of the U.S. Constitution, it also stands to weaken congressional influence over these independent agencies, both through the appropriations and confirmation processes.

On February 4, 2025, U.S. Environmental Protection Agency (EPA) Administrator Lee Zeldin announced the agency’s Powering the Great American Comeback Initiative, signaling five pillars that will guide EPA’s work in the short term, which are summarized below:

In the first days of his Administration, President Trump has issued a number of Executive Orders that mark a significant shift in United States energy and climate policy, marked by deregulation and a focus on traditional energy sources. President Trump’s second term agenda will have profound implications not only domestically but also on the international stage. Understanding the impact of these policies is crucial for businesses and investors alike. This article will explore the effects of President Trump’s agenda with respect to climate change policy, oil and gas, and solar energy sectors.

As the United States government transitions from the Biden Administration to the Trump Administration, significant changes are already impacting infrastructure policy, with likely consequences to both planned and in-progress infrastructure projects around the country. Disruptions in funding and other policy changes are creating uncertainty for investors and stakeholders involved in infrastructure projects, particularly the potential impacts on projects funded under the Infrastructure Investment and Jobs Act and the Inflation Reduction Act of 2022, as previewed in our January 18thclient alert, “Implications of Incoming Administration Changes to Infrastructure Initiatives.”

On January 8, 2025, the Environmental Protection Agency (EPA) published a final rule in the Federal Register adjusting upward the maximum monetary civil penalties for violating its regulations. This rule raised the minimum and maximum fines for 2025 by 1.02% from their 2024 levels. New penalty amounts go into effect immediately and apply to violations occurring after January 8, 2025.

On January 20, 2025, President Trump issued an Executive Order directing the withdrawal of all areas on the Outer Continental Shelf —an expansive area of submerged land under federal control— from eligibility for offshore wind leasing. This Executive Order was one of several energy-related executive orders reportedly intended to increase oil and gas production and curtail the deployment of clean energy resources signed by Trump shortly following his inauguration. The Order is premised on stated concerns for meeting “the country’s growing demand for reliable energy,” maintaining a “robust fishing industry for future generations” and providing “low cost energy to [U.S.] citizens.”

Democratic State Attorneys General took a series of actions to defend Biden Administration Rules on the environment, firearms, and immigration, in the final days before President Trump returned to the White House. While these State AGs argue that the rules at issue protect the public health and safety of their constituents and the nation, the incoming Administration has indicated that it may withdraw its support from some or all of these regulations. Notably, many of the Rules in question face legal challenges from Republican State Attorneys General. A look at the Democratic AGs’ actions is below.

The ongoing changes surrounding the U.S.’s position on infrastructure between the outgoing Biden administration and the incoming Trump administration is creating policy uncertainty for investors and companies in the infrastructure space. This instability may raise concerns among stakeholders that the U.S. is not an ideal place to invest because of the policy inconsistency and increases the likelihood of disputes arising from existing and potential foreign investment projects.

On November 27, 2024, a group of eleven state attorneys general (the “AGs”) sued three of the world’s largest asset managers (the “Asset Managers”), accusing them of anticompetitive stock acquisitions, deceptive asset management practices, and an antitrust conspiracy to restrict coal output. The states seek declaratory and injunctive relief including divestitures, as well as fines under state laws, although the allegations could provide a basis for follow-on private treble damages claims under the antitrust laws.

There is currently a deluge of new EU law being finalized and adopted – particularly on environmental and sustainability issues. At times it may seem overwhelming – with certain new EU laws being overlooked.  However, when serious environmental problems come to light within companies – the first major concern is normally criminal liability. That includes potential criminal liability of the company itself, but also of the CEO, Board Members and other persons leading it. With that in mind – top of a company’s ‘to-do’ list should be ensuring compliance with the new EU Environmental Crime Directive.

Cattle, cocoa, coffee, oil palm, soya, wood, rubber?  Do you sell any of these commodities? Do you sell any products derived, containing or using any of these commodities? Are there any companies in your supply chain which sell or use these commodities, or derivative products?  Do you (or others in your supply chain) sell products in the EU/EEA, or export products from the EU/EEA?  If so, you – and your supply chain – must likely comply with the Deforestation Regulation.[1] And getting ready is no easy feat – even despite the recent actions to postpone some of the application deadlines of concern. 

The EU Institutions are currently adding the finishing touches to the new Packaging & Packaging Waste Regulation (“PPWR”) which is expected to be adopted in Q4 2024 or Q1 2025. While many companies are fully preoccupied with preparing for other EU legislation (e.g. the Deforestation Regulation) – companies will ignore the PPWR at their peril. The PPWR contains a host of ambitious legal targets and requirements – which industry will find it difficult to achieve in practice. And the deadlines to comply – are perhaps even more challenging. Companies will need to start preparing for the EU PPWR now, to avoid serious problems – including supply-chain disruption, penalties and litigation – in the future.

On September 10, 2024, the U.S. Securities and Exchange Commission (the “SEC”) announced a settlement with Keurig Dr Pepper Inc (“Keurig”).  The SEC alleged that Keurig made incomplete and inaccurate statements in the Company’s annual reports for fiscal years 2019 and 2020 touting the recyclability of its K-Cup products. Keurig agreed to pay a $1.5 million civil penalty. 

The amount of litigation regarding environmental and climate change issues is, perhaps unsurprisingly, growing worldwide.[1] A significant portion of that litigation relates to so-called ‘greenwashing’, ‘climate-washing’ or ‘social-washing’ disputes. In other words, legal cases where people or organisations (often NGOs and consumer groups) accuse companies, banks, financial institutions or others, of making untrue statements. They argue these companies or financial institutions are pretending their products, services or operations are more environmentally-friendly, sustainable, or ethically ‘good’ for society – than is really the case. Perhaps more interestingly, of all the litigation in the environmental and climate change space – complainants bringing greenwashing and social washing cases have, according to some of these reports, statistically the most chance of winning. So, in a nutshell, not only is greenwashing and social washing litigation on the rise, companies and financial institutions are most likely to lose cases in this area.

More than a year ago, the EU Batteries Regulation (Regulation (EU) 2023/1542) entered into force.  In approximately one year’s time, the EU Batteries Regulation is set to repeal the 2006 Batteries Directive (Directive 2006/66/EC), with some exceptions. During the 2024 summer, a number of the new requirements under the EU Batteries Regulation have begun to apply.  With these points in mind, it is an opportune time to take stock of the new requirements being phased-in under the EU Batteries Regulation, consider the most recent requirements which begun to apply last month (August 2024), and assess the significant, and growing, impact the EU Batteries Regulation is having more generally.

On August 6, 2024, the Environmental Protection Agency (“EPA”) took the rare action of announcing the emergency suspension of all registrations for pesticide products containing the active ingredient dimethyl tetrachloroterephthalate (“DCPA” or “Dacthal”) under the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”). This is the first time in almost 40 years that EPA has issued an emergency suspension order.[1] EPA’s reasoning for the present action is that DCPA can cause adverse health effects in the fetuses of women exposed to DCPA.

After a somewhat turbulent adoption process, on 25 July 2024 the Corporate Sustainability Due Diligence Directive (“CS3D”)[1] finally entered into force.  The CS3D requires certain companies operating in the EU/EEA, to identify and address adverse impacts on human rights and the environment as regards their actions both inside and outside of Europe. This includes obligations for companies to issue publicly available annual statements on human rights and environmental issues, and to adopt and put into effect transition plans for climate change mitigation.

The EU Institutions are in the process of agreeing new rules to further prevent greenwashing.  On 17 June 2024, the Council adopted its general approach to the proposed Green Claims Directive (“GCD”). The GCD is focused primarily on how companies would need to substantiate and verify green claims which are potentially permissible in the EU.  It complements the Directive on Empowering Consumers of the Green Transition (“ECGT Directive”) which entered into force in March 2024.  That Directive focuses primarily on blacklisting and prohibiting certain greenwashing practices. Together these two Directives will create a single regulatory framework concerning environmental, and to some extent, social claims.