Climate Policy News You Can Use — February 2025

Published: February 1, 2025 by Daniel Neff

Climate Policy Leadership

Dear Colleagues,

In an incredibly busy time, amidst competing priorities that you must advocate on, it is important to remember that the world will continue to move towards further decarbonization. Although the path forward for climate advocacy in the US is unclear right now, policy will continue to be an enabler for managing business risk and reducing costs. Whether behind the scenes or publicly, companies’ engagement on climate continues to be critical, and we are here to strategize with you through the current policy landscape and discuss potential actions.

Reconciliation Process Moves Forward

Last week, the House narrowly passed their budget resolution on a 217-215 vote. This comes after the recent passage in the Senate of their skinnier budget resolution. While the House and Senate will still need to align their approaches, this marks an important step forward in the process where members of Congress will now turn to writing the policy details.

Companies have been demonstrating critical climate policy leadership on the Hill, and it must continue. We have heard from some members they are not receiving a compelling answer from companies to the question of what would happen to private sector investments and facilities if the credits were taken away. If you are interested in strategizing how best to use your voice or discussing more on what we are hearing on IRA from Congress, please reach out!

Take Action:

  • Meet with Members whose districts you are investing in and tell them about the IRA tax credits and grant programs your company has benefitted from.
  • Align your trade associations on your IRA advocacy to maintain the programs and tax credits.
  • Still relevant, thank the members of Congress who signed a letter to Speaker Johnson last year in support of the energy tax credits.

Go Deeper:

  • Read the Clean Energy Buyers Association’s (CEBA) latest report. It explains that the removal of key IRA provisions would raise US residential electricity prices by nearly 7% – an average yearly increase of more than $110 for the average American customer.
  • EDF and the Sabin Center have re-launched their IRA Tracker with a new functionality to track rollbacks, legal action, and other threats and changes to the IRA.

EU Omnibus is Here

You may know that the EU has published an “Omnibus simplification package” to streamline and consolidate the Corporate Sustainability Reporting Directive (CSRD), the Corporates Sustainability Due Diligence Directive (CSDDD), and the EU taxonomy. This kicks off a legislative process where the European Parliament and/or the Council are able to propose wider amendments to the existing legislation – in particular the CSRD and CSDDD. This could bring greater uncertainty for businesses that are already in the process of preparing to comply with the new regimes and for investors who need better data to aid with their capital allocation decisions. You can find some more details on this post from our EU Director of Sustainable Finance.

Here are a few things to pay attention to:

  • For CSRD, only companies with 1000+ employees will be in scope (compared to 250 previously).
  • For CSRD, sector-specific reporting standards (ESRS) are being deleted. Perversely, this increases complexity for companies: sector-specific standards allow companies to focus on the metrics relevant to their industry.
  • For CSRD, double materiality is being retained. Stakeholders will continue to be able to see both the impact of ESG factors on a company and the impact a company has on people and planet.
  • The revised CSDDD proposal falls below internationally recognized standards like the UNGPs and OECD Guidelines. Companies will no longer be required to put their transition plans into effect and the Commission will no longer commit to assessing whether the scope of CSDDD should be widened to include financial services institutions.

As this process continues to unravel, EDF will be asking feedback from companies operating in the EU on their views and opinions on this omnibus. Please reach out if you are interested in discussing these implications or sharing your thoughts.

Reminder to Inform Implementation of CA Climate Risk Disclosure Laws

The California Air Resources Board (CARB) is soliciting feedback from stakeholders to help inform its implementation of the state’s climate disclosure laws, SB 253 and SB 261. CA regulators are interested in hearing from companies on a range of topics, including learning from current practices and aligning with other reporting standards to minimize duplication of efforts. The deadline for responses to this request for input is March 21, 2025.

Take Action:

  • Provide input to CARB on the importance of climate risk reporting, the ways you already engage with reporting standards and frameworks (such as the GHG Protocol and TCFD, which the laws incorporate), and any other information that could help ensure effective implementation of these laws.

Go Deeper:

Keeping up with the Administration

  • The White House Council on Environmental Quality issued an interim final rule, yet to be published in the Federal Register, to rescind all National Environmental Policy Act of 1970 regulations.
  • An Executive Order, “Ensuring Accountability For All Agencies” (2/18/25), attempts to reduce the independence of important independent agencies by requiring them to “submit for review all proposed and final significant regulatory actions” to the President before publication in the Federal Register.
    • The order asserts that only the President and Attorney General can “provide authoritative interpretations of law for the executive branch,” with no alternative interpretations allowed for promulgation by employees in their official capacities.
  • EPA announced plans to transmit to Congress waivers granted to California to preempt federal vehicle standards, including California’s Advanced Clean Cars II, Advanced Clean Trucks, and Omnibus NOx rules in an effort to make them subject to the CRA. This reverses decades of consistent practice and contradicts the law by asserting these waivers are “rules” covered by the CRA.
  • DOE postponed energy efficiency standards for central air conditioners, clothing washers and dryers, general service lamps, walk-in coolers and freezers, gas instantaneous water heaters, commercial refrigeration equipment and air compressors. DOE also created a new efficiency category for natural gas tankless water heaters, exempting these heaters from Biden-era energy efficiency rules as the agency reformulates standards.
  • Simultaneously, EPA announced plans to overhaul Biden-era WaterSense program energy efficiency regulations on household appliances, targeting standards for toilets, faucets and sprinklers.

ICYMI – Things We’re Tracking

  1. EDF Statement: EPA Administrator Lee Zeldin Wants to Strike Down EPA’s Endangerment Finding
  2. EDF Blog: Here’s what we know for certain about business and climate change
  3. NZAA Resource: Unlocking Corporate Climate Innovation

Thank you for reading, and if this was forwarded to you, email us to subscribe!

Best,
Daniel Neff on behalf of the Climate Policy Leadership Team