EU Split On Green Deal

What’s in this week’s newsletter:

• EU stakeholders divided on stripping down the Green Deal

• EU is close to achieving its 2030 goal of a 55% emissions reduction 

• New inquiry into the EU Commission's handling of the Omnibus 

• US and EU accelerate nuclear power adoption

• DOJ and FTC support Republican-led case against asset managers

• California's gas-powered car ban blocked 

• NYC congestion charge gets temporary legal reprieve

• NOAA predicts above-average hurricane season, FEMA unprepared 

• WMO report finds we are hurtling toward a 2°C world

Newton's Third Law - "for every action there is an equal and opposite reaction" also applies to the sustainability movement of late.

Topping the list of wild swings is the EU Green Deal. Since its adoption back in 2021 (which doesn’t seem that long ago!), the Green Deal has been the most progressive sustainability agenda in the world. Within the last six months, the tide turned, and now the EU government is working furiously to undo much of its own work on the Green Deal. And, following Newton’s law, supporters of Europe’s sustainability agenda are finding their voice. 

As we reported last week, a survey from We Are Europe found that only 25% of responding corporate executives support Europe’s simplification effort - the ‘Omnibus package’, and 61% favor the Corporate Sustainability Reporting Directive (CSRD) as it is.

This week, a group of NGOs lodged a complaint to the EU’s Ombudswoman Teresa Anjinho, who has now opened an inquiry into the EU Commission’s Omnibus process. The NGOs claim the EU Commission failed to comply with the EU’s “Better Regulation Guidelines” by not conducting a public consultation or an impact assessment. 

The Ombudswoman sent a letter to the EU Commission President, Ursula Von der Leyen, asking why there was no public consultation, impact assessment, or supporting data shaping the Omnibus. While the ombudswoman has no enforcement powers, the documents and interviews she conducts will clarify whether the Commission was justified in rushing through the Omnibus and will increase the scrutiny on how these rules are being made. The inquiry will be completed by mid-June.

The most contentious rule in this EU rift has been the bloc’s supply chain rule - the Corporate Sustainability Due Diligence Directive (CSDDD). The leaders of two of the EU’s major powers, Germany and France, recently called for it to be scrapped. 

The Danish industry minister Morten Bødskov responded, “We don’t agree [with France and Germany], there are many, many positive sides to it [CSDDD].” The Danes will soon take over the rotating role of the EU Council presidency, which will give them more power to shape green policy. 

Perhaps sensing the shifting tide, this week Germany backtracked, saying it instead wants to “de-bureaucratize” and “streamline” the Directive.

Another major aspect of the Green Deal is the Carbon Border Adjustment Mechanism (CBAM).  This is a tariff applied to certain goods entering the EU if the carbon emissions required to make them are higher than the EU average for the same goods. As expected, the EU cut the number of covered businesses by 90%. This change will exempt 200,000 small businesses but still cover 99% of the emissions - most welcomed the change. 

In the midst of this back and forth, the FT reported “Surprisingly good” data this week, revealing that the EU is close to achieving its 2030 target of 55% emissions reductions (against 1990 levels).

Despite these signs of progress and growing support, some want to go further than the ‘Omnibus’ to weaken sustainability regulations. For example, the EU Parliament Committee on Economic and Monetary Affairs (ECON Committee) wants to reduce the reach of the Corporate Sustainability Due Diligence Directive (CSDDD) and Corporate Sustainability Reporting Directive (CSRD) by increasing the size of the companies affected from 1,000 to 3,000 employees.  Plus, 11 member states have requested further changes to the already delayed and weakened Deforestation Rule (EUDR).

The Nuclear Option

Last Friday, President Trump signed four executive orders to quadruple U.S. nuclear energy and make the US a nuclear leader by 2050. One order requires the Nuclear Regulatory Commission to speed up permitting to be no more than 18 months while loosening safety standards. Another order requires the Departments of Energy and Defense to explore putting small modular reactors (SMR) close to data centers, military sites, or on federal lands.

However, an article by Toby Dalton - co-director of a nuclear policy program - claims these EOs could do more harm than good. The lower standards the EOs promote are “downplaying or ignoring the special magnitude of nuclear risks,” which inevitably could lead to a disaster, irrevocably destroying public trust in nuclear energy.

In the EU, as well, long-held anti-nuclear opinions in some EU countries are beginning to turn. Policymakers in Germany, Denmark, and Belgium are reversing nuclear bans that go back 20-40 years.

DOJ Supports Lawsuit Against Asset Managers

The Federal Trade Commission and Department of Justice released a joint statement last week supporting a Republican state lawsuit against three of the U.S.'s largest asset managers. The lawsuit from the Texas Attorney General, supported by 10 other Republican-led states, claims the asset managers used their holdings in coal companies to “rig the coal market.” 

The DOJ and FTC statement claims the asset managers' influence over coal companies breaches antitrust laws. In response, a BlackRock statement declared, “As we made clear in our earlier motion to dismiss, this case is trying to rewrite antitrust law and is based on an absurd theory that coal companies conspired with their shareholders to reduce coal production.”

California Gas Powered Car Ban Blocked in Senate

Late last week, the US Senate voted to ban California’s nation-leading gas-powered vehicle ban. The 51- 44 vote came after the Senate - acting against the ruling of its own nonpartisan parliamentarian - utilized the Congressional Review Act to reduce the votes needed from the usual 60 to a simple majority.  

These bills reverse half a century of precedent. Smog-ridden LA prompted the federal government to allow California to set its own stringent pollution limits, a practice that has resulted in more efficient vehicles and the nation’s most aggressive push toward electric cars. Because many Democratic-led states adopt California’s standards, automakers move their national fleets in the same direction. In summary, California’s rules have led the way in cleaning up American cars. 

The bills now go to the President’s desk, where they will be signed into law, significantly slowing the transition to electric vehicles in the US. California Attorney General Rob Bonta has vowed to sue over ‘unlawful’ Congressional overreach.  California Governor Gavin Newsom said, “This is about our economy, it’s about our health, it’s about our global competitiveness.” 

NY Keeps Congestion Charge - For Now

New York State won a temporary halt to the Trump Administration’s block of its Manhattan congestion charge. The state had been given until the 28th of May to stop the charge or face a loss of federal funds and approvals. US District Judge Lewis Liman blocked those efforts until June 9th, to give him time to decide if the federal government can legally block the charge. New York Governor Kathy Hochul said, “This is a massive victory for New York commuters, vindicating our right as a state to make decisions regarding what’s best for our streets.”

We Are Unprepared For Hurricane Season

This week, the US National Oceanic and Atmospheric Administration (NOAA) predicted a 60% chance of an above-average hurricane season and 3-5 major hurricanes. These startling figures make a leaked internal memo from the Federal Emergency Management Agency (FEMA) all the more relevant.

The leak, reported in The Handbasket, claims there is a “high risk” of FEMA not being able to perform its critical functions due to “significant personnel losses in advance of the 2025 Hurricane Season.”

Heading Toward a 2°C World

A new report from the World Meteorological Organization (WMO) predicted a 70% chance that the 5-year average warming for 2025-2029 will be more than 1.5°C above pre-industrial average temperatures, blowing through the goals in the Paris Agreement. With temperature predictions ranging between 1.2°C and 1.9°C, and a 1% chance of a 2°C year. WMO’s deputy secretary-general Ko Barrett said, “This means that there will be a growing negative impact on our economies, our daily lives, our ecosystems and our planet.” 

The views expressed on this website/weblog are mine alone and do not necessarily reflect the views of my employer. 

Other Notable News:

Climate Litigation 

• Climate youth activists who previously won cases against the states of Hawaii and Montana have sued the Trump administration for executive orders that they say will suppress climate science, worsen global warming, and damage clean energy adoption.

• A landmark case of a Peruvian farmer suing a German energy company, saying that they should help him pay to protect his home from flooding due to climate-linked glacial melt, was thrown out of a German court this week. 

• A new Supreme Court ruling will limit the environmental review required by Federal law. The unanimous decision on whether a federal agency has done enough to consider the environmental impact of a Utah train line will set a wide-ranging legal precedent. 

Sustainability Regulations

• The European Banking Authority (EBA) released proposals for simplifying and clarifying sustainability risk reporting, particularly for small and medium-sized banks. 

• The EU is set to tell its member states that they must reduce water consumption by at least 10% by 2030, as groundwater reserves dwindle. 

• The EU has proposed the inclusion of carbon credits to help member states get to the bloc’s 90% emissions reduction by 2040 against 1990 levels. 

• The European Commission announced that a ‘quick fix’ delegated act is on the way for large companies that have filed their sustainability disclosures in 2025. The measure will allow these so-called “Wave 1” companies to continue applying existing ESRS phase-in reliefs for their 2025 sustainability reports.

• The Welsh government released a public sector net zero reporting guide to help local councils and other public bodies estimate and report their carbon footprint. 

Trump 2.0

• The Environmental Protection Agency is looking to remove all emissions limits from power plants, claiming they do not contribute significantly to climate change. 

• Former U.S. climate czar and architect of the Inflation Reduction Act (IRA), John Podesta, claims that the gutting of renewable tax credits hands victory to China on clean tech.

Sustainability Articles

• In this excellent opinion piece, Helle Bank Jorgensen introduces her new book and argues that every business decision should be filtered through a sustainability lens. 

• This article argues that China’s focus on renewables, EVs, and other electrifications is turning the country into the first ‘electrostate.’ 

Notable Podcasts: 

• In this week’s episode of Outrage and Optimism, they explore whether non-state actors can survive the Trump administration’s attack on climate action. The podcast team speaks with Helen Clarkson, CEO of the Climate Group (the group that created NY Climate Week), and asks what businesses can do to further climate action in this time and what the future holds for NY Climate Week.

• This week’s episode of Bloomberg’s Zero: The Climate Race examines what happened after last week’s scandal and layoffs at the Direct Carbon Capture (DAC) company Climateworks. Host Akshat Rathi talks to Climeworks co-founder Jan Wurzbacher, who claims the team is looking to cut costs in an unfavorable market after a period of explosive growth.

Notable Jobs:

• Technical Program Manager, Carbon Removal, Google, New York, NY

• ESG/Impact Analyst, SOLV Energy, San Diego, CA

• Climate Action Generalist, Adamah, Remote, U.S.

• Manager Sustainability, Universal Music Group, New York, NY

• Sustaianability Intern, Above Green, Remote, U.S.

• Analyst - Corporate Sustainability, American Express, New York, Ny (Hybrid)Entry Level Environmental Consultant, Trinity Consultants, San Diego, CA

• Advisor, Impact and Inclusion (Sustainability Analyst), WME, New York, NY

• Sustainability Consultant, Code Green, New York, Hybrid