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The “Global Energy Regulation Roundup” is dedicated to capturing and understanding emerging climate, energy, and reporting measures. Currently, international governments are increasingly establishing stricter policies on emissions reporting, trade, and energy. The purpose of this monthly blog is to highlight approaching regulations and educate key stakeholders about their effects on a range of industries.
USA:
President Biden withdrew from the presidential race within 100 days of the election. Within the week, Vice President Kamala Harris was selected as the Democratic nominee. Vice President Harris played a key role in the passage of the Inflation Reduction Act of 2022 by casting the tiebreaking vote. She has extensive experience with energy policies, although she has yet to outline specific climate plans should she win the election on November 5th, 2024.
The Environmental Protection Agency is awarding $4.3 billion in grants to fund projects in 30 states, the money will go to 25 projects targeting greenhouse gas emissions from transportation, electric power, commercial and residential buildings, industry, agriculture, and waste and materials management. The grants are paid for by the 2022 Inflation Reduction Act.
For example, $396 million is going to Pennsylvania to reduce industrial greenhouse gas emissions from cement, asphalt, and other materials. This grant is one of the largest federal grants Pennsylvania has ever received. The state of Nebraska will receive $307 million to boost “climate-smart: agriculture and reduce agriculture, waste from livestock, and fund projects that aim to improve energy efficiency in buildings.
Europe:
The European Union narrowly passed a historic bill to restore one-fifth of its land and sea by 2030. The regulation also aims to prevent further degradation of restored areas and addresses the decline in wild pollinators by 2030, and EU member states must restore drained peatlands and help plant at least 3 billion trees.
In the United Kingdom, election results rolled in on July 4th, 2024 and the Labour Party flipped the parliament for the first time in 14 years. Before the election, there were reports that Labour planned a “twin strategy” for closer UK-EU relations if it won power. Some policies that have been in discussion include:
A Security Pact – with a broad definition, covering areas such as migration, linking Emissions Trading Schemes (ETS), or a joint agreement on critical raw materials. The Security Pact, most likely covering areas of international cooperation such as climate diplomacy or international trade-related topics such as critical minerals, as well as reflecting the EU’s likely priorities around competitiveness, industrial policy, cleantech, or supply chain resilience.
A veterinary trade deal – under which the UK would align with the EU’s rules to facilitate trade in food and agriculture, also resolving some Northern Ireland trade issues. Through the review of the UK-EU Trade and Cooperation Agreement (TCA) expected in 2026, under which a series of bilateral areas for climate and energy cooperation remain outstanding. The TCA review is currently due to be a technical exercise, however, political attention will be key to unlocking progress.
Asia:
Thailand is the second country in Southeast Asia to implement a carbon tax, which goes into effect by early next year. Initially, it will not reduce emissions but will signal to private companies that the government's intent is to decrease emissions.
Singapore rolled out a carbon tax in 2019 that covers about 80 percent of its emissions. The tax was S$5 (US$3.70) per tonne of carbon dioxide equivalent (tCO2e) for the first five years and increased to S$25/tCO2e this year. It could reach $50 to $80 per tonne by 2030. Thailand will follow suit, with the government announcing in June it would levy 200 baht (US$5.60) per tonne of CO2e on oil products such as diesel and gasoline. Existing taxes on oil products will be converted to a carbon tax, meaning no additional revenue will be collected and thus, no costs should be passed onto consumers. It also means no new laws need to be passed.
The tax will be part of a broader legislative package under the Thailand Climate Change Act, expected to take one to three years to implement and could include mandatory emissions reporting, a formal climate change fund, and an emissions trading scheme where firms can buy and sell carbon credits.