May & June 2025 Energy Regulation Round Up

The Global Energy Regulation Roundup is dedicated to capturing and understanding emerging climate, energy, and reporting measures. Governments around the world are increasingly implementing stricter policies on emissions reporting, trade, and energy. The purpose of this periodic report is to highlight upcoming regulations and inform key stakeholders about their impact across various industries.

Europe

The European Council has agreed on a position to significantly reduce the scope and requirements of the EU's sustainability reporting and due diligence regulations. The new proposal raises the employee threshold for the Corporate Sustainability Reporting Directive (CSRD) to 1,000 employees and introduces a €450 million revenue threshold, removing many companies from the regulation’s scope. For the Corporate Sustainability Due Diligence Directive (CSDDD), the threshold is set at 5,000 employees and €1.5 billion in revenue. The Council’s position aims to reduce the reporting burden on companies by focusing on the largest firms, which are better equipped to manage due diligence costs and impacts.

The UK has introduced draft Sustainability Reporting Standards (UK SRS) that align with the International Sustainability Standards Board’s (ISSB) IFRS S1 and S2, with some UK-specific modifications. These standards aim to enhance transparency and comparability in sustainability reporting. To ease the transition, the government has proposed a two-year grace period for businesses to focus initially on climate disclosures. Additionally, the government is seeking feedback on the costs and benefits of adopting the UK SRS to inform potential future mandates for corporate disclosure. Two consultations, covering transition plan disclosures and sustainability assurance oversight, are open until September 17, 2025. These initiatives highlight the UK's commitment to leading in sustainable finance by providing clear, decision-useful information to financial markets.

Asia

Indonesia is working towards achieving its sustainability goals and continues to adapt its regulatory framework for renewable energy, electric vehicles, and green infrastructure. The country's commitment is anchored in key laws such as Law No. 30 of 2007 on Energy and Law No. 30 of 2009 on electricity, which were amended by Law No. 6 of 2023 on Job Creation. The renewable energy targets have been updated from 23 percent by 2025 to 34.3 percent by 2034. Additionally, Indonesia is focusing on reducing its reliance on coal through Presidential Regulation No. 112 of 2022, which mandates the retirement of coal-fired power plants and the expansion of renewable energy sources. New coal plants must reduce emissions by 35 percent within 10 years and cease operations by 2050.

To encourage investment in green projects, Indonesia offers a range of incentives. These include fiscal incentives such as tax deductions, extended tax loss carry-forward, accelerated depreciation, and import duty/value-added tax (VAT) exemptions for renewable energy projects. Non-fiscal incentives include land and building tax reductions and streamlined permitting processes. The country is also pushing for the adoption of electric vehicles, with regulations like Presidential Regulation No. 55 of 2019 (as amended by Presidential Regulation No. 79 of 2023) and MoF Regulation No. 12 of 2025 providing VAT and luxury tax exemptions for EVs. The goal is to have 2 million electric vehicles and 12 million electric motorcycles on the road by 2030.

US

The EPA Administrator, Lee Zeldin, announced that the agency intends to update the 2024 Effluent Limitations Guidelines for Steam Electric Power Generation Units. Steam electric facilities use fuels (such as coal, oil, and natural gas) or nuclear reactions to heat water in boilers, which generates steam. The steam is used to drive turbines connected to electric generators. These facilities may generate wastewater in the form of chemical pollutants and thermal pollution from their water treatment, power cycle, ash handling, air pollution control systems, and other sources. This summer, EPA intends to take the next step to advance this action by proposing to extend compliance deadlines for many of the zero-discharge requirements in the 2024 Rule and the deadline for facilities to decide whether to submit a Notice of Planned Participation. EPA also intends to explore other flexibilities to promote reliable and affordable power generation.

This initial rulemaking will also seek additional information on zero-discharge technologies, including cost and performance data. This information will help the EPA determine whether to move forward with a second rulemaking to address zero-discharge technologies and other flexibilities to ensure US electric utilities can better meet projected energy demand over the next decade. The scope of this second rulemaking could also address unmanaged combustion residual leachate, another type of wastewater.

Additionally, President Trump's "Big Beautiful Bill," which just passed in the US Senate, aims to significantly reduce support for renewable energy projects by rolling back tax credits from the Inflation Reduction Act and imposing hefty taxes on wind and solar projects using Chinese components. The bill also ends clean hydrogen and fuel production credits earlier than planned, while increasing support for the nuclear sector. Critics argue that this could lead to higher energy costs and a shortfall in energy generation, especially impacting the data center industry. Despite opposition from some Senate Republicans and trade unions, the bill also includes provisions to support coal production and prevent states from regulating AI data center development.