July 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.

US

On July 4, the One Big Beautiful Bill (OBBB) was signed into law, advancing Republican priorities in a wide range of areas, including taxes, Medicaid, food stamps, and immigration enforcement. Energy is one of the key industries that this budget bill will most impact. The recently enacted tax credits from the IRA for low-carbon technologies are being phased out faster, restricted in availability, or simply made inaccessible due to the maze of restrictions written into the tax code. The total value of the credits to the industry will be about $500 billion lower over the next 10 years, according to the Tax Foundation.

Wind and solar power are taking a huge hit from these changes. To claim the full value of the previous technology-neutral tax credits, including 45Y and 48E, wind and solar projects must be placed in service by the end of 2027, or start construction by July 4, 2026, and enter service by the end of 2030. In addition, all new clean energy projects must now meet strict new foreign ownership and sourcing requirements to be eligible for any tax credits. This framework was initially introduced under the Biden administration but only applied to EVs and advanced manufacturing tax credits—commonly known as the “foreign entity of concern” (FEOC). The rules have now been expanded under the new tax bill and will cover virtually all tax credits. These expanded rules deny credits to any projects that are owned or controlled by certain foreign entities, or that purchase components from or make payments to these foreign entities.

Under the OBBB, projects that were under construction by the end of 2024 are largely unaffected by the new law. Projects first starting construction in 2025 must generally comply with the FEOC ownership requirements, and projects beginning construction afterward must navigate the complex set of FEOC sourcing and payment rules.

On July 7, the Trump administration issued an Executive Order (EO) directing the U.S. Treasury Department to revisit the “begun construction” rules concerning solar and wind facilities within 45 days. This includes “restricting the use of broad safe harbors unless a substantial portion of a subject facility has been built.” These additional guidelines are now likely to become central to how developers assess the road forward and future investments. The solar and wind industries will now rely heavily on IRS rules to guide their investment decisions and determine whether they need to accelerate project timelines.

Overall, the bill could be particularly crippling to mid-sized and small projects that do not have the resources or investment capacity to rapidly speed up development in order to meet the 2026 deadline to qualify for tax credits. Larger companies with more assets may be able to accelerate project timelines and still manage to meet the 2026 deadline if their projects have not yet begun. For more insight into how the ARC Energy Transition team is viewing recent energy policies, read my colleague’s piece here.

Asia

India has achieved 50 percent non-fossil fuel power five years ahead of its 2030 goal. According to the Government of India’s Press Information Bureau, the country’s total installed power generation capacity has reached 476 GW, with non-fossil fuel sources contributing nearly 49 percent. This marks a substantial shift from a traditionally coal-dominated past, driven by rapid solar growth, expanding wind and hydro capacity, and early strides in hydrogen and nuclear energy.

Over the past five years, India recorded the third-largest growth in power generation capacity globally, following China and the US. Power generation has increased across all sources, and investment in renewables—especially solar PV—has taken the lead. According to the IEA, 83 percent of India’s power sector investment in 2024 went to clean energy. India has also become the world’s largest recipient of development finance for clean power, receiving around $2.4 billion for project-level interventions. As a result, the share of non-fossil power generation capacity climbed to 44 percent in 2024, closing in on India’s target of 50 percent by 2030. Solar energy continues to dominate India’s renewable push. Installed solar capacity soared to 110.9 GW in June 2025, up from just 2.82 GW in March 2014—a nearly 39-fold increase.

Europe

The European Union and the US have signed a trade agreement that commits the EU to importing $750 billion worth of fossil and nuclear energy over the next few years. The deal focuses on liquefied natural gas (LNG), oil, and nuclear fuel and is framed as a diversification strategy in response to the energy crisis triggered by the war in Ukraine and volatility in the Middle East.

The trade agreement has drawn significant criticism from those who question the feasibility of fulfilling the deal and the EU’s decarbonization goals. In 2024, the EU imported $64.55 billion worth of oil, LNG, and coal from the US—just 26 percent of the annual target set in the agreement. To meet the deal, Europe would have to quadruple its energy imports from the US, which had a total export capacity of $165.8 billion in energy for that same year. This raises questions about the agreement’s impact on the EU’s carbon targets.