September 2025 Energy Regulation Roundup

The Global Energy Regulation Roundup is dedicated to capturing and understanding emerging climate, energy, and reporting measures. The purpose of this monthly blog is to spotlight upcoming regulations and inform key stakeholders about their impact on various industries.

European Union

EU Parliament Adopts New Rules to Reduce Textile and Food Waste

The European Parliament has adopted new rules to reduce textile and food waste across EU member states. The legislation sets binding national targets for food waste reduction by the end of 2030, aiming for a 10 percent cut in processing and manufacturing and a 30 percent per capita reduction from retail, restaurants, and households. Additionally, the new measures introduce extended producer responsibility (EPR) schemes for textiles, requiring producers to cover the costs of collecting, sorting, and recycling textile waste. These EPR schemes must be established by each EU member state within 30 months of the directive’s entry into force.

CBAM: EU Council Signs Off on Simplification of the EU Carbon Leakage Instrument

The EU has released a simplified version of the Carbon Border Adjustment Mechanism. To start, it has set a new ‘de minimis’ mass threshold, allowing imports of up to 50 tonnes per importer per year to be exempt from CBAM rules. Another key change is that the amended regulation will also help prevent disruptions for importers at the beginning of 2026, while they wait for CBAM registration: imports of CBAM goods will be permitted under certain conditions, pending the importer’s CBAM registration.

The amended regulation includes several additional simplification measures for all importers of CBAM goods, such as the authorization procedure, data collection processes, emissions calculation, verification rules, and the financial liability assessment for authorized CBAM declarants. Finally, the regulation adjusts provisions related to penalties and rules concerning indirect customer representatives. The legislative act will be published in the EU’s official journal soon and will come into force on the third day following the publication date.

Asia

China Sets 7-10 Percent Carbon Reduction Target

On September 24, China’s president Xi Jinping delivered a speech at the 80th UN General Assembly in New York, announcing China’s 2035 climate pledges. For the first time, China set an absolute carbon reduction target, aiming to reduce CO₂ emissions by 7 to 10 percent across the entire economy by 2035 from peak levels, while “striving to do better.”

Given the rapid pace of China’s solar and wind energy capacity build-out in recent years, the country is expected to easily reach this target. China’s total installed capacity of wind and solar in 2020 was 530 GW, which means its lower target of “six times 2020 levels” would be around 3,100 GW. To reach the more ambitious target of 3,600 GW by 2035, China would need to add an average of 180 GW in new installed solar and wind capacity per year between 2025 and 2035, corresponding to a CAGR of around 9 percent. As of July this year, China has already added 1.68 GW in new installed capacity, while in 2024, it added almost 360 GW. Between 2015 and 2024, total wind and solar capacity grew at a CAGR of almost 20 percent, far outstripping the growth rate needed for the current targets.

For companies, this evolution of China’s climate policy means that future competitiveness will depend on both increased efficiency and investment in low-carbon technologies, renewable energy sourcing, and transparent carbon reporting.

US

EPA Proposes Ending the Greenhouse Gas Reporting Program

The Environmental Protection Agency Administrator Lee Zeldin announced on Friday that the agency will propose a rule to eliminate the Greenhouse Gas Reporting Program (GHGRP), which requires over 8,000 companies and entities to calculate and annually report their greenhouse gas emissions for 47 source categories. The agency estimates that halting the rule would save US companies “up to $2.4 billion” in regulatory costs.

The program currently applies to certain large industrial facilities that emit 25,000 metric tons or more of carbon dioxide equivalent, as well as carbon dioxide injection sites and fuel and industrial gas suppliers. The proposed rule would remove 46 of the 47 greenhouse gas source categories from the program. The agency would leave emissions reporting requirements for companies subject to the waste emissions charge, a methane emissions fee established by the 2022 Inflation Reduction Act.

Illinois Considers Legislation (HB 4120) to Launch a Virtual Power Plant Program

In a significant move toward a more resilient and sustainable grid, Illinois is considering legislation (HB 4120) to launch a virtual power plant (VPP) program. This initiative would incentivize homeowners and businesses with a rebate on solar-powered batteries, in exchange for allowing utilities to draw on that stored energy during peak demand.

With the state’s electricity needs surging from new data centers and a mandate to phase out fossil fuels by 2045, VPPs offer a flexible solution to prevent grid strain and power outages. This bill, while a foundational step, paves the way for a more robust clean energy future, enabling third-party companies to manage these networks and ensuring higher incentives for low- to moderate-income residents. This approach could meet much of the state’s new electricity demand, acting as a crucial bridge while new clean power sources are built.