Clifford Chance

The Trump Administration has taken action to target state climate legislation and federal energy regulation, through an executive order that directs the Attorney General to identify and "take appropriate action to stop" the enforcement of state and local laws and initiatives relating to climate change, ESG, and other environmental considerations, and an executive order directing four federal agencies to insert sunset provisions into energy-related regulations.

Executive Orders Target ESG Measures and Energy Regulation

On April 8, 2025, President Trump issued Executive Order 14260 (EO), "Protecting American Energy from State Overreach," designed to rein in state climate actions that the Trump Administration argues attempt to override national energy policy. The EO states that it aims to remove "illegitimate impediments to the identification, development, siting, production, investment in, or use of domestic energy resources—particularly oil, natural gas, coal, hydropower, geothermal, biofuel, critical mineral, and nuclear energy resources."

To that end, the EO directs the Attorney General to identify and "stop the enforcement" of state and local laws, regulations, causes of action, policies, and practices that "address 'climate change' or involving 'environmental, social, and governance' initiatives, 'environmental justice,' carbon or 'greenhouse gas' emissions, and funds to collect carbon penalties or carbon taxes." The Attorney General is due to report on actions taken and offer further recommendations by June 8, 2025.

In its description of the state measures to be targeted, the EO identifies several regimes, including climate change superfund laws in New York and Vermont, which would enable each state to recover financial damages from fossil fuel companies for certain climate change impacts. Both of these laws are currently involved in litigation challenging them on constitutional grounds. Climate superfund bills are also being considered in California and Massachusetts. The EO also references California's cap-and-trade program, which creates a hard limit on greenhouse gas emissions and a financial incentive for companies to trade their carbon allowances. The EO further points to state and local climate litigation, as well as alleged state delays in processing permit applications for energy projects. For an analysis of state antitrust litigation against institutional investors and manufacturers for allegedly conspiring to restrict certain energy markets, see our recent blog post.

On April 30, 2025, pursuant to the EO, the U.S. Department of Justice (DOJ) filed two lawsuits against the states of Hawai'i and Michigan, seeking to stop both states from suing major oil companies on climate-related grounds. Further, on May 1, 2025, DOJ filed two additional suits against the states of New York and Vermont, seeking an injunction to halt enforcement of each state's climate superfund law. The four lawsuits, which reference the EO in their opening paragraphs, make a number of constitutional and statutory claims to enjoin the states from pursuing planned climate litigation. Beyond directly intervening through litigation, the Attorney General may also recommend pursuant to the EO that Congress consider new legislative action to assert federal authority over the energy-related activities in question.

On April 9, 2025, the Trump Administration issued an EO designed to curb federal energy-related regulations. EO 15643, "Zero-Based Regulatory Budgeting to Unleash American Energy" directs four federal agencies—the U.S. Department of Energy, Federal Energy Regulatory Commission, Nuclear Regulatory Commission, and the U.S. Environmental Protection Agency—to insert one year "Conditional Sunset Date" provisions into a suite of regulations related to energy production by September 30, 2025.

Our global team will continue to closely monitor developments.