The Compass aims to address concerns about productivity and maintain Europe’s leading role in sustainable innovation and climate neutrality.
By Paul A. Davies, Michael D. Green, and James Bee
On 29 January 2025, the European Commission (the Commission) launched the Competitiveness Compass, a strategic initiative that builds on the work undertaken by Mario Draghi. His report, commonly known as the Draghi Report, identified that the EU could no longer rely on many of the essential elements to the
The green paper details plans to position the UK as a leader in green industries.
By Paul A. Davies, Michael D. Green, and James Bee
On 17 October 2024, the UK government published “Invest 2035: the UK’s modern industrial strategy” (the strategy) for public consultation. The strategy sets out a 10-year roadmap based on goals including driving economic growth, fostering innovation, and enhancing global competitiveness. The strategy is designed to position the UK at the forefront
Goods imported into the UK from countries with a lower or no carbon price will face a levy by 2027.
By Paul A. Davies, Michael D. Green, and James Bee
On 18 December 2023, the UK government announced a proposal for a new carbon border adjustment mechanism (UK CBAM). The announcement follows extensive consultation earlier this year on possible measures to mitigate carbon leakage risks and aims to support the UK’s decarbonisation efforts.
The UK has made a number of decarbonisation commitments including reaching net zero by 2050. These commitments to decarbonise can be undermined by “carbon leakage”, in which production of goods and associated emissions move from a jurisdiction with more ambitious climate policies (which add costs to carbon-intensive processes) to another jurisdiction with less ambitious policies, resulting in an overall negative impact on the carbon intensity of the processes/goods themselves. The UK CBAM (or other form of carbon tax) seeks to address this issue by aiming to put a fair price on the carbon emitted during the production of certain carbon-intensive goods entering the UK.
We discuss key regulatory trends and strategies to consider when pursing US transmission and interconnection opportunities.
By Tyler Brown, Marc T. Campopiano, and Jennifer K. Roy
Renewable energy production has grown at an exponential clip over the past decade, with continued strong expansion expected because of declining costs, numerous governmental incentives, and long-term decarbonization policies. This trend has driven a tremendous demand for new transmission infrastructure in the US and globally, yet new transmission lines often take years to develop due to regulatory hurdles and litigation challenges.
An unprecedented investment in transmission will be needed over upcoming decades to keep pace with demand and meet decarbonization goals. Companies and investors will need to factor into their strategies these key regulatory trends when pursuing US and global transmission and generator interconnection opportunities.
Renewable fuels of non-biological origin would play an expanded role in satisfying EU decarbonisation targets.
By Paul A. Davies, JP Sweny, Michael D. Green, James Bee, and Alexander Leighton
The European Council has formally endorsed the proposed amendments to Directive (EU) 2018/2001 on the promotion of the use of energy from renewable sources (the Renewable Energy Directive), as provisionally agreed in principle between the European Council and European Parliament during the trilogue process.
The amendments, commonly referred to as RED III, would mandate that the share of renewable energy in the EU’s overall energy consumption must rise to a minimum of 42.5% by 2030, with a further non-binding EU-wide goal to achieve 45% by this date, in order to meet the EU’s legally binding target of a 55% reduction in greenhouse gas emissions by 2030 as compared to 1990 levels. RED III therefore proposes a more ambitious mandatory target than the 32% set under the existing text of the Renewable Energy Directive.
The forthcoming guidelines will set supervisory expectations to steer financial institutions’ transition planning processes to facilitate decarbonisation efforts by their clients.
By Paul A. Davies, Farhana Sharmeen, Michael D. Green, and Shi Cheng Chong
On 8 June 2023, the Monetary Authority of Singapore (MAS) announced that it will set guidelines to steer financial institutions’ transition planning processes to facilitate, in turn, their clients’ credible decarbonisation efforts.
The guidelines will cover financial institutions’ governance frameworks and client engagement processes in order to manage climate-related financial risks and enable transition towards net zero.
Three funding opportunity announcements and a finance program provide significant investments to support carbon capture and sequestration.
By Jennifer Roy, Janice Schneider, Joshua Bledsoe, and Brett Frazer
Demand for carbon capture and sequestration (CCS) to meet global and national climate goals is on the rise. The International Energy Agency (IEA) 2020 World Energy Outlook suggests that CCS could contribute approximately 15% of cumulative emissions reductions worldwide by 2070.[1] The Intergovernmental Panel on Climate Change (IPCC) AR6 Working Group III Report further identifies the need for carbon dioxide (CO2) removal technology and to build a carbon management industry to achieve global net zero goals.[2] In view of the growing interest in CCS, and as discussed in this Latham blog post, the Biden Administration has announced ambitious decarbonization goals that prominently feature efforts to deploy CCS in the US.[3]
In September and October 2022, the US Department of Energy (DOE) released three funding opportunity announcements (FOAs) and one new finance program that, cumulatively, will provide an additional $7 billion for CCS infrastructure. Two of the FOAs feature grant funding for front-end engineering design (FEED) studies, and the final FOA and finance program feature a combination of grants and loans. Funding for these programs was appropriated in the Infrastructure Investment and Jobs Act (IIJA), which President Biden signed into law in November 2021. The IIJA delivers approximately $75.8 billion for energy and minerals-related research, demonstration, technology deployment, and incentives, including $12.2 billion administered by DOE and dedicated to CCS technology and infrastructure.
This blog post summarizes the three FOAs and the new finance program.
The guidance sends a signal that carbon capture and sequestration remains a focus of the current administration’s decarbonization efforts.
By Janice Schneider, Nikki Buffa, Josh Bledsoe, Nathaniel Glynn, and Kevin Homrighausen
On June 8, 2022, the US Department of the Interior’s (Interior) Bureau of Land Management (BLM) issued new guidance[1] that outlines the use of federal public lands for geologic sequestration of carbon dioxide (CO2). This widely anticipated guidance updates previous interim guidance on exploration and site characterization for CO2 sequestration that BLM issued in 2012.
HM Treasury’s Transition Plan Taskforce aims to influence international standard setting and make the UK the world’s first net zero-aligned financial centre.
By Paul A. Davies, Michael D. Green, Nicola Higgs, Anne Mainwaring, James Bee, and Dianne Bell
On 25 April 2022, HM Treasury (HMT) announced the launch of the UK Transition Plan Taskforce (TPT) to help drive decarbonisation by ensuring that financial institutions and companies prepare plans to achieve net zero, as well as to support efforts to tackle greenwashing. This move is an important step connected with the UK’s development of the new Sustainability Disclosure Requirements (SDR) regime that Chancellor Rishi Sunak announced at his Mansion House speech in July 2021. HMT’s stated aim is to develop “a gold standard for climate transition plans” and for the UK to become the world’s first net zero-aligned financial centre.
An increasing number of companies are making public commitments to decarbonise their operations and reach net zero emissions, but transition plans announced so far are, according to the TPT, “varied in detail and quality”,[i] thereby limiting the ability of stakeholders to assess the credibility of such transition plans. Proposed rules announced by the Chancellor at COP26 would require large companies and certain financial sector firms to publish a transition plan from 2023. The TPT will, over the next two years, develop: (i) a sector-neutral framework for private sector transition plans; (ii) a sector-specific guidance for finance and other sectors; and (iii) recommendations regarding the preparation and use of transition plans. The TPT’s expectations are for such transition plans to be science-based and to help inform the UK’s SDR. (See Latham’s recent briefing for an outline of the SDR regime.)
The world’s largest asset manager stressed that sustainability issues will continue to be fundamental to companies’ long-term economic outlook.
By Paul A. Davies, Michael D. Green, and James Bee
On 17 January 2022, Larry Fink, the founder and chief executive of BlackRock, published his annual Letter to CEOs (the Letter), titled “The Power of Capitalism”. The Letter focuses on the importance of sustainability issues to companies from a financial perspective, and seeks to highlight the economic benefits of stakeholder capitalism.
Fink’s 2020 and 2021 Letters to CEOs also drew attention to sustainability issues, noting that climate change had “become a defining factor in companies’ long-term prospects”. Given BlackRock’s status as the world’s largest asset manager by assets under management, such public statements have been and will continue to be noted by leaders of public companies throughout the US and globally.
This blog post examines key focus areas of the Letter.