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Every month, ARC Advisory Group capsulizes the current environment of the global energy regulations into regional summaries. This August 2023 Round Up covers the USA, Europe, and Asia.
USA Energy Regulations
At the beginning of August, the Biden-Harris Administration proposed reforms to modernize environmental reviews and build upon new permitting efficiencies. Overall, the proposed rules will accelerate the deployment of clean energy, transmission, Regulation Round Up broadband, clean water, and other crucial infrastructure. The Bipartisan Permitting Reform Implementation Rule would fully implement the statutory reforms to NEPA included in the Fiscal Responsibility Act, including clarifying the roles of lead and cooperating agencies, setting deadlines and page limits, and adding other requirements to ensure timely and unified environmental reviews. The proposed rule includes a process for federal agency to use another agency’s categorical exclusion, unlocking faster reviews for projects that have few environmental effects.
On August 28th, top US advisors, administrators, and the President announced the project's selections for nearly $3 billion in climate resilience funding as part of President Biden's Investing in America Agenda. President Biden’s Investing in America agenda has provided record funding to FEMA’s annual resilience grant programs, increasing them from $700 million when he took office to $3 billion this year.
Europe Energy Regulations
The Polish government has filed legal challenges against the European Parliament and the Council of the European Union claiming that three EU climate policies threaten energy security and fail to protect the wellbeing of citizens. The policies highlighted within the legal challenges posed by the Poland government includes the EU ban on the sale of new CO2 emitting cars as of 2035. The policy, "gives rise to serious negative consequences for the European automotive industry, social exclusion, transport exclusion of poorer persons, and increased disparity between citizens as regards the standard of living.".
The other policy challenged includes the annual target for GHG emissions set by the EU, which threatens Poland’s energy security. The final challenge is targeted at the EU’s market stability reserve which aims to reduce the surplus of emission allowances in the EU emission trading system. Warsaw claims it could cut mining jobs leading to “greater social inequality between member states and increased social exclusion”. The country currently gets around 70% of its power from coal, and stricter EU rules scheduled to come into force in 2025 could limit state funding Warsaw can provide to its coal fired power plants.
Asia Energy Regulations
A proposal by Singapore’s Accounting and Corporate Regulatory Authority (ACRA) and Singapore Exchange Regulation (SGX RegCo) will require public and private companies to provide climate-related disclosures aligned with the recently published ISSB standards. Currently, climate reporting requirements in Singapore only apply to listed companies in specific sectors, including finance, agriculture, food, forest products, and energy, and they must align with the Task Force on Climate-related Financial Disclosures. The IFRS Sustainability Disclosure Standards require entities to provide disclosures about:
Governance: The governance processes, controls, and procedures the entity uses to monitor and manage sustainability-related risks and opportunities.
Strategy: The approach the entity uses to manage sustainability-related risks and opportunities
Risk Management: the processes the entity uses to identify, assess, prioritize and monitor sustainability-related risks and opportunities.
Metrics and Targets: The entity’s performance in relation to sustainability-related risks and opportunities, including progress towards any targets the entity has set or is required to meet by law or regulation.
Singapore, Canada, and the UK have already signaled that they are looking at routes to integrate the new standards. The ISSB, which was launched at the UN COP26, is the sister body of the International Accounting Standards Board, whose accounting standards are used in more than 140 countries. In June 2023, the ISSB issued IFRS S1 General Requirements for Disclosure of Sustainability-related Financial Information and IFRS S1 is effective for annual reporting periods beginning on or after January 1, 2024.