Written on: May 5, 2025 by Joe Uglietto
The first 100 days of the second Trump Administration have been nothing if not eventful. The administration has been incredibly active in attempting to put its stamp on all aspects of both Government and the economy. We won’t know how voters will respond to this and unified Republican control of Congress for another 18 months, but there will be plenty to support or oppose depending on one’s political view.
While the administration’s energy policies have not quite received the attention that other aspects of its agenda have, the White House has been active on this issue. On April 8, President Trump issued an Executive Order titled “Protecting American Energy from State Overreach.”
The E.O. states that, “American energy dominance is threatened when State and local Governments seek to regulate energy beyond their constitutional or statutory authorities … Many States have enacted, or are in the process of enacting, burdensome and ideologically motivated ‘climate change’ or energy policies that threaten American energy dominance and our economic and natural security.”
The E.O. goes on to reference Vermont, New York and California policies that are in place or being developed to tax or trade carbon: “These State laws and policies weaken our national security and devastate Americans by driving up energy costs for families coast-to-coast, despite some of these families not living or voting in States with these crippling policies. This E.O. directs the Attorney General to take action to stop the enforcement of State laws that drive up energy costs for Americans.”
Taken at face value, this E.O. would drastically change the landscape for decarbonization programs—such as Low Carbon Fuel Standard (LCFS) programs, Cap-and-Invest and Clean Heat Standards—around the country. Programs in development could be scrapped while programs in existence could be drastically changed or eliminated. For our industry, Bioheat® fuel and other renewable liquid heating fuels would no longer be critical for compliance as decarbonization would essentially be taken off the table. To better understand the prospect of this outcome, it’s important to have a full picture of what is likely to happen.
Less than a day after the E.O. was signed, the U.S. Climate Alliance—a bipartisan coalition of 24 Governors representing 55% of the U.S. population and 60% of the U.S. economy—issued a formal response.
“The Federal government cannot unilaterally strip States’ independent constitutional authority. We are a nation of States—and laws—and we will not be deterred. We will keep advancing solutions to the climate crisis that safeguard Americans’ fundamental right to clean air and water, create good-paying jobs, grow the clean energy economy and make our future healthier and safer.”
One of the two co-chairs of the U.S. Climate Alliance is Governor Hochul of New York, a State that is Ground Zero for aggressive decarbonization policy in the Northeast. It’s safe to say that New York—and likely other States—will not accept the E.O. without a fight, and a potentially long legal challenge. Additionally, given the Federal government’s attempt to direct State policy, we can assume that any legal challenges would be focused on the appropriate jurisdiction of the Federal government over State policy.
There are a few additional considerations when trying to determine whether the recent E.O. will likely become the new standard, or if it will be remembered as a “nice try.” For starters, executive orders do not carry the full weight and force of legislation that is passed by Congress and signed into law; these orders can be undone by the stroke of the pen of the next president. Secondly, executive orders can be halted by the courts if they are deemed to be unconstitutional. Given that most of the Northeast States have decarbonization programs already in place or in process, we can expect legal challenges to ensue.
There is another potential outcome. States are becoming increasingly aware of the rising energy prices that have squeezed their constituents. As well, politicians are beginning to recognize the perils of being associated with programs that are perceived as a burdensome tax on middle-income and lower-income residents. These constituent pressures, combined with pressure from actions like this E.O., could result in a softening of the obligations connected with the programs that are currently in development. We’ve already seen this in real time, as the obligations included in last year’s draft of the Massachusetts Clean Heat Standard were significantly softened.
If you’re wondering what this will mean for you and your business, you’re not alone. In this case, I believe that the vast majority of the Northeast State programs to reduce greenhouse gas emissions—especially future programs for the thermal sector—will still be enacted. I think there is a reasonable chance that the obligation levels and costs of these programs will be reduced and we will most likely see some additional delays in program implementation. ICM
Renewable Energy Insights is a regular column by Joe Uglietto, President of Diversified Energy Specialists, with a focus on emissions reductions & renewable energy innovation. DiversifiedEnergySpecialists.com
