By: Michaelyn Preston

Early in his second term, President Trump declared an energy emergency in the United States, incentivizing and facilitating faster energy production through deregulation.[1] The Environmental Protection Agency (“EPA”), in accordance with Executive Order 14154 (“EO 14154”), recently proposed the repeal of the Greenhouse Gas Reporting Program (“GHGRP”).[2] EPA Administrator Lee Zeldin cited financial concerns and compliance with the Trump Administration’s deregulatory agenda as the basis for repealing this Obama-era program.[3] While less regulatory oversight may mean a lighter load for agencies in the domestic energy sector, this lack of regulatory validation creates compliance issues for producers of liquified natural gas (“LNG”) who engage in the global energy economy.[4]

The GHGRP is aimed at lowering greenhouse gas (“GHG”) emissions through regular, mandatory reports from related producers.[5] Notably, the program does not impose any strict limitation on the amount of GHG emissions any source may produce in a year, only the measurement and reporting.[6] Producers are motivated to lower their overall emissions by qualifying for low-emission tax credits through associated programs.[7] With the future of the GHGRP on the line, producers have less incentive to spend resources recording and reducing their emissions.[8] Without domestic legislation mandating, if not incentivizing, the documentation of these emissions, American producers may lose their qualification to trade LNG outside of the United States due to global demands for emission regulation.[9]

The United States’ deregulation movement is not representative of the global regulatory standards and may present challenges for American energy companies to qualify for, let alone compete in, the global energy sector.[10] The European Union (“EU”) is one such global body that has imposed greater regulations in response to environmental treaties and holdings from the International Court of Justice pushing for climate change mitigation.[11] The EU’s principal regulation is the Corporate Sustainability Due Diligence Directive (“CSDDD”), directing companies to prioritize environmental due diligence in their operations.[12] This directive requires low emissions compliance and reporting from companies within its member states through a penalty program.[13] Under the CSDDD, companies based outside of the EU will need to comply with their emissions standards and reporting measures by 2027 to continue trading LNG within the jurisdiction of the EU.[14]

Prior to this year, the GHGRP was the domestic measure helping American producers qualify under these looming restrictions, but without its presence, American producers will need to self-report and regulate to comply. [15] While not as strict as the CSDDD, the GHGRP presented a measure that would help producers acknowledge and produce their emissions rates through accurate and consistent measurement and reporting.[16] Now, American producers who wish to sell LNG within the EU will need to continue the same monitoring and reporting practices they did under the GHGRP.[17] Although these producers may need to adjust their emissions mitigation methods to comply with the EU’s standards, which are strictly required in contrast to the GHGRP’s incentive approach.[18] Without the incentives posed by the GHGRP, American producers may fall behind in their measurement and compliance with emissions standards, especially when they may no longer rely on tax credits for their efforts.[19] The CSDDD is strict in its compliance requirements, and while states are actively petitioning its implementation, there is a distinct global shift towards more environmentally sustainable energy production and trade.[20] This means that the market for LNG is steadily shrinking, and American producers may be outbid by closer and more compliant alternatives when the burden of regulation falls back onto the American producers’ own shoulders. [21]

With more states committing to green energy programs and the whole of the EU committing to net-zero emissions by 2050, the global market is only growing more competitive.[22] The loss of the GHGRP and, therefore, the lack of regulatory validation in the United States, does not create an exception for the rules of the greater world.[23] If the American energy sector wants to continue operating in the global sphere, it must commit to self-regulation.[24] The implementation of the CSDDD creates a strict barrier for non-compliant producers and serves as an important gateway to a major economic hub.[25] With the politics behind Russian oil and the EU’s drive towards sustainability, the United States is an important provider of LNG to the region.[26]  If American producers cannot comply with the EU’s regulatory measures, however, there are other countries already looking for the opportunity to dominate the European market.[27] In the coming two years, American producers will need to ask themselves if money spent on compliance with the CSDDD to save their role in the global sphere is worth the costs of domestic competition with those producers bypassing mitigation hurdles.[28]

 

[1] Exec. Order. No. 14154, 90 Fed. Reg. 8353 (Jan. 20, 2025) [hereinafter EO 14154] (referencing the EO’s capacity to prioritize and facilitate the production of energy domestically).

[2] Ari Natter, Trump EPA to Stop Tracking Emissions from Biggest Polluters, BL (Sep. 12, 2025, at 15:47 ET), https://www.bloomberglaw.com/product/blaw/bloombergterminalnews/bloomberg-terminal-news/T2HPDEGP493G (on file with the American University Business Law Review); see also EO 14154, supra note 1.

[3] See Press Release, U.S. Env’t Prot. Agency, EPA Releases Proposal to End the Burdensome, Costly Greenhouse Gas Reporting Program, Saving up to $2.4 Billion (Sep. 12, 2025), https://www.epa.gov/newsreleases/epa-releases-proposal-end-burdensome-costly-greenhouse-gas-reporting-program-saving-24 [https://perma.cc/6MUX-XUWP] [hereinafter EPA Proposal] (citing the $2.4 billion in regulatory costs that the EPA asserts cutting this program will save).

[4] See Zahra Hiriji & Ruth Liao, Big Oil Urges Trump to Rethink Plan to End Emissions Reporting, BL (Oct. 23, 2025, at 07:00 ET), https://www.bloomberglaw.com/product/blaw/bloomberglawnews/environment-and-energy/X6QL7I9K000000?bc (on file with the American University Business Law Review).

[5] EPA Proposal, supra note 3.

[6] Angela C. Jones, Cong. Rsrch. Serv., IF11754, EPA’s Greenhouse Gas Reporting Program (2023).

[7] See Mariam Al-Shamma, Why EPA’s GHG Reporting Program Matters for the 45Q Carbon Sequestration Tax Credit, Bipartisan Pol’y Ctr. (Oct. 15, 2025), https://bipartisanpolicy.org/blog/why-epas-ghg-reporting-program-matters-for-the-45q-carbon-sequestration-tax-credit/ (on file with the American University Business Law Review) (noting producers can claim credits through 45Q and 45V, reducing overall costs of operation).

[8] See Hiriji & Liao, supra note 4.

[9] See About the EU ETS, Eur. Comm’n, https://climate.ec.europa.eu/eu-action/carbon-markets/eu-emissions-trading-system-eu-ets/about-eu-ets_en [https://perma.cc/PHF2-EFYE] (last visited Oct. 26, 2025) (noting the European Union’s emissions regulations require producers to verify and report emissions).

[10] See id.

[11] Lukas Schaugg, Natalie Jones & Jeffrey Qi, Historic International Court of Justice Opinion Confirms States’ Climate Obligations, Int’l Institute for Sustainable Dev. (July 28, 2025), https://www.iisd.org/articles/deep-dive/icj-advisory-opinion-climate-change (on file with the American University Business Law Review) (citing an ICJ advisory opinion confirming that states have an affirmative obligation to protect, if not prevent, further harm to the environment); see also Corey Paul & Matt Hoisch, Path to Net Zero: EU Methane Law, US Emissions Stance Challenge LNG Sector, S&P Glob.  (Sep. 30, 2025), https://www.spglobal.com/commodity-insights/en/news-research/latest-news/lng/093025-path-to-net-zeroeu-methane-law-us-emissions-stance-challenge-lng-sector [https://perma.cc/E2B2-LTY7].

[12] See Press Release,  Eur. Council & Council of the Eur. Union, Corporate Sustainability Due Diligence: Council and Parliament Strike Deal to Protect Environment and Human Rights (Dec. 14, 2023), https://www.consilium.europa.eu/en/press/press-releases/2023/12/14/corporate-sustainability-due-diligence-council-and-parliament-strike-deal-to-protect-environment-and-human-rights/ (on file with the American University Business Law Review) (noting the directive would require companies engaging member states of the EU in trade of LNG would be required to comply with emissions reporting and standards).

[13] See id.

[14] See Eur. Comm’n, supra note 9; Alexander Schmidt & Evan Farbstein, CSDDD, Explained: The Corporate Sustainability Due Diligence Directive, Normative (Mar. 4, 2025), https://normative.io/insight/csddd/ (on file with the American University Business Law Review)  (noting non-EU companies must produce €450 million to qualify for these regulations).

[15] Hiriji & Liao, supra note 4; see Paul & Hoisch, supra note 11.

[16] Hiriji & Liao, supra note 4; see Paul & Hoisch, supra note 11.

[17] See Schmidt & Farbstein, supra note 14; see EPA Proposal, supra note 3.

[18] See Schmidt & Farbstein, supra note 14; see EPA Proposal, supra note 3.

[19] See Oliver Milman, US Demands EU Reverse New Climate Rules to Allow Surge in Gas Imports, The Guardian (Oct. 22, 22025, at 15:02 ET), https://www.theguardian.com/us-news/2025/oct/22/us-eu-climate-rules-lng-gas [https://perma.cc/BLV9-H2A2] (noting energy industries build tax credits into their operating costs and may face financial restructuring without them)

[20] See id.

[21] See Paul & Hoisch, supra note 11.

[22] See id.

[23] See Hiriji & Liao, supra note 4.

[24] See Schmidt & Farbstein, supra note 14.

[25] See Schmidt & Farbstein, supra note 14; see also Victoria Zaretskaya, The United States Remained the World’s Largest Liquefied Natural Gas Exporter in 2024, U.S. Energy Info. Admin. (Mar. 27, 2025), https://www.eia.gov/todayinenergy/detail.php?id=64844 [https://perma.cc/PHV9-NPTY] (noting the global market the United States has historically engaged in and may stand to lose with shifting regulatory hurdles).

[26] See Hiriji & Liao, supra note 4.

[27] See Milman, supra note 19.

[28] See Schmidt & Farbstein, supra note 14; see also Zaretskaya, supra note 25.