Insight

Environmental Regulation Under the New Administration: Key Shifts and Implications for Industry

June 04, 2025

The first few months of the new US administration have brought sweeping changes to the country’s environmental regulatory landscape. Through a spate of executive orders, agency directives, and staffing restructurings, the administration is rapidly changing course from many of the climate, clean energy, and environmental justice initiatives established over the last decade.

While the full impacts of these changes will unfold over time—and likely face numerous legal challenges—the strategic direction is discernible: a pivot away from climate mitigation and environmental justice efforts and toward energy independence, including support of fossil fuel development, deregulation, and permitting reform.

For business leaders and their legal counsel, understanding these shifts is essential for successfully addressing compliance planning, identifying litigation risks, and adapting long-term investment strategies. This Insight, based on our Earth Day webinar series, provides an overview of the most significant federal environmental developments to date and offers key takeaways to help companies navigate this rapidly evolving policy environment.

PROMOTING FOSSIL FUEL DOMINANCE

The centerpiece of the administration’s environmental agenda is energy development, particularly domestic fossil fuels. Framed by the declaration of a “national energy emergency,” the administration has empowered federal agencies to fast-track oil, gas, and coal projects, loosen permitting requirements, and prioritize infrastructure development on federal lands.

Key executive orders have

  • directed agencies to rescind Biden-era environmental rules and review regulations deemed to “potentially burden” domestic energy development;
  • halted offshore wind leasing and initiated a review of existing wind energy projects;
  • prioritized the development of Alaska’s natural gas reserves and associated infrastructure;
  • revoked the waiver under the Clean Air Act with respect to California’s authority to set its own vehicle emissions standards; and
  • exempted dozens of coal-fired power plants from recent emissions standards under the Mercury and Air Toxics Standards (MATS) program.

Taken together, these moves reflect an aggressive strategy to boost fossil fuel output by reducing regulatory friction. This could be especially impactful if the administration can effectuate permit reforms that facilitate siting, design, and construction of pipeline and electricity infrastructure.

While the administration expects its reforms to lower costs and enhance energy security, stakeholders should be aware of the potential for public opposition, litigation, and market instability and uncertainty. It is also unknown to what extent oil and gas producers will increase production based on current and projected future commodity prices.

CHANGES TO FEDERAL CLIMATE AND ENVIRONMENTAL JUSTICE POLICY

Two of the most prominent areas impacted by the administration’s shift in environmental priorities are federal climate action and environmental justice initiatives.

Climate Regulation Rollback

One of the most consequential steps in the climate change arena is the administration’s reconsideration of the US Environmental Protection Agency’s 2009 endangerment finding, which underpins all greenhouse gas (GHG) regulations under the Clean Air Act. If revoked, it would undermine EPA’s authority to regulate GHG emissions under the Clean Air Act, require reconsideration of existing climate rules, and likely reshape the regulatory framework around climate issues for the foreseeable future.

The administration has performed the following additional actions:

  • Withdrawn the United States from the Paris Climate Agreement (for a second time)
  • Paused funding for international climate finance and multilateral adaptation programs
  • Reconsidered the Clean Trucks Plan and vehicle emissions standards
  • Revoked various federal rules that subsidized or promoted electric vehicles, EV infrastructure, and renewable energy

Each of these decisions signals a shift from climate mitigation to energy expansion, raising legal and regulatory uncertainty across industries where planning horizons value stability.

Environmental Justice Initiatives Dismantled

The administration has also moved to dismantle the prior administration’s environmental justice framework through several actions:

  • Revoking Executive Order 12898, the 1994 directive that incorporated environmental justice into federal decision-making
  • Eliminating the Justice40 initiative, which had earmarked 40% of climate infrastructure funding for disadvantaged communities
  • Terminating the EPA’s Office of Environmental Justice and eliminating hundreds of related positions
  • Removing environmental justice–related screening tools from federal websites

The administration promotes these efforts as part of its broader push for merit-based and color-blind policymaking. Regardless of the rationale, these steps are a departure from permitting and enforcement decisions that had increasingly accounted for socioeconomic and cumulative pollution factors under prior policy. The loss of dedicated environmental justice funding and infrastructure may also have direct impacts on cleanup, remediation, and development efforts in historically burdened communities.

PERMITTING REFORM AND DEREGULATION

Another cornerstone of the administration’s agenda is reforming environmental permitting processes. At the federal level, the National Environmental Policy Act (NEPA) is a key focus. A recent DC Circuit ruling, Marin Audubon Society v. FAA, called into question the validity of existing NEPA implementing regulations, and the administration has since moved to rescind all Council on Environmental Quality (CEQ) regulations issued since 1977.

New directives

  • instruct agencies to establish their own NEPA procedures aligned with the Unleashing American Energy initiative;
  • encourage use of emergency permitting authority to bypass traditional reviews; and
  • discourage reliance on CEQ guidance currently in legal limbo.

The result is a highly fluid permitting environment, with standards and processes varying between agencies and likely to shift midstream. For project developers and investors, this system may increase the risks of delay, litigation, and noncompliance, particularly for large infrastructure and energy projects.

Further, a slate of deregulatory executive orders aims to reduce federal oversight of emissions sources, water pollution, and power plant operations, including rules that encourage agencies to rescind past guidance or “zero out” entire regulatory budgets tied to clean energy or climate efforts.

LEGAL AND BUSINESS IMPLICATIONS

The volume and scope of the administration’s executive actions in the environmental arena arguably are unprecedented. While many of the policies are still in early implementation phases, several trends are emerging:

  • Legal Challenges Will Proliferate: Environmental NGOs, states, and even businesses are likely to challenge many of these actions in court. From the reconsideration of the endangerment finding to funding rescissions and NEPA rollbacks, expect heavy litigation that will create delays and uncertainty.
  • Compliance Landscapes Are Shifting: Companies that rely on environmental permits, emissions credits, or renewable incentives must reassess their strategies and exposure. Deregulation may reduce federal compliance burdens in the short term but could introduce state-level conflicts and long-term planning challenges, with certain states potentially implementing regulations to replace federal ones that were modified or eliminated.
  • Project Developers Face New Risk/Reward Tradeoffs: The easing of permitting and review requirements may accelerate certain fossil fuel and industrial projects, but at the cost of legal stability and public scrutiny. Companies should be cautious of relying on rapid approvals without accounting for litigation risks or future policy reversals.
  • Climate-Related Investments May Be Jeopardized: With the rollback of clean energy subsidies and Justice40 earmarks, climate-focused investors may find reduced federal support for certain initiatives, particularly in under-resourced communities.

LOOKING AHEAD

Many of the administration’s goals, particularly those focused on deregulation and fossil fuel expansion, rely on agency rulemaking and interpretation: the most significant impacts may not be felt for months or even years. But the administration’s executive actions are already reshaping how companies evaluate environmental risk, approach compliance, and prepare for enforcement.

Business leaders and their legal advisors should stay closely attuned to regulatory developments and court challenges while also evaluating how their internal ESG, climate, and permitting strategies may need to adapt to a more volatile, less predictable federal landscape.