President Trump, through a new executive order titled “Protecting American Energy from State Overreach,” aims to prevent states from imposing sanctions on fossil fuel companies for their greenhouse gas emissions. The order instructing the Department of Justice to take legal action against these state-level regulations has reignited the long-standing debate over the constitutional division of regulatory authority between the federal government and individual states, particularly in the context of environmental governance.
Following his return to office, U.S. President Donald Trump enacted a significant shift in energy policy by issuing a new executive order. Entitled “Protecting American Energy from State Overreach,” the order aims to shield fossil fuel companies from state-level regulations and sanctions related to greenhouse gas emissions. This move reflects the Trump administration’s broader vision to “unleash American energy” and represents a reversal of the climate-focused policies prioritized by the previous Biden administration.
This action by President Trump is seen as a direct response to the Climate Change Superfund Act, a legislative proposal introduced by the State of New York in late 2024, which is still in the legislative process. The proposed law seeks to require fossil fuel companies to contribute financially to infrastructure investments aimed at helping New York adapt to climate change, based on their contributions to greenhouse gas emissions. Under the proposal, these companies would be required to pay approximately $75 billion by 2050—equating to an annual obligation of around $3 billion.
New York’s initiative targets not only companies operating within the state but also large-scale energy producers with nationwide operations. This broad scope has been criticized by several Republican-led administrations as an overreach of state authority.
Earlier this year, a coalition of 22 U.S. State Attorneys General—including Texas and Florida—filed a lawsuit challenging the proposed law, arguing that states cannot penalize companies for emissions generated beyond their territorial jurisdiction.
Content and Legal Implications of the Trump’s Executive Order
The executive order issued by President Trump targets not only New York but also similar regulations in Vermont and California’s emissions trading system. California’s current practice requires companies that exceed a specific emissions limit to purchase emissions allowances.
The executive order directs the U.S. Attorney General to identify state and local laws and regulations that may pose constitutional issues concerning the identification, development, production, or use of domestic energy resources. In this identification process, priority will be given to laws related to “climate change,” “environmental, social, and governance (ESG) practices,” “environmental justice,” and regulations concerning carbon and greenhouse gas emissions. The U.S. Attorney General will take the necessary steps to halt the implementation of these laws.
The policy pursued by Trump through this executive order brings to the forefront federal and state jurisdictional conflicts regarding environmental protection and climate change. While environmental protection is typically a shared responsibility between the federal government and states in the American legal system, federal interventions like this raise serious debates.
Trump’s approach, which aims to protect energy companies, may be welcomed by the business world in the short term. However, in the long run, it may have both legal and diplomatic consequences in terms of environmental sustainability, climate resilience and international commitments.
These decisions may damage the global climate leadership role of the US, as well as cause various tensions in relations with trade partners such as the European Union.