> ## Content Index > Fetch the complete content index at: https://insight.zerocircle.eco/llms.txt > Use this file to discover other available public pages before exploring further. # Who Makes the Rules Now? Government Regulation in 2026 and What It Means for Capital - URL: https://insight.zerocircle.eco/who-makes-the-rules-now-government-regulation-in-2026-and-what-it-means-for-capital/ - Published: 2026-10-15T20:31:23.000Z - Updated: 2026-10-15T20:31:23.000Z - Author: Zero Circle Team In December 2024 we argued that[ governments need stricter rules, consistently enforced](https://insight.zerocircle.eco/the-role-of-government-in-enforcing-environmental-accountability-a-call-for-stricter-measures/). Two years on, the bigger question isn't how strict regulation should be. It's who gets to make it. Federal agencies are rolling rules back, courts are narrowing what agencies can do, Congress is overturning rules directly, and states and the EU are writing their own. For companies and investors, the question is no longer just "how strict?" but "who is setting the rules, and will they hold?" **The short answer:** Regulation isn't disappearing in 2026\. It's moving. Washington is withdrawing from climate and energy rules, the courts are limiting agency power, and California, New York and the EU are filling parts of the gap, while courts push back on some state efforts too. For anyone raising capital, the question isn't how strict the rules are. It's which ones survive. **Key takeaways** - Federal agencies are unwinding major rules: EPA's 2009 endangerment finding, fuel economy standards, the SEC's climate disclosure rule and federal greenhouse gas reporting. - Courts now decide for themselves what a statute allows. Since the Supreme Court's 2024 *Loper Bright* decision, agencies no longer get deference on ambiguous laws, and the Fifth Circuit has already used that to strike down an OSHA rule. - Congress used the Congressional Review Act in 2025 to revoke California's vehicle emissions waivers, and rewrote clean energy tax credits in the One Big Beautiful Bill Act. - States and the EU are writing their own rules, from California's emissions reporting law to the EU's carbon border mechanism, but federal courts have struck down New York's $75 billion climate superfund law. - For project developers and investors, regulatory uncertainty is now a financing risk to model, not a footnote. ## **Who makes the rules now?** Five players now shape regulation in the US, and they often pull in different directions. Federal agencies are rescinding rules. Courts are narrowing agency authority. Congress is overturning rules and rewriting incentives. States are legislating on their own. Trading partners like the EU set terms for anyone selling into their markets. | Who | What they're doing | Example | | ---------------- | ------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------- | | Federal agencies | Rescinding or rewriting rules | EPA rescinded the endangerment finding; DOT cut fuel economy standards; the SEC proposed rescinding its climate disclosure rule | | Courts | Deciding for themselves what statutes allow | The Fifth Circuit struck down an OSHA recordkeeping rule under Loper Bright | | Congress | Overturning rules and changing incentives | Revoked California's vehicle waivers via the Congressional Review Act; cut wind and solar tax credits | | States | Filling gaps, sometimes overreaching | California SB 253 emissions reporting is final; New York's climate superfund law was struck down | | Trading partners | Setting terms at the border | EU CBAM charges importers for embedded carbon | ## **What changed in 2025 and 2026?** The direction of federal policy reversed, and the venues for regulation multiplied. Agencies rolled back climate and energy rules, courts limited agency power, Congress overturned rules by statute, and states and the EU wrote their own, with mixed results in court. | Date | Who | What happened | Status (mid-Oct 2026) | | ------------ | ---------- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------ | | Mar 2025 | SEC | Votes to stop defending its 2024 climate disclosure rule, which never took effect | Litigation on hold | | Jun 12, 2025 | Congress | Congressional Review Act resolutions revoke three EPA waivers for California vehicle rules | Challenged by 11 states | | Jul 4, 2025 | Congress | One Big Beautiful Bill Act cuts off wind and solar tax credits for projects starting construction after July 4, 2026 unless in service by end-2027 | In force | | Nov 18, 2025 | Courts | Ninth Circuit pauses California's SB 261 climate-risk disclosure | Enjoined | | Jan 1, 2026 | EU | CBAM definitive phase: importers of over 50 tonnes of cement, iron and steel, aluminum, fertilizers, electricity or hydrogen must buy certificates for embedded emissions | In effect | | Jan 1, 2026 | New York | Part 253 greenhouse gas reporting year begins for sources above 10,000 tCO2e | First reports due 2027 | | Feb 12, 2026 | EPA | Rescinds the 2009 endangerment finding and repeals vehicle GHG standards | Challenged by 25 attorneys general in the D.C. Circuit | | Feb 26, 2026 | EU | Omnibus I narrows CSRD to companies with 1,000+ employees and €450M+ turnover, and CSDDD to 5,000+ employees and €1.5B+ | Final; CSDDD applies from July 2029 | | May 29, 2026 | SEC | Proposes rescinding its climate disclosure rule | Proposal pending | | Jul 21, 2026 | Courts | Fifth Circuit vacates OSHA's mental illness recordkeeping rule, applying Loper Bright | Binding in TX, LA, MS | | Aug 31, 2026 | Courts | Federal court strikes down New York's $75B Climate Change Superfund Act as preempted | A second federal court ruled the same way | | Sep 30, 2026 | DOT | Publishes final fuel economy rollback, with standards equal to an estimated 34.9 mpg fleet average by 2031 | Effective Nov 30, 2026 | | Oct 12, 2026 | California | [SB 253](https://insight.zerocircle.eco/the-california-effect-how-sb-253-sb-261-will-reshape-global-climate-reporting-in-2026/) rules finalized: companies with over $1B revenue doing business in the state report Scope 1 and 2 emissions by Nov 10, 2026 | In effect | | Oct 14, 2026 | EPA | Moves the 2025 greenhouse gas reporting deadline to Mar 10, 2027 while it decides on repeal | Repeal not yet final | ### **How are federal agencies changing regulation?** By rescinding rules rather than writing new ones. EPA rescinded its 2009 finding that greenhouse gases endanger public health, the legal basis for most federal climate rules, and proposed ending most greenhouse gas reporting. DOT cut fuel economy standards. The SEC stopped defending its climate disclosure rule and has proposed rescinding it. ### **What did *Loper Bright* change?** In 2024 the Supreme Court ended *Chevron* deference, so courts no longer defer to an agency's reading of an ambiguous statute. Judges now decide the best reading themselves. In July 2026 the Fifth Circuit used that standard to strike down an OSHA recordkeeping rule. Legal commentators expect more challenges to long-standing rules in other sectors. ### **Are states filling the gap?** Partly. California's SB 253 now requires companies with over $1 billion in revenue doing business in the state to report Scope 1 and 2 emissions by November 10, 2026, and New York's Part 253 reporting starts in 2027\. But courts are limiting states too: SB 261 is paused, and New York's climate superfund law was struck down. For more detail, see our guides to[ California's SB 253 and SB 261](https://insight.zerocircle.eco/the-california-effect-how-sb-253-sb-261-will-reshape-global-climate-reporting-in-2026/) and[ New York's mandatory GHG reporting program](https://insight.zerocircle.eco/new-yorks-mandatory-ghg-reporting-program-what-climate-regulatory-professionals-need-to-know/). ### **What role do trading partners play?** A growing one. Since January 1, 2026, EU importers of covered goods must buy certificates for the carbon embedded in them, which makes product-level emissions data a pricing issue for US exporters. At the same time, the EU scaled back its own corporate reporting and due diligence rules. Our[ CBAM guide for SMEs](https://insight.zerocircle.eco/cbam-for-smes-in-2026-what-it-is-who-it-affects-and-how-to-prepare/) covers the details. ## **How does regulatory risk affect project finance?** Lenders and investors now underwrite policy risk directly. When a federal rule can be rescinded, a state law struck down and an agency's authority narrowed by a court, a project has to show it still works under more than one policy scenario. Projects that depend on a single mandate or credit are harder to finance. Take the federal tax credits for wind and solar. Under the One Big Beautiful Bill Act, signed in July 2025, wind and solar projects that began construction after July 4, 2026 must be placed in service by December 31, 2027 to claim the Section 45Y or 48E credits. For a project in that window, a few months of construction delay can decide whether the credit exists at all, so lenders will want to see the economics both with and without it. - **Companies:** Track rules by jurisdiction, not just federally. California, New York and EU requirements can apply even as federal ones fall away. - **Exporters to the EU:** Your EU customers now pay for the carbon embedded in covered goods, so verified emissions data for your products matters. - **Project developers:** Show investors how revenue holds up if incentives or mandates change. - **Investors:** Treat regulatory durability as a diligence item. A rule resting on a contested agency interpretation is more likely to change than one written into statute. **Raising capital for an energy or climate project?** Zero Circle's AI agents source investors from 40,000+ institutional profiles, score fundability, draft outreach and track diligence, with your team approving every decision.[ Talk to our team →](https://www.zerocircle.eco/contact?ref=insight.zerocircle.eco) ## **Should regulation be stricter or smarter?** Both. Firm rules only work when the standard is measurable, the data is reliable and the rule is legally durable. The 2025-2026 reversals show that rules built on agency interpretation alone can be undone quickly. Rules grounded in legislation, phased in and paired with incentives last longer. The core case from 2024 still stands: clear, enforced rules change behavior. EPA reports that combined emissions of six common air pollutants fell 79% between 1970 and 2024 while US GDP grew 338%, and the agency concluded 2,127 civil enforcement cases in fiscal 2025, the most in nine years. **The case for firmer regulation** 1. **Credibility.** If penalties are smaller than the gain from breaking a rule, they become a cost of doing business. 2. **A level playing field.** Weak or uneven rules penalize companies that invest in compliance. 3. **Predictability.** Investors price stable rules more easily than rules that flip with each administration. 4. **Data integrity.** Markets depend on trusted data. When EPA eliminated the unit maintaining its USEEIO model in July 2025, companies lost a key federal tool for calculating Scope 3 emissions just as California's reporting rules arrived. **The case for lighter, smarter regulation** 1. **Cost versus benefit.** In rescinding the endangerment finding, EPA estimated that eliminating all US vehicle greenhouse gas emissions would lower global temperatures by only about 0.037°C by 2100, too little in its view to justify the cost. But the figure covers US vehicles alone, and almost any single source of emissions looks small when measured against the global total. 2. **Legal authority.** Agencies should act only where Congress clearly authorized them, which is the reasoning behind the Supreme Court's major questions doctrine for actions of vast economic and political significance. 3. **Competitiveness.** Businesses argue that heavy reporting burdens put them at a disadvantage against competitors in lighter-touch jurisdictions. 4. **Patchwork.** Different state and national regimes raise costs for companies operating across borders. The two sides disagree less than they claim. Both want rules that are clear, enforceable and predictable. They differ mainly on scope and on who should set them. ## **What makes a regulation last?** Regulation that survives changes in administration and court challenges tends to share six features: - **A clear statutory basis**, written by the legislature rather than resting on agency interpretation alone. - **Measurable standards** so companies know exactly what compliance means. - **Verified data**, with third-party verification for the largest players, as New York's reporting program requires. - **Phased timelines** that give industry time to adapt, such as CBAM's reporting-only phase (2023-2025) before payments began. - **Incentives alongside penalties**, so compliance is also the cheaper option. - **Transparency**, with results published so the public can see who is complying. ## **Frequently asked questions** **Who makes regulation in the US in 2026?** Federal agencies still write most rules, but courts, Congress and states increasingly shape them. Since *Loper Bright* (2024), courts decide what statutes allow without deferring to agencies. Congress has overturned rules through the Congressional Review Act, and states such as California and New York are writing their own climate rules. **What did the Supreme Court's *Loper Bright* decision change?** It ended *Chevron* deference in 2024\. Courts must now use their own judgment on whether an agency acted within its statutory authority, rather than accept an agency's reasonable reading of an ambiguous law. **Is the SEC's climate disclosure rule in effect?** No. The rule adopted in March 2024 was stayed and never took effect. The SEC stopped defending it in 2025 and proposed rescinding it in May 2026\. See why[ your reporting obligations haven't changed despite the SEC's retreat](https://insight.zerocircle.eco/the-sec-is-scrapping-its-climate-rules-heres-why-your-reporting-obligations-havent-changed/). **What happened to EPA's endangerment finding?** EPA rescinded its 2009 finding that greenhouse gases endanger public health and welfare in February 2026, arguing that the Clean Air Act does not authorize regulating vehicle emissions to address global climate change. Twenty-five state attorneys general are challenging the repeal in court. **Which climate disclosure rules still apply to US companies?** California's SB 253 reports are due November 10, 2026, and New York's Part 253 reports start in 2027\. Federal reports for 2025 under EPA's greenhouse gas reporting program are now due March 10, 2027, unless EPA finalizes its proposed repeal first. California's SB 261 is paused by a court. **Does the EU's CBAM affect US companies?** Yes, if they export covered goods (cement, iron and steel, aluminum, fertilizers, electricity, hydrogen) to the EU. EU importers pay for the embedded emissions, so product emissions data now affects price and competitiveness. **Do stricter rules still work?** Yes, when they're measurable and enforced. Our 2024 piece showed[ how the Clean Air Act and CERCLA proved enforcement works](https://insight.zerocircle.eco/the-role-of-government-in-enforcing-environmental-accountability-a-call-for-stricter-measures/), and the numbers have improved since: a 79% drop in six common air pollutants since 1970 while GDP grew 338%. ## **Sources** - Davis Polk,[ EPA's Endangerment Finding rescission](https://www.davispolk.com/insights/client-update/epa-s-endangerment-finding-danger-key-takeaways-and-uncertainties-repeal?ref=insight.zerocircle.eco) (includes *Loper Bright* and the major questions doctrine) - State Energy & Environmental Impact Center,[ 25 AGs challenge the endangerment finding repeal](https://stateimpactcenter.org/ag-work/ag-actions/twenty-five-ags-filed-lawsuit-challenging-epas-endangerment-finding-repeal?ref=insight.zerocircle.eco) and[ 11 states challenge the California waiver repeal](https://stateimpactcenter.org/ag-work/ag-actions/eleven-ags-sued-the-federal-government-for-california-clean-vehicle-program-repeal?ref=insight.zerocircle.eco) - Gibson Dunn,[ SEC proposes rescission of climate-related disclosure rules](https://www.gibsondunn.com/sec-proposes-rescission-of-climate-related-disclosure-rules/?ref=insight.zerocircle.eco) - Haynes Boone,[ Fifth Circuit strikes down OSHA's mental health recordkeeping rule](https://www.haynesboone.com/news/alerts/fifth-circuit-strikes-down-osha-mental-health-recordkeeping-rule.pdf?ref=insight.zerocircle.eco) - US Department of Transportation,[ SAFE Vehicles Rule III final rule](https://www.transportation.gov/regulations/federal-register-documents/2026-19964?ref=insight.zerocircle.eco), and DieselNet,[ NHTSA resets CAFE standards](https://dieselnet.com/news/2026/09nhtsa.php?ref=insight.zerocircle.eco) - K&L Gates,[ Federal court invalidates New York Climate Change Superfund Act](https://www.klgates.com/thought-leadership/Federal-Court-Invalidates-New-York-Climate-Change-Superfund-Act-9-15-2026?ref=insight.zerocircle.eco), and US Department of Justice,[ second ruling](https://www.justice.gov/opa/pr/another-federal-judge-strikes-down-new-yorks-climate-superfund-law-unconstitutional?ref=insight.zerocircle.eco) - Sidley,[ The One Big Beautiful Bill Act: navigating the new energy landscape](https://www.sidley.com/en/insights/newsupdates/2025/07/the-one-big-beautiful-bill-act-navigating-the-new-energy-landscape?ref=insight.zerocircle.eco) and[ EPA eliminates key Scope 3 role](https://environmentalhealthsafetybrief.sidley.com/2025/08/06/u-s-epa-eliminates-key-scope-3-role-leaving-gap-ahead-of-sb-253-compliance/?ref=insight.zerocircle.eco) - Morgan Lewis,[ California's climate disclosure regulations receive final approval](https://www.morganlewis.com/pubs/2026/10/californias-climate-disclosure-regulations-receive-final-approval-ahead-of-november-reporting-deadline?ref=insight.zerocircle.eco) - CEC,[ New York's Part 253 GHG reporting rule](https://www.cecinc.com/blog/2025/12/18/new-york-announces-new-greenhouse-gas-report-rule/?ref=insight.zerocircle.eco) - Federal Register,[ GHG Reporting Rule deadline extended to March 10, 2027](https://www.federalregister.gov/documents/2026/10/14/2026-20982/extending-the-reporting-deadline-under-the-greenhouse-gas-reporting-rule-for-reporting-year-2025-to?ref=insight.zerocircle.eco) - Covington,[ EU CSDDD/CSRD Omnibus published in the Official Journal](https://www.cov.com/en/news-and-insights/insights/2026/02/eu-csddd-csrd-omnibus-published-in-official-journal-transposition-delegated-acts-and-guidelines-are-next?ref=insight.zerocircle.eco) - European Commission,[ CBAM definitive regime](https://taxation-customs.ec.europa.eu/carbon-border-adjustment-mechanism/cbam-definitive-regime%5Fen?ref=insight.zerocircle.eco) - US EPA,[ Air Quality National Summary](https://www.epa.gov/air-trends/air-quality-national-summary?ref=insight.zerocircle.eco) and[ FY2025 civil enforcement results](https://www.epa.gov/enforcement/enforcement-and-compliance-assurance-annual-results-fy-2025-civil-enforcement?ref=insight.zerocircle.eco)