USA

According to our analysis, the US will need to implement additional policies to reach its targets. We project GHG emissions will reach between 4.6–5.4 GtCO₂e in 2030 (excluding emissions from land use, land use change and forestry, or LULUCF). This is equivalent to 29%–39% reduction from 2005 levels (excl. LULUCF), which is insufficient to meet the NDC target (45%–50% excl. LULUCF).

The Inflation Reduction Act (IRA), passed in 2022, represents a significant milestone in US climate policy. While its full impact is still unfolding due to the nature of its 10-year implementation plan, the first years have shown real promise. The IRA is mobilising historic investments in clean energy, driving clean projects, creating jobs, and attracting private sector funding. EPA standards for the power and transport sectors, passed in 2024, provide two further milestones in important policy areas.

However, to achieve its domestic emissions reductions target—let alone to reach a 1.5°C-compatible emissions level—the government needs to complement its recent advancements with further sector-specific policies and a shift away from fossil fuels.

The projected emissions trajectory range is wider in this update than previously, due to the incorporation of new analyses that better highlight the uncertainties related to the IRA's implementation. While the middle of the policy projections' range falls into the “Insufficient” category, its lower end, representing a positive outlook on the government’s current policies, falls into the “Almost sufficient” range.

The “Insufficient” rating indicates that the US’ climate policies and action in 2030 need substantial improvements to be consistent with the 1.5°C temperature limit. If all countries were to follow the US approach, warming would reach over 2°C and up to 3°C. The Biden Administration has set the goal to decarbonise the power sector by 2035, which is consistent with a Paris Agreement pathway.

Further information on how the CAT rates countries (against modelled domestic pathways and fair share) can be found here.

The US will need to implement additional policies to reach its 2030 and long-term targets. After an increase in GHG emissions between 2021 and 2022, emissions started to decline in 2023 (-1.9%) (Rhodium Group, 2024). The government has set a target to reduce emissions by 3.8–4.2 GtCO₂e/year in 2030.

According to our projections, emissions are forecasted to decline at an average of 1.7%–3.9% per year and reach between 4.6–5.4 GtCO₂e/year by 2030 (29%–39% below 2005 levels; and 19%–31% below 1990), excluding emissions from land use, land use change and forestry (LULUCF). Under these projections, the US would achieve 64%–87% of its emissions reductions target in 2030, indicating a gap of 13%–36% that would need to be filled with new and additional climate policies and action. As it stands, the 2030 target is not 1.5˚C compatible. Reaching a level in line with a global least-cost pathway requires further reductions of 1.4–2.2 GtCO₂e below the current policy pathway.

Compared to CAT projections in August 2023, our range of emission projections includes an updated estimate of the Inflation Reduction Act’s (IRA) impact, as well as estimates of the impact of the US Environmental Protection Agency’s (EPA) 2024 regulations for the power and transport sectors. As a result, the US emissions projections decreased relative to the CAT’s previous projections, while the range, based on existing policies, widened for 2030–2035. The upper bound decreased by 2% and the lower bound decreased by 8%. The reduced, widened range in emission projections highlights the continued effort by the US government to cut emissions, while recognising the high uncertainty of policy outcomes; especially for the government’s flagship climate policies, including the IRA and the Bipartisan Infrastructure Law (BIL).

The IRA injects USD 370bn into the US economy over a 10-year period. This infusion takes the form of tax credits, grants, and loans intended to develop and deploy the clean energy technologies and investments that are essential for the economy's decarbonisation (The White House, 2023a).

Since the IRA's implementation in 2022, the country has witnessed a significant surge in public and private investment in clean energy projects and infrastructure: between August 2022 and February 2024, investment in announced clean energy projects and infrastructure totalled USD 352bn. Specific highlights include record investment in battery and electric vehicle (EV) manufacturing and in grid and transmission infrastructure (Climate Power, 2024c).

Due to these investments, the share of clean energy investments in total investments increased from 3.7% in Q4 of 2022 to 5% in Q4 in 2023, representing a significant uptick in the role that clean energy investments play in the US economy (Rhodium Group; MIT CEEPR;, 2024). Given the scale of public investment, some studies suggest that the IRA could spur USD 3tn in private investments over the coming decade (Goldman Sachs, 2023).

The BIL and IRA, alongside the Creating Helpful Incentives to Produce Semiconductors (CHIPS) and Science Act, have set the stage for record private investment in the construction of domestic manufacturing facilities (U.S. Department of the Treasury, 2023b). Before the IRA and CHIPS Act were signed, annual investment in manufacturing construction remained below USD 150bn. Since the acts’ passage, investment surged to an all-time high of USD 223bn by February 2024 (FRED Economic data, 2024; Joint Economic Committee, 2024).

Investment in the EV supply chain, especially in battery cell manufacturing and critical mineral production, has increased significantly and accounted for nearly two-thirds of all clean manufacturing investments by the end of 2023 (Rhodium Group; MIT CEEPR;, 2024). As a result of this increase in investment, the US surpassed the EU in battery cell manufacturing capacity in 2023, even though the EU’s capacity was two times larger than the US’ capacity in 2021 (Delgado et al., 2024).

These investments contribute to job creation, with estimates showing that the IRA’s provisions have already generated over 270,000 clean energy jobs (Climate Power, 2024b). The act has also contributed to a more just energy transition by targeting disadvantaged communities and rural areas. Many of the announced investments specifically target and aim to contribute to the economic development of these regions and communities (U.S. Department of the Treasury, 2023a).

In early 2024, the US expanded its climate policy portfolio through the addition of several EPA policies (U.S. Environmental Protection Agency, 2024i, 2024l). The EPA introduced several standards for gas and coal-fired power plants and updated its vehicle emissions standards. Even though these standards were watered down before their finalisation (see Electricity generation and Transport sections below), they add an important regulatory complement to the incentive-based IRA: by setting yearly emissions levels for technologies, the standards provide important guidance for the private sector.

To realise its 2030 and 2035 targets and to align with the Paris Agreement’s 1.5˚C temperature goal, the US has to implement further, more ambitious policies and measures. Additional measures could focus on those sectors in which ambitious action has yet to be taken, such as the building or agriculture sector.

At the same time, the government can further strengthen existing policies across all sectors; for example, the government could extend the IRA beyond 2030, introduce coal phase-out targets for 2030, and enhance energy efficiency standards (America Is All In, 2024). Manufacturing capacity could also be strengthened, in particular for wind turbine and heat pump production (IEA, 2024a). Given that the federal government’s jurisdiction is limited some policy areas, state governments can play a significant role.

Some states, such as Massachusetts, Michigan, and Minnesota, have recently introduced climate policies that are more ambitious than at the federal level (Joselow & Montalbano, 2023). To advance climate action at the subnational level, state governments can adopt of renewable portfolio standards (RPS) and introduce sales targets for EVs.

Despite the IRA’s remarkable measures to support clean energy and address climate change, the IRA includes several concessions to the fossil fuel industry. The concessions are described in the Power section.

Electricity supply contributed to 25% of total US GHG emissions in 2022 (excluding emissions from land use, land use change and forestry, or LULUCF) (U.S. Environmental Protection Agency, 2024k). Total annual emissions in the power sector have declined steadily since 2010, mainly driven by a shift from coal to lower or non-emitting generation sources, such as fossil gas and renewables.

Electricity production from renewables overtook production from coal and nuclear power for the first time in 2022, making renewables the country’s second largest source of electricity generation after fossil gas (U.S. Energy Information Administration, 2023j). Preliminary figures for 2023 suggest that coal is now becoming the least relevant generation source in the US, when all types of renewables are counted together (Rhodium Group, 2024)

Following a drop in CO₂ emissions during the COVID-19 pandemic, emissions in the power sector returned to pre-pandemic levels as the economy recovered, but began dropping again in 2023. In 2021, electricity generation and emissions from coal-fired power plants increased for the first time since 2014 by 16% and 15%, respectively (U.S. Environmental Protection Agency, 2023f). The marked increase in coal-fired generation in 2021, and its sustained elevated level in 2022, can be mainly attributed to the significantly higher and more volatile prices of fossil gas as a consequence of the 2021 energy crisis, which rendered coal more competitive (U.S. Energy Information Administration, 2021b, 2023n).

In 2023, gas generation rebounded and replaced coal generation, which led to emissions reductions in the sector. Although renewables contributed to sectoral emissions reductions, fossil gas had more than double the growth rate of renewable generation.

The Biden Administration announced a target for the US' electricity system to become carbon-free by 2035. The CAT estimates that the full decarbonisation of the US power sector by 2035 would reduce total economy-wide emissions by about 25% below 2005 levels by 2030. The goal of a carbon-free power supply by 2035 is aligned with the Paris Agreement, based on the CAT’s primary global least-cost based benchmarks (Climate Action Tracker, 2023b). The target also meets the IEA’s suggested net zero target year for advanced economies (IEA, 2021). If accompanied by ambitious electrification targets in other sectors, such as 100% electric vehicle (EV) sales by 2030 or the full electrification of building heating, the US would be on track to meet the target of 50%–52% emissions reductions below 2005 levels (Climate Action Tracker, 2021b).

However, emissions in the power sector must reduce more rapidly to reach the US economy-wide target. In 2021, total emissions from electricity generation had decreased by 36% compared to 2005 levels. With the introduction of the IRA, emissions from electricity generation are projected to further decrease by 67%–87% compared to 2005 levels by 2035 (U.S. Environmental Protection Agency, 2023b). More recent analysis, which takes into account the recent EPA regulations in the power sector, suggests that emissions might be even further reduced to 90% below 2005 levels by 2035 (King, Kolus, et al., 2024).

Nevertheless, there remains a gap between the projections and target, highlighting the need for additional, more ambitious policies and actions.

Renewable energy status and outlook

In 2022, electricity generation from renewable sources surpassed generation from coal and nuclear power for the first time, becoming the second largest source of electricity generation after fossil gas (U.S. Energy Information Administration, 2023j).

Increasingly cost-competitive renewables, in combination with the IRA and state-level renewable portfolio standards (RPS), are expected to continue driving the growth of renewables in the electricity sector, further displacing nuclear and fossil fuel-fired power plants.

In 2023, renewables generated approximately 22% of total US electricity, with wind (10%), hydropower (6%), and solar (3%) representing the greatest shares. In 2022, solar and wind capacity increased by 5% above 2021 levels, growing to more than 238 GW. Nearly 75% of added generation capacity in 2022 were renewables. The installed capacity of solar increased by roughly 20 GW in 2023 and is projected to increase by 36 GW in 2024. The annual expansion of wind capacity lags behind solar; wind capacity only grew by 6 GW in 2023 and is forecast to increase by 7 GW in 2024 (U.S. Energy Information Administration, 2024e).

Modelling of the IRA’s impact on renewables suggests an average capacity deployment of 54 GW/year, driven mainly by the expansion of wind and solar (U.S. Environmental Protection Agency, 2023c).

However, according to scenarios that model a 100% clean energy power sector by 2035, annual additions in renewable energy capacity need to increase significantly. To achieve 100% renewable energy generation by 2035, the installed capacity of wind would need to grow by 70–145 GW/year between 2025 and 2035. During the same period, the installed capacity of solar would need to increase by 43–90 GW/year (Denholm et al., 2022).

The clean energy project pipeline, that is emerging as a result of the IRA, shows promising growth, having reached 309 GW of announced clean energy capacity (Cleanpower, 2024). The growth in clean energy projects is also reflected in the total project capacity seeking transmission access: in total, 1,480 GW of clean electricity generation are seeking transmission access, of which solar alone accounts for 1,086 GW (WRI, 2024).

Historically only about 14% of announced capacity gets interconnected, but the number of new projects that were announced after the passage of the IRA (e.g. more than 500 GW of solar) reflect increased developer interest and may result in a higher interconnection rate. However, major challenges for the deployment of renewables persist; complex permitting processes, higher interest rates and costs, and supply chain issues will need to be overcome to ensure project implementation (WRI, 2024).

The IRA is strengthening value chains in the medium to long term in the US by incentivising domestic manufacturing (see above), but current supply chain issues remain. While issues plaguing the solar supply chain have largely been resolved, other decarbonisation-critical equipment, such as transformers, are subject to enduring supply chain issues, resulting in long lead times (WRI, 2024).

Heightened interest rates have increased project costs, especially for renewables with high upfront costs, and have elevated prices for power purchase agreement (PPA). In turn, higher PPA prices have reduced clean energy purchases by corporates (WRI, 2024). To address risks that lead to and are associated with higher interest rates, the IRA allocates USD 3.6bn for clean energy loans to enable USD 40bn in loan guarantees, particularly targeting new technologies (Harper et al., 2023). Other instruments, such as contracts for difference, which the EU recommends to its Member States in its market design directive (European Commission, 2023), could help minimise risks and thus financing costs, especially for offshore wind (Beiter et al., 2024).

Expanding transmission lines is a major enabler for the deployment of renewables, especially wind and solar, and is essential for their overtaking of fossil gas as the primary source of electricity generation. The historical pace of grid extension of about 1% per year needs to increase to 2.3% per year to reach the full reduction potential of the IRA; a net zero pathway would require an even faster expansion (Jenkins et al., 2022). Currently, only 10% of the necessary investment in transmission infrastructure is planned (WRI, 2024).

This low level of investment is especially alarming given that transmission projects in the US take an average of 10 years to build (WRI, 2023). Although state governments are primarily responsible for maintaining and upgrading grid infrastructure, federal agencies are implementing several measures to augment investment. For instance, the US Department of Energy (DOE) introduced the Coordinated Interagency Authorizations and Permits programme (CITAP), which streamlines the permitting process for transmission facilities. The DOE also unlocked additional targeted funding to expand transmission capacity (S&P Global, 2024) and is in the process of developing auxiliary measures (WRI, 2024).

Another challenge for the power sector is the growing demand for electricity. The growth in demand is not only driven by the electrification needs of a decarbonised future, but also by the emergence of large-scale data centres, the increase in manufacturing facilities, the enhanced demand for building cooling and heating, and the introduction of hydrogen fuel plants. For example, electricity demand from data centres, which currently account for around 4% of electricity demand, is expected to grow to between 4.6%–9.1% of electricity demand by 2030 (EPRI, 2024).

Permitting and siting are major barriers for the buildout of renewable energy capacity. Current project build times average four years. The IRA includes USD 1bn to support the Biden Administration's Permitting Action Plan, which seeks to accelerate the federal permitting and environmental review process for transmission lines and clean energy productions. The federal government is also working to address issues related to project siting. The government set a target to double clean energy permits on public lands in order to reach 25 GW of renewable energy generation by 2025. This goal was reached at the end of 2023, with a total of 29 GW worth of allocated permits. A further 32 GW are currently under consideration by the government (Reuters, 2024).

Given that permitting and siting processes are largely controlled by subnational jurisdictions, action at the state level is key. California and Massachusetts have implemented promising approaches for streamlining the permitting process for clean energy projects that could be replicated by other states (WRI, 2023).

The US Department of the Interior (DOI) announced a plan to deploy 30 GW of offshore wind by 2030 and unlocked USD 3bn in federal loans for offshore wind and transmission projects. By the end of FY2023, the Bureau of Ocean Energy Management aims to approve a cumulative 14.8 GW in offshore wind energy capacity to support the 2030 target (U.S. Department of the Interior, 2023a). However, estimates suggest that only 14.5 GW will come online by 2030, which means the government will fall significantly short of its 30 GW target. Approximately 11 GW of planned offshore capacity have been cancelled or are being renegotiated (Canary Media, 2023).

A diverse set of drivers have been responsible for the growth of renewable energy in the US. At the subnational level, renewable portfolio standards (RPS) and clean energy standards (CES) have been major drivers. In total, 32 states and the District of Columbia (D.C.), accounting for 58% of US electricity sales, have enacted RPS or CES legislation. Of these, 15 states and D.C. have signed 100% clean electricity goals into legislation, while seven states have enacted such a target through state-level executive orders (U.S. Energy Information Administration, 2023c).

In the past, roughly half of the growth in renewable generation capacity could be associated with these standards. In recent years, however, these standards have contributed less; with current RPS or CES legislation alone the share of non-hydro RE will only increase to 28% by 2050, well below what is needed (see below).

Voluntary utility procurements, net metered PV/onsite production, and corporate PPAs have become drivers for the development of renewable energy sources (Barbose, 2023). However, these drivers are constrained by high interest rates. To ensure that sufficient renewable generation capacity is built, states could increase the ambition of their RPS or CES legislation, while states without such standards could introduce them.

At the federal level, tax credits for the production and investment in clean energy support the buildout of renewables. The Biden Administration modified and extended the current Production Tax Credit and Investment Tax Credit through 2024. After 2024, the credits transition towards technology-neutral, emissions-based credits in the form of the Clean Electricity Production Tax Credit and the Clean Energy Investment Tax Credit.

Importantly, the current tax credit applies to all projects that commence construction by 2032, providing additional investor certainty (Harper et al., 2023). Both credits incentivise investment in disadvantaged communities and provide additional bonuses to wind and solar projects in low-income neighbourhoods (The White House, 2023c). The direct impact of these credits is uncertain and difficult to assess as they overlap, complement, and engage with other incentive schemes and market dynamics.

An EPA review of scenarios estimating the IRA’s impact, which this assessment uses for the current policy projections scenario, shows that the implementation of the IRA could lead to emission reductions of between 49%–83% in the power sector by 2030 below 2005 levels (U.S. Environmental Protection Agency, 2023d). The modelling projects that the share of renewables in total electricity generation will increase significantly, reaching 28%–60% in 2030 and amounting to up to 85% in 2035 (U.S. Environmental Protection Agency, 2023d).

However, these penetration levels are insufficient to meet the Biden Administration’s 2035 goal of a carbon-free power sector. In order to be aligned with a Paris Agreement-compatible, least-cost pathway, the CAT estimates that 68%–86% of the electricity generated by 2030 should come from renewable sources (Climate Action Tracker, 2023b).

Storage and flexibility

With an increasing share of variable renewable energy in the US electricity generation mix, there is an increasing need for supply and demand-side flexibility. Storage needs will increase as gas-fired power plants, currently providing flexibility services, are phased out.

To decarbonise the power sector by 2035, approximately 120–350 GW of diurnal storage and up to 680 GW of seasonal storage is required (in a scenario that does not include carbon capture and storage (CCS)) (Harper et al., 2023). The need for utility storage and demand flexibility is also directly linked to the buildout of the transmission grid which, as highlighted above, is happening far too slowly. Building out storage capacity can reduce the need for transmission expansion and vice versa.

The IRA has spurred a significant increase in utility-scale diurnal storage projects, as evidenced by the number of storage projects awaiting interconnection. Since August 2022, more than 540 GW of storage has requested interconnection. Approximately half of that storage capacity is combined with a generation technology, mainly solar. In total, around 514 GW of storage is planned to come online before the end of 2026.

Historically, only 11% of planned storage capacity has materialised. However, the operationalisation rate might increase given that the IRA makes available the Production Tax Credits and Investment Tax Credits for standalone storage projects. In the current storage project pipeline, battery storage dominates. The number of other storage technologies in the pipeline, notably those better suited for seasonal storage, has also increased.

In contrast to supply flexibility, demand flexibility remains underdeveloped in the US. Demand flexibility can play an important role, as transmission projects are developing too slowly, and storage projects incur additional resource use. Economic analyses suggest that large-scale demand flexibility deployment can reduce the costs of grid extension and ancillary services by approximately USD 13bn/year, while simultaneously contributing to the integration of renewables (Bronski et al., 2015).

States are beginning to recognise the importance of demand flexibility: state level institutions, such as the California Utility Commission, are starting processes to enable “widespread demand flexibility” (California Public Utilities Commission, 2022). Nevertheless, demand flexibility continues to be largely underfunded.

Seasonal storage, or long-duration storage, is underdeveloped, but will likely be critical to decarbonising the power sector by 2035. Unlike for short-term, diurnal storage, where batteries have emerged as a promising, increasingly cost-competitive technology, seasonal storage is much less mature and requires significant investments in research and development. The DOE is beginning to support seasonal storage projects; it is providing a USD 504.4m loan guarantee for a hydrogen storage capacity in Utah and introduced the Long Duration Storage Shot that aims to decrease costs for seasonal storage by 90% within the coming decade (U.S. Department of Energy, 2023c). However, the government’s efforts must be intensified to deploy the technology at the scale and pace to achieve sectoral decarbonisation.

Fossil fuel phase-out

The US government has not set a fossil fuel phase-out target for coal or fossil gas. It did not support the coal phase-out initiative at COP26, but has taken an important step since the last CAT assessment by becoming a signatory to the Powering Past Coal Alliance.

Several states have committed to phasing out coal, but states with a major share of coal generation generally have not. The federal government also recently reframed its position on phasing out fossil fuels: since May 2024, the US refers to a “a fully or predominantly decarbonized power sector by 2035" after initially calling for a “carbon pollution free” electricity sector by 2035. Such reformulation opens the door for use of abated coal (e.g. with carbon capture and storage), as well as the use of coal in sectors that are not directly related to electricity generation (GEM Wiki, 2024).

In 2023, the share of coal generation continued to decline at an even faster pace than in 2022. In 2022, approximately 20% of total US electricity generation was derived from coal. This dropped to 16% in 2023, a decrease driven by the continued buildout of fossil gas generation and the growth of renewable sources.

Elevated fossil gas prices induced a temporary increase in coal-fired generation in 2021, which did not last, as gas prices returned to 2020 levels in 2023 (U.S. Energy Information Administration, 2024c). As a result, the capacity factor of coal-fired power plants reduced from 48% to 42% (Inside Climate News, 2024); a trend that reflects the worsening economics of coal but one that could be reversed in future if coal-fired power plants are not shut down.

Approximately 30% of the US coal-fired generating capacity has been retired since 2010: no new coal-fired capacity has been installed since 2013, and more coal power plants are due to be decommissioned in the near future (U.S. Energy Information Administration, 2021a, 2023g, 2023k). However, the retirement of coal generation capacity has slowed in recent years and is expected to continue to slow in 2024. Although the US Energy Information Administration (EIA) expected 8.9 GW of coal-fired power plants to retire in 2023 (U.S. Energy Information Administration, 2023g), only 5 GW actually retired (Ember, 2024). For 2024, only 2.3 GW of coal-fired power plants are set to retire (U.S. Energy Information Administration, 2024d). In comparison, annual coal retirements averaged 11 GW between 2015 and 2020 (U.S. Energy Information Administration, 2023g). The EIA’s Annual Energy Outlook 2023, used as one of the reference scenarios for this assessment’s current policy projections, suggests that no new coal-fired capacity will be added in the US. In the reference case, coal-fired capacity is projected to decline by 64% to 73 GW by 2050 (U.S. Energy Information Administration, 2023h).

This means that a full phase-out of coal power by 2035 requires additional policy action to accelerate and reinforce market forces that, as evidenced by the last decade, are pushing coal out of the mix. According to the CAT, the US needs to phase out all coal-fired power generation by 2030 to be aligned with the Paris Agreement (Climate Action Tracker, 2023b).

In April 2024, the EPA finalised its new Greenhouse Gas Standards for Fossil-Fuel Fired Power Plants, which targets existing coal-fired power plants and new gas-fired power plants. The standards cover GHG emissions, waste water, mercury, and toxic metals. The standards set the most stringent emissions limits for both plant types in US history and mandate that all coal-fired power plants reduce or capture nearly all of their CO₂ emissions by 2040 (U.S. Environmental Protection Agency, 2024m).

The regulation exempts coal-fired plants that are set to retire before 2032, while relaxing the standards for those retiring between 2032 and 2039; these plants need to reduce emissions by only 16%. Coal plants that operate beyond 2039 will be required to reduce their emissions intensity by implementing CCS technology to capture 90% of CO₂ emissions by 2032. These requirements are expected to accelerate coal plant retirements before the 2040 deadline, resulting in an additional 22 GW of coal-fired capacity going offline between 2023 and 2035 (U.S. Environmental Protection Agency, 2024m).

The EPA’s emissions standards for fossil gas distinguish between baseload and peak power plants: the standards only apply to baseload plants larger than 300MW. Plants covered by the regulation have the option to capture 90% of emitted CO₂ using CCS by 2035 or transition to 96% hydrogen fuel use by 2038. These standards are projected to reduce fossil gas emissions by approximately 200–400 MtCO₂e by the mid-2040s. The combined cumulative reductions for both coal and fossil gas are forecasted to amount to 600 MtCO₂e by 2050 (U.S. Environmental Protection Agency, 2023h). While setting emissions limits for power plants is a step in the right direction, the regulation’s impact remains uncertain as smaller baseload plants and peak power plants are not covered.

Carbon capture and storage (CCS)

The new EPA standards aim to reduce the environmental impact of fossil fuel-fired power plants and explicitly allows for CCS, signalling that the government considers CCS a viable solution for emissions reductions in the mid to long term (Parenteau, 2024). However, CCS has yet to be proven commercially viable at scale, and it remains unclear whether the technology will have demonstrated commercial viability by 2040. Given the high cost of CCS applications for fossil fuel-fired power plants (Clarke et al., 2022), the CAT estimates that most fossil fuel-fired power plants that are subject to the proposed regulations will already cease operations by 2040.

If instead CCS does get deployed at scale, the widespread adoption of CCS could lead to significant additional emissions since current CCS technology only captures 90% of power plant emissions.

Legal challenges

In the past, the EPA has met numerous legal challenges in its efforts to regulate GHG emissions from fossil fuel-fired power plants; notable are two failed attempts during the Obama and Trump Administrations. Most recently, in June 2022, the US Supreme Court ruled to limit the EPA’s ability to regulate carbon emissions from power plants (West Virginia v. EPA, 2022). The decision sets a worrying precedent for future climate action. However, experts suggest the design of the EPA’s most recent standards explicitly considers the weaknesses of previously proposed regulations and, therefore, gives the standards a better chance against legal challenges (Parenteau, 2024).

In parallel, the government passed stricter standards for power plants whose pollution crosses state lines (U.S. Environmental Protection Agency, 2023e). The EPA has also proposed stronger limits for mercury and water pollution from coal-fired power plants. These rules do not target pollution that directly contributes to global warming, but, nevertheless, limit the operation of coal-fired power plants and, in doing so, could indirectly accelerate their phase-out (U.S. Environmental Protection Agency, 2023g, 2023j).

Unlike coal generation, oil and fossil gas generation increased significantly in 2023. More than 10GW of fossil gas-fired power plants were added in 2023, the highest increase since 2003 (Global Energy Monitor, 2024). Generation from fossil gas grew more than twice as fast as generation from renewables in 2023 (Rhodium Group, 2024).

Studies suggest that lifetime use for fossil gas-fired plants breaks even after 9–17 years of operation under current regimes. The longevity of gas-fired power plants severely hampers the phase-out of fossil gas and, as a result, either jeopardises the sector’s 2035 decarbonisation target or invites the widespread deployment of CCS if the gas-fired fleet remains in operation or is expanded (Global Energy Monitor, 2024).

Oil and fossil gas extraction

The US became the world’s largest producer of crude oil in 2018 (U.S. Energy Information Administration, 2018), reaching its highest levels of oil and gas production and exports in 2023. US crude oil exports reached a high of 4.1 million barrels per day in 2023, corresponding to a 13% increase compared to previous record export level in 2022 (U.S. Energy Information Administration, 2024b). Increasing exports were driven by increased crude oil production, several releases from the US Strategic Petroleum Reserve (SPR), and increased demand in Europe for an alternative to Russian crude oil (U.S. Energy Information Administration, 2023l).

Exports of petroleum products similarly increased: more petroleum products were exported—nearly six million barrels per day—in the first half of 2023 than in the first half of any prior year. Since 2020, growth in propane exports has driven growth in overall petroleum product exports; approximately 1.5 million barrels were exported per day in the first half of 2023 (U.S. Energy Information Administration, 2023e).

The US is also the largest producer of fossil gas. Liquified natural gas (LNG) exports continue to increase year after year. In the first half of 2022, the US became the world’s largest LNG exporter. By the first half of 2023, LNG exports had further increased by 4% (U.S. Energy Information Administration, 2023d). This trend is expected to continue into the future as the US is planning to increase its LNG export capacity by more than 40% by 2026, compared to 2022 (U.S. Energy Information Administration, 2023m).

The growth in exports is mainly driven by strong LNG demand from Europe, as well as by expanded and reopened LNG capacity. In 2022, US LNG exports to Europe increased by 141% compared to 2021 levels (U.S. Energy Information Administration, 2023b). Outside of Europe, interest in and demand for US LNG is also growing. In Mexico, new LNG terminals, as well as an expanding pipeline network, are contributing to growth in LNG imports from the US. In Asia, imports from the US continue to increase; Japan, China, and India increased imports in 2023 relative to 2022, while the Philippines and Vietnam imported LNG from the US for the first time in 2023 (Zaretskaya, 2024).

In January 2024, the Biden Administration took a step towards addressing the climate impacts of US fossil fuel exports by issuing a temporary pause on the development of new LNG export terminals (Daly, 2024). The administration cited outdated project evaluation criteria, which inadequately capture the financial and environmental cost of new LNG infrastructure, as cause for the moratorium. As of October 2024, the pause remains in place. It is important to note that the pause does not impact operational, as well as approved, LNG terminals and, as a result, does not immediately impact the US supply of LNG to Europe and Asia (The White House, 2024b).

Although a step in the right direction, the US should take stronger, more consistent action to phase out fossil fuel production and exportation. As the world’s largest fossil fuel producer and LNG exporter, as well as one of the largest GHG emitters and richest countries in the world, the US has a responsibility and is well-positioned to phase out fossil fuels.

On the international stage, the US has signalled support for a reduction in fossil fuel production: at COP26, the US pledged to end international public support for the unabated fossil fuel energy sector by the end of 2022 (UK COP 26 Presidency, 2021b), and at COP27, the US supported language on a “fossil fuel phasedown." However, as evidenced by ever increasing domestic oil and gas exploitation, the government has contradicted itself on this issue (CAT, 2023).

Record levels of fossil fuel production translate to record profits for oil and gas corporations. An analysis of five major fossil fuel corporations revealed that this set of companies earned USD 152bn in profit between 2017 and 2020 (Climate Power, 2024a). More recent data for 2021 through 2023 show that profits for the top ten largest oil and gas corporations by value tripled to USD 313bn under the Biden Administration in comparison to reported profits from 2017 through 2019 (McCormick & Smyth, 2024).

The EIA’s Annual Energy Outlook 2023, included in the range of our current policy scenario projections, projects US fossil gas production to increase by 15% and LNG exports to increase by 152% between 2022 and 2050 (U.S. Energy Information Administration, 2023a). This increase is due to the expected increase in domestic and foreign demand for fossil gas and a continued increase in LNG capacity (U.S. Energy Information Administration, 2023m).

The US has one of the largest expansion plans for oil and gas projects in the world. The country accounts for over one-third of planned global expansion in oil and gas extraction between 2023 and 2050. With 22 oil and gas mega-project plans in place, the US accounts for more than one-fifth of potential emissions from major carbon emitting energy projects in the world. Together, these 22 mega-projects have the potential to emit nearly 143 GtCO₂e in their lifetime, which is almost four times more than the entire world emits each year (Kühne et al., 2022).

Expansion of oil and gas projects is driven by planned increases in fracking and LNG extraction (Ioualalen & Trout, 2023). In 2022, subsidies for fossil fuels, as defined as budgetary transfers, tax expenditures, and general supply- and demand-side financial support, reached their highest level since 2010: subsidies amounted to USD 14bn in 2022 (Fossil Fuel Subsidy Tracker, 2022).

Fossil fuel subsidies have and will continue to spur the expansion of fossil fuel projects. Research indicates that two of the largest and longest standing subsidies—the ‘expensing of intangible drilling costs’ (IDC) subsidy and the ‘percentage depletion’ subsidy—increased the expected value of new oil and gas projects by upwards of USD 20bn over the past two decades (Erickson, 2021). Additionally, the Inflation Reduction Act (IRA), which incentivises the build out of renewable energy, simultaneously enables the expansion of oil and gas production by mandating new leases on public lands for fossil fuel projects (see below on new auctions and project approvals) (Ioualalen & Trout, 2023).

To keep 1.5°C of warming within reach, GHG emissions must be halved globally by 2030 and no new oil and gas should be developed (IEA, 2023b; IPCC, 2022). Therefore, the planned investment in and development of new oil and gas infrastructure in the US obstructs progress towards the global 1.5°C temperature target, as well as the country’s 2030 climate target and 2050 net zero target, and will likely lead to significant stranded assets in a Paris Agreement-compatible future.

New fossil fuel auctions and project approvals

Beyond the IRA’s incentives for clean energy production and investment, the act also provides notable concessions to the fossil fuel industry. The act offers these compromises under the pretence of allowing domestic oil and gas companies to transition away from fossil fuels at a reasonable pace.

The IRA requires the federal government to offer an annual minimum area of specified public lands for oil and gas drilling. While the act does increase the royalty rates paid by companies for extracting fossil fuels on public lands, it also requires the prioritisation of oil and gas auctions over renewable energy on federal lands and offshore developments.

These provisions not only contradict President Biden’s promise to end new federal fossil fuel leasing of public lands, but also increase the risk of locking in fossil fuel infrastructure and creating stranded assets during the energy transition. Although the Biden Administration has already reached its 2025 target for renewable energy deployment on public lands (Groom, 2024), the continued leasing of public lands for oil and gas extraction sends a long-term signal to the fossil fuel industry that may slow the pace of emissions reductions.

The result of new fossil fuel leasing under the IRA has been the approval of several large oil and gas projects on public lands. In March 2023, the US Department of the Interior (DOI) gave its formal approval for the ConocoPhillips Willow Project in Alaska’s National Petroleum Reserve, which is the largest approved oil and gas project in the country (Chu, 2024). Although the DOI significantly reduced the scope of the project, the Willow Project is one of the few oil projects that the Biden Administration approved without a congressional or court mandate (U.S. Department of the Interior, 2023b).

The approval of the project breaks Biden’s promise to stop new oil drilling on federal land and will result in significant environmental and biodiversity impacts. The project has the potential to produce over 600 million barrels of crude oil over the next 30 years, which will release nearly 280 MtCO₂e in emissions (U.S. Bureau of Land Management, 2023).

In 2023, the Biden Administration auctioned off 73 million acres in the Gulf of Mexico, more than double the size of the Willow Project, for offshore oil and gas drilling. The auction generated over USD 260m, the highest bid total since 2017. While the auctioning of these offshore sites was a mandatory provision under the IRA, the government had the ability to reduce the size and scope of the sale but chose not to (U.S. Bureau of Ocean Energy Management, 2023).

In July 2023, the Supreme Court cleared the way for the construction of the Mountain Valley Pipeline to proceed. The pipeline is a 500-km-long project that will transport fossil gas from West Virginia to Virginia. The pipeline was subject to multiple lawsuits and a complex environmental permitting process as the planned pipeline will cross waterways and national forest lands. The project’s approval came after a bipartisan group of lawmakers filed an emergency request to include the project in the debt ceiling negotiations, which eliminated the ability to challenge the pipeline in court (AP News, 2023; U.S. Department of Agriculture, 2023).

In September 2023, the government published new, stricter rules for offshore oil and gas leasing as part of the next iteration of its offshore leasing programme for 2024–2029 (Bureau of Ocean Energy Management, 2023). During this five-year period, only three areas of the Gulf of Mexico will be auctioned to fossil fuel companies. The drafting of the updated leasing programme was delayed by litigation from several states, oil and gas companies, and environmental groups (U.S. Bureau of Ocean Energy Management, 2022).

State-level action to end fossil fuel production

California is the only oil and gas producing state that has moved to end production. The state banned new fracking permits from 2024 and plans to phase out oil production by 2045. California is a founding associate member of the Beyond Oil and Gas Alliance (BOGA), which was introduced at COP26. Washington state joined BOGA at COP27 in 2022 and has implemented measures to ban new fossil infrastructure, including oil refineries (Beyond Oil and Gas Alliance, 2021, 2022). The US did not join BOGA at its founding at COP26 and has since not joined the alliance.

Abandoned fossil fuel infrastructure

The Bipartisan Infrastructure Law (BIL) includes a USD 21bn investment to plug and clean up abandoned coal mines and oil and gas wells, which continue to emit significant amounts of methane and other pollutants long after remission (U.S. Senate, 2021). In August 2022, the DOI awarded USD 560m to 24 states to begin work on monitoring and capping methane emissions from orphaned oil and gas wells (U.S. Department of the Interior, 2022). This initiative is further supported through the IRA’s Methane Emissions Reductions Program, under which the Biden Administration announced an additional USD 350m in the first of a series of grants for states to measure and reduce methane emissions from the oil and gas sector. The programme includes funding for plugging and cleaning up abandoned well sites (U.S. Department of Energy, 2022f).

Direct GHG emissions from industry accounted for 23% of total US emissions in 2023, making it the third largest contributor to US GHG emissions after the transport and electricity sectors.

In 2020, emissions from the industrial sector decreased by 6% due the COVID-19 pandemic. In 2021, sectoral emissions increased by 1% as a result of the economy’s recovery. In 2022, emissions remained stable, indicating that the sector’s emissions have not reached pre-pandemic levels again (U.S. Environmental Protection Agency, 2024n).

Industrial emissions have remained largely stable over the past decade, even as the US economy has transitioned from a manufacturing to a service-based economy and as industrial processes have experienced efficiency improvements and shifted to less emissions-intensive fuels (U.S. Environmental Protection Agency, 2024n). Under current policies, emissions from the industrial sector are projected to remain stable or minimally decrease as a result of the counteracting forces of renewed growth in domestic manufacturing and strengthen decarbonisation policies under the Inflation Reduction Act (IRA) (King, Kolus, et al., 2024; U.S. Environmental Protection Agency, 2023d).

The IRA funds several measures to decarbonise the industrial sector. The act provides USD 5.8bn in funding for the new Advanced Industrial Facilities Deployment Program. In 2024, this programme selected, and began awarding financing to, projects in emissions-intensive industrial facilities (e.g. iron, steel, concrete sectors). The DOE estimates that the programme will reduce 14 MtCO₂ annually (Office of Clean Energy Demonstrations, 2024).

The IRA also expands tax credits for carbon capture, utilisation, and sequestration (CCUS) technology, building on the Bipartisan Infrastructure Law’s (BIL) investments in CCUS demonstrations and industrial applications (The White House, 2023b; U.S. Department of Energy, 2022d). Estimates suggest that measures under the IRA for industrial CCUS might reduce up to 240MtCO₂e/year (U.S. Environmental Protection Agency, 2023d).

The IRA includes the Advanced Energy Project Credit, which provides tax credits for industrial and manufacturing facilities that invest in certain clean energy technologies. Eligible facilities either must re-tool with equipment designed to reduce GHG emissions by at least 20%, re-equip, expand, or establish measures for producing and recycling clean energy equipment, or process, refine, and recycle critical materials (The White House, 2023b). A total of USD 10bn in tax credits was allocated in a first round. A second round in 2024 aims to allocate an additional USD 6bn (IRS, 2024; U.S. Department of Energy, 2024g).

The US implemented a diverse patchwork of financial incentives to support the research and development of technologies that are key for industrial decarbonisation. However, the government has not introduced instruments to facilitate the commercialisation of many of the technologies needed in hard-to-abate industrial subsectors (System Change Lab, 2024). Unlike the EU, the US has not developed a national emissions trading scheme, which, if designed correctly, could help expediate the commercialisation of key technologies.

The challenging economics of many technologies in the industrial sector, such as green hydrogen and CCUS, require clear, robust incentive schemes to de-risk and attract investment (Department of Energy, 2024). Individual products, such as clean and/or green steel, might otherwise still find niche market applications (e.g. via government procurement), but will likely not be sufficiently commercialised to enable a full sector decarbonisation.

In March 2023, the US Environmental Protection Agency (EPA) finalised its Good Neighbour Plan, which requires industrial facilities and power plants in 23 states to cut NOx emissions to prevent pollution across state lines. By 2026, the EPA plans to set enforceable NOx emissions control requirements, which will primarily reduce emissions from harmful air pollutants and also reduce CO₂ emissions by 16 MtCO₂e/year (U.S. Environmental Protection Agency, 2023e).

F-gases

In December 2020, the US Congress enacted legislation under the American Innovation and Manufacturing (AIM) Act to tackle hydrofluorocarbon emissions (HFC). The act directs the EPA to phase down the production and imports of HFCs by 85% until 2036. It is expected to reduce emissions by 4.7 GtCO₂e by 2050 via sector-based requirements to transition to non-HFC-emitting alternatives and next-generation technologies (U.S. Environmental Protection Agency, 2021b).

In 2024, the US met its HFC phase-down target of reducing HFCs by 40% below 2020 levels (Haroldsen, 2024). The IRA provides an additional USD 38.5m to the EPA to implement the AIM Act (The White House, 2023b). We incorporate the IRA's effects on reducing non-CO₂ emissions into our current policy projections through a review of studies that quantify this impact (see Assumptions section).

Hydrogen

Hydrogen plays a central role in the Biden Administration’s roadmap for decarbonising hard-to-abate industrial processes and replacing fossil fuel-based feedstock with cleaner alternatives. The IRA established the Hydrogen Production Tax Credit to incentivise domestic production of clean hydrogen and to meet the Biden Administration’s Hydrogen Shot target, which aims to reduce the cost of clean hydrogen by 80% to USD 1 per kilogram through 2030 (The White House, 2023b). Recently, the credit has received criticism for its requirements to minimise emissions from hydrogen production, which certain actors argue are too costly (Pontecorvo, 2024).

In 2022, the transport sector accounted for 28.5% of total US GHG emissions and, since 2017, has been the largest contributor. Total sector emissions increased by 19.4% between 1990 and 2022 due to increased motorised transport demand: during the same period, the average number of vehicle miles travelled (VMT) per passenger cars and light-duty trucks increased by 46.7%. Road transport is responsible for the vast majority of transport sector emissions in the US: light, medium, and heavy-duty trucks and passenger cars accounted for 79.8% of total sectoral emissions in 2022 (U.S. Environmental Protection Agency, 2024g).

The 2021 Bipartisan Infrastructure Law (BIL) includes several components to decarbonise the transport sector, such as investments to improve roads, modernise public transit, and boost the electric vehicle (EV) market (U.S. Senate, 2021). The BIL includes measures to develop EV charging stations (USD 7.5 bn), strengthen the country’s EV battery supply chain (USD 7bn), update and upgrade public transportation (USD 39bn), build out ‘climate-friendly’ passenger and freight railways (USD 66bn), and invest in roads, bridges and other transportation infrastructure projects (USD 110bn), as well as in clean busses and ferries (USD 7.5bn).

The Inflation Reduction Act (IRA), alongside significant investments in electrifying light- and heavy-duty vehicles (see below), provides considerable financial support for EV manufacturing and supply chains: the IRA sets aside USD 2bn for the Domestic Manufacturing Conversion Grant Program, which funds the re-tooling of production lines for EVs. The act allocates another USD 3bn for the Advanced Technology Vehicle Manufacturing Loan Program, which has expanded coverage to heavy-duty vehicles, locomotives, maritime vessels, and planes. As a result, plans for 163 new battery and 117 EV manufacturing plants have been announced.

If fully realised, these plants would create over 170,000 new jobs in battery and EV manufacturing and account for over 60% of all new jobs created by the IRA (Climate Power, 2024b). By 2030, if all planned manufacturing plants are operationalised, domestic battery manufacturing capacity is estimated to increase by nearly 20 times to approximately 1000 GWh/year relative to 55 GWh/year in 2021 (U.S. Office of Energy Efficiency & Renewable Energy, 2023).

The IRA also extends the Advanced Manufacturing Production Credit to spur the domestic production and sale of clean energy components, including certain EV-relevant battery components and critical minerals (The White House, 2023b). Through these measures, the IRA is expected to reduce transport sector emissions by 15%–35% by 2035 relative to 2005 (U.S. Environmental Protection Agency, 2023c). In combination with existing policies and the BIL, the IRA is estimated to reduce overall GHG emissions by 1,150 MtCO₂e in 2030 in comparison to business-as-usual scenarios; the result is that GHG emissions are forecasted to be 40% lower in 2030 than in 2005 (U.S. Department of Energy, 2022e).

In January 2023, the Biden Administration released its National Blueprint for Transportation Decarbonisation to support the 2050 economy-wide net zero target and the 2050 target of 80%–100% emissions reductions in the transport sector. The blueprint's three key strategies align with the Avoid, Shift, and Improve (ASI) framework: the strategy supports community design and land-use planning, expands access to more efficient public and private transport, and facilitates the transition to zero emission vehicles and fuels (U.S. Department of Energy et al., 2023).

Passenger transport

The modal split for passenger transport has been and continues to be dominated by road transport. In 2022, nearly 70% of all commutes were undertaken by single-occupancy vehicles, while only approximately 9% of commuters carpooled. The share of single-occupancy vehicle commutes decreased by over 10% between 2018 to 2022. During the same period, and likely attributable to the COVID-19 pandemic, the share of the population working from home increased by nearly 10%. In 2022, approximately 6% of commuters used public transport and engaged active mobility (U.S. Bureau of Transportation Statistics, 2022).

In March 2024, the US Environmental Protection Agency (EPA) revised its Multi-Pollutant Emissions Standards for passenger cars, light-duty trucks, and medium-duty vehicles. The standards, which will phase in from 2027 through 2032, set fleet-wide CO₂ emissions targets for auto manufacturers. For light-duty vehicles, the fleet-wide average target is 170 CO₂ grams/mile in 2027. By 2032, the average target for light-duty fleets will be reduced to 85 CO₂ grams/mile (U.S. Environmental Protection Agency, 2024i).

To meet the 2032 target, the EPA estimates that battery electric vehicles will account for 30–56% of automaker's fleets to meet the average emissions target (U.S. Environmental Protection Agency, 2024j). The resulting emissions reductions are approximated to total 7.2bn tons of CO₂ through 2055 (U.S. Environmental Protection Agency, 2024b).

The efforts are somewhat undermined by the fact that medium-duty vehicles—a vehicle segment that includes vans and pickup trucks and represented nearly 20% of the total US light- and medium-duty vehicle fleet in 2021—are subject to a different, less demanding set of emission standards (U.S. Environmental Protection Agency, 2022a).

Although the updated standards are the most stringent in US history, the standards are less ambitious than equivalent regulations in the EU and the UK, where the emissions target for 2035 is 0 CO₂ grams/mile for new light-duty vehicles (The International Council on Clean Transportation, 2024). The relative weakness of the US standards may be partially attributable to lobbying efforts from auto manufacturers. The EPA initially proposed more ambitious fleet-wide average targets between 2027 and 2032, but the auto lobby, spearheaded by Toyota's push for more flexibility in achieving the emissions targets, successfully watered down the standards (Tabuchi, 2024). In doing so, auto manufacturers can continue to fulfil their emission reduction targets with ICE-based vehicles, which prolongs the production and profitability of fossil fuel-powered vehicles and obstructs a faster transition towards a decarbonised transport sector.

At the state level, stricter, more ambitious EV policy has been implemented. California established a 100% EV sales target for 2035 through its Advanced Clean Cars II regulation in 2023. This regulation has been duplicated and adopted by twelve other states and the District of Columbia (D.C.) (California Air Resources Board, 2024). As a result, over one-third of all light-duty vehicle (LDV) sales in the US are subject to the 2035 100% EV sales target (IEA, 2024b).

The combined sales of hybrid, plug-in hybrid, and battery electric vehicles made up 16.3% of all new LDV sales in the US in 2023. Battery electric vehicles accounted for approximately 7% of new car sales in the US in 2023; BEV sales reached a record of 1.1 million in 2023 (U.S. Energy Information Administration, 2024a).

The growth in BEV sales is the result of a larger selection and significant price cuts in vehicles: in 2023, 20 new BEV models were introduced, while the average transaction price for BEVs decreased by over 17% between December 2022 and December 2023. In the first quarter of 2024, the gap in average transaction price between BEVs and ICE-based vehicles decreased to a record low of USD 7,000 before any purchase incentives are applied (Doll, 2024; Kelley Blue Book, 2023; U.S. Energy Information Administration, 2024a). This means that, once government incentives are applied, certain BEVs are as or more affordable than their ICE counterparts. Beyond increases in availability and affordability, growing consumer interest and IRA incentives continue to further augmented uptake (Inside EVs, 2023).

To reduce emissions from road transport, the government set a goal for 50% of all new vehicles sold in 2030 be battery electric, plug-in hybrid, or fuel cell vehicles (The White House, 2021d). However, this 50% target is not aligned with the Paris Agreement. To be compatible with the PA, research suggests that 95–100% of sales of new LDVs in the US should be zero-emissions by 2030 (Climate Action Tracker, 2020).

Even with IRA support, the US government estimates that LDV EV sales will only reach a median of 36% in 2030 (with a range of 15%–54%) (U.S. Environmental Protection Agency, 2023c), which is insufficient to meet the Biden Administration's goal, let alone to meet the 1.5°C compatible benchmark (U.S. Energy Information Administration, 2023a; U.S. Environmental Protection Agency, 2023c).

It is important to note that estimates for EV uptake vary substantially. The International Energy Agency’s (IEA) Global EV Outlook 2023 estimates that the US will achieve the EV sales target of 50% by 2030 under the STEPS scenario and the International Council on Clean Transportation anticipates the LDV EV sales share will reach 48%–61% in 2030 (U.S. Environmental Protection Agency, 2023c). At the same time, recent US Energy Information Agency (EIA) calculations only project 13–29% EV sales in 2050 (IEA, 2023a; U.S. Energy Information Administration, 2023i).

The US did not sign the 100% EVs declaration at COP26. Signatories agreed that 100% of new car and van sales in 2040 should be electric vehicles (Race to Zero, 2021). Despite the absence of the federal government’s signature, many US subnational and non-state actors, including states, cities, and automakers, signed the declaration (UK COP 26 Presidency, 2021a).

In March 2024, the Biden Administration, building on the set of tariffs imposed by the Trump Administration in 2018, increased tariffs on a range of decarbonisation-relevant products and technologies from China. Tariffs on Chinese electric vehicles increased the most: the border tax on EVs will quadruple from 25% to 100% of the import value (Tankersley & Rappeport, 2024). Although politically significant, research indicates that economic impacts will likely be limited (Sherman, 2024). In September 2024, the Biden Adminsitration, citing national security concerns, proposed a ban on all Chinese connected car hardware and software (Shepardson et al., 2024). If finalised, Chinese software would be banned starting in 2026, while hardware would be prohibited beginning in 2030.

The IRA accelerates the uptake of electric light-duty vehicles by extending and expanding tax credits for both new and used EVs. From 2023 through 2032, the Clean Vehicle Credit provides up to USD 7,500 for new battery electric, plug-in hybrid and fuel cell EVs that retail under USD 80,000 for vans, SUVs, and pickup trucks and USD 55,000 for all other types of vehicles. To qualify for the full credit, the vehicle and its critical mineral and battery components must meet certain requirements for assembly in and sourcing from North America or trusted trade partners (U.S. Internal Revenue Service, 2024a). The result of the sourcing and manufacturing requirements is that only 22 EV models qualified for the total tax credit out of the 104 EV models for sale in May 2024 (Lambert, 2024).

Beyond targeting new EV sales, the US government seeks to leverage the maturing used electric vehicle market, which was made up of approximately 400,000 EVs in 2023 (IEA, 2024b): the Used Clean Vehicles Credit provides up to USD 4,000 to buyers who purchase a used electric vehicle for USD 25,000 or less (U.S. Internal Revenue Service, 2024c).

Both the credits for new and used EVs are capped at different income levels to increase the affordability of and access to EVs for individuals and households with lower to middle incomes. Buyers of used EVs can also claim the credit at the time of purchase, which more immediately reduces the purchasing or monthly financing cost. As high costs remain a crucial barrier to EV adoption, reducing costs, particularly for buyers with lower incomes, accelerates and supports a just transition to EVs (Pamidimukkala et al., 2023).

The government is on track to achieve its 2030 target for 500,000 publicly accessible recharging points in 2026 (The White House, 2024a). The number of publicly accessible recharging points increased by over 70% to 170,000 stations since 2021 (U.S. Joint Office of Energy and Transportation, 2024).(U.S. Environmental Protection Agency, 2023i)

Freight transport

Freight transport emissions account for an increasing share of total transport emissions in the US: the share of emissions from freight transport increased from 24% in 1990 to 32% in 2021 (K. Kennedy, 2023). Trucking accounted for 65% of all freight moved by weight and made up roughly 83% of total freight transport emissions in 2021 (U.S. Environmental Protection Agency, 2024f).

To mitigate emissions from trucking, the government revised emissions standards for heavy-duty vehicles in 2024 (see below). Shifting freight transport to rail, which only emitted 5.7% of total sectoral emissions in 2021 (U.S. Bureau of Transportation Statistics, 2023) and accounted for the greatest share of long-distance freight volumes across all modes of freight transport, has significant emissions reductions potential (Association of American Railroads, 2021).

In March 2024, the EPA adopted an updated set of vehicle emissions standards for heavy-duty trucks, transit, and vocational vehicles. The Greenhouse Gas Emissions Standards for Heavy-Duty Vehicles Phase 3 strengths the existing emissions standards: heavy-duty vocational vehicles need to reduce emissions by up to 60% more under the Phase 3 standards relative to Phase 2.

The revised standards will effect HDVs starting in 2027 through 2032. Between 2027 and 2055, the standards are expected to mitigate approximately 1bn tons of CO₂ emissions (U.S. Environmental Protection Agency, 2024e). In comparison, the EU, which also revised its heavy-duty vehicle emissions standards in 2024, sets a more ambitious emissions reductions target for all new HDVs for 2030, which will escalate to a 90% target for 2040.

As a first step to mainstream reductions in freight transport emissions, the Biden Administration established a national goal to transition towards a zero-emissions freight sector in April 2024. Although the administration has not indicated an explicit timeline for the zero-emissions target, separate action plans for decarbonising truck, rail, aviation, and marine freight transport are to be developed.

Since its adoption in 2022, the IRA has spurred investments and introduced provisions to reduce GHG emissions from heavy-duty transport. Through the IRA, the EPA launched the Clean Heavy-Duty Vehicle Program, which was revised in 2024, to provide USD 1bn in grants to states, municipalities, and Tribes to offset the costs of replacing heavy-duty vehicles with zero-emissions alternatives and installing related infrastructure; at least USD 400m of the total funding will be channelled towards communities suffering from severe air pollution (U.S. Environmental Protection Agency, 2024d). The programme's first funding round of over USD 900m opened in April 2024 (U.S. Environmental Protection Agency, 2024c). The EPA estimates that 70% of the programmes funding will go towards replacing ICE-based school buses (U.S. Environmental Protection Agency, 2024a). An additional USD 3bn is allocated to provide grants to local governments, port authorities, and other relevant actors to purchase and install zero-emission port equipment and technology (The White House, 2023b).

The IRA has also introduced the Commercial Clean Vehicles Credit, which defers 30% of the costs of replacing diesel or gas-powered commercial vehicles—ranging from cars to long-haul trucks —with electric vehicles. A credit of up to 15% is also available when replacing a vehicle with a partially electric alternative. The IRA also allocates USD 3bn for electrifying the United States Postal Service fleet (The White House, 2023b).

Beyond providing tax credits for buyers, the government is partnering with truck manufacturers to further develop heavy-duty EV technologies. Through the 21st Century Truck Partnership, the Supertruck 3 programme, and the Million Mile Fuel Cell Truck consortium, the US Department of Energy (DOE) is supporting the research and development of next generation of heavy-duty batteries and fuel cells (U.S. Department of Energy, 2022a).

The government is also funding commercial EV demonstration projects. In 2023, the DOE awarded over USD 7m to seven projects that will develop a medium- and heavy-duty recharging station corridor across 23 states. In 2024, the government announced that the DOE would fund the research and development of load management strategies to alleviate recharging-related grid capacity challenges.

Federal government support for commercial EV uptake has been supplemented by state action. New York and California provide additional purchase incentives of over USD 100,000 on top of the IRA’s mechanism. In response, adoption of heavy-duty EVs seems to be increasing: delivery van fleets are quickly electrifying as Amazon, FedEx, UPS, USPS, and Walmart place major EV orders. Commercial production by Volvo and Freightliner of electric tractor trailers, or 18-wheelers, began in 2023.

Although there are promising signs of increasing implementation, only 1.5% of all commercial heavy-duty vehicles in the US were BEVs or PHEVs in September 2023. At the same point in time, the share of BEVs and PHEVs in the HDV fleets in Europe and China amounted to over 7% and 10%, respectively (Soulopoulos, 2023).

Aviation

The IRA also seeks to encourage the development and adoption of sustainable fuel technologies in the aviation industry. The Sustainable Aviation Fuel Tax Credit incentivises the sale and use of sustainable aviation fuels (SAF) that reduce lifecycle GHG emissions by at least 50% compared to petroleum-based jet fuel.

The tax credit, worth USD 1.25 per gallon, is progressive: SAF that reduce emissions by more than 50% are eligible for an additional USD 0.01 per gallon for each extra percent that the reduction exceeds 50% (up to USD 0.50 per gallon) (U.S. Department of Energy, 2022c). The act additionally provides nearly USD 300m in grants to develop and deploy projects related to sustainable aviation fuel and low-emission aviation technologies (The White House, 2023b).

Although the US produced nearly 16m gallons of SAF in 2022, these fuels accounted for less than 0.1% of the total fuel used by US airlines in the same year (U.S. Government Accountability Office, 2023). Additionally, analysis suggests that currently available SAF do not reduce emissions across the fuels’ full lifecycles given their emissions and agricultural resource-intensive production methods (Lashof & Denvir, 2024).

In 2022, direct GHG emissions from buildings accounted for 13.5% percent of total US GHG emissions; 7.3% of the sector’s emissions came from commercial buildings and 6.2% from residential buildings. When accounting for indirect, electricity-related emissions, the buildings sector made up almost one-third (31.1%) of the country’s total GHG emissions in 2022. Since 2005, total emissions—the combination of direct and indirect emissions—from residential and commercial buildings have decreased by approximately 25%. However, direct emissions from buildings have remained nearly constant since 2005 (U.S. Environmental Protection Agency, 2024g).

The Biden Administration aims to reduce emissions from buildings by 65% in 2035 and by 90% in 2050 compared to 2005 emissions levels. However, to be 1.5°C compatible, the CAT estimates that emissions from buildings in the US should already be 60% lower in residential buildings and 70% lower in commercial buildings by 2030 compared to 2015 levels (Climate Action Tracker, 2021a, 2021b). Achieving these levels of emissions reductions requires the complete phase-out of new fossil fuel-based energy supply installations in buildings and the rapid retrofitting of the existing housing stock to improve energy efficiency.

Building codes

Developing and implementing building codes is largely the responsibility of state and local authorities. The federal government’s ability to regulate emissions from buildings is limited; the federal government can directly regulate federal buildings and, otherwise, can only provide financial support and technical guidance for state and local governments.

In April 2024, the US Department of Energy (DOE) released a national strategy to guide the decarbonisation of the building sector by 2050, which emphasises the federal government’s role in coordinating and supporting subnational governments in reaching this target (U.S. Department of Energy, 2024a). The strategy outlines key actions, performance targets, and barriers to increase building energy efficiency, accelerate on-site emissions reductions, transform the grid edge, and minimise embodied lifecycle emissions.

The Bipartisan Infrastructure Law (BIL) includes USD 225m for state and local implementation of energy codes. Albeit limited in comparison with other funding allocations under the BIL, these resources have largely gone towards the Resilient and Efficient Codes Implementation programme to support energy code adoption, enforcement, training, and technical assistance at the subnational level. In 2022, the DOE released a new building energy code for federal buildings that aims to improve energy efficiency (The White House, 2022b).

The Biden Administration’s National Initiative to Advance Building Codes unlocked USD 1bn in IRA grants to further support state and local governments in the adoption of the latest building codes and energy efficiency standards. The initiative aims to provide technical and financial support to state and local governments to modernise building codes in underserved communities, to enhance resilience to increasingly severe weather impacts, to increase household savings on utility bills, and, in turn, to further reduce residential GHG emissions.

In June 2024, the DOE released its National Definition for a Zero Emissions Building (U.S. Department of Energy, 2024e). According to the definition, a net zero energy building (nZEB) must be highly energy efficient, cannot emit greenhouse gases on-site, and is powered entirely by clean energy. It is important to note that this definition is not a binding, regulatory standard. Instead, the definition is intended to support and guide public and private sectors in decarbonising new and existing commercial and residential buildings.

At the state level, only California and Massachusetts have set targets for nZEBs in their building codes (Massachusetts State, 2022; State of California Public Utilities Commission, 2021). Due to its limited jurisdiction regarding building codes, the federal government has only set a net zero target for federal buildings (see federal buildings section below). In contrast, the EU, which is similarly legally constrained in implementing building codes, requires Member States to set domestic regulations for all new buildings to be zero emissions by 2030 and for the entire building stock to be zero emissions by 2050.

Given that the average lifetime of residential buildings is over 60 years (Aktas & Bilec, 2012), renovating and converting existing buildings into nZEBs is key to mitigating emissions from the sector. To encourage net zero renovations, the federal government provides financial incentives. However, the government does not clearly define or provide guidance on the process of converting buildings to net zero structures. In comparison, the EU provides a step-by-step, long-term guide for deep, net zero renovations through its Building Renovation Passport; the guidelines make the renovation process more accessible to homeowners and, in turn, expediate the transition to nZEBs (European Commision, 2024).

As it stands, the decarbonisation of buildings in the US will mainly rely on financial incentives for energy efficiency improvements, which, as a result, may have to rely heavily on the electrification of buildings and put more pressure on the power sector. Modelling work by the US Environmental Protection Agency (EPA) hints at the building sector’s dependency on electrification for decarbonisation: under the IRA, total emissions from buildings will decrease significantly by 2035 as the share of electricity in final energy consumption is expected to increase by nearly 5% between 2025 and 2035 (in contrast, to an increase of only 2% in the absence of the IRA) (U.S. Environmental Protection Agency, 2023a). At the same time, direct emissions from fuel combustion will likely remain stable; indicating that reductions in total emissions seem to be driven by a decrease in indirect, end-use electricity emissions (U.S. Environmental Protection Agency, 2023c).

Support for energy efficiency and RE measures

Through the BIL, the government allocated USD 3bn to support energy efficiency and electrification upgrades in homes (U.S. Department of Energy, 2022g). The 2022 IRA builds on the BIL by unlocking nearly USD 9bn for states and Tribes to support consumer home energy rebate programmes; specifically, for programmes related to retrofitting buildings and purchasing high-efficiency electronic appliances in lower-income communities (The White House, 2023b).

The incentives aim to simultaneously reduce energy costs for homeowners and emissions from residential buildings. Via IRA funding, households that retrofit their homes and reduce energy use by at least 35% are eligible for a tax rebate worth USD 4,000. Multifamily structures can qualify for up to USD 400,000.

To further incentivise home energy improvements, the government provides tax rebates for energy efficiency upgrades, such as for installing heat pumps, insulation, doors, and windows, and for investing in residential clean energy, including rooftop solar, wind, geothermal, and battery storage (U.S. Internal Revenue Service, 2024b).

Beyond supporting residential building upgrades, the IRA targets energy use in commercial buildings by providing tax deductions for buildings that increase their energy efficiency by at least 25% (The White House, 2023b). The BIL introduced the Energy Efficiency Revolving Loan Fund Capitalization Grant Program (RLF), which channels USD 250m to states to establish revolving loan funds. With these funds, states can provide loans, grants, and technical assistance for energy upgrades and retrofits in commercial and residential buildings (U.S. Department of Energy, 2022b, 2024d).

Embodied life-cycle carbon emissions of construction and building materials are a significant contributor to GHG emissions: embodied carbon is estimated to make up approximately 14% of building emissions (U.S. Department of Energy, 2024a) and as much as 6% of total national emissions (Huynh et al., 2023).

However, there is a lack of standardised, high-quality data on embodied emissions and the federal government does not publicly release data on such emissions. Nevertheless, the government, under the IRA, has taken steps to reduce embodied emissions in buildings. In 2023, the IRA allocates USD 100m to develop standardised labels for lower-embodied carbon building materials, as well as USD 2.15bn for 150 construction projects that employ types of asphalt, concrete, glass, and steel with low embodied carbon (Chase, 2024).

Energy efficiency standards

Energy efficiency standards for consumer products and appliances in the US are generally ambitious; a 2023 review of the stringency of minimum energy performance standards determined that the federal government’s energy standards for electric motors, refrigerators, and water heaters meet or exceed international best practice (Mavandad & Malinowski, 2023).

The EPA’s voluntary energy efficiency labelling programme, ENERGY STAR, supports the government’s efficiency standards. The programme labels efficient products, as well as residential, commercial, and industrial buildings and, in 2020, is estimated to have reduced emissions by 400 MtCO₂e, which is equivalent to a 5% reduction in total national emissions (ENERGY STAR, 2023).

In 2022, the Biden Administration took over 100 actions to strengthen energy efficiency standards for a broad range of products, including household products and appliances, as well as commercial and industrial equipment. The updated standards will reduce GHG emissions by an estimated 2.4 GtCO₂e over the next 30 years, or around 80 MtCO₂e/year (The White House, 2022c).

In 2023 and 2024, the DOE finalised new standards for refrigerators and freezers, air conditioners and cleaners, and clothes washers and dryers. In combination, these new standards are expected to reduce emissions by an average of 19.9 MtCO₂e/year over the next 30 years (U.S. Department of Energy, 2023b, 2023a, 2024c). In total, the revised standards for these products will reduce household and business energy costs by USD 8.7bn per year.

Federal buildings

The federal government is the largest energy consumer in the US and federal buildings are a principal source of the government’s emissions (Council on Environmental Quality, 2024). In April 2024, the DOE amended its energy performance standards for the new construction and renovation of federal buildings (U.S. Department of Energy, 2024b). The revised standards explicitly require federal buildings to reduce the use of fossil fuels. According to the standards, federal agencies must reduce their fossil fuel use in new construction and major renovation projects by 90% between FY2025 and FY2029. The standards mandate that the on-site use of fossil fuels is eliminated by 2030 (U.S. Department of Energy, 2024f).

In 2021, President Biden established through Executive Order numerous targets for federal operations and procurement, including reaching net zero emissions in the federal buildings portfolio by 2045 and reducing federal buildings emissions by 50% by 2032 (The White House, 2021c). In 2022, the Biden Administration issued implementing instructions on the Executive Order, which detailed the agency planning, reporting requirements, and accountability mechanism to achieve such targets (The White House Council on Environmental Quality, 2022).

Greenhouse gas emissions from the agriculture sector made up 9% of US emissions in 2022. Between 1990 and 2022, agriculture emissions increased by 8%, primarily from the growth of the livestock sector and the intensification of farming practices. Nitrous oxide emissions from soils made up half of agricultural emissions. Enteric fermentation and manure management from livestock represented other significant emissions sources.

Agricultural emissions decreased in 2022 compared to the previous year. However, this decrease was not the result of new policy, but is rather attributable to the decline in herd size—the smallest since the 1960s—due to drought conditions (U.S. Environmental Protection Agency, 2024h).

The Inflation Reduction Act (IRA) allocates USD 19.5bn for mitigation activities in the agriculture sector. The act mainly boosts the funding of existing conservation programmes, such as the Environmental Quality Incentives Program (EQIP) and the Conservation Stewardship Program (CSP) (Monke et al., 2022).

Both programmes offer financial and technical support to farmers to implement climate-friendly practices, including nutrient management, cover crops, low or no-tillage, and agroforestry. Historically, farmers have struggled to access funding under such programmes due to high demand and limited institutional capacity. These barriers could potentially be addressed by better distributing programme spending (e.g. by capping funds per farm), limiting the funding that goes to ineffective conservation practices, and increasing agency resources (Happ, 2023; Tham, 2023).

However, the efficacy of existing programmes to address on-farm emissions has come into question. Between 2019 and 2020, only one-fifth of total EQIP spending reportedly went towards the implementation of agricultural practices that directly reduce GHG emissions (Schechinger, 2022). While programmes like EQIP and CSP are now bolstered by IRA funding, they still face structural issues that may impede climate mitigation.

In 2024, 15 new practices were added to the 'climate-smart' category under the EQIP, but many of the new measures do not have proven climate benefits. A significant portion of EQIP funding goes towards manure management practices, including biodigesters that convert manure into biogas, which can be sold for profit and, therefore, may incentivise farmers to maintain or increase their herd sizes (Happ, 2024; Schechinger, 2024).

The IRA has also funded several programmes to support renewable energy use in the agriculture sector, including loans and grants for farmers who implement energy efficient equipment or underutilised renewable energy technologies (The White House, 2023b). However, certain provisions of these programmes could lead to perverse incentives. For instance, the Rural Energy for America Program (REAP) subsidises biogas production. However, in combination with existing state subsidies for cattle farmers to produce biomass, REAP’s subsidies could lead to intensified livestock production (Sainato, 2022).

The Farm Bill is a policy that heavily influences farmers’ decisions on what food to produce and how to produce it. The 2018 bill expired last year, but was temporarily extended through FY2024. Its official renewal was pushed to 2024 since Congress could not come to an agreement on the contents of the new bill.

In 2024, the Republican-led House Committee on Agriculture released a draft bill that could deter climate progress in the agriculture sector. The bill would reallocate up to USD 14.4bn from the IRA that is specifically meant for climate-friendly farming practices to cover all conservation practices. The bill would also reinstate the requirement that 50% of EQIP funds are channelled to livestock operations (House Committee on Agriculture, 2024). However, the fate of the Farm Bill and its contents remain unclear as it has yet to arrive on the House floor.

There are still considerable policy gaps in addressing agricultural emissions. Beyond the structural issues of existing programmes (i.e. EQIP, CSP), the US lacks regulations or plans for addressing emissions from animal production. There are no incentives for reducing the volume of animal agriculture or for promoting plant-based foods and crops (CBD, 2020). Instead, Concentrated Animal Feeding Operations (CAFOs), which are detrimental to animal and environmental welfare, continue to be subsidised by the government (Happ, 2024).

The government also lacks policies on the demand-side. The US has one of the highest rates of meat and dairy consumption in the world, but food consumption patterns have not been addressed by the government. Historically, the meat industry has lobbied against key demand-side policies, such as changes to dietary guidelines, which constitute the basis of federal nutrition programmes and policy (Bottemiller Evich, 2016; Sebastian, 2024). Without a shift in diets, related emissions may increase by 9% in the US as a result of population growth (Heller et al., 2020).

The volume of food waste in the US is very high. Approximately one-third of available food is lost or wasted. Surplus, wasted food results in significant embodied emissions across the supply chain, and has been estimated to account for 6% of the country’s total GHG emissions (Harwood et al., 2023). The US Environmental Protection Agency (EPA) has set a goal to halve food loss and waste by 2030.

However, the target puts little focus on food losses, which occur during the production and processing stages, due to a lack of data (U.S. Environmental Protection Agency, 2024o). The US is not on track to reach this target due to insufficient federal and state-level policies. Interventions to prevent food waste, such as policies on date labels, are insufficient. At the subnational level, some states hinder the recycling of food waste through bans on diverting food waste streams towards animal feed (ReFED, 2024).

In 2022, the net CO₂ removals from the land use, land-use change and forestry (LULUCF) sector corresponded to roughly 15% of total US GHG emissions. Between 1990 and 2022, net carbon removals in the sector decreased by 13% due to the declining rate of net carbon accumulation in forests and on cropland, as well as an increase in emissions from urbanisation (U.S. Environmental Protection Agency, 2024h).

Maintaining and increasing the carbon sink is an important component of the US government’s NDC and net zero targets. The government is a signatory of COP26’s forestry pledge, and the New York Declaration of Forests, which aims to halt natural forest loss by 2030, improve and expanding forest finance and governance, and reduce emissions from deforestation and forest degradation (Forest Declaration Platform, 2022).

Although the government has pledged to preserve and expand its natural carbon sink in its national policies and international negotiations, a recent study published by the US Forest Service raises concerns about the potential of US forests to store carbon in the long term. A decrease in forest area from land conversion, an increased demand for timber products, and a higher frequency of natural disturbances from climate change are reducing the ability of US aging forests to sequester carbon. Under a high wood demand scenario, US forests could even become a carbon source by 2070 (U.S. Forest Service, 2023).

To circumvent such risks, the US needs more robust forest management practices and policies. Current afforestation rates are insufficient to maintain current levels of CO₂ removal, let alone meet the values presented in the government’s long-term strategy (LTS). Further incentives are needed to expand forest area, which is especially challenging on private lands (Wear & Wibbenmeyer, 2023).

Although afforestation has the largest potential to improve the carbon sink, more can be done to increase the average carbon stocks of managed forests, such as extending harvests or rotation ages. Increased investments in fire suppression and post-wildfire reforestation are necessary to mitigate wildfires and reduce their severity, which is exacerbated by climate change (S. Kennedy et al., 2024).

In 2020, then-President Trump reversed a long-standing rule that limited logging in the largest national forest, Alaska’s Tongass National Forest. The Biden Administration reinstated the protections on the forest in January 2023 by banning road-building and logging on the majority of the forest’s 16 million acres (Friedman, 2023). Considering that the Tongass makes up over one-fifth of the nation’s forest carbon stocks, its protection is critical to preserving the considerable US carbon sink (Dellasala et al., 2022).

The IRA has led to further investments (USD 5bn) in the National Forest Service and programmes that support the preservation of carbon sinks and nature-based climate mitigation activities. This includes grants for urban and community tree planting efforts, technical and financial assistance for landowners to boost carbon sequestration on forestland, and support for existing programmes (The White House, 2023b).

The Forest Legacy Program identifies and conserves environmentally significant forest areas that are threatened by land conversion through economic incentives. Landowners can either sell their property to the government or use a conservation easement. The programme has conserved over 3 million acres of forest land since 1990 (U.S. Forest Service, n.d.).

On the other hand, the IRA has introduced some tax measures that could drive biomass production and accelerate logging if inputs are not well-managed. Certain tax incentives for clean energy production and subsidies for advanced manufacturing equipment, as well as tax credits for carbon capture technologies, could be used by bioenergy companies to boost their production of forest biomass (e.g. wood pellets). The Treasury Department has not yet defined what ‘clean energy’ refers to under such provisions (Bruggers, 2024).

The US Forest Service has separate timber production targets that are highly misaligned with its responsibility to preserve and increase the carbon sink (Talbott, 2024). The agency wants to increase timber production by 25% above current levels, which is higher than any period in the past few decades (U.S. Forest Service, 2022).

The agency cites some of the reinstated protections on old-growth forests as a barrier to increased logging, and also identifies logging in regions critical to preserving high-carbon forests, such as the Pacific Northwest, as key to meeting the target (U.S. Forest Service, 2022)(Talbott, 2024). To reach the net LULUCF emissions removals needed to meet US climate targets, climate mitigation should be prioritised over timber production.

The waste sector made up only 2.7% of national emissions in 2021 but contributed to 17% of anthropogenic methane emissions (U.S. Environmental Protection Agency, 2023f). Therefore, addressing methane emissions from landfills is a key pillar of the US Methane Emissions Reduction Action Plan. In 2021, the Biden Administration finalised emissions standards to ensure that large municipal landfills significantly reduce their methane emissions, and the US Environmental Protection Agency (EPA) has developed a Landfill Methane Outreach Program to support methane collection and distribution at smaller, unregulated landfills (The White House, 2021b).

The IRA has not led to significant policies or programmes in the waste sector, aside from some funding to improve methane monitoring and to develop a better method to measure fugitive methane sources (e.g. landfills) (The White House, 2023b).

Recently, the EPA has been sued by environmental groups for failing to update its landfill emissions accounting methodology, which it has not revised since 1998. The current emissions factors reportedly underestimate the emissions released from landfills from several pollutants, including nitrogen oxide, by as much as 25%. As a result of the lawsuit, the EPA has agreed to evaluate whether methodology needs updating and to suggest new emissions factors in case updating is required (Quinn, 2023).

Methane is an important source of GHG emissions in the US, representing 15% of total GHG emissions in 2022, which are split between the oil and gas industry (37%), agriculture (36%), waste (19%), and land use, land-use change and forestry (LULUCF) (8%) sectors (U.S. Environmental Protection Agency, 2024o).

Alongside the EU, the US spearheaded the launch of the Global Methane Pledge. The Biden Administration released its Methane Emissions Reduction Action Plan in 2021. The plan seeks to reduce emissions from all major sources through regulations, financial incentives, and public-private partnerships.

The plan also includes USD 20bn in new investments targeted at reducing methane emissions (The White House, 2022a). The IRA provided USD 1.5bn for the Methane Emissions Reduction Fund, which aims to monitor and reduce emissions from petroleum and natural gas systems through financial and technical assistance, but also potentially locks in new “brown” infrastructure. It also established a ‘waste emissions charge’ per ton of methane emissions to oil and gas facilities that exceed emissions thresholds (The White House, 2023b).