Trump eases carbon restrictions. And America throws down the energy gauntlet to Europe

The issue of electricity prices must also be assessed in the medium term. In 2030, the EPA even estimates that the national average price will be 0.7 per cent higher under the repeal scenario. The benefit would materialise in subsequent years, once the more costly obligations under the previous regulations had come fully into force: in 2035, the modelled average retail price would fall from 134 to 127 thousandths of a dollar per kWh, representing a 5.8 per cent reduction. In 2040, the benefit would be 1.1 per cent, and in 2045, 2.6 per cent.

The most significant impact of deregulation is, in fact, to be measured in terms of gas. By retaining a higher proportion of coal in the electricity mix, the United States would, according to the EPA, consume around 9 per cent less natural gas in 2035 than under the regulated scenario. The price of gas supplied to power stations would fall from $5.7 to $5.2 per million Btu. And this is where the issue extends beyond the electricity sector. Gas is, in fact, also a feedstock for the chemical industry, fertilisers, hydrogen and refining. A decision regarding power stations can therefore indirectly affect the costs of numerous industrial supply chains.

From 1 January 2026, the Carbon Border Adjustment Mechanism entered its final phase, and the European Union continues to pass on the cost of CO₂ to businesses through the Emissions Trading System. Meanwhile, the protection afforded by free allowances to sectors affected by the CBAM is being gradually reduced: from the 97.5 per cent envisaged for 2026, it will fall to 95 per cent in 2027, 90 per cent in 2028, 77.5 per cent in 2029 and 51.5 per cent in 2030. In 2034, this protection will cease.

The two sides of the Atlantic are therefore on different paths. The United States is reducing the projected cost of fossil-fuel generation and postponing some of the investment required for its transition. Europe, on the other hand, is increasing the economic weight of emissions in industrial balance sheets.

The CBAM is designed to prevent a product manufactured in a country with less stringent climate regulations from entering the European market without bearing an equivalent cost for its embedded emissions. However, it cannot eliminate all competitive differences. It can influence the cost of CO₂ in the sectors concerned, but not electricity and gas prices, grid availability, the time taken to obtain permits, the cost of capital or taxation.

It is therefore the location of investments that is the real issue at stake. A company that has to decide today where to build a plant intended to operate for twenty or thirty years looks at the price of electricity, the availability of power, gas, the grid, incentives, the time taken to obtain planning permission and environmental obligations. In the United States, the new energy policy reduces one of these costs at the very moment when demand for electricity linked to data centres and artificial intelligence is rising.

In 2025, energy-related emissions from the US electricity sector amounted to approximately 1.485 billion tonnes of CO₂, with coal and gas continuing to account for the majority of electricity generation. Washington is therefore not taking action on a marginal component of the system, but on a central part of the national energy infrastructure.

Ultimately, the transatlantic debate can be boiled down to two strategies. The United States is seeking to make it less expensive to maintain energy supply, including through the extended use of existing fossil-fuel infrastructure. Europe is seeking to make carbon emissions progressively more expensive. The two approaches are not necessarily incompatible. However, they come into direct competition when a company has to decide today where to invest capital that will remain tied up in a particular region for decades.

The CBAM may offset part of the US advantage on products subject to the mechanism. An increasingly decarbonised electricity generation sector can also reduce Europe’s dependence on fossil fuels over time. However, for this strategy to work at an industrial level, low-emission energy must be abundant, reliable and competitive.

For Washington, the priority is to reduce regulatory costs and maintain existing capacity. For Europe, the challenge is to transform investments in decarbonisation into an electricity system capable of supporting industry. If it fails to do so, the risk will not only be that of importing more American products. It will be that of seeing new industrial investments — from steelmaking to the chemical industry, from data centres to large manufacturing plants — increasingly opting for the other side of the Atlantic.

The American turning point in September 2026 does not, therefore, mark the end of climate policy, nor does it signify the removal of all emissions restrictions. It marks something more specific: the emergence of the cost of the energy transition as a central factor in international industrial competition. And the future distribution of investment between America and Europe will also depend in part on this competition.

Charlye Ghezzi is a geopolitical analyst and specialist in technology and government security