Climate Change Regulation 2025

Climate Change Law and Regulation in 2024–2025

It has been a difficult year for climate law since the last update to the Chambers Climate Change Global Practice Guide. The United States of America (USA) withdrew from the Paris Agreement and pulled back environmental regulations, and the European Union delayed its flagship Corporate Sustainability Reporting Directive (CSRD). Governments have been slow to submit their Nationally Determined Contributions under the Paris Agreement this year, and to date very few have materially strengthened their mitigation targets. 

Amidst this stagnation, however, national climate laws have continued to flourish. There are, according to the Climate Change Laws of the World database, more than 1,343 climate laws now globally, including new framework climate change laws for Belgium, South Africa, Ukraine, Kosovo, Moldova and Zambia. With the finalisation of the rulebook for Article 6 and related methodological guidance, domestic carbon market rules and regulations have also abounded. Governments are now in the process of developing national legal frameworks seeking to authorise their Article 6 designated national authorities and support their carbon markets.

With mounting dissatisfaction at the slow pace of global actions, court rooms have also continued to see an influx of cases. While the landmark, decade-long youth for climate suits Juliana v US finally came to an end this year, after the US Supreme Court denied the youth plaintiffs’ petition, it inspired over 60 youth-led climate lawsuits around the world, seeing breakthrough victories in courts in Colombia, Germany and South Korea.

The Luciano Lliuya v RWE AG case was also decided this year. Although Peruvian farmer Lliuyu was ultimately unsuccessful in his petition within German courts to hold energy giant RWE liable for climate impacts caused by its operations, the decision has nevertheless been hailed by some as a victory. This is because the German court supported the concept that major emitting companies could be held responsible for the costs caused by their emissions, even if located in another country. It also affirmed that climate science can provide a basis for legal liability.

The number of climate lawsuits has also continued to rise, with over 2,967 cases filed across the world to date. Lawful administrative action, strategic litigation and human rights cases continue to remain dominant themes as the submission in this year’s edition highlights. There is also an emerging trend of cases focusing on greenwashing, the “polluter pays” principle, as well as climate displacement.

In this year’s edition of the Chambers Global Practice Guide for Climate Change Regulation, we have substantive reviews from China, Germany, Italy, Mexico, New Zealand, Portugal and South Africa, all evidencing an evolving, increasingly sophisticated and maturing climate change legislative regime.

China affirms the popularity of framework climate laws, as it progresses toward a dedicated climate change law, with the 2025 draft Ecological and Environmental Code including a chapter on climate change. The country is also working to strengthen its carbon market, which is governed by the Interim Regulation on Carbon Emission Trading and related rules. Environmental and social governance (ESG) reporting is also on the rise, with national requirements for major listed companies to publish their ESG reports by 2026.

Germany continues the positive trend in milestone climate laws, with its Federal Climate Adaptation Act entering into force in July 2024. The law is one of few laws worldwide entirely devoted to adaptation, obliging the federal government to develop a national adaptation strategy including risk analyses, measurable goals and concrete measures. The review from Germany highlights how, following a court ruling, the government also revisited its Federal Climate Action Act in 2024, to revise the approach adopted towards sectoral emission reduction targets.

After a very long gestation period, the South African Climate Change Act was also enacted in 2024 and several of its provisions have been brought into operation this year. However, as the review highlights, the bulk of the Act’s provisions, such as those relating to carbon budgets, sector targets and local government climate plans, are on hold pending the finalisation of regulations.

Climate laws are also starting to mature. The review of New Zealand’s climate regime demonstrates the successful operation of review climate policy mechanisms through the work of the Climate Change Commissions, legislated under the country’s Climate Change Response Act 2002.

While Italy does not have bespoke climate legislation, it has recently finalised renewable energy laws that establish preferential areas for such developments and rationalised the permitting framework. Its courts have declined to step in to direct government to update its policy, however these updates demonstrate a growing appetite to foster low carbon development and achieve national renewable energy targets.

The review of Portugal’s climate change legislative landscape engages with how Europe’s evolving climate policy and regulation is impacting the region. The Draghi report, the Omnibus I package, and the bloc’s Clean Industrial Deal signal an interest in addressing both longstanding and emerging challenges in what the authors describe as an attempt for a more integrated and holistic response. While overall targets have not changed, the way members achieve them may change, requiring a recalibrated balance between cutting emissions and offsetting. To this end, Portugal has enacted laws to support the development of the nation’s voluntary carbon market in 2024.

New Zealand is also well known for its legislation which makes climate-related disclosures mandatory for certain entities. The submission highlights how government is addressing the release of the International Financial Reporting Standards and how these align or differ from the existing reporting regime. It is not the only country to make climate-related disclosures mandatory in some instances, with the review for Mexico also highlighting a new mandatory sustainability-reporting framework. Commencing in 2025, the requirements in the Mexican Financial Reporting Standards mandate companies to share information about their environmental and social impacts in their financial statements. Listed issuers will also be required to publish standalone Sustainability Reports aligned with international IFRS Sustainability Disclosure Standards.

These submissions demonstrate maturing climate legislative frameworks, often spurred by high-level political signals, such as the EU’s Green Deal and Omnibus Package or Mexico’s Presidential 100-Step Transformation Strategy. Legal regimes are becoming more substantial and detailed, particularly with financial and carbon market regulation becoming increasingly sophisticated. This is complemented by climate litigation with mixed results: some prompting government to take greater action and other cases where courts have declined to enter the fray, citing a separation of powers.

In this highly diverse context, this publication seeks to extend the awareness and knowledge of global and national legislative climate developments and encourage a cross-pollination of ideas on what has worked and why. We remain continuously grateful to the diverse body of authors who shared their time and insights in compiling these thoughtful contributions.