This article is an extract from Lexology Panoramic: Energy Disputes 2026. Click here for the full guide.
In the decade since the 2015 Paris Agreement, there has been widespread and rapid growth in the focus on energy transition, fundamentally reshaping the energy industry that we see today. Today’s legal practitioners will need to navigate complex, and sometimes polarised, legislation affecting the energy industry across different regions, as lawmakers either seek to accelerate the energy transition, or focus on traditional energy sources such as oil, gas, liquefied natural gas, and coal.
The broad consensus on the importance of tackling climate change recorded in the Paris Agreement, and its binding legal commitment to limit the average global temperature increase to below 2°C compared with pre-industrial levels, acted as a catalyst for a multitude of countries to adopt net zero targets. The UN announced that, as at June 2024, 107 countries, accounting for roughly 82% of global greenhouse gas emissions, had set net zero pledges. This includes the UK, which amended the Climate Change Act 2008 in 2019 to formally establish its net zero target, moving from an 80% target to a legally binding commitment of at least 100% lower than the 1990 baseline.
Consistent with the overarching objective of achieving a carbon neutral society by 2050, a range of measures have been introduced at a national level. The UK government implemented the Energy Act 2023, the Clean Power 2030 Action Plan, and the Great British Energy Act 2025 (which established a public company for the purpose of accelerating clean energy investments). Further, with effect from 27 April 2025, the UK withdrew from the Energy Charter Treaty (ECT) due to stalled efforts to update the 1994 treaty better to support cleaner technologies and align it with net zero.
Internationally, the EU has been particularly active, approving the European Green Deal in 2021 - an ambitious project aimed at achieving carbon neutrality in conjunction with economic growth decoupled from resource use. In late 2025, leaders from France, Germany and Italy publicly affirmed accelerated domestic climate action, such as boosting renewables targets, to maintain the momentum generated by the Paris Agreement, and France, Spain, the Netherlands and Germany all followed the UK in withdrawing from the Energy Charter Treaty.
Further, China, India and the EU, three of the four largest emitters of greenhouse gases worldwide, reaffirmed their commitment to the objectives of the Paris Agreement through updated climate pledges. For example, in September 2025, President Xi Jinping announced a landmark pledge to cut all greenhouse gas emissions by 7-10% below peak levels by 2035, while expanding solar and wind capacity to more than six times the levels in 2020.
Whilst some countries, particularly within the EU, continue to prioritise efforts to mitigate the effects of climate change, others - most notably the US - have scaled back their efforts and refocused on traditional energy sources.
In 2017, President Trump announced the US’s withdrawal from the 2015 Paris Agreement. Following his re-election, in 2025 he signed an Executive Order, titled "Putting America First in International Environmental Agreements", which started the process of withdrawing the US from any agreement, pact, accord or similar commitment made under the UN Framework Convention on Climate Change. The Executive Order also confirmed that the US shall "immediately cease or revoke any purported financial commitment made by the United States under the United Nations Framework Convention on Climate Change", commitments that are used to assist economically developing countries in their efforts to mitigate and adapt to climate change.
President Trump’s State of the Union address to Congress on 6 March 2025 also made clear his support for fossil fuel projects, such as a natural gas pipeline in Alaska with federal backing (to be completed by 2028) and increasing offshore oil and gas leases in the Gulf of Mexico and Alaska’s Cook Inlet.
In response to the measures adopted by countries at the national level, multinational companies, particularly within the energy industry, have adapted their investment strategies and reporting to respond to the changing legislative environment. The vast majority have invested in renewable energy sources and enhanced their reporting on energy sources.
For example, reports in 2025 show that Shell, BP and Chevron have collectively invested US$65 billion in low-carbon tech and confirmed ongoing reductions in Scope 1 and 2 emissions. TotalEnergies reported that it had exceeded its 2025 methane reduction targets early, lowering it by 55% as against 2020. Similarly, ExxonMobil outlined, in its 2025 Advancing Climate Solutions Report, that it intends to pursue up to US$30 billion in lower-emission investments between 2025 and 2030, and achieve a 20-30% reduction in greenhouse gas intensity and an 80% reduction in methane intensity by 2030.
At the same time, traditional energy sources are seeing renewed interest and investment. In 2025, Shell announced its plans to increase its LNG business by 30% by 2030, and BP announced that it would refocus up to US$10 billion a year to oil and gas projects.
Accordingly, we continue to see a significant global drive towards the energy transition, alongside renewed focus on more traditional energy sources in some regions. The challenge for practitioners of navigating this environment will be compounded by the need to be sensitive to a client’s goals, which may simultaneously conflict or coincide with the varying legislative agenda of different nations.
