The US Starts the Clock on Leaving Paris Again: What Executive Order 14162 Changes for Energy Markets
On January 20, 2025, the first day of the new administration, President Trump signed Executive Order 14162, titled "Putting America First in International Environmental Agreements." The order directs the US ambassador to the United Nations to submit formal written notice of withdrawal from the Paris Agreement. It also tells agencies to revoke or rescind any purported financial commitment made by the United States under the UN Framework Convention on Climate Change, and it rescinds the US International Climate Finance Plan.
The order states that the United States will consider the withdrawal effective immediately upon notification. In practice this matters less for domestic energy policy than for the US position at international talks. A party that has given notice can still attend sessions and, until the exit takes effect, retains its formal rights. The Paris Agreement contains no binding emissions caps, and US domestic energy rules are set by statute and agency regulation rather than by the treaty.
The nationally determined contribution submitted by the outgoing administration in December 2024, which set a 2035 target, is now effectively without a sponsor in the executive branch. Emissions standards for power plants and vehicles, methane rules for oil and gas, and tax credits for clean generation are all governed by the Clean Air Act, appropriations and the tax code. By rescinding the International Climate Finance Plan and ordering agencies to revoke financial commitments under the UNFCCC, the order withdraws the United States from a set of pledges that underpinned multilateral climate funds and bilateral energy transition programs.
For emerging market power systems that were counting on concessional finance for grid upgrades and coal retirement, that matters more than the treaty status itself. Electricity demand is now rising after more than a decade of near-flat consumption, driven by data centers, manufacturing and electrification. The withdrawal coincides with the third round of NDCs, which are due on February 10, 2025, ahead of COP30. What can be said now is that the main climate instruments with direct price effects on energy, carbon markets in Europe and China, border adjustments and methane standards, sit outside the US decision.