SCOTUS Cues Up Challenge to California Waiver

Current conditions: New York City has an air quality alert today due to smoke from a 13,500-acre New Jersey wildfire• There is a thunderstorm warning for the Vatican City, where mourners are gathering to pay their respects to Pope Francis • Several New England ski areas announced they are staying open “well into May” thanks to the region’s near-record levels of spring snow.

THE TOP FIVE

1. Supreme Court appears sympathetic to fuel producers’ challenge to California’s emissions waiver

The Supreme Court indicated after oral arguments on Wednesday that fuel producers likely have legal standing to challenge California’s ability to set vehicle emissions standards that are stricter than federal limits. Since 1967, the Environmental Protection Agency has granted California a waiver from the federal Clean Air Act acknowledging the state’s unique air pollution challenges, including severe smog. Due to the state’s size, however, those stricter standards have largely been adhered to by automakers nationally. As a result, the California waiver — sometimes incorrectly referred to as the “electric vehicle mandate” — has been a target of Republicans, including in an unsuccessful lawsuit brought by a coalition of states and industry groups in 2024, in which a D.C. Circuit panel ruled unanimously in favor of the EPA.

But on Wednesday, “several of the justices suggested” that the D.C. appeals court “erred when it barred the fuel makers’ suit on the theory that market forces are driving the national push toward electric vehicles far more than California’s tough regulations,” CNN writes. Justice Clarence Thomas, a conservative, questioned the EPA’s attorney over whether the goal of the California regulations was to “reduce the use of petitioner’s fuel,” while liberal Justice Elena Kagan pointed out that when the EPA reestablished the waiver in 2022, officials did so by suggesting it would help reduce the reliance on fossil fuels. The Trump administration has also threatened to revoke the waiver, in keeping with direction from Project 2025, although “California says the waiver makes no difference to its emissions control right now,” mainly because of the proliferation of fuel-efficient cars, EVs, and hybrids in the state, Courthouse News Service reports.

2. We’re in the midst of the biggest coral bleaching event in history

The planet is undergoing the biggest coral bleaching event in history, with nearly 84% of the world’s coral reefs exposed, the National Oceanic and Atmospheric Administration and the International Coral Reef Initiative reported this week. “We’re looking at something that’s completely changing the face of our planet and the ability of our oceans to sustain lives and livelihoods,” Mark Eakin, the executive secretary for the International Coral Reef Society, told the Associated Press. The bleaching event, which began in 2023, has already exceeded the second-largest global coral bleaching event on record, which occurred from 2014 to 2017 and impacted approximately 69% of the world’s reef areas.

Heat stress is the primary driver of coral bleaching, causing marine invertebrates to expel the symbiotic algae that serve as the coral’s food and provide it with color. While bleaching doesn’t necessarily kill the coral, prolonged and more frequent bleaching since the 1980s has caused coral reefs to decline by 30% to 50% over the past four-and-a-half decades. “If the corals die, this support structure that provides food and homes is lost. Consequently, many species will suffer, as well,” Joerg Wiedenmann, a marine biologist at the Coral Reef Laboratory at the University of Southampton in England, told The Washington Post.

NOAA

3. How progressive states are navigating Trump’s ‘no man’s land’

Progressive states are navigating a “weird no-man’s land” as they negotiate budgets amidst the uncertainty of the Trump administration’s clawbacks on decarbonization-related funding, my colleague Emily Pontecorvo writes. Speaking with state senators and representatives in Washington, Massachusetts, New York, and New Jersey, Emily found that states with cap-and-trade programs are in an awkward limbo after Trump signed an executive order directing his attorney general to “stop the enforcement” of such programs. Many state climate goals are also on the chopping block, especially with Trump targeting offshore wind, which was an essential component in New York and New Jersey’s transition to renewable energy sources. There is good news, though: Many states have a pot of funds that are “more impervious to federal interference,” Emily writes, and rely instead on funding climate programs through fees on monthly electric and gas bills.

4. Tariffs could spell trouble for Woodside Energy’s $1.2 billion investment in Louisiana LNG

Analysts believe President Trump’s tariffs just made the math a whole lot “trickier” for Woodside Energy’s $1.2 billion purchase of the Louisiana liquified natural gas plant formerly known as Driftwood. The Australian company acquired the development opportunity via its acquisition of Tellurian last year, with the intent of becoming a “global LNG powerhouse,” Reuters writes; the first part of its four-phase development plan is expected to run to $16 billion.

But in her quarterly update, CEO Meg O’Neill acknowledged that Woodside Energy is “assessing” what the tariffs — and “potential further trade measures” — might mean for the company’s LNG business in Louisiana. Though the plant falls within a Foreign-Trade Zone that allows it to defer the payment of tariffs until the completion of individual LNG trains, “around 25% of Louisiana LNG’s estimated capital expenditure is equipment and materials, approximately half of which is currently expected to be sourced from the U.S.,” O’Neill said. The company has already sold 40% interest in the export terminal to increase its funding through 2026, but “if energy prices come under further pressure as a result of tariff-related growth pressures, it could make things trickier for Woodside down the track,” Tim Waterer, the chief market analyst at KCM Trade Global, told Reuters.

5. Exowatt, Sam Altman-backed modular solar energy startup, raises $70 million in Series A

Exowatt, a startup aiming to create “modular, dispatchable solar solutions” for data centers, announced that it closed a $70 million Series A financing round this week. Following a $20 million seed round that included investments from OpenAI’s Sam Altman and actor Leonardo DiCaprio, the Series A was led by venture capital firm Felicis, with $35 million in equity and $35 million in debt provided by HSBC Innovation Banking and other partners.

At last year’s RE+ conference, Exowatt unveiled its Exowatt P3, an orange battery module that the company claims is capable of delivering up to “24 hours of power daily” by capturing solar energy as heat in a long-duration battery that can convert to electricity on demand, “making it ideal for data centers and other commercial and industrial applications.” Despite the company’s 1.2-gigawatt backlog of orders, Exowatt has its critics, with Latitude writing that “each of P3’s components rely on technologies that have already been used in other applications — often unsuccessfully.”

THE KICKER

Mati Carbon, an enhanced rock weathering startup that works with farms in India, has won the $50 million Carbon Removal XPRIZE.