USA Withdraw from Paris Agreement, Europe Tightens Climate Policies

The most important event at the beginning of 2026 is the formal withdrawal^[1] of the United States from the Paris Agreement. The administration of Donald Trump notified the decision on January 27, 2025^[2], and it will take effect 2026^[3]. The USA also leaves the Intergovernmental Panel on Climate Change (IPCC)^[4] and the United Nations Framework Convention (UNFCCC)^[5], meaning that the country withdraws from the UNFCCC^[6]. The world’s largest economy will no longer participate in the development of new Nationally Determined Contributions (NDCs)^[7], global scientific reports, or climate finance and transparency mechanisms.

USA Turn Away from Climate Cooperation

The US withdrawal signals a return to an energy policy based on fossil fuels^[8], which Donald Trump already promised during his campaign^[9]. The Trump–Rubio administration reinstates licenses for LNG exports^[10], limits the development of offshore wind farms^[11], and weakens institutions involved in environmental justice^[12]. The Environmental Protection Agency (EPA), under Lee Zeldin’s leadership, is preparing to repeal the so-called “endangerment finding”^[13]. In practice, this could mean dismantling most existing climate regulations in the US^[14]. Rapid legislative changes may occur in the first half of 2026.

Europe Streamlines ESG Regulations and Emissions Trading

The weakening of the multilateral climate system opens space for the European Union and China^[15], which may assume political leadership in climate negotiations^[16]. However, the lack of coherent US involvement risks chaos in international emissions reporting^[17], complicates planning for global low-emission investments^[18], and increases geopolitical risks for developing countries^[19]. These countries had previously counted on American funding for climate projects^[20]. Climate protectionism tools^[21] such as trade mechanisms and anti-deforestation regulations are gaining importance.

The European Union signals a more pragmatic but consistent approach to ESG regulations^[22]. The European Financial Reporting Advisory Group (EFRAG) submitted a package of changes to the European Sustainability Reporting Standards (ESRS) Commission in December 2025^[23]. The new version reduces the number of mandatory indicators by as much as 61%^[24]. Approximately 3,800 large Polish companies will have to regularly report ESG data^[25] under the supervision of regulatory authorities.

Water Crisis and New Ambitions after COP30

The European Commission postponed the entry into force of the EU Deforestation Regulation (EUDR) by one year^[26]. Operators will be subject to the rules starting December 30, 2026^[27]. This gives sectors such as trade, timber, palm oil, and cocoa additional time to organize their supply chains^[28]. On January 1, 2026, the scope of the Carbon Border Adjustment Mechanism (CBAM) expanded^[29]. The mechanism now covers processed products^[30]. According to estimates, CBAM’s impact could increase final product prices by 2–5% in the Union^[31], generating 14–18 billion euros annually for the EU budget^[32].

The Environment Agency in England warns^[33] that most regions of the country will experience drought conditions in 2026^[34] with lower rainfall, which could cost the UK economy between 500 million and 1 billion pounds annually^[35]. Dar es Salaam is struggling with a severe water shortage^[36] from the Ruvu River, Uruguay forecasts below-normal rainfall in the first months of the year^[37], and Greece faces recurring “rollercoaster” weather patterns^[38]. The water crisis impacts agriculture and hydropower^[39] and increases the risk of internal migration^[40].

Poland Accelerates Energy Transition

Climate commitments tighten after COP30^[41] in Belém, Brazil. The UNFCCC parties adopted the so-called Belém Package^[42], which envisions tripling adaptation finance to 120 billion dollars per year^[43]. A just transition mechanism and an action plan until 2031 were also agreed upon^[44], but no binding commitment was achieved to phase out fossil fuels globally^[45]. This leaves wide leeway for coal, oil, and gas producers to continue exporting^[46].

Poland is preparing the largest energy modernization program since 1989^[47]. It aims to reduce greenhouse gas emissions by 53.9% by 2030^[48]. The share of renewables in electricity production is to increase to 51.8% by 2030^[49], and coal-fired power and heat plants are to be largely phased out by the mid-2030s^[50]. The total cost of the transformation by 2030 is estimated at approximately 1.1 trillion zlotys^[51], financed from EU funds, the national budget, and private capital^[52]. For domestic businesses, this means both a huge market for investments in renewables, grids, and energy storage^[53], an accelerated restructuring of the coal sector^[54], and a sharp increase in the importance of reliable ESG reporting^[55].

Related posts:

• Iran–Israel–USA Conflict: Status as of March 2, 2026
• USA Loosen CO₂ Emission Controls, EU Strengthens Climate Tools, Poland Accelerates in Renewables
• CBAM, the Hamburg Declaration, and CSRD Adjustment: A Breakthrough Week in Global ESG
• ESG at a Crossroads: CBAM, Simplified Reporting, and Real Costs of the Climate Crisis