London Daily

Focus on the big picture.
Thursday, Jul 23, 2026

America's most powerful oil lobby is changing its tune on a carbon tax

America's most powerful oil lobby is changing its tune on a carbon tax

The oil industry's most powerful lobbying group announced Thursday that for the first time it will support setting a price on carbon, a significant shift that underlines intensifying pressure on Washington and business to tackle the climate crisis.

But the devil will clearly be in the details. The American Petroleum Institute laid out a series of principles that must be met before the century-old group endorses a price on carbon.

The announcement is part of a broader framework unveiled by the API that includes calling for direct regulation of methane, expanded emissions transparency and stepped-up federal spending on energy research.

Advocates of carbon pricing say it is crucial to fighting the climate crisis, as it would accelerate efforts to curb planet-warming emissions and force investors, companies and individuals to bear the cost of pollution.

After years of debate, the API's support for "market-based" carbon pricing is part of an evolution by the group, which is among the most influential trade associations in Washington. The API opposed the last serious effort to impose a price on carbon in 2010, but ExxonMobil, Chevron (CVX) and other industry leaders have since publicly backed carbon pricing.

"This is a pretty big deal for the industry. There is broad recognition that obviously the country has to do something on climate change," API CEO Mike Sommers told CNN Business in an interview. "We want to be a willing partner with the Biden administration and others in Congress who are serious about taking on this challenge."

The API's reversal on carbon pricing reflects a desire to help shape Washington's response to the climate crisis and set its own terms on how to protect the industry.

"It's a triage response. They are going on the offensive to propose something they can live with rather than be threatened by something that could have greater damage," said Ed Mills, Washington policy analyst at Raymond James. "If you're not at the table, you're on the menu."

Some climate groups are voicing deep skepticism about the API's stated change of heart.

"A statement of theoretical support for a market-based carbon price is a long way from agreeing to what will likely need to be strong, binding rules to limit fossil fuel usage & methane emission," Dylan Tanner, executive director of InfluenceMap, a think tank focused on energy and climate change, said in a statement.

InfluenceMap gives the API an "F" in terms of how aligned the group's climate policy is to the Paris agreement.

Carbon tax is not a slam dunk


Notably, the API is not announcing blanket support for just any form of carbon pricing, nor is it supporting a specific proposal.

Instead, the group said it will "advocate for sensible legislation that prices carbon across all economic sectors while avoiding regulatory duplication." The API laid out a series of principles that must be met before lending any support, including that US companies wouldn't be left at a competitive disadvantage globally. Sommers said both a carbon tax and a cap-and-trade program broadly fits within such a framework.

"This shouldn't be punitive against the oil-and-gas industry. We are an emitter, but we are not the only emitter," Sommers said.

Sommers said the API "absolutely" could withhold support for carbon pricing legislation that may emerge from Congress.

"It's not as if we would support any carbon tax or cap-and-trade program that is slapped onto a piece of legislation," Sommers said.

The lobby stressed that oil and gas aren't going away. The International Energy Agency expects both to be leading fuel sources even in 2040 if every nation meets the goals of the Paris Climate Agreement.

Carbon pricing must meet the "dual challenge of continued economic growth while addressing the risks of climate change," the API framework said.

Yellen is strong supporter of carbon pricing


The API's shift on carbon pricing comes after the Business Roundtable, an influential CEO group, changed its tune on the issue last September to say it supports market-based carbon pricing to fight climate change. Exxon (XOM), the largest US oil company, previously announced plans in 2018 to financially support a carbon tax.

In January, France's Total quit the API in part because of the lobbying group's stance on carbon pricing.

There is growing momentum — and appetite — in Washington to take bold steps to address the climate crisis.

President Joe Biden has announced a goal of slashing net greenhouse gas emissions to zero in electricity by 2035 — and the entire economy by 2050.

Treasury Secretary Janet Yellen is a strong supporter of carbon pricing. In a written response to questions from lawmakers, Yellen said in January that Biden supports "an enforcement mechanism that requires polluters to bear the full cost" of the carbon they are emitting.

"We cannot solve the climate crisis without effective carbon pricing," Yellen wrote.

Newsletter

Related Articles

0:00
0:00
Close
Northern Ireland Secures Additional Infrastructure Funding From UK Treasury
Wales Approves Port Investment Plans to Support Green Energy Supply Chains
UK Financial Regulator Simplifies Stock Market Rules to Attract More Listings
UK Reports Decline in Small Boat Crossings Across the English Channel
UK Government Creates Emergency Support Fund for Financially Pressured Universities
Scottish Government Launches Economic Strategy Focused on Innovation and Renewable Industries
UK Expands Sustainable Farming Incentives to Support Environmental Measures
UK Government Introduces New Neighbourhood Policing Standards Across England and Wales
UK Competition Regulator Opens Review of Artificial Intelligence Foundation Models
UK Deepens Indo-Pacific Security Cooperation After Talks With Singapore and Japan
UK Announces Rail Modernisation Plan for Northern England With New Infrastructure Funding
UK Government Updates Housing Planning Rules to Accelerate Residential Construction
UK Approves Major North Sea Offshore Wind Project to Support Clean Power Goals
UK Health Service Begins Major Digital Upgrade to Cut Hospital Waiting Times
Bank of England Holds Interest Rates Steady as UK Inflation Pressures Remain Persistent
UK Universities and Industry Expand Space and Defense Research Partnerships
House of Lords Approves Social Housing Bill Amendments on Shared Ownership Rights
House of Lords Advances Civil Aviation Bill With New Passenger Protection Measures
UK Government Suspends Tariffs on Fertilizer and Food Imports to Reduce Costs
Russell Group Universities Support New UK Business Department Focused on Innovation
UK Parliament Opens Inquiry Into Transport Barriers Facing Young Jobseekers
Home Builders Federation Calls for Lower Costs as New UK Government Sets Housing Priorities
Andy Burnham Meets UK Devolved Leaders to Strengthen Regional Cooperation
Andy Burnham Holds First International Calls With Trump, Macron, and Zelenskyy
Andy Burnham Reshuffles Cabinet With John Healey Appointed Chancellor of the Exchequer
Andy Burnham Government Removes VAT From Electricity Bills to Cut Household Costs
Andy Burnham Becomes United Kingdom Prime Minister After Sir Keir Starmer Resigns
Miliband Sets Climate and International Law at Centre of UK Diplomacy
US Gasoline Returns to $4 as Renewed Iran Fighting Disrupts Oil Flows
Czech Central Bank Governor Rejects Early Euro Entry and Rate-Cut Pressure
Trump Orders 50% Tariffs on Selected Canadian Imports
Pentagon Discloses Nearly 100 US Troop Injuries During Renewed Iran Fighting
Trump Readies New Tariffs as Temporary Global Levy Nears Expiry
US Judge Pauses Paramount Skydance and Warner Bros Discovery Merger Over Antitrust Concerns
NHS England Faces Growing Retention Pressure Among Younger Midwives
UK Data Centre Expansion Faces Water and Grid Capacity Challenges
UK Defence Shares Rise After John Healey Appointment and Continued Spending Commitments
OECD Urges UK Government to Review Pension Triple Lock to Protect Public Finances
Bank of England Keeps Cautious Approach as Energy Costs Threaten Inflation Progress
County Councils Call for Wider Devolution and Long-Term Social Care Funding Reform
IMF Urges UK Government to Maintain Fiscal Discipline as Growth Forecast Slows
Russian Warship Holds Live-Fire Exercises Near UK Coast as Royal Navy Monitors Activity
Mitie Agrees Three Point One Billion Pound Takeover by OCS in Another Blow to London Listings
JPMorgan Chase Warns Bank Levies Could Hit UK Growth and Drive Capital Away
UK Unemployment Holds at Four Point Nine Percent as Labour Market Shows Resilience
UK Government Borrowing Falls Below Forecasts as Treasury Receives Early Fiscal Boost
John Healey Cuts VAT on Household Electricity Bills After Cancelling National Digital ID Scheme
Andy Burnham Forms New Labour Government With Ten-Year National Renewal Plan
EU Imposes Record €550 Million Digital Services Fine on AliExpress
UK Publishes Updated Consumption-Based Carbon Emissions Data
×