London Daily

Focus on the big picture.
Wednesday, Jun 24, 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
UK Energy Price Volatility Reinforces Pressure for Faster Electrification of Economy
UK Defence and Aerospace Strategy Gains Momentum as Keir Starmer Pushes Industrial Cooperation in Berlin
Department for Environment, Food and Rural Affairs Unveils £53 Million Investment in Farming Innovation
Foreign Secretary Announces Medical Evacuations and University Support for Palestinians in Gaza
Government-Commissioned Report Highlights Economic Exposure to Climate-Driven Fossil Fuel Price Shocks
Climate Change Committee Warns UK Is Off Track on Emissions Cuts and Calls for Faster Decarbonisation
Prime Minister Keir Starmer Calls for Deeper UK-EU Defence and Industrial Cooperation in Berlin Address
Met Office Issues Red Extreme Heat Warning as Temperatures Set to Surpass 37°C in England and Wales
Bank of England Holds Interest Rates at 3.75% as Inflation Outlook Remains Uncertain
UK Announces New Military Infrastructure at Catterick to Support Engineer Regiment Relocation
University of Reading Ranked Among Top 100 Globally for Sustainability Impact
UK Launches Counter-Fraud Taskforce to Investigate Covid Loan Scams
UK Government Introduces Customs and Tax Reforms to Support High Street Retailers
Jonathan Haskel Nominated as Chair of the UK Office for Budget Responsibility
UK Government Expands Powers to Recover Benefit Debt and Tackle Welfare Fraud
Labour Party Leadership Contest Intensifies as Andy Burnham and Ed Miliband Clash Over Economic Direction
Rail Operators Urge Essential Travel Only as Extreme Heat Threatens UK Network Stability
United Kingdom Issues Red Extreme Heat Warning as Temperatures Forecast to Reach 38°C
Keir Starmer Announces Resignation as UK Prime Minister Amid Deepening Political Instability
UK Biotechnology Sector Receives Increased Public Funding to Support Regional Growth
Police Chiefs Update National Protest Management Guidelines Amid Rising Demonstration Activity
UK Aviation Regulator Expands Support for Regional Airports to Strengthen Domestic Routes
CMA Launches Investigation Into Retail Pricing Across UK Grocery Sector
UK Energy Operator Warns of Winter Supply Pressures Despite Stable Overall Grid Outlook
UK Research Council Expands Funding for Regional Biotechnology and Life Sciences Clusters
UK Compensation Scheme for Post Office Horizon Scandal Reaches 80 Percent Completion
Police Chiefs Issue Updated National Guidance on Managing Large Public Demonstrations
UK Expands Regional Airport Funding Scheme to Boost Domestic Connectivity
UK Competition Watchdog Launches Inquiry Into Grocery Pricing Practices
National Grid Warns of Tight Energy Management Needs During Upcoming Winter Peak Demand
UK Education Department Introduces National Standards for AI Use in Secondary Schools
UK High Court Clears North Sea Carbon Capture Project After Final Legal Challenge Fails
Northern Ireland Leaders Hold Emergency Talks on Trade Disruption Under Windsor Framework
Welsh Government Moves to Expand Social Housing in Response to Severe Affordability Pressures
UK Economy Sees Unexpected Rise in Business Investment in Second Quarter, ONS Data Shows
Scottish Government Unveils Multi-Billion Pound Investment Plan for Renewable Energy and Grid Expansion
UK and EU Agree Enhanced Defence Cooperation Pact Covering Intelligence and North Sea Security
Prime Minister Orders Independent Review of NHS Performance After Record Waiting Lists
Bank of England Holds Interest Rates at 5 Percent as Services Inflation Remains Persistent
UK Heatwave Disrupts Transport, Healthcare and Public Services as Red Weather Alerts Expand Nationwide
Barclays Warns of Growing Cyber Risk Divide Between Large UK Firms and Micro Businesses
European Defence Plans Including Ukraine Integration Prompt UK Strategic Reassessment
UK Equity Markets React as US–Iran Peace Roadmap Eases Oil Price Pressures
United Kingdom Expands Global Clean Energy Partnerships With Brazil, Morocco and Tanzania
Lord David Frost Urges Incoming UK Leadership to Abandon EU Regulatory Reset Strategy
Housing Groups Support Amendment to Strengthen Fire and Gas Safety Access Powers in Social Housing
South London NHS Estates Staff Ballot on Industrial Action Over Pay Structures in Hospital Maintenance Services
United Kingdom Government Invests £60 Million in AI Research Labs at Oxford and University College London
Barclays Cyber Security Report Highlights Rising Threat Exposure Among UK Small Businesses in AI-Driven Attacks
UK Met Office Heatwave Triggers Transport Warnings as Rail Operators Urge Cancellations Amid Infrastructure Strain
×