The U.S. government is dismantling the legal foundation of numerous climate protection measures from the era of President Barack Obama. The economy is being freed from the shackles of CO₂ fixation. For European businesses, this will soon translate into noticeably higher competitive pressure.
February 12, 2026, marks the end of a political era in the United States. On Thursday, President Donald Trump, together with EPA Administrator Lee Zeldin, repealed the so-called Endangerment Finding. This is one of the largest deregulation measures in recent U.S. history.
Legally, the move primarily deregulates the EPA framework. It is not an executive order or a law passed by Congress. It takes immediate effect but will need congressional confirmation to remain fully secure, avoiding legal side battles and denying NGOs a public platform.
Obama’s Legacy
Seventeen years ago, President Barack Obama legally identified six greenhouse gases as endangering public health and prosperity to anchor the green transformation.
Among them was the much-discussed CO₂, actually plant food and a driver for agriculture, as hobby gardeners well know. For policymakers, however, CO₂ became the central lever to legally cement the ubiquitous climate regime under the Clean Air Act, together with European partners.
A political masterstroke, no doubt, since every human action—industrial production, farming, mobility, or heating—is linked to CO₂ emissions. This repressive regime ultimately generated high fiscal revenues to build a sprawling state apparatus. Power politics at its finest, setting clear limits on citizens’ actions—a bureaucrat’s dream.
Repealing the Endangerment Finding is likely to feel like a liberation from Promethean chains for the U.S. economy and consumers. Trump called the move an end to the disastrous Obama-era policies that severely burdened the American auto industry and consumers.
A year has passed since Trump’s initiative. Legal complexity and judicial hurdles—especially obstruction from California and New York, and the massive opposition from NGOs—had slowed this crucial act of liberation. Washington’s bureaucratic mills grind slowly, but thoroughly.
The political opposition is, of course, not leaving the battlefield without a counterattack. Environmental groups and individual states, particularly California, are expected to challenge this policy shift in court. Whether state-level exceptions withstand federal law remains to be seen. In this case, federal law is likely to prevail.
California acts as a kind of European outpost. Governor Gavin Newsom uses emissions restrictions to curb individual mobility and the operations of the local energy sector.
This presents an additional challenge for the Trump administration, which may even consider nationalizing some capacities to ensure the continued processing of oil and gas on the U.S. West Coast.
The deregulation step provides immediate relief. Vehicle and transport emissions rules are lifted. The entire subsidy apparatus of the green machine in the U.S. is slowed, affecting companies like Tesla. Reporting requirements, similar to Europe’s supply chain law, are entirely eliminated.
Another positive side effect: the U.S. CO₂ emissions trading system is effectively buried, shielding industry from federal fiscal intervention.
The Beginning of a New Era
The U.S. is entering a new era of deregulation, impacting not only the energy sector but also the rapid development of new infrastructure projects such as gas pipelines and nuclear power plants.
This decision will unleash technological competition and give American firms, after the introduction of the administration’s tariff strategy, another advantage over European competitors.
It will take some time, but once investors realize the massive impact this decision will have on the profitability of America’s industrial core, capital flight from Europe to the U.S. is expected to accelerate. In recent years, Germany alone lost 60–100 billion euros annually in direct investments abroad, a substantial portion flowing to the U.S. This capital is being used to build a new industrial base, a safe harbor away from European regulatory chaos and its energy crisis.
At present, the exact effects of this paradigm shift on the European economy are unclear. But pressure on Brussels, Berlin, and Paris—the centers of the transformation ideology—is mounting. EU representatives are reacting frenetically.
Friedrich Merz stated at the EU summit in Belgium that all sectors must be deregulated. French President Emmanuel Macron plans to cut investment in renewable energy while bringing France’s traditionally strong nuclear energy back into focus.
European experience shows, however, that these are likely performative media plays—especially from a German perspective—to ease pressure amid deindustrialization in the Super Election Year 2026.
The EU is more likely to follow the Draghi plan, investing 800 billion euros annually on credit into the slowly drying-up subsidy channels of the green transformation economy and military buildup.
Two opposing systems collide. History teaches that centralized planning creates inefficiencies that ultimately lead to economic collapse, especially if a competitor, in this case the U.S., pursues an alternative path.
For free-market proponents who also value environmentally sophisticated production technologies, the Trump administration’s move is welcome news.
History shows that the competitive innovation process ensures that progress and ecology can coexist, provided property rights are respected and enforced.
A strong state can be precisely described along these lines: guardian of property rights and promoter of an innovative competitive framework. The U.S. is visibly returning to this civilizational foundation.
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Thomas Kolbe, born in 1978 in Neuss/Germany, is a graduate economist. For over 25 years, he has worked as a journalist and media producer for clients from various industries and business associations. As a publicist, he focuses on economic processes and observes geopolitical events from the perspective of the capital markets. His publications follow a philosophy that focuses on the individual and their right to self-determination.
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