Hi John,

Energy prices have had a major impact on politics and the economy of the US and Europe over the past year. It doesn’t look like that will end any time soon. As our own Senior Resident Fellow Ellen Hughes-Cromwick notes, the price swings we’re seeing now in the oil markets will take your breath away. As we’re looking ahead to 2023, the one thing we’re planning on is more unpredictability in energy markets that will have a big impact on inflation, politics, and the US economy, including how the Inflation Reduction Act gets implemented and what Congress and the President focus on.

Last week on the COP27 stage, President Joe Biden proposed a new Federal Supplier Climate Risks and Resilience Rule that would hold federal contractors accountable for measuring, disclosing, and reducing their carbon emissions and fortify American supply chains from climate risks.

Under the proposed rule, major federal suppliers must set emissions reduction targets aligned with the Paris agreement and disclose their emissions and climate-related financial risks. Read our Twitter thread for more details.

The proposed rule is part of the Biden-Harris Administration’s larger Federal Sustainability Plan, which leverages the federal government's $630 billion purchasing power to drive decarbonization in some of America’s heaviest polluting sectors. This will help companies in the federal supply chain make their products clean and more competitive while shrinking the federal government’s carbon footprint. 

With only 31% of major contractors currently disclosing their greenhouse gas emissions, the Administration’s proposed rule would ensure federal suppliers get serious about reporting their carbon footprint. Our report on Environmental Product Declarations (EPDs) outlines a reliable way for manufacturers to quantify and disclose their emissions so that buyers, like the federal government, are confidently purchasing low-carbon products.

With the world’s largest aircraft fleet parked in our backyard, the Department of Defense has recognized the threat that volatility in petroleum-based fuel supply can have on our armed forces. One way to combat this is by scaling up sustainable aviation fuel (SAF)–a clean, liquid fuel that can be used interchangeably and blended with today’s conventional jet fuel. Our newest blog from Policy Advisor, John Hebert, outlines why the military should utilize sustainable aviation fuel and how we can accelerate adoption.

The Why: Aviation is very carbon intensive. Switching to a more sustainable fuel source will make meaningful cuts to our carbon emissions, stave off some of the most harmful effects of climate change, secure our energy independence, and cut costs for our military in the long run.

The How: Both the House and Senate version of the National Defense Authorization Act (NDAA) include provisions to scale up SAF through a five-year pilot program that would allow the Department of Defense to examine what a path forward for military-wide adoption would look like.

Curious about other ways the federal government is expanding SAF? Read Third Way’s blog on how the Inflation Reduction Act incentivizes SAF production or listen to conversations from our recent virtual event on net-zero aviation initiatives.

Last week, EU Commissioner for Energy, Kadri Simson, opened the 15th European Nuclear Energy Forum by outlining how Russia’s invasion of Ukraine has irreparably altered Europe’s energy landscape and ushered in a future for nuclear energy.

The Why: As the second-largest source of carbon-free energy in the EU, nuclear energy will be a key player in Europe’s clean energy mix, providing firm, baseload power that can work in tandem with other renewable energy technologies. Modeling from Carbon-Free Europe underpins this–nuclear reactors, including existing plants, will be responsible for generating 17%-28% of EU’s and UK’s electricity in 2050.

The How: To get there, the EU’s nuclear industry will need a significant financial boost in the realm of hundreds of billions of dollars. This summer’s update to the EU taxonomy to include nuclear energy as “green” was a critical move that will spur investment from both governments and private investors.

The UK: Across the Channel, the United Kingdom is reaffirming its commitment to building energy independence through a technology-inclusive energy transition. Presenting the UK’s newest budget plan this week, Jeremy Hunt, the Chancellor of the Exchequer, signaled that the Sizewell C nuclear power plant in Suffolk would move forward following significant delays.

Lindsey Walter, Third Way’s Director for International Policy and co-founder of Carbon-Free Europe, outlined the important role that Sizewell C and nuclear energy more broadly will have for the UK's security and economy. Hunt’s support of Sizewell C makes this the first state-backed nuclear plant in over three decades.