Energy Insights 2021 Issue 5

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Page 4 of 51

S H E A R M A N & S T E R L I N G L L P | 3 Energy transition is a pivotal global topic that has attracted widespread interest. In this latest edition, we provide a roadmap of the key European regulatory developments relevant to hydrogen in 2021. Hydrogen has clearly become central to the European Commission's decarbonization agenda. Carbon offset credits provide a credible method of lowering various sectors' carbon footprint and achieving emissions reduction targets. We examine how carbon offset credits are issued for sale and we review the various carbon offset projects that are available for credit purchasers. On July 14, 2021, the European Commission published its proposal for a Carbon Border Adjustment Mechanism ("CBAM") which will be phased in from 2023 and be fully operational in 2026. We describe how CBAM certificates will work, how they are designed to reduce carbon leakage, and which sectors they will apply to. We also offer some insight into the expected avenues for appealing CBAM-related decisions. We also look at the recent trend of courts within the EU – both at the EU and individual Member State levels – becoming increasingly assertive in adjudicating energy-related matters. In the United States, we examine how offshore wind presents a significant opportunity for local economic growth and job creation. We also consider the new bipartisan Senate infrastructure bill that emphasizes reauthorization, research, resilience and reliability. If passed, this bill will provide more than $1 trillion in improvements to the nation's physical infrastructure. In Asia, we consider the challenges of cross-border renewable independent power projects. We also look at the changes to foreign ownership restrictions in the Philippines and the impact on the energy sector. We hope you find this latest edition both interesting and informative. If you have any questions regarding this edition or would like to discuss any of the topics further, then please get in touch with any of our contributors. From Shearman & Sterling We are delighted to bring you the fifth edition of our Energy & Infrastructure Insight, providing expert information and analysis of the current issues facing the energy and infrastructure sectors across the globe.

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