Today: EU proposes watering down rules aimed at spurring electric-vehicle adoption amid pressure from automakers; AGs sue Trump administration over EV funding freeze; factory workers who build the power grid by hand.

Welcome back: The European Union proposed watering down rules that would have effectively banned the sale of new combustion-engine cars in the bloc from 2035, after heavy pressure from the automotive industry.

The Wall Street Journal's Kim Mackrael and Stephen Wilmot write that the move, announced Tuesday, is the latest sign of a major economy pulling back on its electric-vehicle ambitions as the transition away from gasoline-powered cars proves more difficult than many policymakers had anticipated. It comes as the EU seeks to improve its competitiveness and trim some of the rules that businesses say are holding them back.

Instead of requiring automakers to completely eliminate carbon-dioxide tailpipe emissions for new cars starting in 2035, the EU’s new proposal calls for a 90% reduction from baseline levels. The remaining 10% would need to be made up through the use of low-carbon steel or from e-fuels and biofuels, according to the proposal.

The European Commission, the EU’s executive arm, said its plan maintains a strong market signal in favor of zero-emission vehicles while giving carmakers more flexibility. The change would mean plug-in hybrid electric vehicles, range extenders and internal combustion engines can still be sold in the EU after 2035, in addition to fully electric and hydrogen vehicles.

The proposal will need approval from the EU’s member states and the European Parliament before it can become law.

• The EU is set to reduce its sustainability reporting requirements after negotiators from the European Parliament and European Council struck an agreement to simplify the rules. (WSJ)
• The Trump administration wants the EU to exempt American oil and gas companies from a landmark law aimed at curbing emissions of methane, a powerful planet-warming gas. (NYT)

A group of state attorneys general led by Rob Bonta of California are suing the Trump administration in an effort to reclaim billions in funds to expand electric vehicle charging infrastructure.

WSJ Pro Sustainable Business's Clara Hudson reports that the lawsuit alleges that the Trump administration unlawfully suspended two grant programs for EV charging infrastructure without any explanation or notice.

The attorneys general say the U.S. Department of Transportation “has quietly refused” to approve any new funding under the EV programs, known as the Charging and Fueling Infrastructure Grant Program and the Electric Vehicle Charger Reliability and Accessibility Accelerator Program.

The plaintiffs allege that “unexplained and secretive actions violate the constitutional separation of powers” as the funding was approved by bipartisan majorities in Congress.

• California regulators gave Tesla 90 days to comply after a judge found the company deceived consumers. (WSJ​)

In a factory not far from the North Carolina state line, Robin Cisco walks her fingers across hundreds of feet of paper-insulated copper wire, The Wall Street Journal's Jennifer Hiller writes.

Cisco is a “winder” at Hitachi Energy’s transformer factory in southern Virginia where she twists wire by hand around a giant cylinder. The pattern will eventually create the heart of an electric transformer that takes four to six weeks to build and is the size of a small garage. Soaring demand means the wait list for the crucial equipment is yearslong.

The growth of the U.S. electric grid depends on factory workers like Cisco, whose craft can take three to five years to master and can’t be fully automated. The manual precision and specialty materials required are among many reasons that the U.S. is struggling to meet the surging electricity needs of the artificial-intelligence frenzy.

Orders for larger transformers have exceeded supply by about 14,000 units this year, according to Wood Mackenzie. The U.S. will import 80% of its large power transformers this year and half of its distribution transformers.

• China now has the biggest power grid the world has ever seen. (WSJ)

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• Ben & Jerry’s co-founder says new parent company is attempting to dismantle the ice-cream maker’s social mission. (WSJ)
   
• BlackRock loses second Dutch pension mandate over sustainable investment concerns. (Bloomberg)
   
• NGP is seeking $1.5 billion for a new private equity fund to back entrepreneurs looking to buy and build clean-energy assets. (WSJ)
   
• Google signs 21-year clean energy deal with TotalEnergies to power Malaysia data centers. (ESG Today)
   
• The Energy Department ordered TransAlta to keep its Centralia coal-fired power station in Washington state open for 90 days. (WSJ)
   
• President Trump ordered a “total and complete blockade” of sanctioned Venezuelan oil tankers, escalating pressure on Nicolás Maduro. (WSJ)
   
• Disclosure standards don't bend to corporate preferences. (Harvard Law School Forum on Corporate Governance)

WSJ Pro Sustainable Business gives you an inside look at how companies are tackling sustainability. Send comments to bureau chief Perry Cleveland-Peck at perry.cleveland-peck@wsj.com and reporters Clara Hudson at clara.hudson@wsj.com and Yusuf Khan at yusuf.khan@wsj.com. Follow us on LinkedIn at perrycp, clara-hudson and yusuf_khan.