Welcome back: The U.S. and China are meeting in London today, not to discuss tariffs, but export controls—those restrictions countries place on their own materials or products that another country desperately needs. 

At the top of the agenda for President Trump's negotiators are China's rare-earth elements, which go into much of modern American technology, from electric vehicles to smartphones to F-35 jet fighters.

China controls roughly 90% of the world’s supply of these elements, which help magnets to operate at high temperatures. In April, in response to Trump's tariffs, the country began requiring companies to apply for permission to export magnets made with rare-earth metals. 

Now faced with a dire shortage of the materials, some U.S. automakers are considering moving parts of their operations to China. Were they to do so, it would amount to a remarkable outcome from a trade war initiated by Trump with the intention of bringing manufacturing back to the U.S.

Read on for more on this story and other sustainability news.

U.S. electric vehicle makers are racing to find workarounds to China’s stranglehold on rare-earth magnets, which they fear could force them to shut down some car production within weeks.

Several automakers and their suppliers are considering shifting some parts manufacturing to China to avoid looming factory shutdowns, people familiar with the situation told the WSJ's Sean McLain and Ryan Felton.

Ideas under review include producing electric motors in Chinese factories or shipping made-in-America motors to China to have magnets installed. Moving production to China as a way to get around the export controls on rare-earth magnets could work because the restrictions only cover magnets, not finished parts, the people said.

China was supposed to have eased export controls on rare-earth magnets as part of a 90-day tariff truce agreement with the White House, but the country has slow walked license approvals for magnets.

• Dyspro-What? Why an Obscure Element Has the EV Industry in a Panic
• China’s Exports to U.S. Suffer Biggest Decline Since 2020
• Rare-Earths Plants Are Popping Up Outside China

Most hydrogen today is extracted from natural gas, a process that adds carbon dioxide to the atmosphere. There are two main alternative methods.

Green hydrogen is made by splitting water into oxygen and hydrogen using renewable electricity. Blue hydrogen is produced the traditional way, but the carbon is captured and kept out of the atmosphere—forever, if possible. Blue hydrogen is more controversial. Carbon-capture facilities often catch less pollution than hoped, the WSJ's Ed Ballard writes.

Industrial-gas supplier Air Products & Chemicals is working to produce blue hydrogen at a facility in Louisiana by the Mississippi River. The captured carbon dioxide would then be piped through wildlife-rich wetland and sequestered below picturesque Lake Maurepas.

But five years after the CEO unveiled the project to the state governor, the price tag has swelled to $8 billion, the construction timeline has slipped, the CEO has been ousted, and his successor is reining in spending. 

Now, the tax bill approved by House Republicans is set to cut off hydrogen production tax credits, part of an effort to undo many Biden-era climate programs and reduce funding for wind and solar power.

• Cost of Producing Green Hydrogen Makes It Prohibitive, Study Finds
• Fossil-Fuel Companies Lobby Trump to Save a Green-Fuel Program
• Airbus Promised a Green Aircraft. That Bet Is Now Unraveling.

California is finding ways to pressure companies to cut pollution, even as Republican lawmakers roll back the state’s clean-air efforts that pioneered emissions regulations.

The air-quality agency that covers the region around California’s busiest port complex is stepping up enforcement of an obscure rule that regulates emissions from vehicles operating at warehouses. Regulators are hoping the rule, known as an indirect-source rule, could push companies toward green tech as other regulatory efforts stall, the WSJ's Paul Berger reports.

The South Coast Air Quality Management District has over the past six months issued more than 220 violation notices to companies for failing to submit timely reports for the warehouse indirect-source rule. The agency has collected more than $1.3 million in penalties and more than $54 million in fees since 2023 to mitigate warehouse-related pollution.

Those actions, as well as the continuing enforcement of the warehouse rule even after Republicans rolled back other California air regulations, are prompting logistics companies to take a hard look at emissions and to consider mitigation efforts. These range from installing electric-vehicle charging stations to buying battery-electric trucks.

• California Points to Trump as It Drops a Clean-Trucks Mandate
• GM Is Pushing Hard to Tank California’s EV Mandate
• Sales of Electric Heavy-Duty Trucks Are Hitting a Regulatory Wall

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• H&M, Eileen Fisher top fashion environmental scorecard. (ESG Dive)
   
• Carbon market downturn leads to staff cuts at Pachama. (Trellis)
   
• Schneider Electric appoints Esther Finidori as new chief sustainability officer. (ESG Today)
   
• Hedge funds face california rebuke over role in wildfire claims. (Bloomberg)
   
• The philanthropy stepping in to fund center-right climate groups. (Heatmap)
   
• Why Brazil’s ‘King of Cattle’ is embracing a plan to save the Amazon. (Reuters)
   
• ‘Ticking timebomb’: sea acidity has reached critical levels, threatening entire ecosystems. (Guardian)

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 wsjperry, clara-hudson and yusuf_khan.