Today: Attorneys general are leading a challenge against the Trump administration over its greenhouse gas emissions rollback; battery makers shift to grids and data centers; EU moves to relax carbon-pricing program as energy crunch hits industry; Swedish startup bets on electric ferries.

Welcome back: Attorneys general from New York and California are leading an alliance of states, counties and cities in an attempt to reinstate the legal foundation for federal greenhouse gas emissions regulation.

WSJ Pro Sustainable Business's Clara Hudson reports that the legal filing challenges the Environmental Protection Agency’s repeal of the Obama-era “endangerment finding” that classified six gases as a threat to public health and welfare. The repeal put an end to rules requiring companies to report and measure vehicle emissions.

The petition, filed in the U.S. Court of Appeals for the District of Columbia Circuit, was brought by more than two dozen attorneys general including those from California, Washington, Maine and Virginia, as well as cities such as Boston, San Francisco and Cleveland. California Gov. Gavin Newsom is also leading the petition.

The state officials say the repeal contradicts scientific evidence of threats posed by climate change. They also say that ending the endangerment finding doesn’t align with the EPA’s requirements under the Clean Air Act.

• A coalition of climate and health organizations sued the EPA in an effort to combat its repeal of a landmark climate finding. (WSJ)
• The Trump administration is suing California in an effort to shut down the state’s moves to limit pollutants from cars. (WSJ)

Makers of electric-vehicle batteries are pivoting to make energy storage for data centers and utilities, including the likes of Ford Motor, The Wall Street Journal's Jinjoo Lee reports.

Battery manufacturers made significant investments in the U.S. in recent years, buoyed by policy support for EVs. That changed when President Trump’s administration took away carrots incentivizing EV buyers and did away with sticks that punished automakers for making gas-guzzlers.

Benchmark Mineral Intelligence expects energy storage to make up 41% of total U.S. battery demand this year, up from 26% two years ago.

At the same time, there are clear incentives to make grid-scale batteries in the U.S. Even though Trump’s signature One Big, Beautiful Bill Act took away tax credits for solar and wind, subsidies remain for energy storage as long as the equipment doesn’t contain too much content from China. Chinese-made batteries themselves face high tariffs.

• LG Energy Solution will produce battery cells for Tesla’s energy-storage business at a new $4.3 billion Michigan factory. (WSJ)
• U.S. EV fast-charging sites grew by roughly 70% in 2025, but the U.S. lags behind China in charging speed, which can take minutes. (WSJ)

The European Union plans to relax its landmark carbon-pricing program as the bloc’s industrial sector braces for a spike in energy prices caused by the war in the Middle East, the Journal's Joshua Kirby reports.

The EU is to adjust its emissions-trading system in the face of soaring prices for oil and gas, said Ursula von der Leyen, president of the EU executive, the European Commission. “We need to modernize it and make it more flexible,” von der Leyen told reporters late Thursday.

The emissions-trading system will be adjusted to account for industry concerns, with roomier benchmarks for free credits for manufacturers and greater firepower for the system’s market-stability reserve, a tool designed to promote balance in the European carbon-trading market. The changes should come within days, von der Leyen said. Under the ETS, companies must acquire a permit for each metric ton of carbon they emit.

• Governments globally are pressuring consumers to reduce energy use, the broadest effort since the 1970s, due to the Iran war. (WSJ)

A Swedish company is defying a downturn in green-technology funding by raising new capital as investors bet that its electric ferries can make a splash with public transport operators and commuters.

WSJ's Dominic Chopping writes that Stockholm-based Candela started out developing hydrofoiling electric leisure boats, but is now applying the technology and lessons learned from its speed boats to ferries. Its hydrofoil system lifts boats completely out of the water, cutting drag and reducing overall energy consumption by up to 80% versus conventional ships.

This week the company said it raised 30 million euros ($34.6 million), which will support the expanded production of its ferry—known as the P-12.

Stockholm’s public-transport operator recently completed a trial of the P-12 on a commuter route, concluding that travel time was nearly halved, carbon dioxide emissions were cut by 94% and passenger numbers increased.

• Hybrid-electric vessels at North America’s two largest ferry systems are hoisting the fortunes of a Morgan Stanley-backed battery maker. (WSJ)

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• Rivian Automotive and Uber announced a partnership to deploy 10,000 fully autonomous Rivian R2 SUVs as robotaxis. (WSJ)
   
• Next-gen nuclear should stick to proven designs or simplify supply chains by tapping into existing materials and know-how. (Canary Media)
   
• Encouraging the C-suite to prioritize environmental initiatives can require sustainability leaders to reach beyond their direct boss. (Trellis)
   
• ConocoPhillips and Exxon among oil companies that snapped up drilling leases in northern Alaska’s mammoth petroleum reserve. (Bloomberg)
   
• Standard Chartered signs $435 million loan with agri-business company COFCO, with terms tied to its climate performance. (ESG Today) 
   
• The massive power outage that hit the Iberian Peninsula in April last year was the result of multiple factors, investigation finds. (Reuters)
   
• The Iran war is causing global supply-chain disruptions, boosting inflation and raising the odds of a U.S. recession. (Barron's)
   
• Planned Parenthood settles federal investigation into alleged discrimination against white employees. (Dow Jones Risk Journal)

WSJ Pro Sustainable Business gives you an inside look at how companies are tackling sustainability. Send your comments to editor 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.