Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Commodity Futures Trading Commission relating to "Commission Guidance Regarding the Listing of Voluntary Carbon Credit Derivative Contracts".
- Bill Number
- H.J.Res. 90
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Finance and Financial Sector
- Status
- Introduced
- Latest Action
- 2025-04-18: Referred to the Subcommittee on Commodity Markets, Digital Assets, and Rural Development.
- Last Updated
- 2026-04-17T20:44:40Z
AI-Generated Summary
Purpose
This joint resolution (H.J. Res. 90) aims to block a guidance document issued by the Commodity Futures Trading Commission (CFTC), a federal agency that oversees futures trading and derivatives markets. The guidance addresses how voluntary carbon credit derivative contracts—financial products tied to carbon offset credits for reducing emissions—can be listed on exchanges. By disapproving it, Congress seeks to prevent this guidance from taking effect, effectively nullifying the CFTC's attempt to clarify and regulate these emerging environmental financial instruments.
Key Provisions
- Disapproval Mechanism: Invokes the Congressional Review Act (a law allowing Congress to review and overturn certain federal agency rules or guidance within a set period). It specifically targets the CFTC's final guidance titled "Commission Guidance Regarding the Listing of Voluntary Carbon Credit Derivative Contracts," published in the Federal Register on October 15, 2024 (89 Fed. Reg. 83378).
- Nullification: Declares the guidance invalid, stating it "shall have no force or effect," meaning exchanges and traders cannot rely on it for listing or trading these contracts.
- Legislative Path: Introduced in the House of Representatives on April 3, 2025, by Representative Bice and referred to the Committee on Agriculture for review. If passed by both chambers and signed by the President (or overridden if vetoed), it becomes law.
Significant Changes to Existing Law
- This resolution does not amend statutes but uses the Congressional Review Act to reverse an agency's interpretive guidance, which is not a formal "rule" but acts like one in providing regulatory clarity.
- It halts the CFTC's effort to standardize how voluntary carbon credits (non-mandatory environmental offsets) are treated as derivatives, potentially reverting oversight to prior, less specific practices or requiring new agency action.
- No direct changes to core laws like the Commodity Exchange Act (which governs CFTC's authority), but it limits the agency's ability to guide markets without congressional approval in this instance.
Potential Impacts
- On Government Agencies: Undermines the CFTC's regulatory influence over climate-related financial products, possibly forcing the agency to issue new guidance or face legal challenges in enforcement. It could slow federal efforts to integrate environmental goals into financial markets.
- On Citizens and Businesses: Traders, exchanges, and companies in the voluntary carbon market (valued at billions globally) may face uncertainty in listing or trading these contracts, potentially stifling innovation in green finance. Environmental groups might see reduced market confidence in carbon credits as reliable tools for emission reductions.
- On International Relations: Minimal direct impact, but it could signal U.S. reluctance to robustly regulate carbon markets, affecting global climate finance efforts (e.g., under the Paris Agreement) where voluntary credits play a role in international offset trading.
Main Stakeholders Affected
- Commodity Futures Trading Commission (CFTC): Primary target; loses authority over its issued guidance.
- Financial Exchanges and Traders: Entities like the Chicago Mercantile Exchange that list derivatives; they may delay or alter carbon credit product offerings due to lack of clear rules.
- Environmental and Climate Organizations: Groups promoting carbon markets (e.g., for voluntary offsets by companies) could be hindered in using financial tools to support sustainability.
- Businesses and Industries: Energy, agriculture, and tech firms involved in carbon trading or offsets; potential disruption to hedging against climate risks.
- Congress and Policymakers: Demonstrates congressional power to check executive branch agencies, influencing future oversight of financial regulations.
Notable Legal, Constitutional, or Political Implications
- Legal: Relies on the Congressional Review Act, which has a 60-day window for disapproval (starting from submission to Congress); success here sets precedent for challenging agency guidance on emerging markets like green finance. If enacted, it prevents judicial review of the guidance, as the Act streamlines congressional overrides.
- Constitutional: Reinforces Congress's Article I powers to oversee executive agencies (separation of powers), ensuring lawmakers can veto regulations seen as overreach without lengthy court battles.
- Political: Highlights partisan divides on climate policy—opponents may view it as blocking "woke" regulations, while supporters see it as protecting free markets from unneeded bureaucracy. Passage could energize debates on federal roles in environmental finance during the 119th Congress.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Rep. Bice, Stephanie I. [R-OK-5]
Recent Actions
- 2025-04-18: Referred to the Subcommittee on Commodity Markets, Digital Assets, and Rural Development.
- 2025-04-03: Referred to the House Committee on Agriculture.
- 2025-04-03: Introduced in House
- 2025-04-03: Introduced in House
Bill Versions
- Providing for congressional disapproval under chapter 8 of title 5, United States Code, of the rule submitted by the Commodity Futures Trading Commission relating to "Commission Guidance Regarding the Listing of Voluntary Carbon Credit Derivative Contracts". — issued 2025-04-03 — PDF (2 pages)