A business group is suing Texas over the so-called “anti-ESG law.” Photo via Getty Images

A progressive business group sued Texas on Thursday over a 2021 law that restricts state investments in companies that, according to the state, “boycott” the fossil fuel industry.

The American Sustainable Business Coalition filed suit against Attorney General Ken Paxton and Comptroller Glenn Hegar, alleging that the law, Senate Bill 13, constitutes viewpoint discrimination and denies companies due process, in violation of the First and Fourteenth Amendments. The group asked a federal judge in Austin to declare the statute unconstitutional and permanently block the state from enforcing it.

“Texas has long presented itself as a business-friendly state where limited state regulation facilitates the ability of businesses to conduct themselves as they see fit,” lawyers for the group wrote. “Yet in 2021, the Legislature passed SB 13 to coerce and punish businesses that have articulated, publicized, or achieved goals to reduce reliance on fossil fuels.”

Known as the “anti-ESG law” — which stands for “environmental, social and governance” — Senate Bill 13 requires state entities, including state pension funds and the enormous K-12 school endowment, to divest from companies that have reduced or cut ties with the oil and gas sector and that Texas officials deem antagonistic to the fossil fuel industry.

In approving the legislation, Republican officials looked to protect Texas oil and gas companies and to bite back at Wall Street investors pulling financial support from the industry in an effort to incorporate climate risk into their investments and respond to pressure to divest from fossil fuels, which play an outsized role in accelerating the climate crisis.

In March, Texas Permanent School Fund, Austin, cut ties with BlackRock, which managed roughly $8.5 billion of the $52.3 billion endowment and which was listed by Texas as one of the companies that should not handle state business.

The statute defines “boycott” as, “without an ordinary business purpose, refusing to deal with, terminating business activities with, or otherwise taking any action that is intended to penalize, inflict economic harm on, or limit commercial relations with” a fossil fuel company. It also prohibits state agencies from doing business with a firm unless it affirms that it does not boycott energy companies. And it charges the state comptroller with preparing and maintaining a blacklist of companies based on “publicly available information” and “written verification” from the company.

In a statement, Hegar, the comptroller, called the lawsuit an “absurd” attempt to “force the state of Texas and Texas taxpayers to invest their own money in a manner inconsistent with their values and detrimental to their own economic well-being.”

“This left-wing group suing Texas,” he said, “is hiding their true intent: to force companies to follow a radical environmental agenda that is often contrary to the interests of their shareholders and to punish those companies that do not fall into lockstep and put politics above earnings.”

Paxton’s office did not immediately reply to a request for comment.

Texas has blacklisted more than 370 investment firms and funds, including BlackRock and funds within major banks like Goldman Sachs and J.P. Morgan. BlackRock, among other companies, pushed back on its designation as “boycotting” fossil fuels, calling the decision “not a fact-based judgment” and citing over $100 billion in investments in Texas energy companies.

“Elected and appointed public officials have a duty to act in the best interests of the people they serve,” a BlackRock spokesperson said at the time. “Politicizing state pension funds, restricting access to investments, and impacting the financial returns of retirees, is not consistent with that duty.”

In Thursday’s suit, the American Sustainable Business Coalition argued that the physical and financial risks posed by climate change are a legitimate investment and business consideration and cause for efforts to reduce carbon emissions.

The group said the Texas law was enacted to go after what Republican lawmakers saw as a “burgeoning fossil fuel discrimination movement,” and that it effectively “infringes rights of free speech and association under a scheme of politicized viewpoint discrimination” and allows Texas officials to “punish companies they believe are insufficiently supportive of the fossil fuel industry.”

The group argued that the law penalizes companies for their energy policies and membership in certain business associations, and compels them to adopt positions that align with Texas officials “as a condition” of doing business with state entities.

The suit also alleged that the law violates companies’ right to due process because vagueness in the statute “encourages arbitrary enforcement” and fails to provide blacklisted companies a fair process to contest their designation.

Texas blacklisted “the flagship investment funds” of Etho Capital and Sphere, two climate-focused firms represented by the American Sustainable Business Coalition, according to the lawsuit.

“Among ASBC’s many projects are efforts to encourage sustainable investing and sustainable business practices,” the lawsuit reads. “These are all cornerstones of the modern Texas economy. Yet, SB 13 takes aim at, and punishes, companies that speak about, aspire to, and achieve this goal.”

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This story was originally published by The Texas Tribune and distributed through a partnership with The Associated Press.

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Houston climatech company signs on to massive carbon capture project in Malaysia

big deal

Houston-based CO2 utilization company HYCO1 has signed a memorandum of understanding with Malaysia LNG Sdn. Bhd., a subsidiary of Petronas, for a carbon capture project in Malaysia, which includes potential utilization and conversion of 1 million tons of carbon dioxide per year.

The project will be located in Bintulu in Sarawak, Malaysia, where Malaysia LNG is based, according to a news release. Malaysia LNG will supply HYCO1 with an initial 1 million tons per year of raw CO2 for 20 years starting no later than 2030. The CCU plant is expected to be completed by 2029.

"This is very exciting for all stakeholders, including HYCO1, MLNG, and Petronas, and will benefit all Malaysians," HYCO1 CEO Gregory Carr said in the release. "We approached Petronas and MLNG in the hopes of helping them solve their decarbonization needs, and we feel honored to collaborate with MLNG to meet their Net Zero Carbon Emissions by 2050.”

The project will convert CO2 into industrial-grade syngas (a versatile mixture of carbon monoxide and hydrogen) using HYCO1’s proprietary CUBE Technology. According to the company, its CUBE technology converts nearly 100 percent of CO2 feed at commercial scale.

“Our revolutionary process and catalyst are game changers in decarbonization because not only do we prevent CO2 from being emitted into the atmosphere, but we transform it into highly valuable and usable downstream products,” Carr added in the release.

As part of the MoU, the companies will conduct a feasibility study evaluating design alternatives to produce low-carbon syngas.

The companies say the project is expected to “become one of the largest CO2 utilization projects in history.”

HYCO1 also recently announced that it is providing syngas technology to UBE Corp.'s new EV electrolyte plant in New Orleans. Read more here.

Tackling methane in the energy transition: Takeaways from Global Methane Hub and HETI

The view from heti

Leaders from across the energy value chain gathered in Houston for a roundtable hosted by the Global Methane Hub (GMH) and the Houston Energy Transition Initiative (HETI). The session underscored the continued progress to reduce methane emissions as the energy industry addresses the dual challenge of producing more energy that the world demands while simultaneously reducing emissions.

The Industry’s Shared Commitment and Challenge

There’s broad recognition across the industry that methane emissions must be tackled with urgency, especially as natural gas demand is projected to grow 3050% by 2050. This growth makes reducing methane leakage more than a sustainability issue—it’s also a matter of global market access and investor confidence.

Solving this issue, however, requires overcoming technical challenges that span infrastructure, data acquisition, measurement precision, and regulatory alignment.

Getting the Data Right: Top-Down vs. Bottom-Up

Accurate methane leak monitoring and quantification is the cornerstone of any effective mitigation strategy. A key point of discussion was the differentiation between top-down and bottom-up measurement approaches.

Top-down methods such as satellite and aerial monitoring offer broad-area coverage and can identify large emission plumes. Technologies such as satellite-based remote sensing (e.g., using high-resolution imagery) or airborne methane surveys (using aircraft equipped with tunable diode laser absorption spectroscopy) are commonly used for wide-area detection. While these methods are efficient for identifying large-scale emission hotspots, their accuracy is lower when it comes to quantifying emissions at the source, detecting smaller, diffuse leaks, and providing continuous monitoring.

In contrast, bottom-up methods focus on direct, on-site detection at the equipment level, providing more granular and precise measurements. Technologies used here include optical gas imaging (OGI) cameras, flame ionization detectors (FID), and infrared sensors, which can directly detect methane at the point of release. These methods are more accurate but can be resource and infrastructure intensive, requiring frequent manual inspections or continuous monitoring installations, which can be costly and technically challenging in certain environments.

The challenge lies in combining both methods: top-down for large-scale monitoring and bottom-up for detailed, accurate measurements. No single technology is perfect or all-inclusive. An integrated approach that uses both datasets will help to create a more comprehensive picture of emissions and improve mitigation efforts.

From Detection to Action: Bridging the Gap

Data collection is just the first step—effective action follows. Operators are increasingly focused on real-time detection and mitigation. However, operational realities present obstacles. For example, real-time leak detection and repair (LDAR) systems—particularly for continuous monitoring—face challenges due to infrastructure limitations. Remote locations like the Permian Basin may lack the stable power sources needed to run continuous monitoring equipment to individual assets.

Policy, Incentives, and Regulatory Alignment

Another critical aspect of the conversation was the need for policy incentives that both promote best practices and accommodate operational constraints. Methane fees, introduced to penalize emissions, have faced widespread resistance due to their design flaws that in many cases actually disincentivize methane emissions reductions. Industry stakeholders are advocating for better alignment between policy frameworks and operational capabilities.

In the United States, the Subpart W rule, for example, mandates methane reporting for certain facilities, but its implementation has raised concerns about the accuracy of some of the new reporting requirements. Many in the industry continue to work with the EPA to update these regulations to ensure implementation meets desired legislative expectations.

The EU’s demand for quantified methane emissions for imported natural gas is another driving force, prompting a shift toward more detailed emissions accounting and better data transparency. Technologies that provide continuous, real-time monitoring and automated reporting will be crucial in meeting these international standards.

Looking Ahead: Innovation and Collaboration

The roundtable highlighted the critical importance of advancing methane detection and mitigation technologies and integrating them into broader emissions reduction strategies. The United States’ 45V tax policy—focused on incentivizing production of low-carbon intensity hydrogen often via reforming of natural gas—illustrates the growing momentum towards science-based accounting and transparent data management. To qualify for 45V incentives, operators can differentiate their lower emissions intensity natural gas by providing foreground data to the EPA that is precise and auditable, essential for the industry to meet both environmental and regulatory expectations. Ultimately, the success of methane reduction strategies depends on collaboration between the energy industry, technology providers, and regulators.

The roundtable underscored that while significant progress has been made in addressing methane emissions, technical, regulatory, and operational challenges remain. Collaboration across industry, government, and technology providers is essential to overcoming these barriers. With better data, regulatory alignment, and investments in new technologies, the energy sector can continue to reduce methane emissions while supporting global energy demands.

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HETI thanks Chris Duffy, Baytown Blue Hydrogen Venture Executive, ExxonMobil; Cody Johnson, CEO, SCS Technologies; and Nishadi Davis, Head of Carbon Advisory Americas, wood plc, for their participation in this event.

This article originally appeared on the Greater Houston Partnership's Houston Energy Transition Initiative blog. HETI exists to support Houston's future as an energy leader. For more information about the Houston Energy Transition Initiative, EnergyCapitalHTX's presenting sponsor, visit htxenergytransition.org.

Houston battery recycling company signs 15-year deal to supply Texas flagship facility

green team

Houston- and Singapore-headquartered Ace Green Recycling, a provider of sustainable battery recycling technology solutions, has secured a 15-year battery material supply agreement with Miami-based OM Commodities.

The global commodities trading firm will supply Ace with at least 30,000 metric tons of lead scrap annually, which the company expects to recycle at its planned flagship facility in Texas. Production is expected to commence in 2026.

"We believe that Ace's future Texas facility is poised to play a key role in addressing many of the current challenges in the lead industry in the U.S., while helping the country meet the growing domestic demand for valuable battery materials," Nishchay Chadha, CEO and co-founder of Ace, said in a news release. "This agreement with OM Commodities will provide us with enough supply to support our Texas facility during all of its current planned phases, enabling us to achieve optimal efficiencies as we deploy our solutions in the U.S. market. With OM Commodities being a U.S.-based leader in metals doing business across the Americas and Asia with a specialty in lead batteries, we look forward to leveraging their expertise in the space as we advance our scale-up efforts."

The feedstock will be sufficient to cover 100 percent of Ace's phase one recycling capacity at the Texas facility, according to the statement. The companies are also discussing future lithium battery recycling collaborations.

"Ace is a true pioneer when it comes to providing an environmentally friendly and economically superior solution to recycle valuable material from lead scrap," Yiannis Dumas, president of OM Commodities, added in the news release. "We look forward to supporting Ace with lead feedstock as they scale up their operations in Texas and helping create a more circular and sustainable battery materials supply chain in the U.S."

Additionally, ACE shared that it is expected to close a merger with Athena Technology Acquisition Corp. II (NYSE: ATEK) in the second half of 2025, after which Ace will become a publicly traded company on the Nasdaq Stock Market under the ticker symbol "AGXI."

"As we continue to scale our lead and lithium battery recycling technologies to help support the markets for both internal combustion engines and electric vehicles, we expect that our upcoming listing will be a key accelerator of growth for Ace,” Chada said.