Aviation emissions covered by the EU Emissions Trading System (ETS) grew 3.9% year-on-year in 2025, while those in the industry and power sectors continued to fall, according to new analysis.

European carbon recorded a 1.2% drop on Monday as a robust rally in the morning saw prices test their recent highs, before sellers swarmed into the market and pushed EUAs lower, while participants waited for the resumption of daily auctions and a clearer signal on the scale of demand amid a 9% year-on-year drop in auction supply.

The voluntary carbon market’s credibility has been undermined by reliance on static, assumption-based deforestation baselines that over-credit avoided emissions, but can be restored through dynamic, data-driven baselines that continuously measure real-world outcomes using scientific controls, advanced satellite data, and adaptive modelling.

Cyprus, which has taken over the rotating EU Council presidency for the next six months, will aim to clinch a deal between the 27 EU countries on the extension of the bloc's Carbon Border Adjustment Mechanism (CBAM) on Mar. 10, as well as secure agreements on the European Grids Package and the Competitiveness Fund in June.

Voluntary carbon credit issuances surged at the end of 2025 and the beginning of 2026, while the market now gears up for the expected impact of the first wave of CORSIA demand and advancements on Article 6.

Grid expansion - Germany's grid agency BNetzA issued permits to build about 2,000 km of high-voltage transmission lines last year, up 45% on the 1,280 km installed in 2024. Among the approvals were several major high-voltage DC lines to connect industrial hubs in the country's south to wind power in its north. These north-south powerlines called A-Nord, Ultranet, SuedLink and SuedOstLink are expected to help absorb the growing amounts of renewable energy as electrification rises. The country plans to extend its transmission grid by a total of 16,800 km, of which around 3,500 km had been built by June 2025. Doing so is necessary to ensure a secure and reliable supply of renewables, said the BNetzA agency.

UK energy sustainability - The UK's National Energy System Operator (NESO) intends to press ahead this year with what it says is a first-of-a-kind spatial energy plans, nationally and regionally, as part of its effort to create a more sustainable energy system, CEO Fintan Slye said in a statement on Monday. The spatial plans will look to the future and prioritise what's needed, and where it's needed, in order to support sustainable and low-carbon energy. NESO is looking to create an energy system that works for the UK's people, society, and economy - which requires greater energy security, lower energy prices, and emission reductions, Slye added.  

Scaling tech-based carbon removal will not necessarily prove detrimental to the nature-based solutions market, with some technological solutions also bringing biodiversity co-benefits, a carbon finance consultancy told Carbon Pulse.

Trust Issues - A new review drawing on a systematic literature review finds that sustainability reporting assurance is associated with reduced corporate greenwashing and is positively valued by capital markets via lower equity capital costs. However, its effectiveness is highly contingent on regulatory strength, enforcement, and assurance quality. Third-party verification can increase perceived risk and reputational cost of misleading ESG disclosures by exposing gaps between public claims and internal practices, but in weak legal environments or under permissive assurance standards, firms may use assurance as a legitimising signal rather than a binding constraint. The study proposes a five-pillar anti-greenwashing framework spanning regulation, stakeholder engagement, third-party verification, corporate culture and internal controls, and technology.

Renewables rush - Europe's push to install renewable energy is being held up by grid connection queues, operators have warned. Rising power demand from industry, households, and data centres is putting a huge strain on energy networks. Queues to be connected stretch over seven years in the Netherlands, while in Germany there are double the number of requests to add battery storage to the grid as is planned in the country's grid development plan. Network operators should be able to allocate connections to projects on their readiness status rather than those that applied first, said the CEO of Elia Group, which operates grid in Belgium and Germany. Meanwhile, grid congestion costs could rise to as much as €26 bln by 2030, according to EU energy regulator Acer. (FT)

Environmental groups condemned the US attack on Venezuela and the abduction of its President Nicolas Maduro on Jan. 3 as illegal, saying the move illustrates the geopolitical instability caused by oil interests and highlights the need to accelerate the transition to clean energy.

UK ETS expansion - In order to prepare for the expansion of the UK ETS to energy from waste and waste incineration from 2028, stakeholders are invited to participate in the monitoring, reporting, and verification (MRV) period, the UK government has announced. The voluntary MRV period is open from Jan. 1, 2026. Further details on the installations in scope and how operators can participate are available here.

CBAM hit - EU's CBAM could hit Thailand's industry by as much as THB 28 bln ($1 bln), or 3.8% of exports to the EU, the Nation reported. Steel industry is particularly troubled, chairman at the Federation of Thai Industries said. The group's data for last year showed that Thailand’s exports of iron and steel products to the EU rose by more than 250% year-on-year. That is now under risk, but EAF steel can help reduce a buyer’s carbon-related costs in the EU by 5-10%. Additionally, efforts to have the EU recognise accredited verifiers in Thailand, work on a Climate Change Act, and an emissions trading system could help blunt the impact. In neighbouring Malaysia, a carbon price of RM 200 ($47) per tCO2e by 2030 is seen as ideal to spur low-carbon steel production.

Greenhouse gas emissions covered by compliance carbon pricing schemes are expected to swell by an additional 2 billion tonnes of CO2 equivalent by the end of 2026, despite political volatility and cost-of-living pressures, according to analysts.

Green loan - The Asian Development Bank has signed a $50 mln loan with Georgia’s only fertiliser maker JSC Rustavi Azot, owned by Singapore-based Indorama Corporation, to upgrade its plants with energy-efficient technology, the bank announced Monday. The project will modernise ammonia and ammonium nitrate facilities, aiming to cut energy use and lower  emissions by about 120,000 tCO2e,  ADB said. It will also provide $500,000 in technical assistance to support sustainable farming practices in Georgia, with a focus on women smallholders, with its total loans, grants, and technical assistance in the country now coming to $5 bln.