The European Commission’s proposed revision of CO2 emission standards for new cars leaves renewable fuels with only a “token” role in cutting road transport emissions after 2035, Europe’s fuel refiners have warned.

Hanging in the balance - Fertiliser producer Yara International has warned it may call off a planned low-emission ammonia project in the US if the EU were to exclude fertilisers from its carbon border levy, reported Bloomberg. The bloc's CBAM took effect on Jan. 1, but last week European Commissioner for Trade Maros Sefcovic proposed temporarily exempting fertilisers following pressure from France and Italy. Analysts have said doing so could undermine stability of the entire mechanism.

European and British carbon prices settled at above €90.00 for the first time since July 2023 after prices surged to new highs as broadly bullish sentiment was supported by another strong auction result, while sharply higher natural gas added to the upward momentum.

About one-fifth of 53 nature-based projects assessed in a recent study created “triple wins” for climate, biodiversity, and people in Small Island Developing States, although researchers warned against a one-size-fits-all approach.

Voluntary prices rallied at the start of the year, and sources reported healthy liquidity in Clean Development Mechanism credits as traders and project owners scramble to sell inventory ahead of the proposed closure of the UN registry.

Researchers this week proposed five ‘golden rules’ to assess the scientific credibility of nature markets, creating a scorecard against which eight of the world’s most well-known nature markets fail.

The EU has an opportunity to raise the standard of international forestry carbon credits – and strengthen the impact of the new Tropical Forest Forever Facility (TFFF) – as it begins to allow international credits into its domestic climate targets from 2036, according to a new report. 

The voluntary carbon market is heading into 2026 as a mature, pragmatic instrument for delivering credible net zero strategies at scale.

Polish steel – ArcelorMittal Poland will invest more than PLN 200 mln in a new heating plant at its Krakow steelworks, aiming to cut natural gas use and emissions while boosting energy security. The project, announced Jan. 8, includes a new boiler house with two gas-fired boilers, a waste heat recovery unit and a 6 kV substation to supply the site’s hot and cold rolling mills. The company expects to reduce natural gas consumption by over 2,000 TJ a year and cut CO2 emissions by 115,000 tonnes annually once the installation starts operating before the end of 2027.

Battery boom – The capacity of stationary energy storage systems in Germany has increased fivefold in five years, reported the German Solar Association (BSW-Solar) on Monday. Around 2.4 million battery storage systems are now in operation in Germany, it said. Most were installed in combination with solar PV to enable more self-consumption. Total storage capacity is now estimated at 25.6 GWh, but BSW-Solar said the annual expansion of battery storage capacity still needs to more than double to see through the energy transition in Germany. Installed capacity should quadruple to 100 GWh in 2030, it said. This will require further changes to the regulatory framework, it added. Batteries balance electricity generation with consumption, reduce peak loads at midday, decrease the need for grid expansion, and can also be used for emergency power supply. (BSW-Solar)

Mission Innovation – The International Energy Agency (IEA) will host the Mission Innovation Secretariat at its Paris HQ, as approved by the member governments of both organisations. The secretariat is a global government initiative to catalyse action and investment in R&D and demonstration of advanced energy technologies. It was launched in 2015 with the goal of making these technologies affordable and accessible for all, and meets annually at the ministerial level under the leadership of its 24 member countries.

A Stockholm-based carbon removal finance platform has issued a call for proposals aimed at three distinct stages of project development.

Explain yourself – The Kenya Electricity Generating Company (KenGen) was ordered last week by the country's Public Procurement Administrative Review Board (PPARB) to respond formally to a letter from a losing bidder, Sintmond Group Ltd, over the Sh2.5 bln ($19 mln) tender for the sale of 6.38 mln carbon credits. The decision followed a court ruling from October that the losing bidder was denied the right to be heard. (Business Daily Africa)

Agriculture emissions – The outgoing Dutch government is introducing a new voluntary termination scheme for livestock farmers who wish to cease operations, for example because they don’t have a successor. Under the new scheme, livestock farmers located near nitrogen-sensitive nature reserves would receive compensation of 110% for shutting down. Nitrogen pollution has paralysed construction in the Netherlands and is a top priority. Most emissions come from intensive livestock farming and fertilisers; reducing them would also reduce GHGs and potentially bring the country's 2030 climate targets within reach. €750 million has already been set aside for the new scheme. An Internet consultation on it opened on Jan. 12 and will run until Feb. 9. The government is also sending it to the European Commission this week for pre-notification under EU state aid rules and hopes it will be live from mid-2026. (Consultation)

Ammonia shipment - Uniper has agreed to purchase up to 500,000 tonnes of green ammonia per year from India's AM Green in a long-term binding agreement, Reuters reported. The German utility called it a key building block in its goal to provide customers with reliable access to low-carbon molecules at scale. The first delivery is set to occur as early as 2028, and Indian Prime Minister Narendra Modi welcomed the news at a conference with German Chancellor Friedrich Merz on Monday.  

Climate risk impact - The UK government has published a review of the current literature and evidence on the impact of climate risk on global financial stability, particularly in emerging market and developing economies, and its implications for global financial architecture. It was commissioned by the Department for Energy Security and Net Zero (DESNZ), and produced by Adam Smith International, Columbia Center on Sustainable Investment, and The Carbon Trust. It came in response to a recommendation from UK institutional investors.

The European Commission has issued guidance to fast-track permits for a raft of innovative renewables technologies that Brussels sees as critical to meeting its 2030 and 2050 climate goals, particularly where land constraints and local opposition threaten the expansion of conventional wind and solar.

Latvian innovation - Latvia has allocated €6 mln in state budget funding from 2026 to 2028 to strengthen its food self-sufficiency and to increase the efficient usage of its forest resources. This will include enhancing its national forest monitoring system and exploring the potential use of carbon markets. The programme developed by the Ministry for Agriculture will also explore soil improvement methods and strengthening food supply resilience in crisis conditions. (Labs of Latvia)

Brits for climate – British lawmakers are significantly underestimating how far voters are prepared to go on climate action, new research suggests. The study by University of Cambridge researcher Lisa-Maria Tanase, based on polls of 50 MPs and about 4,200 members of the public, found MPs understated support for new green taxes by as much as 20 percentage points. Almost two-thirds of Britons back a frequent flier levy that rises with the number of flights, compared with MPs’ expectation that less than half would support it. Public support for a red meat tax was 42%, against MPs’ estimate of 24%. (edie)