Carbon Pulse rounds up carbon pricing trends and developments in the Middle East and North Africa (MENA) region for Jan. 2026, highlighting state-led responses to international compliance obligations and opportunities, and the UAE’s role as a “great convener”.

EU carbon allowances got off to a weak start on Monday, with early strength giving way to determined and repeated selling in the wake of the fifth auction discount in the last six days, and natural gas markets also opened strongly but quickly went into reverse, while some traders began to eye a floor to the market.

Renewable energy investment fell 9.5% year-on-year, according to analysts, who said the drop was in large part due to a decline seen in China.

CORSIA-eligible spot and futures prices softened last week, although volumes remain very thin amid a market that has yet to strike a balance on fundamentals, sources noted.

A Swiss telecoms company has signed a deal with a German platform to purchase durable carbon removals in service of its 2035 net zero target.

The UK government is expected to publish its Reformed National Pricing (RNP) programme in the next month – a key element in revamping the country's energy system to achieve its 2030 clean power goal, an official said on Monday.

Nigeria's solar barrier - Investors and lenders need to improve financing options to help Nigerian customers shift to solar generators, from petrol and diesel, including with the use of carbon credits, according to a report by ZE-Gen, based on smart meter data collected over a year. The study found that while most customers want to make the switch, they're impaired by high upfront costs and inflexible financing terms - even though solar generators are more economical over the long-term, because they don't require fuel. Among its recommendations, it said flexible financing models and the use of carbon credits could help to lower upfront costs and expand inventory procurement services. Meanwhile, donors and development partners could build local capacity and customer awareness by training technicians, while policymakers could strengthen regulatory support and incentives by streamlining approvals.    

Steel plant to be shut - Ukraine's largest steelmaker ArcelorMittal Kryvyi Rih is set to close one of its production units in the second quarter, citing the impact of the EU's carbon border fee and high local power prices driven by Russian attacks on energy infrastructure. The plant is based in southeast Ukraine and makes billets for small-gauge and wire mills. The company has blamed the EU's Carbon Border Adjustment Mechanism (CBAM) as closing the market to much of Ukraine's metallurgical products, and also high power prices worsening its economic feasibility. Ukrainian industry is battling blackouts and electricity restrictions as a result of Russian attacks. (Reuters)

Progress review - The EU and Norway held the annual implementation meeting of the EU-Norway Green Alliance last Thursday, which convened representatives of the European Commission and a delegation from Norwegian ministries. It saw both sides reaffirm their shared commitment to decarbonisation and climate neutrality, including as drivers of growth and competition, and saw participants review the alliance's technical cooperation on areas such as energy and green shipping. The EU and Norway will now explore options to deepen partnership on several focus areas including on clean industrial policy. Both parties reaffirmed the alliance's value in strengthening cooperation beyond the European Economic Area (EEA) Agreement.

Murky horizon - Germany has yet to decide a national CO2 price for 2027 following the one-year delay to the EU's emissions trading system for buildings and transport (ETS2), the environment ministry told national outlet Tagesspiegel Background. EU ETS2 will replace the country's national system, but given its delay to 2028, the German system will run for an extra year. However, there's been no decision on the concrete design during that period. Lawmakers from the government coalition partners had proposed to freeze the price at this year's level, which is set by auctions and currently at €55-65/t, but it's not clear if the govt will follow the agreement. A higher carbon price would bring extra revenues for the state, but higher prices could also risk backlash from consumers.

Geothermal money in Kenya - The African Development Bank (AfDB) Group has approved a loan of $16.5 bln to support the development of Kenya's 35 MW OrPower Twenty-Two geothermal power plant, which is expected to boost the country's baseload generation and accelerate the shift to clean energy, it announced on Friday. The project, developed by independent power producer OTTL, will is the third in the Menengai geothermal field, following the operational Sosian Menengai and Globeleq Menengai, which is under construction with separate AfDB financing. Together, they will cover the first phase of the field's development, with 105 MW of capacity. Once fully developed, the Menengai field is expected to generate around 301 GW a year, helping to displace expensive diesel-fuelled power generation.

Forest management can support both climate mitigation and biodiversity conservation, provided that environmental policies extend beyond just living trees to also include deadwood, according to a new paper.

Nearly one in five new cars sold in Europe in 2025 were fully electric, according to figures released by a think tank on Monday.

North Sea CO2 shipping deal – LBC Tank Terminals, Associated British Ports and North Sea Port announced Monday they have signed an MoU to develop a cross-border CO2 shipping corridor connecting Northwest Europe with the UK. The partnership aims to link industrial emitters with offshore storage by building out infrastructure for carbon handling, storage and transport, including at ABP’s planned terminal in Immingham linked to the Viking CCS cluster. The corridor would complement a separate inland link between LBC’s Vlissingen terminal and Duisburg.

Post-Brexit nature check – Wales, Scotland, Northern Ireland, and England are all expected to release assessment findings for offshore habitats before the end of January, replacing pre-Brexit obligations under EU law. Statutory nature advisory, the Joint Nature Conservation Committee (JNCC), published some UK-wide findings late last week on the conservation status of offshore species including birds. The assessment covers the habitat and the species level. The JNCC was previously responsible for gathering data to meet requirements of the EU’s Birds and Habitats Directives, which are both set to be tested and potentially weakened by the European Commission this year.

Meat and fossil ad ban – The city council of Amsterdam voted in favour of banning adverts for fossil fuel and meat products last week, prohibiting campaign materials from its public spaces. The ban, which passed by 27 to 17, is the first of its kind to be approved by a capital city, DeSmog reported. Initially, Amsterdam’s new policy will cover adverts relating to specific carbon-intensive products, meaning that general promotional material for fossil fuels and meat can continue. However, general advertising will also be axed in 2028 once the city council’s contract with advertising operator JCDecaux expires.

Nine countries have pledged to build 15 GW of offshore wind per year in the North Sea, doubling down on the target to build 300 GW by 2050 during a summit on Monday.

Turkiye has appointed a high-level climate champion with experience in civil society and the United Nations to lead its work with businesses, investors, local governments, and others around November's COP31, the UNFCCC announced on Monday.

The Council of EU member states gave the final go-ahead to plans for phasing out Russian natural gas imports entirely by the end of 2027, despite opposition from Slovakia and Hungary who said the ban will increase price volatility.

Ethiopia is close to finalising carbon credit transactions under its national REDD+ programme, the Ministry of Finance said following a consultation last week with Norway on the next phase of their forest and climate partnership.

A marine CO2 removal company has announced a $20 million first close of its Series A financing.

CDR matchmaking - EU innovation agency Climate-KIC and Japan’s trade body JETRO are inviting European partners to meet Japanese climate tech start-ups in Feb. 2026, including Innovare, which converts waste rubber seeds into biochar and other bioproducts. The open call aims to spark cross-border pilots, investment, and carbon removal credit deals as part of the J-StarX Global Growth for Climate Tech in Europe Programme.