The EU carbon market is being increasingly shaped by political intervention, macroeconomic uncertainty, and shifting structural drivers, experts said, warning that investor confidence has been severely dented.

Solar and wind met almost all electricity demand growth last year, while fossil generation stayed flat, according to the latest report by an energy think tank.

Burning wood for carbon capture projects is unlikely to deliver net carbon removals for up to 150 years, with emissions in one modelled scenario remaining more than double those of natural gas with CCS over that period, new research found.

Under to over - The German government plans to require new high-voltage direct current (HVDC) transmission lines to be built over rather than underground, reported Tagesspiegel Background Energie & Klima on Monday based on a draft amendment to a Federal Requirements Planning Act. The move would end a ten-year priority for underground construction introduced to overcome public resistance to new cables, noted Clean Energy Wire (CLEW) - and save billions of euros. Germany's Federal Network Agency has estimated that building lines overhead rather than underground could save €35 bln by 2045. Lower costs for grid expansion should translate into lower grid fees and therefore contribute to lower electricity prices and competitiveness, a key government priority. Germany needs to extend its transmission grid in part for renewable power from the windy north to reach the industrial south. Germany's states will have to approve the government's plan. However, while Bavaria has welcomed it, criticism has come from the north, Tagesspiegel Background reported on Monday. (Tagesspiegel Background and CLEW)

A new carbon finance company launched on Monday said it secured over $50 million to expand a Kenya-based agroforestry carbon project, pitching early-stage funding as a way to unlock stalled projects and draw in institutional capital.

Spot credits for Phase 1 of CORSIA traded around $14 this week, while the ending of Indonesia's moratorium on selling voluntary carbon units internationally looks set to unleash a flood of fresh REDD issuances onto the market. 

European and UK carbon prices weakened on Monday, with both markets trading in a very narrow range after initial volatility. while energy markets initially jumped after Iran closed the Strait of Hormuz in response to the seizure by US forces of one of its commercial vessels and then quietened as traders waited for news on peace talks.

A group of heavy industrial companies and trade lobbies, the ceramic industry's association, and the Spanish government have all expressed concerns to the European Commission about its incoming update to the benchmarks used to determine how many free EU ETS allowances to hand out, according to documents seen by Carbon Pulse.

The cost of meeting demand for CORSIA-Eligible Emissions Units (EEUs) in 2025, at current market prices and based on expected sectoral growth figures, could near $2 billion, according to industry data presented at the Colombia Carbon Forum last week.

Germany has proposed allowing international Article 6 carbon credits into the EU’s Market Stability Reserve as part of broader plans to retool the bloc’s Emissions Trading System (ETS) around industrial competitiveness, according to a document seen by Bloomberg.

A planned biochar carbon removal plant in eastern Germany will supply heat under a long-term offtake agreement, the companies involved said last week.

Countries around the world are back to negotiating a carbon price for international shipping, with hoping to reach final adoption later this year – but they will have to contend with intense pressure to break the current framework apart.

Dollars for greener fuel - Synthetic fuel developer Rivan has raised $34 mln in a funding round led by IQ Capital, to support the launch of a new manufacturing plant and double its team. The company uses solar powered to produce green hydrogen, combining that with CO2 captured from the air to create carbon-neutral natural gas. Over the last year it has built the UK's largest synthetic natural gas (SNG) plant at 1 MW, tripled its customer contracts, and moved from pilot to operational system, the release said. The funding will allow Rivan to become the first company to inject SNG into the UK gas grid and build a larger plant in Europe.

Local communities and private forest owners in Tanzania will be allowed to participate in carbon markets under new government guidelines, a government official said in parliament last week, according to local media.

Niger's office - The state of Niger's government has reaffirmed its commitment to setting up a Carbon Market Office, in an effort to become a key player in Nigeria's rising carbon market system, the local newspaper Punch reported, following a meeting on the proposed framework. The planned Carbon Market Office is part of the state's economic strategy, and seen  as a way to open access to climate finance, encourage green investments, create jobs, and strengthen Niger's revenue base, according to secretary to the state government, Abubakar Usman. The state of Niger set out a plan in December for participating in Article 6.1 markets, positioning the UN crediting system as a key tool to finance its sustainable development.  

A Qatar-based carbon market initiative has completed its first auction of CORSIA-eligible credits, with units from a Cambodian clean water project clearing above a $14/tonne floor, it announced Monday.

Community oversight - Recent changes to the Northern Kenya Rangelands carbon project's 2021 implementation agreement grant the 22 community conservancies involved greater control over managing the carbon credits generated from their land. The changes must be concluded by June 30 and will ensure all project activities and governance structures comply with the 2023 Climate Change Amendment Act and the 2024 Carbon Markets Regulations. The changes are expected to streamline activities at the world's largest soil carbon project, through better governance and community involvement. The revised agreement is being hailed as marking a shift towards greater community influence in carbon finance, but its impact will ultimately depend on how well the changes are implemented. (People Daily)

UK sunshine – Orsted, a Danish energy group, will work on a solar power project in the UK, it announced last week. The group will partner with UK-based developer, PS Renewable, to create a solar park in East Riding of Yorkshire. Once operational, the 500 MW project is expected to power up to 160,000 homes. The project, classed as a Nationally Significant Infrastructure Project (NSIP), will run a consultation from June this year targetting a planning decision by 2028. Commissioning is currently set for 2033.

Hydrogen alliance – A Swedish green steel producer has joined the The European Resilience Alliance for Clean Hydrogen & Derivatives (ERA), it announced late last week. Stockholm-based Stegra will work with the alliance to promote decarbonisation and clean hydrogen to European policymakers, according to its statement. Stegra received SEK 390 million (€35.5 mln) last year from the Swedish Energy Agency last year to support the construction of a large-scale, low-carbon steel plant in Boden.

The market for nature-based carbon removals will withstand Microsoft’s possible pause in carbon removal (CDR) activity, with investor appetite and a broader base of corporate buyers looking to support the sector, according to an expert.

French centrist MEP Pascal Canfin sees a price corridor for the EU Emissions Trading System (ETS) as a realistic way to marry market flexibility with the predictability investors need, telling Carbon Pulse it can be designed inside existing market rules without being challenged as a new tax.

Applications open – Nature-based carbon standards programme Equitable Earth is seeking experts to join its Technical Advisory Board (TAB), with applications open until May 15 and successful candidates set to begin in July 2026. The Paris-based organisaiton will provide technical oversight and guidance to ensure methodologies and programme documents remain scientifically robust and aligned with market best practice, it said on its website. The new TAB members will be expected to review and provide expert input on methodologies and programme documents, participate in quarterly meetings, challenge and improve technical approaches, and sign off on standards before publication, while maintaining confidentiality and declaring conflicts of interest.

Italy could reach net zero by significantly scaling up carbon removal (CDR), with potential capacity seen as high as 91 million tonnes a year, but only if it acts swiftly, according to a new report.

The renewables boom slowed global growth in energy-related CO2 emissions to a tiny fraction last year, according to the International Energy Agency (IEA).