The EU ETS is delivering emissions cuts well beyond its borders without triggering widespread carbon leakage, according to new research that points to global policy and market spillovers from higher EU carbon prices.

Morocco and Norway on Tuesday signed a bilateral agreement under Article 6.2 of the Paris Agreement to support deployment of renewable energy in the North African country.

The largest political groups in the European Parliament, including the centre-right European People’s Party (EPP), back removing the Carbon Border Adjustment Mechanism’s (CBAM) temporary suspension clause from the European Commission’s December proposal to extend the scheme.

The Intergovernmental Panel on Climate Change (IPCC) is refocusing its work on mid-range pathways that imply around 3-3.5C global warming by 2100, media outlets have reported.

European carbon prices surged strongly after the holiday weekend as traders appeared to react to leaked proposals showing that free allocation benchmarks would not change significantly from the previous trajectory, supporting the bullish narrative that had driven prices up by around 50% from a year ago, as well as to the market's failure to break below €73.00 in previous sessions.

CORSIA prices dropped last week amid the global jet fuel crisis, although the latest leaked memo from Brussels about tightening carbon credit restrictions for the international aviation offsetting scheme has also played a role, analysts said.

Case dismissed - A court in Kenya has dismissed a case filed by Green Planet Initiative 2050 Foundation against Earthbanc over a contractual dispute linked to the Regeneration Kenya Project. The High Court in Eldoret ruled in favour of Earthbanc and its subsidiary Earthtree Company Limited, rejecting all claims and reliefs sought by the plaintiff and ordering it to pay legal costs. The judgement stated that the case lacked merit and legal basis, adding that a party that fails to meet its contractual obligations cannot enforce the agreement. The dispute came to light after the contractor's engagement in the project was terminated in Apr. 2025 following concerns about compliance and performance standards. (AllAfrica)

Downstream impact - The EU's Carbon Border Adjustment Mechanism (CBAM) could cost farmers €39 bln over seven years because it would increase the cost of imported fertiliser, according to industry body Copa Cogeca. Around 30% of nitrogen fertilisers used in the EU are imported. This year alone, fertiliser prices are expected to increase by around 15% on average, which would total about €12 bln over the next seven years, and if considering the price alignment that EU-based fertiliser producers could operate, Copa Cogeca estimates that total cost for farmers could reach up to €39 bln over the period. The group has called for CBAM to be suspended and long-term measures to be introduced to offset related costs for farmers, as well as full clarity on how CBAM revenues will be redistributed. (Agriland)

The EU must channel far more EU carbon market revenue into clean investment, while building a “credible” new Competitiveness Fund, the European Commission's Stephane Sejourne told European Parliament members on Tuesday.

Political pressure on the EU's Emissions Trading System (ETS), which is being blamed for declining industrial competitiveness and rising energy costs, is more a "smoke screen" distracting from inaction on real issues across national governments across the bloc, a new policy brief has argued.

Russia’s war in Ukraine and the Middle East conflict have highlighted a convergence between the climate and security agendas in Europe, while exposing new risks linked to dependence on imported clean tech and jet fuel, a NATO official has said.

First injection - Octavia Carbon has achieved their first injection of CO2 underground captured by a direct air capture (DAC) plant, making them the world's fourth DAC company to do so. Octavia Carbon has so far captured around 0.5 tonnes of CO2 in Kenya, which is "just the start" and signals what's possible for the technology in emerging markets, said Catalyst Fund on LinkedIn, an investor in Octavia Carbon. The injection was done in partnership with Cella Mineral Storage, which borrows established practices from enhanced oil recovery (EOR) to mineralise pure‑phase CO2 in basalt rocks while reducing water requirements.

Think tanks, NGOs, and scientific bodies have warned the EU over the planned use of international carbon credits in its climate policy framework, while a large number of companies endorsed their inclusion, also in the bloc's carbon market, in response to a public consultation.

The UN Environment Programme has expanded its global methane detection system to cover coal mines and waste facilities for the first time, in a move aimed at turning satellite data into faster emissions cuts.

Off track - Norway's $2.2 trillion sovereign wealth fund is failing to actively engage on climate change at its investee companies despite its stated goal for all companies it invests in (~7,200) to reach net zero by 2050, according to green group Framtiden i Vaare ​Hender (Future in our Hands). Its report analysed Norges Bank Investment Management's (NBIM) voting record last year on 23 priority votes at 12 ​upstream oil and gas developers such as BP and Shell, and found the fund to only signal management disapproval in three instances by voting against the re-election of directors at Petrobras, ExxonMobil, and Chevron. The green group also flags the fund's actions at the BP AGM in April as showing a lack of active management on climate risks when NBIM chose to protect the BP board's position rather than join others demanding better disclosure and oversight of their fossil fuel strategy. NBIM said that voting is one of several tools it uses to address climate risk, alongside direct engagement with companies. (Reuters)

Fingers in many pies - The European Commission's spend on climate and energy consultants increased 433% to €127 mln in the 10 years up to 2024 as it vastly expanded its legislative work under the 2019 Green Deal. Yet the growth has also drawn criticism about potential conflicts of interest as advisory firms worked both on EU policy and lobby for industry on the same topics. Climate campaigners are especially concerned that Brussels' work on hydrogen policy will embed gas industry interests and drive money away from electrification. Advisory firm Guidehouse has worked for the Commission on hydrogen policy while simultaneously setting up lobby group Gas for Climate, and working as secretariat for lobby group European Hydrogen Backbone. The Commission said that it maintained “strict conflict-of-interest checks at all stages of the procedure” and that “external contractors are never responsible for policymaking”. (FT)

Gold Standard has announced updates to four major methodologies covering clean cooking and thermal energy projects, in a move aimed at aligning its carbon crediting rules with the Paris Agreement.

Next payouts from NextGenerationEU - The European Commission has announced new disbursements under the Recovery and Resilience Facility (RRF), an instrument that provides grants and loans to member states. It is the centrepiece of NextGenerationEU, originally set up to help the EU recover from Covid. On Tuesday, the EU executive paid out €4.6 bln to Germany and €1.25 bln to Slovakia for investments to accelerate Europe's energy independence, the green and digital transitions, and long-term resilience and competitiveness. In practice, this includes investments in electric vehicles, energy-efficient buildings, renewables and the grid, and hydrogen research. It brings the total RRF funds disbursed across the EU to a "landmark figure" of over €400 bln. The RFF is set to wind down at the end of 2026.

Germany will allocate up to €5 billion this year to help heavy industries to cut CO2 emissions via a competitive bidding process, the economy ministry confirmed on Tuesday as it launched the auction.

EU-China - The European Commission intends to halt subsidies for energy projects using Chinese inverters, multiple media outlets have reported. Inverters are key to renewables, since they convert the direct current (DC) of solar panels, wind turbines, or batteries into the alternating current (AC) typically used on the grid, and in households and industry. But inverters represent one of "the most pressing threats" to EU critical infrastructure, the Financial Times reported the Commission as saying. In future, they should come from countries like South Korea or Japan, or Europe itself (Russia, Iran, and North Korea are also on the blacklist, Le Monde reported), though the Commission will not require companies to replace existing inverters, Tagesspiegel Background Energie & Klima clarified. Brussels has told European partner banks to stop financing renewable projects using Chinese, Iranian or Russian grid equipment from Nov. 1, said Euractiv. The decision, which dates back to April, was first reported by South China Morning Post, the outlet noted, and concerns primarily the European Investment Bank and the European Bank for Reconstruction and Development, but also national banks like Germany’s state-lender KfW.

Methane blind spot - About one-third of the methane emissions reports required under the EU Methane Regulation were completely missing for 2024-25, while others were incomplete or incorrect, found an analysis by NGO Deutsche Umwelthilfe (DUH) of 800 German oil and gas companies. The NGO found that many companies either failed to report emissions adequately or relied on outdated, estimated values rather than direct measurements, undermining the credibility of disclosures. Only a small share of companies provided sufficiently robust data aligned with best-practice standards. Moreover, in 10 of Germany's 16 federal states, there is still no responsible oversight authority, DUH added. The NGO warned that weak reporting could mask the true scale of methane emissions and delay mitigation efforts, despite the availability of cost-effective abatement technologies. According to the International Energy Agency, the actual methane emissions from fossil fuel companies remain 80% higher than officially reported, the group noted. (DUH)

CO2 storage - Shell has received a CO2 storage permit from the Dutch government for the Aramis project in the North Sea, reported newspaper De Telegraaf on Tuesday. Aramis aims to store up to 22 million tonnes of CO2 per year from 2030 in two empty gas fields, from carbon capture and storage (CCS) at industrial sites. Aramis follows in the footsteps Porthos, which is targeting 2.5 Mt CO2 storage per year. Porthos recently announced a delay of almost a year: Shell, ExxonMobil, Air Liquide, and Air Products will not start storing CO2 in Porthos from the end of 2026, but only from H2 2027.  In total, they expect to store 37 Mt over the next 15 years, versus a total capacity of 400 Mt for Aramis. The two projects share some key infrastructure, like CO2 pipelines and a compressor station. (Change Inc.)

A Dutch carbon removal developer has launched a €20 million equity raise to fund what it says will be the country’s first 'made-in-the-Netherlands' negative emissions energy plant.

The European Commission has approved Austrian and Spanish support schemes designed to shield energy-intensive industries from higher electricity prices linked to the EU's Emissions Trading System (ETS) and preventing production relocation outside Europe.

UN officials are considering whether to repurpose an existing voluntary carbon credit cancellation platform to support the Paris Agreement’s Article 6.4 mechanism, as the current system under the Kyoto Protocol approaches closure at the end of 2026.

Environmental NGOs and carbon market advocates remain divided over how far the EU should rely on carbon removals, international credits, and other market-based flexibilities for the next phase of its climate policy, according to submissions to a European Commission consultation on post-2030 national targets.

EU member states will on Tuesday discuss a significant simplification of the EU’s Carbon Border Adjustment Mechanism (CBAM), specifically its default emissions values for downstream goods, as concerns mount that the current system is too complex to apply effectively to manufactured goods with fragmented supply chains.

Market volatility, changing regulation, and lack of harmonised standards are dulling investor and developer interest in carbon markets, according to legal firm polling.