RGGI Allowance (RGA) futures reversed late last week the gains made over the first few days of 2026 after concerns over potential legal action against the programme resurfaced following a consultancy's publication of a contested client notice.

Pipeline question - The US Supreme Court on Monday denied a petition to take up a case on whether two Iowa counties can impose restrictions on where CO2 pipelines are built. Summit Carbon Solutions (SCS) sued Shelby and Story counties after they passed ordinances regulating CO2 pipelines, arguing the rules conflicted with state and federal law. The counties lost at the US Court of Appeals for the Eighth Circuit in June and voted in August to continue pursuing the case. Summit plans to transport captured CO2 from ethanol plants in Iowa and North Dakota for underground storage. The project has faced opposition from some landowners over property rights and safety concerns.

Power at last - The New England Clean Energy Connect transmission line, a 145-mile project designed to deliver 1.2 GW of Canadian hydropower to Massachusetts, is expected to begin commercial operations as soon as Jan. 16, nearly a decade after the state first sought the power. Developed by Avangrid, a US-based energy company, the line links the New England grid to Hydro-Quebec and is projected to lower electricity costs modestly for Massachusetts consumers while supporting the state’s 2050 net zero goal. The project faced years of legal challenges and a 2021 Maine referendum that temporarily halted construction, contributing to higher costs that were ultimately resolved through a 2025 settlement with regulators and utilities. (Canary Media)

Blending backlash - California regulators have directed gas utilities to test blending hydrogen into existing natural gas systems as part of efforts to cut GHG emissions, prompting pilot projects such as one proposed by Southern California Gas Co. in the Central Valley town of Orange Cove, the AP reported. Supporters argue hydrogen blending could reduce reliance on fossil gas while using existing infrastructure and help inform statewide safety rules. Critics, including local residents and environmental justice advocates, warn the approach poses health and safety risks, particularly for low-income communities, and say projects are moving forward with limited transparency or public input.

New York’s attorney general sued the Trump administration on Friday to block federal stop-work orders halting two offshore wind projects, as a US judge on Monday ruled to resume construction on a separate East Coast wind farm facing similar national security-based suspensions.

The new year began by providing a glance at what might be expected in Latin America in 2026: the advancement of carbon regulations in the region amid the backdrop of political tensions.

Legislation prefiled in Virginia's House of Delegates on Monday would require the state to rejoin regional power sector cap-and-trade scheme RGGI, with required actions to be completed within 90 days of the bill's enactment.

California carbon market regulator ARB will publish its preliminary cap-and-invest regulatory proposal Tuesday, according to a bulletin distributed on Monday.

Power shift - Duke Energy Florida announced last week it had launched the DeBary Hydrogen Production Storage System, a first-of-its-kind US demonstration capable of producing, storing, and combusting up to 100% green hydrogen. Powered by an existing solar facility, the system uses electrolyzers to split water into hydrogen for storage and later use in a modified combustion turbine. The project aims to boost grid flexibility, support higher renewable penetration, and provide reliable, on-demand power during peak demand, while diversifying the company’s generation fleet and reducing fuel costs for customers.

Litigation legislation - New York and Hawaii are considering legislation that would allow their attorneys general to sue fossil fuel companies if climate-driven disasters push up property insurance premiums, E&E News reports. The proposals would let states seek damages on behalf of residents facing higher costs after storms, wildfires, and other extreme events linked to climate change. Observers say the measures would open a new front in climate litigation, as insurance becomes more expensive and harder to obtain, with similar ideas also emerging in California.

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.

Offtake volumes for carbon removal (CDR) credits surged in December, driven largely by major biochar and bioenergy with carbon capture and storage (BECCS) deals, analysts reported on Monday, with issuances also up month-on-month and retirements on the rise.

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.

Step forward – ART TREES accepted a set of Para’s jurisdictional REDD+ (J-REDD+) programme documents last Thursday, the Brazilian state announced on Saturday. The certifier confirmed that Para’s TREES Registration Document (TRD) and 2023 TREES Monitoring Report (TMR) are complete and meet the requirements for this phase. As a result, the state can proceed towards its first issuance of 38 mln carbon credits. The state government said it expects issuance to reach 260 mln carbon credits by 2027.

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)

More island ITMOs – Japan and the Maldives have completed the second issuance of Internationally Transferred Mitigation Outcomes (ITMOs) under the Joint Crediting Mechanism (JCM) in line with Article 6 of the Paris Agreement. The issuance covers 750 tonnes of CO2e from a smart mini-grid solar project in Addu City, of which 433 tCO2e were acquired by the Japanese government, marking the second Paris-aligned ITMO issuance under the JCM after Thailand in Nov. 2025 and the first to utilise the Japan Fund for the JCM contributed to the Asian Development Bank, according to the announcement.

Biogas boost – India’s biogas sector has called on the government to create a $1.2 bln capital subsidy fund in the Union Budget 2026 to accelerate project deployment and improve financial viability, the Economic Times reported. The Indian Biogas Association (IBA) said the proposed fund would help bridge high upfront costs, attract private investment, and support the scaling up of compressed biogas (CBG) plants across the country. The association urged policy support to strengthen feedstock supply chains and ensure long-term offtake certainty, arguing that targeted fiscal backing could speed up the sector’s contribution to energy security, waste management, and emissions reduction. As well, the IBA urged the government to create a framework enabling biogas and CBG producers to sell carbon credits in domestic and international markets to support industry growth.

Traders and analysts have pushed back against warnings circulated last week by a Utah-based consultancy of an imminent risk of a coordinated legal assault by the Trump Administration and US states against the country’s regional carbon markets.