Connecticut's Power Play - Connecticut's 2026 gubernatorial race centers on electricity affordability as candidates navigate tension between the state's 2040 zero-emission electricity mandate and rising utility costs, according to CT Mirror. Governor Ned Lamont supports expanding natural gas pipeline capacity while backing offshore wind, facing primary challenger Josh Elliott who proposes state bond financing for renewable projects instead of ratepayer charges. Republican Ryan Fazio advocates eliminating or reducing the $1 bln annual public benefits charge funding energy efficiency and renewable programmes. Trump administration offshore wind project suspensions and federal clean energy subsidy rollbacks complicate state climate policy implementation as Connecticut electricity prices rank near highest nationally.

Washington state legislators have prefiled two bills that would increase compliance obligations for certain entities under the state's emissions trading scheme and enable the state to generate revenues from public land via carbon credit project development.

North American carbon traders closed out their Vintage 2025 holdings in the futures and options as well as futures only markets over the Dec. 10-23 period, US Commodity Futures Trading Commission (CFTC) data showed.

Total California-registered accounts under the state's Quebec-linked emissions trading system reached 821 at the end of Q4 as both general market participants and compliance entities opened accounts, state data published Wednesday showed.

California regulator ARB issued more than 5 million offsets in December, the majority of which offered direct environmental benefits (DEBs) to the state, according to data released during the end-of-year holiday period.

A new preprint released this week finds that most tree-planting intermediary organisations rely on aggregated reporting, limiting scrutiny of outcomes and long-term permanence.

Finance flows - Wall Street’s largest banks earned more from financing green projects than from fossil fuel clients in 2025 for a fourth consecutive year, even as broader pressure mounted to curb their involvement in the sector, Bloomberg reported Friday. Lenders generated about $3.7 bln in revenue from climate-related loans and bond underwriting last year, compared with roughly $2.9 bln from oil, gas, and coal. That marked a sharp reversal from 2020, when banks earned nearly twice as much from fossil fuel companies as from green initiatives. However, the total was down from about $4.2 bln in 2024, when banks generated higher fees from climate-related financing.

Taxing turns – Fuel tax revenues worth around $920 bln a year are potentially at risk over time as electric vehicle uptake accelerates worldwide, with lower-income countries facing the sharpest fiscal exposure, according to new research in Nature Sustainability. The study estimates fuel taxes generated over $920 bln in 2023 across 137 taxing countries within a 168-country sample, and finds low-income economies rely on these revenues for over 9% of total government income on average, around three times the relative exposure of high-income states. Many highly exposed countries are associated with weaker institutional capacity and higher debt burdens, constraining their ability to replace revenues as battery-electric vehicles expand and internal combustion engine sales decline.

Alberta’s environment and protected areas minister, responsible for overseeing North America's longest-running carbon pricing system, has tendered her resignation, saying she will step down from cabinet while continuing to serve in the legislature.

European carbon prices continued to move higher during the first session of 2026, albeit on low traded volume, as they tracked bullish energy prices, and UK Allowances also surged, while speculators' net long positions in both markets eased marginally lower towards the end of last year, remaining around record highs.

The EU's 2025 boom in solar generation was offset by a strong rebound in gas, according to electricity data updated for the calendar year.

The Democratic Republic of the Congo adopted a programme last week that seeks to restore 8 million hectares of the forests over the next four years while supporting the development of the country’s carbon market.

A Californian tech company claims to have created an electro-sustainable aviation fuel (eSAF) that will be cheaper than the cost of fossil jet fuel at any scale of production.

Retirements across the voluntary carbon market (VCM) grew year-on-year in 2025, while the total value surpassed $10 billion for the first time, according to analysts.

Prices in China's national emissions market climbed above the level of RMB 70 ($10) with a spike in trading volumes over the past two weeks, supported by growing momentum ahead of the year-end compliance deadline.

COP31 presidency - Murat Kurum, Turkiye's minister of environment, urbanisation, and climate change has been appointed president of UN climate summit COP31 in Turkiye this November, he announced on LinkedIn. The decision was made by the country's President Recep Tayyip Erdoğan.

BECCS from biogas - A carbon capture and storage (CCS) plant is being set up at Denmark's Favrskov Biogas facility and is expected operational in Q2 2026. The plant should reduce emissions by 2.5 tonnes of CO2 per hour, equivalent to more than 20,000 tonnes annually, with the captured CO2 to be stored in the North Sea. Operator BioCirc has pledged to store 130,000 tonnes of CO2 annually by end-2032 in the Danish Energy Agency's tender for CO2 storage. Overall, BioCirc aims to capture around 200,000 t/CO2 per year once it has installed CO2 capture at all of its eight biogas plants.

Gabon has positioned forests and international carbon markets at the core of its updated climate pledge, outlining plans to scale up the use of Article 6 mechanisms and expand carbon credit generation as part of its third Nationally Determined Contribution (NDC 3.0), submitted to the UNFCCC.

El Salvador’s latest climate pledge under the Paris Agreement places new emphasis on the potential role of international carbon markets, signaling interest in using Article 6 mechanisms to raise finance under its updated Nationally Determined Contribution (NDC).

Big year ahead - 2026 will present some key tests for climate action, the FT reports. The kick-start of the EU's carbon border tax (CBAM) in January will challenge the bloc's trading relations, while a host of other green regulations will be adopted this year including the European Sustainability Reporting Standards. Corporate climate disclosures will be mandated for some companies, including in Asia, Australia, and the UK. And some large-scale solar and battery projects will come online, including the 1.1-GW Obelisk development in Egypt, the first phase of the Terra Solar project in the Philippines, and the 1.4-GW Sofia offshore wind farm in the UK's North Sea. The fight against fossil fuels shall continue, with Colombia and the Netherlands set to co-host the first global conference on transitioning away from fossil fuels in Santa Marta, and Brazil expected to present a roadmap away from oil, gas, and coal at COP31 in Turkey this November. And in electric vehicles, despite the EU relaxing its targets for banning combustion engines, the first vehicles featuring CATL Naxtra sodium-ion batteries are due on the market early to mid this year, which should charge faster and work well in lower temperatures, the company claims.

Glaring gap - The UK's upcoming future homes standard (FHS) is unlikely to stipulate that new homes be fitted with batteries, despite the strong benefits of combining renewables with energy storage and potential power bill reductions from doing so. The regulation, due to be published in January, will regulate how all homes are built and is expected to mandate the use of solar panels on nearly all houses and high standards of insulation and heat pumps in most cases. But ministers are posed to remove the requirement for batteries, even though doing so would result in long-term savings on energy bills and would support grid resiliency, the Guardian reported. Housebuilders have been lobbying against the inclusion of batteries, which would pose upfront cost to them, despite the emissions and bill reduction benefits.

Thailand has raised registration and issuance fees for carbon credit projects under its domestic voluntary standard in a move that raises costs for developers.

France has opened a public consultation on the regulatory framework for CO2 transport infrastructure, urging stakeholders to respond to different approaches to managing such a network.

The Tokyo Stock Exchange (TSE) is planning to launch an over-the-counter (OTC) trade settlement service for domestically issued J-Credits in March, a move that should streamline the trading process.

It's official - South Korea has submitted its latest NDC to the UN, pledging to cut GHG emissions by 53-61% by 2035 compared to the 2018 level. As previously announced by the government, the 53% reduction represents a linear pathway from the base year, while the 61% reflects a more ambitious target. The country is also in the process of formulating the national green transformation (K-GX) strategy to generate new growth engines while advancing the transition towards carbon neutrality.  

Software spinout - Octopus Energy is gearing up to spin out its software division Kraken at an $8.65 bln valuation, it announced Monday. The UK energy company has reached a deal to sell $1 bln-worth of shares in Kraken, of which $150 mln will go to Kraken and the remainder will go to Octopus. The round is being led by US investor D1 Capital Partners, with participation from Ontario Teachers’ Pension Plan, Fidelity International, and Durable Capital Partners. The deal paves the way for a formal demerger mid this year of the software platform developed by Octopus that supports other utilities including EDF and E.ON Next with billing their customers. A potential public listing of Kraken could be on the horizon in the next year or two, the FT reported. It's unclear how the split will affect Octopus's valuation. (Sifted)

China has said it would take all necessary measures in response to trade restrictions under the EU's Carbon Border Adjustment Mechanism (CBAM), which enters its full implementation phase from 2026 after a two-year pilot.

Drill baby, drill - IIT Bombay and NTPC have successfully completed the drilling of India’s first test well to assess the feasibility of geological CO2 storage, in a step towards the country’s carbon capture, utilisation, and storage (CCUS) efforts. The well, drilled to a depth of 1,200 metres in the state of Jharkhand, will be used to test CO2 storage potential in coal and sandstone formations, with injection and plume monitoring planned. The project, launched under the leadership of NITI Aayog, builds on earlier work to create India’s first geological storage atlas and is intended to provide feasibility and risk assessments for full-scale CCS deployment, supporting India’s net zero and decarbonisation goals.

Open for business - Indonesia’s forestry ministry last week invited provincial governments to tap performance-based REDD+ finance through the ART-TREES mechanism, Ecobiz Asia reported. The offer was outlined at a coordination meeting with governors and forestry officials from provinces of Sulawesi, Maluku, West Nusa Tenggara and Papua. The ministry said provinces able to show verified emission reductions could access ART-TREES funding, but would need to improve monitoring, data transparency, and forest protection. It also underlined the need for inclusive governance and fair benefit-sharing with Indigenous Peoples and local communities.

Carbon squeeze - Indian steel and aluminium exporters to Europe may be forced to cut prices by 15-22% from Jan. 1, 2026, as carbon-related costs under the EU’s CBAM begin to apply, according to an analysis by India-based Global Trade Research Institute, ANI reported. The mechanism will require exporters to factor in the embedded carbon emissions of products shipped to the EU, raising compliance costs and potentially eroding competitiveness for Indian producers unless prices are adjusted to absorb the additional carbon burden, according to the report.

Bhutan has set out a framework for how it intends to participate in carbon markets, both domestic and international, while tightly controlling authorisation, pricing, and the application of corresponding adjustments.

Environmental watchdog RimbaWatch has filed what it called a first-of-its-kind climate litigation case in Malaysia, seeking judicial review over government agencies’ refusal to investigate alleged greenwashing by a fossil fuel company.