Environment

A French think tank proposed allocating 25% of EU ETS auction revenues to support industrial decarbonisation investments. The suggestion targets easing compliance costs while directing funds toward emissions reductions in covered sectors. It highlights policy debates ahead of the European Commission's July 17 ETS reform proposals. Read →

The U.S. EPA proposed scaling back 2023 heavy-truck and engine emissions standards, including reduced warranty requirements and extended lead times. The changes would still achieve nearly 90% of the original NOx reduction forecast. The move signals potential policy softening that could influence future transport-sector emissions trading demand. Read →

Microsoft reported a 25% rise in carbon emissions to 20 million metric tons in 2025, driven by AI-related data center expansion. The increase underscores growing corporate demand for offsets or compliance instruments amid voluntary and regulatory pressures. It highlights tensions between tech growth and net-zero targets in emissions markets. Read →

European Commission plans to propose extending emissions timelines into the 2040s and increasing free CO2 permits for industries in exchange for decarbonization investments. The overhaul targets alignment with the 90% emissions cut goal by 2040 while addressing competitiveness concerns; it could deliver an extra €6 billion in free permits and lower the linear reduction factor. This directly affects EUA supply and pricing in the EU ETS by easing near-term compliance burdens for covered sectors. Read →

EPA finalized the RFS Set 2 rule with the highest renewable fuel volume obligations in program history for 2026 and 2027. Volumes require over 60% growth in biodiesel and renewable diesel production versus 2025, driving major new demand for soybean oil and other feedstocks. The policy strengthens RIN values and supports U.S. biofuel output while cutting reliance on imported energy. Read →

Communities for a Better Environment sued CARB, alleging the May approval of cap-and-invest amendments violated CEQA by skipping proper environmental analysis of a new industrial decarbonization incentive. The changes include up to $4 billion in allowances for polluters and could reduce climate fund revenues by $2 billion annually. The suit targets the program's integrity amid ongoing California carbon allowance market operations. Read →

A European Commission official proposed directing a larger share of EU ETS auction revenues back to industries facing carbon costs. This comes as the Commission prepares its July ETS review proposals. The move could ease compliance burdens and influence allowance demand dynamics in the compliance market. Read →

EU carbon allowances reversed prior gains with persistent selling despite impending REPowerEU auction volume cuts. Energy prices rose after an LNG tanker attack. The price action highlights short-term volatility ahead of structural reforms. Read →

A non-profit filed a legal challenge against the California Air Resources Board's approval of Cap-and-Invest amendments. It claims inadequate analysis of environmental and fiscal effects. The case could delay or alter the program's implementation and allowance supply. Read →

As the European Commission prepares to unveil its proposed revision of the EU Emissions Trading System on July 17, Carbon Pulse outlines main reform issues already on the table and key decisions ahead. The preview covers potential changes to free allocations, market stability reserve, scope expansion including waste and flights, and integration of carbon removals. This matters for the EUA market as the proposals will shape supply, price signals and compliance costs for covered sectors through the 2030s. Read →

Five European Commission departments issued negative opinions on a draft reform of the EU ETS. Internal objections signal potential revisions or compromises ahead of the July 17 release. The discord highlights tensions over industrial competitiveness, price stability and decarbonisation pace, which will affect allowance supply and compliance entity strategies once finalized. Read →

ArcelorMittal, thyssenkrupp and voestalpine sent a June 15 letter urging immediate action to halt ETS cost escalation ahead of the July 17 Commission review, while rivals SSAB, Salzgitter and Outokumpu demanded the opposite. The first group has relined blast furnaces for 26 Mtpa capacity with no retirement plans, locking in emissions and betting against tighter carbon pricing. This divide risks influencing free allocation rules and the pace of industrial decarbonisation under the ETS. Read →

SSAB and other firms that invested in low-carbon tech warn that softening the ETS via extra free allowances ahead of the 2040-aligned review would erode their edge. Carbon prices near €80/t now incentivise electrification and hydrogen projects, but BASF, ArcelorMittal and thyssenkrupp lobby for relief citing global competition and energy costs. Policymakers face pressure to balance the carbon price signal with short-term industrial viability. Read →

WindEurope called on the Commission to preserve a predictable carbon price in the July 17 ETS review and redirect revenues toward ready-to-electrify industrial heat. Only 5% of 2025's €43 billion ETS revenues have gone to industrial decarbonisation, with the Innovation Fund disbursing just 2.7% of available funds. Prioritising electrification would displace fossil imports and boost competitiveness, the group argued. Read →

The European People's Party urged Climate Action Commissioner Wopke Hoekstra to extend free carbon allowances for heavy industry beyond 2030 in an internal document ahead of the European Commission's July 15 ETS revision proposal. The move aims to safeguard industrial competitiveness while the ETS has already cut covered emissions by about 50% since 2005. Some steelmakers oppose further weakening, warning it would penalize early decarbonization investors. Read →

U.S. biodiesel and renewable diesel plants ran at 77-78% capacity in May versus the EPA's 90% assumption for record 2026 mandates requiring 8.86 billion biomass-based diesel RINs. Production through April lagged needs by 1.41 billion RINs, depleting the RIN bank and raising risks of higher credit prices or future mandate adjustments. Refiners' group AFPM sued the EPA and lobbied lawmakers over compliance costs. Read →

California's LCFS program pays dairy farmers for manure-to-biogas projects that generate credits for fuel suppliers, but uses a 100-year methane GWP that understates long-term CO2 impacts from displaced fossil fuels. Researchers argue the system trades short-lived methane cuts for permanent CO2 additions, locking in more warming. Regulators extended elements beyond 2050 despite these critiques. Read →

The European Commission postponed its EU ETS revision proposal from July 15 to July 17. The package includes a slower cap reduction, extended free allocations for industry, market stability reserve tweaks, and scope expansions to waste and extra-European flights. Traders have kept activity subdued ahead of the details, which will shape 2028 implementation after parliamentary and member-state talks. Read →

Amazon reported 81 million metric tons of CO2e emissions for 2025, a 16% rise from 2024 and 58% above 2019 levels. Data-center construction and delivery fuels drove the increase despite the company's 2040 net-zero pledge. Similar spikes at Google underscore how AI-driven power demand challenges corporate climate targets and voluntary carbon demand. Read →

SSAB and other industrial firms investing billions in low-carbon upgrades warn the EU Commission's planned July 15 ETS revision risks eroding advantages for early decarbonizers by adding free allowances or softening rules. The changes aim to align with 2040 targets but face pressure from leaders citing competitiveness. At €80/t, the carbon price has driven investments; weakening it could undermine the market signal for heavy industry. Read →

Salzgitter, SSAB and other top EU steelmakers urged policymakers to avoid diluting the ETS and to bolster the carbon border adjustment mechanism. Weakening the system would reduce investment certainty, penalize faster decarbonizers and slow the industry's clean transition, they said in a Tuesday statement. Read →

A Saudi state-backed voluntary carbon market company will add homegrown carbon credits to its platform before year-end. The move expands domestic supply in the VCM as the firm builds out local and international trading infrastructure. Read →

Washington state signed a linkage agreement on June 25 with California and Québec for their cap-and-invest programs. The deal enables mutual recognition of allowances, joint auctions, and a common price once full regulatory steps complete, expected in 2027. It expands the largest subnational carbon market, stabilizing prices and supporting cross-border emissions reductions. Read →

European carbon permits fell marginally on June 26 amid the narrowest trading range in over two weeks. Traders positioned ahead of the financial half-year end and the upcoming EU ETS reform package. Energy markets mixed with limited impact on allowances. Read →

Platts will remove the annual vintage roll for Renewable Energy, Nature-Based Avoidance, South America, and Household Devices carbon credit assessments effective July 1. The change simplifies pricing for these voluntary market categories. It reflects evolving assessment practices in the VCM. Read →

The European Commission will propose changes to the Market Stability Reserve design and thresholds in its July 15 EU ETS review. Dynamic controls aim to automatically adjust allowance supply and prevent price spikes or illiquidity. This targets the bloc's flagship carbon market covering power, industry and aviation emissions. Read →

EU Climate Commissioner Wopke Hoekstra said the resignation of UK PM Keir Starmer requires recalibrating linkage talks between the EU and UK ETS. The EU needs time to assess impacts from British political developments. Linkage would expand cross-border trading and price signals for emissions allowances. Read →

Vietnam's pilot ETS begins next week with 92 companies in power, steel and cement sectors trading quotas. About 511 million tons CO2e allowances are allocated for 2025-2026. Participants include Hoa Phat Group, Formosa Ha Tinh Steel and Vietnam Electricity. Read →

Biomass-based diesel D4 RINs traded at $2.41 and ethanol D6 RINs at $2.37 as of June 4, near 2021 records. Higher EPA blending targets and wider biodiesel-conventional diesel spreads lifted values. Elevated RIN prices boost biofuel blending economics and support renewable diesel output. Read →

An internal Commission document outlines extending free EU ETS allowances for industries committing to local investments. The proposal forms part of the broader ETS review to balance decarbonization with competitiveness. Changes could ease near-term compliance costs for covered emitters while directing capital domestically. Read →

EEX revised the 2026 EU ETS auction calendar, lowering total volumes to 559.884 million allowances because the REPowerEU funding target was only partially achieved. The adjustment reduces supply in the compliance market. Lower auction supply supports higher EUA prices, which traded near €81/t. Read →

EU Carbon Permits rose to 81.35 EUR, the highest level since February 2026. Prices gained over 5% in the past four weeks amid the revised auction supply outlook. The move tightens the EUA market balance for compliance buyers. Read →

EU policymakers debate shifting the Market Stability Reserve to price-based triggers instead of volume indicators for faster response to spikes. A more responsive MSR could stabilize or support EUA prices ahead of the post-2030 review. The discussion signals potential policy support for the carbon market. Read →

Twelve Eastern and Central European countries including Poland, Bulgaria, Romania and Estonia sent a June 19 letter to the European Commission demanding a significant increase in the Modernization Fund financed by EU ETS permit sales. The fund has already invested over €20 billion since 2021 in clean energy projects for poorer states. The push comes as the Commission prepares its July 15 ETS overhaul proposal to align with 2040 climate goals amid competing demands on industrial costs and funding. Read →

A group of 12 EU countries including Greece, Hungary, Latvia and Poland called on the European Commission to scale up financing under the Modernization Fund for the post-2030 period. The request forms part of the upcoming review of the Emissions Trading System. The Commission is scheduled to unveil its carbon cap-and-trade reform proposal on July 15. Read →

California filed suit against the US EPA in US District Court for the District of Columbia after the agency sent four state vehicle emissions waivers to Congress for potential repeal under the Congressional Review Act. The waivers cover car, truck and equipment standards approved under prior administrations that support stricter tailpipe limits and EV adoption. California argues the move is illegal and would increase pollution and market uncertainty. Read →

A CE Delft study commissioned by Carbon Market Watch finds extending EU ETS to all EEA-departing flights raises €9 billion annually by 2030 with negligible demand impact. Airlines would absorb up to 85% of costs; fuel volatility dwarfs ETS effects. The finding counters airline warnings ahead of the EU's July ETS review and supports higher EUA demand. Read →

Extending ETS to all EEA departures would raise extra €9 billion yearly by 2030 (up to €19 billion including arrivals). Frankfurt-Singapore economy return rises just 0.9% with 0.95% demand drop. Private jets and long-haul exemptions weaken the polluter-pays signal; expansion bolsters EUA market fundamentals. Read →

The 72nd RGGI auction sold 18.35 million allowances at $35 clearing price, up $10 from March, generating $642 million. No CCR allowances released; Virginia's return and supply dynamics drove the surge. Higher RGGI prices signal tightening in North American compliance markets. Read →

EU leaders endorse a separate Commission proposal to adjust fall-back benchmarks for free ETS allowances based on heat and fuel use, applying from January 2026. The move responds to competitiveness concerns from Italy, Poland and Czech Republic ahead of the July ETS revision. Extra free permits could allow higher emissions while easing costs for chemicals, refineries and other emitters. Read →

The European Commission is seriously considering granting free CO2 permits to shipping companies using clean fuels as part of the upcoming EU ETS reform due in July. This targets maritime operators already covered by the system to incentivize lower-carbon fuels without full compliance costs. The proposal forms part of broader efforts to balance decarbonization with industry competitiveness in the post-2030 review. Read →

U.S. EPA data released June 18 shows D4 biomass-based diesel, D5 advanced biofuel and D6 renewable fuel RIN prices significantly higher in May 2026 than a year earlier, while D3 prices dipped slightly. May RIN generation reached 2.02 billion, up 4% year-over-year, with first-five-month totals at 9.66 billion. Elevated prices reflect sustained biofuel mandate pressure on refiners and blenders. Read →

The European People's Party, the largest group in the EU Parliament, is weighing carbon market adjustments to safeguard industrial competitiveness and limit price volatility ahead of the European Commission's July ETS review. The move highlights growing political pressure on the EU Emissions Trading System over energy costs and global competitiveness. Reforms could alter free allowance rules or stability mechanisms, directly affecting EUA supply and pricing dynamics. Read →

EU member states voted to adopt updated benchmarks for distributing free pollution allowances under the Emissions Trading System following criticism of the Commission's methodology. In exchange, the Commission pledged to review the benchmark approach and increase free allowances for industry in its mid-July ETS revision proposal. The benchmarks, based on the top 10% performers per sector, influence company profitability and compliance costs in the EUA market. Read →

EU officials addressed Asian concerns over Carbon Border Adjustment Mechanism compliance costs and hurdles by outlining plans to explore purchasing international carbon credits to help meet 2040 climate goals. The briefing comes as CBAM implementation expands and intersects with ETS reforms. Greater acceptance of Article 6 or voluntary credits could influence demand in compliance and voluntary carbon markets. Read →

A coalition of agricultural, climate and carbon market groups urged the European Commission to ensure demand for carbon farming credits under the CRCF regulation. They warned that without viable markets for farmers, the regulation's success is at risk. This highlights growing focus on voluntary and nature-based credits linked to EU policy. Read →

EU member states approved revised carbon efficiency benchmarks that set free allowance allocations for EU ETS-covered facilities in 2026-2030. The move follows Commission concessions on methodology revisions and fallback values due in July. It reduces uncertainty for energy-intensive industries and supports stable supply in the compliance market. Read →

Member states endorsed updated benchmarks for free ETS allowances over the next five years. In return, the Commission will propose more specific fallback values in July. The decision advances implementation while addressing industry concerns over allocation levels. Read →

EU economy ministers agreed to tighten rules on suspending the carbon border adjustment mechanism (CBAM) fee, allowing suspension only under strict criteria like a 50% price spike over six months versus the prior decade average. The move aims to reduce uncertainty for low-carbon investments in steel, cement and fertilizers. It extends CBAM coverage to more goods like car parts while facing final negotiations with lawmakers. Read →

Stainless steel maker Outokumpu and other early decarbonizers face risks as the EU reviews ETS rules amid competitiveness concerns, with proposals for investment-linked free allowances and potential timeline extensions. Carbon prices hover near €76/t, below some firms' 2030 expectations. The FT notes political pushback has already diluted other Green Deal elements like combustion engine phaseouts. Read →