Carbon Markets Weekly: Rules Harden, Removals Scale, Industry Commits
US energy-related carbon dioxide emissions rose about 2% last year, adding roughly 115 million tonnes to reach some 4.9 billion tonnes, according to preliminary data from the Energy Information Administration. Power generation drove the increase. Output grew 3%, coal-fired generation jumped 13%, and sector emissions climbed 4%, while gas generation slipped 4%. Solar rose 34% and wind 3%. A colder winter lifted residential emissions 9% and commercial emissions 7%; industry and transport barely moved. Renewables expanded quickly last year and were still outrun by demand from data centres, factories and air conditioning.
Beijing has chosen administration over price signals. The Ministry of Industry and Information Technology is selecting manufacturing plants and computing facilities with established low-carbon records and workable transition plans for a national zero-carbon factory programme, offering recognition in exchange for efficiency upgrades, cleaner processes, digital carbon management, offsetting and fuller disclosure. Assessment is iterative rather than a single certification, and the inclusion of computing sites acknowledges that data infrastructure has become an emissions category of consequence.
The European Union has blocked Russia’s first request for a World Trade Organization panel to examine the Carbon Border Adjustment Mechanism, a step that postpones rather than prevents a hearing. Moscow argues the measure is protectionism dressed as climate policy, breaching obligations on non-discrimination, tariffs, transparency and subsidies. Brussels says it merely equalises carbon costs between imported and domestically made goods. Any eventual panel would rule on questions every prospective adopter of border carbon measures is watching: how embedded emissions are counted, how foreign carbon prices are credited, what default values apply, and whether free allocation to European industry amounts to an advantage.
MOL Plc is suing over Hungary’s carbon dioxide quota tax after the tax authority refused refund claims lodged in April by the company and several subsidiaries. The claims followed a Court of Justice of the European Union ruling that month finding the levy incompatible with EU law. Including late-payment interest, the dispute is valued at HUF 126 billion, or roughly US$395 million — a reminder that national levies stacked on the bloc’s carbon framework can create sizeable retrospective exposure.
The European Central Bank intends to apply climate risk adjustments to eligible credit claims from non-financial companies pledged as collateral, extending a factor already applied to marketable assets since June. Haircuts will reflect an uncertainty score drawing on Eurosystem climate stress test indicators, the borrower’s transition exposure and the remaining maturity of the claim, capped at an additional 5% reduction and not disclosed at an individual level. Implementation is unlikely before the end of 2027. Notably, the bank frames this as protecting the value of what it holds, not as steering credit.
The UN’s crediting machinery is the bottleneck. Meeting in Bonn for its twenty-second session, the Article 6.4 Supervisory Body took up its draft annual report alongside a methodology pipeline that more than 2,000 Clean Development Mechanism projects are waiting on before they can issue credits. Approved methodologies so far cover landfill gas and nitrous oxide abatement from nitric acid production, plus supporting tools. Seven of 39 bottom-up submissions have cleared initial screening; the Body expects up to seven approvals this year, enough on its own estimate to cover 60% -70% of transitioning activity. The mechanism’s first issuance, a Myanmar cookstove project whose credits are split between the Republic of Korea’s trading system and Myanmar’s national target, was cut roughly 40% against what the predecessor scheme would have granted. Host country delegates have said developers will not wait indefinitely.
Preparation continues regardless. At the fifth Asia Zero Emission Community carbon markets conference in Hiroshima, convened by Japan’s environment and industry ministries, the Article 6 Implementation Partnership Center chaired sessions on applying crediting methodologies in practice and on building domestic frameworks that attract foreign capital into Article 6 projects. The consistent message from participants was that investors treat governance clarity as a precondition, not an obstacle.
Chinese researchers framed the same problem as a trade question. The Carbon Economics Salon in Shenzhen, hosted by Peking University HSBC Business School and the university’s Institute of Carbon Neutrality, drew close to 100 participants ahead of the APEC Forestry Ministerial Meeting to examine unilateral climate trade measures, uneven carbon market development and the use of artificial intelligence in carbon governance. Speakers argued that climate uncertainty strengthens rather than weakens the case for early spending on green research and forest protection, and identified 2030 to 2035 as the decisive stretch for China’s energy transition.
Voluntary market practitioners meeting in London arrived at a blunter conclusion: the market still has no pricing benchmark anyone accepts. The closed-door roundtable during London Climate Action Week, hosted by the London Stock Exchange Group with S&P Global Energy and the UN Sustainable Stock Exchanges Initiative, credited the Core Carbon Principles, the Voluntary Carbon Markets Integrity Initiative, Article 6 and CORSIA with restoring some confidence, while acknowledging that competing methodologies and ratings keep buyers guessing. Carbon differs from other commodities in lacking predictable demand, which explains the flight towards compliance-linked credits — and the concern that crowding into that segment will tighten supply and sharpen price swings.
Indonesia’s market is entering delivery, and with it a set of accountability questions. Internews’ Earth Journalism Network and RECOFTC brought journalists together in Jakarta with the World Resources Institute Indonesia, UNEP, Conservation International, Auriga Nusantara, Madani Berkelanjutan, HUMA and KKI WARSI to weigh forest and blue carbon finance against risks around enforcement, Indigenous rights and greenwashing. Participants pressed for reporting that follows the money to communities rather than stopping at transaction volumes, citing a payment for ecosystem services scheme in Jambi where revenues have funded village infrastructure and scholarships.
Japanese support for carbon removal is broad but thinly informed. A survey of 1,061 adults released by the Carbon Business Council, conducted with Bellwether Research and Intage, found 81% consider climate change serious, 56% back investment in atmospheric removal and 70% support capture at industrial sources. Yet only 12% say they understand what carbon removal is, 67% have never heard of a net zero target, and 58% have never heard of GX-ETS — the scheme about to become mandatory for the country’s largest emitters. Respondents preferred government and industry to lead jointly, with 6% favouring the private sector alone. Legitimacy tends to be tested once costs reach household bills.
Verra has moved the world’s largest voluntary crediting programme onto new infrastructure, migrating more than 5,900 projects, 10,500 account holders, 1.4 billion credits and 125,000 documents to a registry built with S&P Global Energy. Users can now track a project from listing through validation, issuance, transfer and retirement in one system. Transaction-ready interfaces, exchange and broker connectivity and stronger Article 6 functionality are promised in later phases. Given that serialisation and double-counting prevention are integrity questions before they are convenience questions, the reliability of that plumbing matters well beyond user experience.
New supply looks much as it did before. Fourteen projects opened for public comment in the week of 20 July, the first intake published on the new platform, seven of them forestry or peatland schemes across Latin America and South East Asia, including REDD+ projects in Colombia and Brazil and a Sumatran peatland site. The rest spanned Malaysian waste-to-fuel, Indian wind and electric vehicle charging in Vietnam and Thailand. Forest conservation continues to supply the bulk of registrations despite years of argument over baselines and over-crediting, while consultations run in parallel on biochar, cookstove, concrete and rice methodologies.
Poor data undermines much of the rest. A peer-reviewed paper backed by Cambridge-based Neutreeno argues that corporate carbon accounting was designed to satisfy reporting requirements rather than to find abatement, and that more than 75% of a typical company’s emissions sit in supply chains where industry averages substitute for supplier data — estimates that can be out by a factor of ten. The proposed CSA Principles would sit alongside existing standards, flagging where numbers are dependable and where they are not. With reporting requirements loosening in Europe and enforcement priorities shifting in the US, the authors contend that voluntary rigour matters more, not less.
Corporate removal buyers, meanwhile, are writing longer cheques. Frontier, the advance market commitment, has added US$915 million to take total pledged spending to US$1.8 billion since 2022, with Anthropic joining Stripe, Google, Shopify, Salesforce, H&M Group, Workday and McKinsey Sustainability. The model has changed: instead of small pre-purchases spread thinly, Frontier is pursuing eight-to-ten-year offtakes with perhaps 10 to 15 suppliers it judges capable of gigatonne scale, on contracts running towards 2040 and conditional on a plausible source of demand when they expire. Seven portfolio companies delivered 23,000 tonnes in 2025, roughly double the prior year, against 1.4 million tonnes of annual capacity now under construction. Frontier’s own cost curve runs from US$80 to US$120 a tonne for surficial mineralisation to US$200 to US$300 for direct air capture.
Supply is being contracted well ahead of construction. Frontier Infrastructure Holdings and Carbonfuture have signed what they call the largest ethanol bioenergy with carbon capture and storage removal deal announced to date, covering 750,000 credits from Project Sprint, with first removals due in the fourth quarter of 2027. Biogenic carbon dioxide from Midwestern ethanol plants will travel by rail to permitted storage in Wyoming, sidestepping pipeline routes that have met stiff local resistance. Certification falls under Puro.earth’s geologically stored carbon methodology, with independent monitoring and verification.
Climeworks Solutions is betting that the money will follow the rulebook. Its new offering targets three compliance regimes: CORSIA for airlines, Article 6.2 bilateral transfers, and the EU’s Carbon Removal and Carbon Farming Certification Framework, which the European Commission has proposed as the basis for admitting permanent removals into the emissions trading system. The unit, launched in 2024, counts more than 200 corporate clients including JPMorgan, Boston Consulting Group, Schneider Electric and NTT DATA, and plans to add jurisdictions as rules settle. Fragmentation is the product: a marketplace alone cannot tell buyers which credits their regulator will accept.
South Africa is treating removal as rural policy. The Department of Forestry, Fisheries and the Environment has agreed a programme with the Nqadu Kingdom in the Eastern Cape covering restoration, climate-smart agriculture and community forestry, beginning with 2,000 indigenous and fruit trees under a national scheme targeting one billion plantings over five years. Seven state plantations have already passed to beneficiary communities and four more are due this financial year, in a province with more than 100,000 hectares identified as suitable for afforestation. E-waste collection and public employment schemes sit alongside, with a joint task team to plan delivery.
Denmark has committed to the largest single industrial decarbonisation contract in Europe. Aalborg Portland, owned by Cementir Holding, will receive up to about €2.2 billion over 15 years from the Danish Energy Agency, at roughly €117 for each tonne captured up to a ceiling of 1.25 million tonnes a year once its ACCSION plant starts up in 2030 — around €146 million annually, indexed to inflation. The full-chain project uses Air Liquide capture technology, biogas-fired kilns and renewable power, and depends on transport and storage infrastructure still being built. Cement generates roughly 8% of global industrial carbon dioxide, much of it released chemically when limestone becomes clinker and therefore untouchable by fuel switching, which is precisely why the sector has ended up on guaranteed-price contracts of the kind first used for offshore wind.
Uniper has picked SLB Capturi as preferred technology supplier for Connah’s Quay Low Carbon Power in north Wales, closing a competitive engineering process opened in December 2024. Built in two phases to as much as 1.38 GW, the station would run an amine-based capture system tuned for flexible operation alongside intermittent renewables, with carbon dioxide piped through the HyNet cluster to depleted reservoirs under the Irish Sea. A development consent decision is expected within months and first power could follow from 2030, subject to a final investment decision. Flexible capture is a materially harder engineering problem than steady-state industrial capture.
E.ON has commissioned Capsol Technologies, through competitive tender, to study capture at its biomass and waste-to-energy site in Norrköping, Sweden, where up to 500,000 tonnes of carbon dioxide a year could be captured. Such plants draw interest because capture results in removals as well as reductions. Northern Europe now has a substantial queue of feasibility work whose conversion rate will depend on transport, storage and revenue certainty rather than on technology.
Betolar has won an emissions value of 121 kg of carbon dioxide equivalent per tonne for the ground granulated blast furnace slag it supplies through the Port of Hamina, clearing it for Finland’s official low-carbon concrete calculations. The company puts that at around six times below conventional CEM I cement. Because the figure rests on a verified environmental product declaration, producers can use the material without further certification — removing the paperwork barrier that has often slowed uptake of cement substitutes.
Volt Carbon Technologies has taken a first commercial order from Northern Ore Resources to process 40,000 tonnes of vermiculite at US$100 a tonne, worth roughly US$4 million a year in processing revenue. Early testing suggests the feedstock needs no more than two passes through the company’s dry air classification system, fewer than graphite typically requires. A larger 100,000-tonne line would cost around US$750,000 to build, funded from revenue, government incentives or warrant exercises, with commercial deployment targeted for 2028.
Low-carbon industrial space is in demand. Skyline Industrial REIT has fully leased Bayers Lake Industrial Centre in Halifax, a 400,000 sq ft, two-building park certified by the Canada Green Building Council and built with Secure Capital and Lindsay Construction. ID Logistics has taken 230,235 sq ft, with a Canadian warehousing operator on 113,547 sq ft and F3 Group on 57,345 sq ft, in the city’s largest recorded industrial speculative lease. Full occupancy of a building put up on spec is a firmer demand signal than any corporate pledge.
Mondial Relay by InPost has leased 6,600 sq m at SEGRO Centre Paris Les Gobelins, a converted early twentieth-century freight station in the thirteenth arrondissement, from which it will supply its Paris lockers and collection points using electric vans and cargo bikes alone. Fit-out starts in August, operations in October, with three to five semi-trailers arriving daily through nine ground-level doors. The site carries several environmental certifications and is targeting more. Cutting delivery emissions in dense cities turns on securing inner-urban floor space as much as on the vehicles themselves.
The University of Dayton will cover its entire electricity demand from recovered industrial heat under a 15-year agreement with AES Ohio, Tallgrass and Kanin Energy. A recovery unit at a compressor station on the Rockies Express Pipeline is expected to supply about 78,000 MWh a year and avoid some 55,000 tonnes of carbon dioxide, cutting the university’s footprint by 71% without costs falling on other utility customers. The partners see comparable potential in gas processing, refining, cement, steel and chemicals, where waste heat is plentiful and no new generating plant is needed.
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