Macroeconomics

ECB Signals Conclusion of Rate-Cutting Cycle

The European Central Bank (ECB) appears to be approaching the end of its current cycle of interest rate reductions, according to Governing Council member Madis Muller. Following the ECB’s eighth consecutive rate cut, lowering the deposit rate to 2%, President Christine Lagarde hinted that the easing may come to a halt by July. She cited ongoing uncertainties, largely stemming from global trade tensions, particularly those linked to US trade policy.

Trump and Xi Resume Trade Talks Amid Rare Earths Dispute

US President Donald Trump and Chinese President Xi Jinping have agreed to restart trade negotiations this week, focusing on a growing dispute surrounding rare earth minerals. This diplomatic breakthrough offered a degree of reassurance to markets concerned about worsening trade frictions. Senior US trade officials will lead the next round of discussions, with an emphasis on critical supply chains, especially rare earths essential to the technology and manufacturing industries.

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Carbon Markets

Call for Pragmatism in EU Steel Decarbonisation Plans

Green certification organisations have urged EU legislators to adopt a more realistic stance on steel decarbonisation targets, highlighting the limited availability of scrap metal. They stressed that sustainable goals must reflect the true constraints of material supply and called for broader incentives to reduce emissions across diverse steel production processes.

Brazilian Court Suspends REDD+ Project Over Consent Dispute

A court in Brazil has halted a proposed REDD+ project following allegations that it lacked free, prior, and informed consent (FPIC) from local Indigenous communities. This ruling signals growing scrutiny of voluntary carbon initiatives, particularly concerning their engagement with community rights and the legitimacy of their implementation.

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Renewables and Biofuels

Biofuels Investment Expected to Rise 13% in 2025

Global investment in biofuels is projected to increase by 13% in 2025, surpassing $16 billion, according to the International Energy Agency (IEA). This growth is being driven by the rising demand for low-emission fuels. The United States and Brazil continue to lead in the production of liquid biofuels, while Europe focuses on biogas, illustrating regional differences in low-carbon fuel strategies. In contrast, fossil fuel investments are expected to decline, thereby increasing the market share of renewables.

Germany to Launch Gas Plant Auctions in 2025

Germany intends to auction at least 5 GW of new gas-fired power plant capacity by the end of the year, with a longer-term aim of reaching up to 20 GW. These plants are intended to serve as dependable backup for renewable energy, aligning with Germany’s energy transition and coal phase-out agenda. The move highlights the continued need for flexible and reliable power sources to support a grid increasingly dominated by renewables.

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Corporate Sustainability and Regulation

Tech Companies’ Indirect Emissions Surge with AI Growth

A United Nations report has revealed that indirect carbon emissions from major technology firms focused on artificial intelligence rose by approximately 150% between 2020 and 2023, primarily due to the energy demands of data centres. Amazon recorded the steepest increase at 182%, followed closely by Microsoft and Meta. Despite public commitments to emissions reductions, the rapid expansion of AI is driving electricity usage upwards, exposing a growing gap between corporate sustainability pledges and real-world performance.

UK Urged to Cut Energy Costs Ahead of Industrial Strategy

UK industry leaders and Members of Parliament have cautioned that Britain’s upcoming industrial strategy could be undermined unless substantial reductions in industrial energy costs are made. They have advocated for the removal of certain climate levies and policy-related charges from electricity bills, arguing that such reforms are necessary to maintain global competitiveness and to support industrial decarbonisation efforts.

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Environmental and Sustainability Regulation

Colombian Deforestation Falls by 33% in First Quarter

Colombia experienced a 33% year-on-year drop in deforestation during the first quarter of 2025, attributed to heightened government presence, agreements with local communities, and military intervention. This development marks a significant step in the country’s efforts to preserve its rich biodiversity and aligns with Colombia’s broader environmental and conservation commitments.