Week 29 was marked by turbulence in global trade and energy policy, with renewed U.S. tariff threats unsettling markets and placing pressure on central banks. In Europe, policymakers debated monetary responses to currency strength, while analysts in the carbon markets maintained their EU price forecasts despite external disruptions. In the renewables space, revised targets in the Netherlands and delayed EU sanctions point to a more cautious political climate. Meanwhile, corporate reforestation initiatives and U.S. scrutiny of Brazil’s environmental practices underscore the growing strategic importance of sustainability in international affairs.

Macroeconomics

ECB Should Cut Rates to Weaken Euro, Says Italy’s Deputy Premier

Italy’s Deputy Premier, Antonio Tajani, has called for a sharp reduction in ECB interest rates to counteract a “too strong” euro and bolster economic competitiveness. Tajani proposed a policy rate between 0.5% and 1%, alongside renewed bond purchases via quantitative easing. These comments reflect growing pressure on the ECB to adjust its monetary stance in light of trade tensions and currency strength.

Trump Increases Pressure on Powell but Says Sacking ‘Unlikely’

President Trump escalated his criticism of Federal Reserve Chair Jerome Powell, suggesting, while denying, that Powell might be dismissed over alleged financial misconduct linked to the Fed’s building renovations. The mixed messaging caused brief market volatility, with the dollar dipping and bond yields spiking. Trump reiterated his call for rate cuts and hinted at possible leadership changes at the Fed after 2025.

Trump Proposes 10%–15% Tariffs on Over 150 Nations

Trump disclosed plans to issue tariff notifications to over 150 countries, with proposed rates of 10% or 15%. The announcement adds to a string of escalating trade actions expected to commence on 1 August, unless new agreements are reached. Markets and international partners remain on edge as negotiations continue.

Carbon Markets

EU Carbon Price Forecasts Hold Steady Amid US Tariff Concerns

Despite subdued industrial output and ongoing trade concerns, analysts have maintained stable EU carbon price forecasts. Q3 2025 EU Allowances (EUAs) are projected to average €73.54 per tonne. While short-term demand faces uncertainty, the long-term outlook remains positive, supported by tighter emissions caps and the forthcoming carbon border adjustment mechanism.

German Industry and Energy Emissions Almost Halved Since ETS Launch

Germany’s Federal Environment Agency reported a 47% reduction in emissions from the energy and industrial sectors since the inception of the EU Emissions Trading System (ETS) two decades ago. This drop is largely attributed to cleaner energy generation and increased adoption of renewables. Revenues from the ETS continue to play a crucial role in financing projects through Germany’s Climate and Transformation Fund.

Major Carbon Standard Introduces CORSIA Insurance Scheme

A leading voluntary carbon standard has launched an insurance mechanism for aviation-related credits under the CORSIA scheme. This initiative aims to scale the aviation carbon market while mitigating investor risk, further supporting decarbonisation in the sector.

Renewables and Biofuels

Dutch Government Scales Back Offshore Wind Target

The Netherlands has revised its 2040 offshore wind capacity goal from 50 GW to a more achievable range of 30–40 GW, citing high costs and underwhelming demand. This shift mirrors broader industry challenges, as Europe’s offshore ambitions face growing financial and logistical constraints.

EU Again Fails to Approve New Russia Sanctions

The EU’s 18th sanctions package remains blocked, with Slovakia demanding assurances regarding future gas supplies. The deadlock highlights persistent energy security concerns within the bloc, particularly surrounding the 2027 deadline for phasing out Russian gas imports.

Germany Sets Record for E-Car Sales in H1 2025

Electric vehicles comprised nearly 18% of new car registrations in Germany during the first half of 2025, representing a 35% increase year-on-year. Despite a decline in overall car sales, the surge in EV uptake reflects tightening EU emissions targets and greater access to affordable models.

US Increases Renewable Blending Credits in June

The U.S. Environmental Protection Agency reported a rise in both ethanol and biodiesel blending credits in June, indicating increased biofuel production. Biodiesel (D4) credits reached 629 million, aiding compliance with U.S. renewable fuel standards.

Corporate Sustainability and ESG

Nestlé and Barry Callebaut Launch Reforestation in Brazil

Nestlé, chocolatier Barry Callebaut, and startup re.green have launched collaborative reforestation projects to restore 8,000 hectares in Brazil’s cocoa and coffee regions. The initiative aims to promote biodiversity and agroforestry, and is aligned with corporate net-zero targets. The project is projected to generate nearly 880,000 carbon credits. Nestlé plans to plant 200 million trees globally by 2030.

Environmental and Sustainability Regulation

U.S. Opens Trade Probe into Brazilian Deforestation

The U.S. Trade Representative has initiated a broad investigation into Brazil’s deforestation practices, examining their impact on global trade and U.S. agriculture. The probe also covers Brazilian ethanol imports, digital trade, and anti-corruption issues. This development follows Trump’s threat to impose a 50% tariff on Brazilian goods, injecting further geopolitical tension into environmental discussions.