The closing days of September brought a sharp escalation in political, regulatory, and economic tensions, with shutdown dynamics in the United States dominating headlines across energy and climate markets. In Europe, clarifications on carbon policy and delays to hydrogen regulation added friction to the continent’s decarbonisation roadmap. Meanwhile, structural shifts in renewables, biofuels, and shipping continue to reshape market expectations and timelines. Below are this week’s key developments.

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Macroeconomics and Geopolitics

Trump Keeps Oil Permits Moving in Shutdown, Halts Renewables

‍Despite the ongoing US government shutdown, the Trump administration has prioritised conventional energy projects, allowing continued permitting for oil, gas, and coal while halting activity on renewable developments. The Interior Department cited a national energy emergency as justification. The Bureau of Ocean Energy Management will continue work on offshore leasing, while offshore renewable energy development has been paused.

White House Freezes Funds for Democratic States in Shutdown Slap

‍In a highly political move, the White House froze $26 billion in federal funds earmarked for transit and green energy projects in Democratic-led states. The administration cited budget control, but Democrats labelled the move punitive. Redundancy warnings have been issued across agencies, with services already being scaled back at organisations such as Veterans Affairs and the Patent Office.

Macron Urges EU Tariffs to Protect Domestic Industry

‍French President Emmanuel Macron has called on the European Commission to expand the use of protective tariffs, targeting a broader range of sectors beyond steel and electric vehicles. Citing the absence of a level playing field with China and the US, Macron pressed for a sector-by-sector tariff regime to support struggling EU industries and retain sovereignty in global trade.

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Carbon Markets

Sweden to Cut Carbon Removals Subsidy by €500 Million

‍Sweden will reduce its 15-year carbon removals programme budget from SEK 36 billion to SEK 30 billion, limiting future funding for projects such as Stockholm Exergi’s bioenergy with carbon capture and storage (BECCS) operations. The reversal comes despite several major credit deals already in place, including two contracts with Microsoft. No removals have yet been delivered, and only SEK 10 billion remains available for new bidders.

EU Clarifies International Carbon Credit Demand Up to 143 Mt by 2040

‍During a closed-door industry roundtable, EU officials reportedly confirmed that the bloc may permit up to 143 MtCO₂e of Article 6 international credits between 2036 and 2040 towards its 2040 climate targets. This represents three per cent of 1990 emissions. The clarification provides early guidance to the voluntary market, although the proposal remains subject to consultation. Officials also discussed the eventual inclusion of domestic carbon removals under the CRCF framework.

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Renewables and Biofuels

Trump Plans Review of Equinor’s Empire Wind 2 Near New York

‍The US government will reassess the construction approval for Equinor’s Empire Wind 2 offshore project, following legal challenges from local stakeholders. The review may delay or alter the project’s development near New York and New Jersey. The Interior Department’s decision adds uncertainty to the future of offshore wind permitting in the US.

Spain’s Wind, Solar Growth Pushes Power Prices Down

‍Spain’s rapid deployment of wind and solar has driven some of the lowest electricity prices in the EU, with renewables meeting 46 per cent of demand in the first half of 2025. Gas-based pricing influence fell from 75 per cent to 19 per cent over six years. However, rising curtailments, grid instability, and limited storage capacity have raised concerns about system resilience. Spain’s blackout in April highlighted shortcomings in cross-border interconnection capacity.

Alternative-Fuelled Ship Orders Drop 48 Per Cent Year-on-Year

‍Orders for alternative-fuelled ships fell sharply in September, with just 14 new vessels booked, a 48 per cent year-on-year decline. LNG remains the dominant fuel, while interest in methanol, ammonia, and hydrogen has waned. The slowdown is attributed to regulatory uncertainty surrounding the International Maritime Organization’s pending Net-Zero Framework, prompting shipowners to delay decisions.

Australia Excludes UCO, Hydrogen from Feedstock Strategy

‍Australia’s updated bioenergy feedstock strategy excludes used cooking oil, municipal waste, and green hydrogen from policy support. Instead, the strategy will prioritise feedstocks derived from agricultural and forestry sources, such as rapeseed (canola), tallow, and sugarcane. The decision limits diversification options for power-to-liquid fuels and comes despite separate support for hydrogen under the Hydrogen Headstart initiative.

US Asks for Shutdown Delay in Biofuel Cases

‍The Trump administration has requested delays in several court cases relating to the Renewable Fuel Standard (RFS) due to the government shutdown. Legal proceedings on biofuel blending mandates and refinery waivers are now stalled, raising concerns among stakeholders about quota finalisations and credit expiry. Some refineries argue they could lose millions if Renewable Identification Numbers (RINs) are not reallocated promptly.

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Corporate Sustainability and Regulation

Most EU Businesses Support Stronger Sustainability Rules

‍A new YouGov survey conducted across five EU countries found that most businesses, including small and medium-sized enterprises, support maintaining or strengthening the EU’s sustainability and due diligence requirements. The findings come amid debate over the European Commission’s Omnibus proposals, which aim to reduce regulatory burdens. The survey showed strong support for mandatory transition plans and greater supply chain oversight, particularly from firms with international exposure.

EPA Seeks to Roll Back HFC Regulations

‍The US Environmental Protection Agency has proposed loosening the timeline and scope of hydrofluorocarbon (HFC) phase-down rules. The changes would extend compliance deadlines and allow higher-emitting refrigerants in certain applications, including cold storage and retail systems. Industry groups are split on the move. The Air-Conditioning, Heating, and Refrigeration Institute opposed the rollback, citing investment risks, while the Food Industry Association welcomed the proposal.

EU Confirms Hydrogen Strategy Update by End-2026

‍The European Commission will revise its Hydrogen Strategy by the end of 2026, frustrating industry leaders who argue that current regulatory complexity is delaying large-scale electrolyser deployment. Despite falling well short of installed capacity goals, the Commission has reaffirmed its timeline and will begin stakeholder engagement through an evidence call. Grid and infrastructure integration is expected to be prioritised in the forthcoming energy networks package due later this year.