This week’s developments marked a pivotal moment across climate policy, energy markets, and the voluntary carbon sector. The EU intensified its global climate diplomacy ahead of COP30, even as internal divisions surfaced regarding the timeline for ETS2 and maritime emissions pricing. In carbon markets, structural delays and environmental volatility further undermined project credibility and delivery. Meanwhile, in the United States, rising oil inventories exerted downward pressure on prices, although long-term sustainability investments continued to gain momentum across corporate sectors. Renewable energy markets, particularly in Italy and China, came under mounting policy and pricing pressure, highlighting the need for financial stability to scale clean technologies.

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Macroeconomics

EIA Confirms Rising U.S. Crude Inventories

‍U.S. commercial crude oil inventories increased by 3.5 million barrels last week, extending the upward trend observed in early October. Despite this build, stocks remain 4% below the five-year seasonal average. The data triggered a third consecutive day of oil price declines, with Brent and WTI falling to $61.52 and $57.84 per barrel respectively. Petrol and distillate inventories also fell, although distillate stockpiles are now 7% below historical norms. Refinery output dipped, and overall petroleum demand eased slightly year-on-year, indicating softening economic activity amid the seasonal transition.

EU’s Carbon Border Tariff to Accelerate Global Green Steel Race

‍New research indicates that the EU’s Carbon Border Adjustment Mechanism (CBAM) and revised ETS will significantly boost the competitiveness of hydrogen-based green steel by 2026. Findings published in Nature Communications project strong investment inflows into low-emission steel production across northern Scandinavia, Portugal, and Spain. These measures could reshape global market dynamics by internalising carbon costs in imports and indirectly supporting cleaner production through redistributed ETS revenues.

EU Sets Out Global Climate and Energy ‘Vision’ Ahead of COP30

‍The European Commission unveiled an ambitious climate and energy strategy, positioning clean industrial growth at the centre of its global economic agenda. The plan includes expanding EU manufacturing capacity to capture 15% of the global clean tech market, establishing a Clean Transition Business Council, and leveraging €300 billion in green investments via the Global Gateway initiative. A major focus is on extending global carbon pricing and reforming multilateral financial institutions to mobilise $300 billion annually in climate finance by 2035.

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Carbon Markets

Delays Undermine IMO Vote on Maritime GHG Pricing

‍A vote on the International Maritime Organization’s (IMO) net zero framework for marine fuel emissions was postponed following contentious discussions among member states. The U.S. delegation proposed an opt-in mechanism that could delay adoption until 2026, drawing criticism from EU allies. Meanwhile, Greece, one of the world’s leading shipping nations, signalled it would abstain, reflecting deepening divisions over maritime climate policy. Even if adopted, the framework’s implementation timeline now appears uncertain.

EU Member States Push to Delay ETS2 Until 2030

‍A leaked draft letter from several EU member states calls for postponement of the ETS2 system for road transport and heating fuels, initially planned for 2027. Countries including Poland, Ireland, and Hungary cited concerns over implementation readiness and price volatility. While reaffirming commitment to climate goals, the letter argues that a delay would allow time for essential technical reforms and social adaptation, particularly in vulnerable sectors.

Commission Confirms ETS Cap Extension Beyond 2039

‍The European Commission confirmed this week that the EU ETS cap will not reach zero by 2039. Emissions allowances will continue to be issued beyond that date to maintain market stability, while international carbon credits may be centrally procured through a public mechanism. The update signals a recalibrated long-term approach as the bloc balances market-driven decarbonisation with industrial competitiveness.

Nearly 20% of Forest Carbon Projects Affected by Wildfires in 2024

‍BeZero Carbon reported that almost one-fifth of forestry projects in the voluntary carbon market experienced wildfire damage in 2024, the highest level recorded since tracking began in 2021. The State of Wildfires 2024–25 report attributes the surge in severity and extent of fires to climate change, with many regions facing drought and extreme heat. On average, 1.6% of total project area was burned, raising concerns about the long-term integrity of carbon credits.

September Sees Decline in Voluntary Credit Quality

‍Calyx Global reported a sharp drop in the quality of voluntary carbon credit issuance in September, primarily due to a single low-integrity cookstove project that released over 21 million credits, representing 40% of the monthly total. However, the quality of credit retirements improved, reaching a record score of 3.5 following the exclusion of Kariba REDD+ credits by South Pole and Verra. Analysts expect heightened scrutiny across the voluntary carbon market amid intensifying credibility challenges.

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Renewables & Biofuels

Italian Renewables Schemes Reshape PPA Market Dynamics

‍Italy’s Fer-X renewable energy support scheme is expected to influence power purchase agreement (PPA) pricing and liquidity. With 70% of auction bids below €60/MWh and continued delays in the Energy Release scheme, developers face tightening margins. The oversubscription of Fer-X suggests that unsuccessful bidders may turn to lower-priced PPAs, intensifying competition. Experts warn that PPAs priced below €55/MWh risk financial viability without additional incentives or tax relief mechanisms.

HVO Sales Remain Sluggish in Germany Amid High Prices

‍Sales of HVO100 (hydrotreated vegetable oil) remain subdued in Germany despite greater availability. Price premiums of 8–10 cents per litre over B7 diesel and limited compatibility concerns continue to restrict demand. Municipalities and fleet operators remain the main buyers. However, rising GHG quotas and CO₂ pricing may gradually narrow the cost differential. Blending remains the dominant use case, with projected volumes for 2025 approaching 200,000 tonnes.

China Approves Further SAF Exports, Targets EU Market

‍Three additional Chinese biofuel firms have been granted sustainable aviation fuel (SAF) export quotas totalling nearly 800,000 tonnes. With European SAF mandates approaching, Chinese producers are scaling up to meet regional demand. EcoCeres, Sanju Bioenergy, and Haike Chemical are the latest to secure export authorisation. Total Chinese SAF quotas for 2025 now exceed 1.2 million tonnes, although uncertainty persists over reapplication procedures and quota utilisation limits.

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Corporate Sustainability & Regulation

83% of Companies Increase Sustainability Investments: Deloitte

‍A global Deloitte survey of over 2,100 C-suite executives found that 83% of companies increased sustainability investment over the past year. Notably, 22% of firms with revenues above $10 billion boosted spending by more than 20%. Despite reduced stakeholder pressure in some areas, executives reported tangible business benefits, including revenue growth and operational efficiency gains.

U.S. Regulators Withdraw Climate Financial Risk Standards

‍Under political pressure from the Trump administration, U.S. federal regulators have rescinded 2023 guidance requiring banks to assess and disclose climate-related financial risks. Agencies including the Federal Reserve and FDIC stated that banks should focus on material risks broadly, rather than climate-specific disclosures. The move represents a broader rollback of climate finance oversight at the federal level.