This week highlighted the growing convergence between geopolitics and environmental regulation, as sanctions, tariffs, and sustainability laws increasingly serve as instruments of broader economic strategy. Both compliance and voluntary carbon markets continued to undergo structural reform, while decarbonisation efforts became ever more intertwined with investor confidence and regulatory clarity. Momentum in renewables remains strong across Europe, yet global headwinds, particularly in hydrogen and biofuels, underscore the policy risks associated with fragmented climate leadership.

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Geopolitics & Energy

EU and US Ramp Up Sanctions on Russian Energy

The EU adopted its 19th sanctions package against Russia, introducing a future ban on LNG imports from 2027, tightening restrictions on transactions with Russian oil majors Rosneft and Lukoil, and targeting 117 additional shadow fleet vessels. The measures aim to further isolate Russia’s energy sector and coincided with the United States imposing direct sanctions on both Rosneft and Lukoil. Oil prices surged by more than 3% in response, with Brent crude exceeding $65 per barrel for the first time since early October. These coordinated actions reflect escalating Western efforts to curtail Russian oil revenues amid the ongoing war in Ukraine.

Trump Targets EU Sustainability Laws

President Trump’s administration intensified its opposition to international climate policy, pressuring the EU to amend or repeal its Corporate Sustainability Due Diligence Directive (CSDDD). The move follows a US-led block on the UN’s proposed global shipping emissions levy. The US Department of Energy warned that continued enforcement of EU corporate climate rules could threaten the affordability of US LNG exports, a critical energy source for Europe since 2022.

EU Parliament Rejects Bid to Weaken Sustainability Regulations

A compromise agreement that would have reduced the scope of EU sustainability reporting legislation under the CSRD and CSDDD was narrowly defeated in the European Parliament (318–309). The decision sends the Omnibus reform initiative back to the committee stage, prolonging uncertainty for companies seeking clarity on future ESG compliance thresholds.

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Carbon Markets

ETS2 Reforms Expected to Lower Prices Through 2030

The European Commission’s reform package for the ETS2, covering buildings and transport, is projected to lower average allowance prices by 11%, with a 2030 estimate of €103 per tonne, down from previous forecasts of €116. Early auctions, an enhanced Market Stability Reserve (MSR), and an extended reserve lifespan are expected to stabilise the market’s early years and limit long-term price volatility.

CO₂ Prices Forecast to Rise Sharply After 2026

Despite a near-term dip, EU carbon prices are forecast to average €93 per tonne in 2026 and could reach €150 by 2030 due to declining cap volumes and the gradual phase-out of free allowances. These increases will also affect CBAM certificate costs, which will track EUA prices from 2026 and become payable from 2027.

Industry Alliance Urges Brussels to Maintain Free Allocation

An alliance of 80 European industrial companies, including BASF and Ineos, has called for the continuation of free ETS allowances beyond the planned 2034 phase-out. The coalition warned that the current trajectory risks driving production offshore. It also criticised CBAM’s limited coverage in protecting exporters and urged the Commission to freeze the tightening of emissions benchmarks.

Verra Publishes Colombia REDD+ Risk Map

In the voluntary carbon market, Verra released its provisional national deforestation risk map for Colombia under its new jurisdictional REDD+ methodology. The publication enables forest project developers to assess eligibility and aligns with Verra’s shift away from site-level baselines. Public consultation on the dataset will remain open for three weeks.

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Renewables & Biofuels

Germany Sets Record for Onshore Wind Permits

Germany has already issued 15.5 GW of onshore wind permits in 2025, surpassing last year’s record of 14.1 GW. Average permitting times have been reduced from 23 to 17 months. The country aims to reach 115 GW of onshore capacity by 2030 to support its target of generating 80% of electricity from renewables.

Romania Opens 290 MW Wind Tender

Romania has launched a new tender under its Contracts for Difference (CfD) scheme, offering a maximum strike price of €80/MWh. Wind bids were undersubscribed in the previous round, reflecting concerns over project complexity and relatively low pricing caps. Analysts suggest stronger incentives may be required to achieve Romania’s 3 GW wind capacity target by 2030.

IMO Delay Dampens Singapore’s Green Bunker Ambitions

The International Maritime Organization’s delay in adopting a Net Zero Framework (NZF) for shipping could slow the uptake of green marine fuels such as bio-bunkers and methanol, particularly in Singapore. Market observers noted that the delay may dent investor confidence, although existing EU-led measures, including FuelEU Maritime and the EU ETS, remain in force.

Clean Fuels Group Calls for Closure of Renewable Diesel Tariff Loophole

Clean Fuels Alliance America has urged the Trump administration to impose tariffs on imported renewable diesel, citing a loophole that exempts it under current tariff classifications shared with petroleum diesel. The group argued that this oversight harms domestic biorefineries and undermines recent “Buy American” climate policy objectives.

EU Green Hydrogen Market Faces ‘Reality Check’

French hydrogen firm Lhyfe warned that inflation, regulatory delays, and weak buyer-side incentives have forced numerous green hydrogen projects across the EU to be shelved. Although global electrolyser investment is rising, expected to reach 5 GW in 2025, Europe risks losing competitiveness to China in hydrogen and electrolysis technology without stronger regulatory support and market incentives.

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Corporate Sustainability & Regulation

BNP Paribas AM Launches Article 9 Environmental Infrastructure Fund

BNP Paribas Asset Management has launched a new Article 9 fund focused on environmental infrastructure, targeting sectors such as power, water, waste, and transport. The fund is designed to capitalise on resilient infrastructure trends and the ongoing green transition across Europe and the United States.

EU Parliament Vote Delays Omnibus Reforms to CSRD/CSDDD

The European Parliament’s failure to agree on a common position regarding the Commission’s Omnibus I proposal has delayed the legislative process further. The proposed compromise would have raised CSRD thresholds to 1,000 employees and relaxed due diligence requirements. The next vote is scheduled for 13 November.