This week underscored growing momentum across global energy and climate sectors. Europe is on track to double its energy storage capacity by 2030, Türkiye and Australia have confirmed they will co-host COP31, and new updates on emissions trading systems emerged from China, Germany, and Switzerland. Meanwhile, significant regulatory developments, ranging from Germany’s industrial power price cap to recent US legal rulings on climate disclosure, signal deeper engagement with climate transition measures as 2025 draws to a close.

‍

Macroeconomics and Energy Policy

Europe’s Energy Storage to Double by 2030

A joint report from LCP Delta and Energy Storage Europe projects that Europe’s installed energy storage capacity will exceed 215 GW by 2030, more than double current levels. Battery systems are expected to contribute 160 GW of that total, supported by dedicated auctions and utility-scale deployment. Pumped hydro remains the largest segment, but batteries are driving growth, particularly among commercial and industrial users seeking cost savings and on-site renewable integration.

Turkey and Australia to Co-Host COP31

A compromise agreement positions Türkiye as host of COP31 in Antalya, with Australia leading governmental negotiations under the banner of a “Pacific COP.” Australia has pledged deeper collaboration with island nations, while Türkiye aims to elevate the voices of emerging economies. With just one year to prepare, both countries face considerable diplomatic and logistical challenges ahead of the summit.

Oil Market Focuses on Russian Sanctions

Oil markets steadied this week amid anticipation of US sanctions coming into force against Rosneft and Lukoil. The measures have already begun reshaping global crude flows, particularly to India. At the same time, the EU is considering additional restrictions on entities operating within Russia’s shadow tanker fleet. Although inventories offered mixed signals, concerns over supply disruptions are keeping volatility elevated.

‍

‍

Carbon Markets

Germany Prepares EUA Cancellations for 14 Coal Plants

Germany has notified the European Commission of its intention to cancel EU Emission Allowances (EUAs) linked to 14 coal plants shut down in 2024. The move aims to prevent surplus allowances entering the market, ensuring emissions reductions resulting from coal phase-outs translate into genuine climate benefits. Final cancellation figures will depend on verified emissions data and Commission approval.

China Expands Carbon Market to Cement and Metals

Carbon prices in China surged by more than 8% following confirmation that the steel, aluminium, and cement sectors will be integrated into the national emissions trading system before the year’s end. The Ministry of Ecology and Environment plans to reduce allowances annually and to include all major industrial polluters by 2027. This expansion is central to China’s emissions reduction roadmap for 2035.

Switzerland Aligns ETS with EU Reforms

Switzerland will revise its CO₂ law from 1 January 2026 to reflect recent EU ETS reforms. The changes will update emissions targets, offset rules, and free allocations, ensuring continued compatibility with the EU system. Switzerland also intends to launch an emissions trading system covering buildings and transport by 2031, mirroring the EU’s ETS2.

Verra’s J-REDD Framework Approved for CCP Badge

The Integrity Council for the Voluntary Carbon Market has confirmed that all three scenarios under Verra’s Jurisdictional REDD+ methodology qualify for the Core Carbon Principles (CCP) label. The decision strengthens the credibility of jurisdictional forest credits and could boost voluntary market demand heading into 2026. Verra’s main competitor, Equitable Earth, also launched a new REDD methodology this week.

‍

Renewables and Biofuels

Germany Confirms Industrial Power Price Cap

Germany has formalised a €50/MWh power price cap for eligible industries as part of a new subsidy scheme expected to launch in 2026. The cap, set at the lowest level permitted under EU state-aid rules, will apply to firms meeting specific electricity-intensity criteria. The scheme is projected to cost €3.3 billion over three years and is currently awaiting European Commission approval.

Floating Wind Gains Ground in the Celtic Sea

Ocean Winds, a joint venture between EDP Renewables and Engie, has secured rights to develop a 1.5 GW floating wind project in the Celtic Sea. This follows earlier lease awards to Equinor and EDF/ESB. Together, the three projects could supply power to four million homes. The UK is targeting up to 50 GW of offshore wind capacity by 2030.

China’s Green Hydrogen Coal Plant Enters Operation

China’s first coal-to-chemicals facility incorporating green hydrogen has entered commercial operation in Inner Mongolia. Operated by Datang Group, the project integrates a 150 MW solar and wind installation and is intended to demonstrate a replicable pathway for decarbonising heavy industry. The site is expected to produce more than 70 billion cubic metres of hydrogen annually.

Japan Expands Offshore Wind Subsidies

The Japanese government plans to include offshore wind in long-term decarbonisation power auctions to address rising project costs. The move aims to stabilise investment conditions amid global price pressures and support firms such as JERA and Mitsui, which recently secured bids but face construction delays due to escalating expenses.

Trump Administration Considers Delay to Biofuel Credit Cuts

The US Environmental Protection Agency is reportedly considering delaying proposed reductions to biofuel import credits until 2027 or 2028. The proposal had faced criticism from industry groups, and a final decision is expected in the coming months. The EPA has yet to formally comment on the possible rescheduling.

‍

Corporate Sustainability and Regulation

California Climate Risk Law Temporarily Blocked

A US appeals court has temporarily halted implementation of California’s climate financial risk disclosure law (SB 261), scheduled to take effect in 2026. However, another law requiring greenhouse gas emissions disclosures (SB 253) remains on course. The US Chamber of Commerce has challenged both laws, arguing they compel subjective speech, but only SB 261 has been paused pending appeal.

Germany to Contribute €1 Billion to Brazil Forest Fund

At the COP30 conference in Belém, Brazil’s environment minister announced a €1 billion pledge from Germany to the Tropical Forest Forever Facility. The fund supports forest conservation and represents one of the largest climate finance commitments to date from a single EU member state.

EU Agrees on EV and Gas Metering Standards

The EU has updated its Measuring Instruments Directive to cover EV chargers, compressed gas dispensers, and hydrogen meters. New conformity standards, digitalisation rules, and accuracy thresholds will apply from 2027. The revision reflects the bloc’s effort to modernise metering systems for the energy transition and supports wider decarbonisation objectives.

EU Momentum Builds for Deforestation Law Delay

EU member states have reached a consensus on delaying the bloc’s deforestation regulation by one year, extending beyond the Commission’s original six-month proposal. The delay reflects concerns over compliance readiness and the regulation’s potential trade impacts. Negotiations with the European Parliament are expected to finalise the revised timeline by the end of the year.