EU states agree 2040 and NDC goals, seek ETS 2 delay

Spanish Market: Emissions
05/11/25

EU environment ministers have agreed to pursue a 90pc reduction in greenhouse gas (GHG) emissions by 2040 — with up to 5pc allowed to be covered by international carbon credits from 2036 — and have asked for a one-year delay in implementation of the emissions trading system for road transport, buildings and other sectors (ETS 2). These changes now need to be approved by the European Parliament.

Ministers want high-quality international credits — as defined under Article 6 of the Paris agreement — to be counted towards up to 5pc of the cut, measured against EU net emissions in 1990.

Use of "high-quality" international credits "in a way that is both ambitious and cost-efficient" would start from 2036, diplomats said, with a pilot to be considered for 2031-35.

The 2040 target was agreed by a qualified majority. Four countries — Poland, Hungary, Slovakia and the Czech Republic — were opposed, while Bulgaria and Belgium abstained.

A final text revising the bloc's 2021 climate law with the 2040 GHG goal will need to be negotiated and agreed with the European Parliament. If agreed, a revision clause would oblige the European Commission to assess the scope for EU states to use more international credits, up to 5pc of their post-2030 targets.

Ministers also said implementation of ETS 2 should be postponed by a year to 2028, following lobbying from Poland.

ETS 2 is currently scheduled to launch in 2027, with the option to delay to 2028 if energy prices are exceptionally high. The commission was due to decide a definitive launch date by 15 July 2026. But the proposal by ministers to delay by one year will have to be agreed by the European Parliament under the same law that includes the 2040 target — and this is expected by the end of 2025.

Poland welcomed the "strong" revision clause for the 2040 target, if technology or public support is not there, although Polish climate secretary Krzysztof Bolesta had pushed for "offsets" of up to 10pc to be specified. "We have a target that is not 90pc, but significantly lower," said Bolesta.

Czech environment minister Petr Hladik said he was "glad" that Prague — with France, Italy, Poland, Romania, Bulgaria, Slovakia and Hungary — had blocked adoption of a "destructive" 90pc target for 2040. Hungarian environment secretary Aniko Raisz had pushed for international credits to be counted earlier than 2036.

"We proposed that 5pc as a compromise," France's ecological transition minister, Monique Barbut, said, noting that France would not accept anything under 5pc.

Italian climate and energy minister Gilberto Pichetto Fratin had called for "at least 5pc" from 2031 — and through an EU purchasing mechanism. Italy also backed flexibility for member states to use a further 5pc to achieve national targets.

But German climate minister Carsten Schneider said 3pc was the maximum Germany could accept. And Dutch climate minister Sophie Hermans — noting the credit market's immaturity — said credits "must be of high quality and sourced from countries with strong climate ambitions".

Ministers on 5 November also approved the EU's nationally determined contribution (NDC) — the climate plan to be submitted before the UN Cop 30 climate summit in Belem, Brazil — seeking GHG cuts of 66.25-72.5pc by 2035, against a 1990 baseline. This was decided by "consensus", with none of the 27 member states objecting officially.

Danish climate and energy minister Lars Aagaard had called the meeting on 4 November, following previous failure to agree the targets. The NDC reiterates a previous statement of intent. Germany had called for a "strong, derived" NDC of 72.5pc, rather than the 66.25-72.5pc range.

By Dafydd ab Iago

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

04/12/25

Arab region warming at twice the global average: WMO

London, 4 December (Argus) — The Arab region is warming at twice the global average, with temperatures increasing by 0.43°C per decade from 1991 to 2024, a report from the World Meteorological Organisation (WMO) found today. The world experienced the hottest year on record in 2024. The average temperature across the Arab region in 2024 was 1.08°C higher than the 1991-2020 average, the WMO said. The Arab region saw "intense heatwaves and droughts as well as extreme rainfall and storms", the WMO added. The WMO's report, the inaugural State of the Climate in the Arab Region , covers 22 countries across north and east Africa and the Middle East and was compiled with the Economic and Social Commission for Western Asia and the League of Arab States. The Middle East and north Africa "are among the hottest regions in the world, and climate projections indicate a continued intensification of summer heat extremes in both subregions", the WMO said. The report also included regional climate projections from the UN Intergovernmental Panel on Climate Change. "If the current warming rate continues, mean temperature increase in the Arab region could reach 1.8°C with respect to the 1991-2020 average by 2050", the report found. A handful of climate plans — known as nationally determined contributions (NDCs) — submitted recently by Arab region countries underline the challenges that climate change poses for the region. NDCs submitted over the past few weeks by Bahrain, Qatar and Yemen all note the countries' vulnerability to climate change, including water scarcity. Of the 20 most water-scarce countries globally, 15 are in the Arab region, and climate change is compounding this, the WMO said. Qatar and Bahrain flagged in NDCs their water sectors as a source of emissions , including through power-intensive desalination processes. Bahrain this week noted its "water vulnerability as a challenge that is further intensified by climate change impacts", in its third NDC. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Qatar presents 2040 climate target to UN

04/12/25

Qatar presents 2040 climate target to UN

Edinburgh, 4 December (Argus) — Qatar has pledged to reduce its emissions by 42mn t of CO2 equivalent (CO2e) by 2040 from a 2019 baseline, with the oil and gas sector "at the forefront of national mitigation efforts". Qatar does not provide its total greenhouse emissions for 2019, but said its climate plan encompasses CO2, methane and nitrous oxide gases. It covers the energy sector — oil and gas, power and water — construction and industry, transport, waste and agriculture, forestry and other land use. Parties to the Paris Agreement were required to submit climate plans, known as nationally determined contributions (NDCs), for 2035 to the UN climate body UNFCCC this year. Qatar had previously targeted emission reductions of 25pc, or 37mn CO2e, by 2030, compared with a business-as-usual (BAU) scenario. BAU scenarios typically assume emissions based on current policies, leaving room for potential increases. The country's emission cuts in its oil and gas sector will rely on "deploying cleaner fossil fuel technologies, developing engineered sinks to store emissions, diversifying the energy mix, and driving operational excellence across existing facilities and infrastructure", according to its climate plan. Qatar is the world's largest LNG producer, with a production capacity of 77mn t/yr, according to QatarEnergy, and its economy is heavily reliant on hydrocarbon revenues. The country's climate plan highlights the country's vulnerability to response measures to mitigate climate change, resulting from its economy's reliance on hydrocarbons. "Qatar is actively working to reduce the socio-economic effects of global climate action," the plan said, adding that it seeks to balance climate goals with national sustainable development. "Despite many efforts and considering its role as a leading producer and exporter of natural gas, Qatar remains significantly vulnerable to climate response measures," it said. Qatar is part of the Arab Group, a negotiating group in UNFCCC climate talks, which is seeking to focus on cutting emissions from fossil fuels, rather than hydrocarbon production and consumption, through increased adoption of carbon capture technologies. The country said it plays "a pivotal role" in supporting other countries' targets by "reliably supplying them with a cleaner alternative to coal and oil and providing a critical backup for intermittent renewables". Qatar's climate plan sees the secure and affordable supply of lower-carbon energy as well as the deployment of carbon capture and storage (CCS) and the management of emissions of energy production as the focus to pursue sustainable development and climate action. The country considers itself to be among the leaders in CCS with its Ras Laffan project, and aims to capture 11mn t/yr of CO2 by 2035. Engineering firm Samsung C&T was recently awarded a contract to build a 4.1mn t/yr CO2 facility to process and store emissions from Qatar's LNG liquefaction plants. Qatar, in its climate plan, highlighted the country's water supply vulnerability to temperature increases and heat. The power and water sector accounts for a large share of the country's emissions. Water scarcity is also responsible for increasing greenhouse gas emissions (GHG) in Bahrain through desalination, although its energy sector remains the main source of emissions, according to the country's new climate plan. The country is heavily reliant on fossil fuels for its energy and revenues, while "limited land availability and competing land-use demands constrain large-scale deployment" for the development of solar energy. Rising demand over the peak summer months this year meant that Bahrain had to import LNG for the first time since commissioning its 800mn ft³/d onshore LNG receiving and regasification terminal in 2020. But it is looking at renewables options and is in talks with Saudi Arabia for a link to a large-scale solar facility. Bahrain said that response measures to climate change "may lead to economic losses that, in turn, hinder Bahrain's ability to pursue effective climate action and achieve broader sustainable development objectives." By Caroline Varin Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia proposes native forest management ACCU method

04/12/25

Australia proposes native forest management ACCU method

Mumbai, 4 December (Argus) — Australia's carbon market statutory body the Emissions Reduction Assurance Committee (Erac) has today released a proposal for a new carbon crediting method to enhance native forest management. The proposed Improved Native Forest Management in Multiple-use Public Native Forests (INFM) method aims to abate greenhouse gas (GHG) emissions by mitigating or reducing harvesting in multiple-use native public forests. Projects registered under the proposed method can generate Australian Carbon Credit Units (ACCUs), if approved. The government proposes at least a 20pc reduction in harvesting relative to baseline levels for INFM projects to receive ACCUs. Projects may have to cover a minimum of one entire forest region to reduce the risk of "carbon leakage" caused by harvesting from another area. Projects under the proposed methodology would have a reduced crediting period of 15 years, compared to the typical 25-year period for other land-based approaches. INFM projects would be required to ensure a 100-year permanence period to ensure long-term carbon sequestration. Stakeholder consultation on the proposed method will open from 2 January 2026 and will conclude on 30 January 2026. The INFM method is one the four new carbon crediting project methodologies proposed outside of government and prioritised for the ACCU scheme in October 2024 under a proponent-led model . The Australian carbon credit industry has been focusing on boosting future issuances to address an expected shift in the supply-demand balance within a few years. This has prompted the authorities to prioritise method approvals. By Shribalaji Shenbagaraj Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Australia to unlock ACCUs from government contracts

03/12/25

Australia to unlock ACCUs from government contracts

Sydney, 3 December (Argus) — Australia announced today a long-awaited decision to permanently unlock millions of carbon credit units (ACCUs) from multi-year government contracts, spurring secondary market trading. Companies with active carbon abatement contracts (CACs) with the government for a combined remaining volume of around 84mn ACCUs for fixed delivery will be able to exit their agreements if they meet certain requirements, the Clean Energy Regulator (CER) announced on 3 December. Firms will need to deliver at least 25pc of the outstanding volume of ACCUs under their contracts as of 1 January to receive a 60pc discount on their exit payment — referred to as buyer's market damages. They would then be able to sell the remaining 75pc contracted volume in the secondary market. Interested companies will need to submit an expression of interest by 30 June 2026, with permanent exit arrangements starting on 1 July 2026. But they would be able to deliver the minimum 25pc volume and make the exit payment with respect to the outstanding contracted volume by 31 December 2030. "This timeframe for fulfilling obligations by 31 December 2030 considers that most fixed delivery carbon abatement contracts were entered into between 2015 and 2020 for initial durations of seven to 10 years," the CER said. Any ACCUs that have been delivered from 1 January 2025 will contribute towards the eligibility for the discounted exit payment, the CER noted. Uncertainties after four exit windows The decision follows four exit windows between March 2022 and December 2024 that released around 13mn ACCUs from the CACs. The government was for years the largest buyer of ACCUs through the CACs, which were awarded in auctions carried out by the CER in 2015-23. The government introduced the exit window scheme in response to concerns about surging ACCU prices in late 2021 and early 2022. Spot ACCU prices collapsed in March 2022 following the announcement of the CAC exit arrangements, with the Australian Financial Markets Association (Afma) saying the action had shaken confidence in the ACCU market . Although a decision for permanent exit arrangements for fixed delivery CACs had been widely expected, there were uncertainties about the timeframe and terms of the changes. Under the fourth exit window, for instance, sellers had to deliver at least 20pc of the volume scheduled between July 2023 and 31 December 2024 and pay an exit fee to be released of the remaining volume under that period. All ACCUs delivered to the CER under the CACs since January 2023 have been held in the cost containment reserve, which can only be accessed by facilities under the safeguard mechanism at fixed prices that rise each year, starting at A$75/t CO2e for the 2023-24 year and at A$82.68/t CO2e for 2025-26 — levels not expected to be recorded in the secondary market within the next few years. Market participants had mixed views on the effects of the permanent exit arrangement, with some seeing it as bearish for prices as it mitigates uncertainties and confirms expectations that millions of ACCUs could be released. Others, however, expressed doubts on whether some sellers will be able to deliver 25pc of their outstanding contracted volumes until 2030. Trading prices for spot generic ACCUs started the day at A$35.75/t CO2e and reached as low as A$35.50/t CO2e, before rising following the announcement. Generic no avoided deforestation (No AD) ACCUs traded as high as A$36.30/t CO2e early in the afternoon, but prices fell back again. Argus assessed generic ACCU prices at A$35.55/t CO2e on 3 December, down by A$0.35/t CO2e on the day, while generic (No AD) prices were assessed at A$35.65/t CO2e, with more than 230,000t CO2e across around 20 spot transactions having been verified by the end of the day. This compares with 31 spot deals for 340,000t CO2e the whole of last week. By Juan Weik Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Idemitsu, Kanematsu start biofuel supply for ships

03/12/25

Idemitsu, Kanematsu start biofuel supply for ships

Osaka, 3 December (Argus) — Japanese refiner Idemitsu and trading house Kanematsu have started supplying biofuel mixed with fatty acid methyl ester (Fame) for oceangoing ships, to help reduce greenhouse gas (GHG) emissions in the maritime sector, the companies said today. In October, Idemitsu began bunkering cleaner fuel oil, which includes up to 24pc of Fame, for oceangoing ships, using Kanematsu' storage and shipping facilities in southern Japan's Kokura, a spokesperson at Idemitsu told Argus on 3 December. Under this partnership, Kanematsu procures Fame and blends it with fuel oil supplied by Idemitsu. The Fame mixture will cut GHG emissions by around 20pccompared with conventional fuel, Kanematsu said. Idemitsu aims to deliver a total of 5,000t of bio-blended fuel by March 2026, including supply for domestic vessels. This is equivalent to the amount of fuel consumed by a 300,000 dwt vessel during about 50 days of operation, the company added. The start of their commercial operations comes after Idemitsu's demonstration in northern Hokkaido , where it tested bunkering operations for coastal vessels with fuel containing 24pc Fame in 2023-24. Idemitsu is also gearing up to develop a supply chain for low-carbon methanol for vessels, aiming to start methanol bunkering from the April 2026-March 2027 fiscal year. By Motoko Hasegawa Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Argus Carbon

Benchmarks de precios del carbono, noticias sobre políticas y proyectos, y análisis exhaustivos, a diario.

Informe Argus Low Carbon Hydrogen Strategy

Tercera parte: América del Norte Un análisis en profundidad de los sectores, países y políticas claves que permiten el crecimiento del hidrógeno.

Argus Hydrogen and Future Fuels

El punto de vista global sobre el hidrógeno y los mercados de productos derivados.

Argus LNG Daily

Acceda a las últimas evaluaciones del precio al contado de GNL, noticias del mercado y análisis independientes.

Argus North American Natural Gas Forward Curves

Herramienta de valoración de mercado independiente para respaldar las decisiones de inversión y negociación en los mercados de gas natural de Norteamérica.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more