India’s Varaha secures finance for CO2 removal projects

: Emissions
26/02/04

Indian carbon project developer Varaha has closed an initial $20mn tranche of a $45mn financing round intended to help scale its carbon dioxide removal (CDR) projects, the firm said on 4 February. Varaha also aims to use this second growth stage to pass on its biochar know-how to partners worldwide, it said today.

Varaha today announced a $45mn series B financing round — an advanced stage of investment for a start-up company that has proven early traction and is looking to scale. It has already closed an initial tranche of $20mn, with the financing led by private equity firm WestBridge Capital.

The developer aims to strengthen its scientific research capabilities, as well as its measurement, reporting and verification (MRV) processes. It also plans to scale its services to partners worldwide, it said.

As part of its scaling-up operations, Varaha has launched a biochar-focused partnership model for industrial operators, called the Varaha Industrial Partners Programme (VIPP). Through VIPP, partners with gasification capabilities and access to sustainable biomass will be able to leverage Varaha's expertise in MRV and carbon credit origination. As part of such partnerships, Varaha will train partner staff, install sensors, implement MRV systems and bring credits to the market.

The VIPP is already operational, with current partners including a project with a large cashew company in west Africa, multiple agribusiness partners in India, and a major Indian steel company that has decarbonisation goals, Varaha said.

Varaha has four main types of CDR projects — biochar projects, afforestation, reforestation and revegetation projects, regenerative agriculture projects, and enhanced rock weathering projects. It has signed long-term offtake deals with companies including technology giants Microsoft and Google, as well as "a major US-based aviation company", Varaha said. German airline Lufthansa is one of Varaha's offtake counterparties, WestBridge said.

"Varaha has built… deep scientific credibility in a nascent industry alongside a commercially viable business model," WestBridge co-founder and managing partner Sandeep Singhal said. WestBridge believes in Varaha's "potential to shape the next phase of climate infrastructure worldwide", Singhal said. This deal is WestBridge's first climate technology investment.

Varaha sold 100,000 CDR credits to Microsoft in January, as well as 100,000 and 30,000 credits to Google and trading firm Louis Dreyfus, respectively, in 2025.

Venture capital firm RTP Global also took part in the latest financing round, having led Varaha's series A funding. RTP Global made a "super pro-rata investment", Varaha said in its statement. Agritech investment firm Omnivore was also an early stage investor in Varaha and participated in the series B round.

By Erisa Senerdem and Kiara Campagne Nieva

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26/02/04

UK marginally narrows sixth carbon budget shortfall

London, 4 February (Argus) — The gap between the UK's projected greenhouse gas emissions and meeting the country's sixth carbon budget has narrowed by 42mn t of CO2 equivalent (CO2e) since last year, latest government data show. Government projections now assume a shortfall in the UK's emissions cuts of 737mn t CO2e against its sixth carbon budget of 965mn t CO2e, which covers 2033-37. This is down from a projected shortfall of 779mn t CO2e in last year's assessment. The country is expected to meet its fourth (2023-27) and fifth (2028-32) carbon budgets comfortably, with projected headroom of 126mn t CO2e and 86mn t CO2e, respectively, against targets of 1.95bn t CO2e and 1.73bn t CO2e. This is up from surpluses of 104mn t CO2e and 83mn t CO2e in last year's projections. The estimates stem from a projected 25pc fall in UK emissions in 2023-50, calculated on the basis of policies implemented or close to being finalised as of June 2025. New policies included since last year's projections include the Warm Homes Local Grant, the third wave of the Social Housing Decarbonisation Fund, and collection and packaging reform policies affecting the waste sector. The new policies are projected to contribute 0.7mn t CO2e to emissions savings in the fourth budget, 9mn t CO2e in the fifth and 14mn t CO2e in the sixth. The sixth budget is the first to include emissions from UK international aviation and shipping, adding 24mn t CO2e to the 1990 base year emissions on which carbon budget calculations are based. The UK must set its seventh carbon budget, covering 2038-42, by June. It has a legally binding target of net zero emissions by 2050. The government has also updated projected average carbon prices under the UK emissions trading scheme (ETS), which it used as part of its new carbon budget calculations. The figures are not forecasts, but are designed for use for modelling purposes, and do not take into account any potential changes to the scope of the scheme or linkage to the EU ETS, negotiations on which continue. The government models four scenarios — one assuming decarbonisation in line with achieving net zero emissions by 2050; one assuming low fossil fuel prices and low economic growth; one assuming low fossil fuel prices and high economic growth; and one assuming "unobservable market factors" in the early years of the projections. These produce a range of £22-47/t CO2e in 2026, rising to £25-66/t CO2e in 2030, £74-178/t CO2e in 2040 and £167-298/t CO2e in 2050. The trajectories become steeper over time as carbon abatement options become more expensive, the government said. These have changed significantly from last year's ranges — £62-103/t CO2e in 2026, £50-107/t CO2e in 2030, £94-151/t CO2e in 2040 and £85-154/t CO2e in 2050 — because of adjustments to underlying business-as-usual emissions projections and corresponding marginal abatement cost curves, and assumptions relating to the power sector and interconnectors, the government said. By Victoria Hatherick UK ETS government price projections £/t CO2e Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Biomass needed for steel decarbonisation: Kobelco

26/02/04

Biomass needed for steel decarbonisation: Kobelco

Singapore, 4 February (Argus) — Biomass is one pathway that cannot be ignored for the decarbonisation of steel manufacturing, the trading arm of Japanese steelmaker Kobe Steel (Kobelco) said at the Argus Biomass Asia Conference on 2-4 February. The steelmaking sector can "no longer ignore" the role of biomass as a viable pathway, in a context of tightening sustainability policies pressuring heavy industries to decarbonise, Kobelco Trading Australia marketing and resource trading manager Kazuyuki Nakamura said in Singapore. Japan's regulatory environment has accelerated sharply toward clearer timelines for emissions reduction in the past two years, and biomass is one of the few immediately deployable options. Decarbonisation "has to be very seriously considered" in steel production, Nakamura said. And biomass is one of the routes that companies "are already working on", he added. Kobelco is evaluating different feedstocks from forestry byproducts to agricultural residues as substitutes for fossil fuels. It plans to use torrefied pellets in its steelmaking process, in collaboration with cement manufacturer Mitsubishi Ube Cement (MUCC). MUCC has developed torrefaction technology to make 60,000 t/yr of torrefied pellets at its Ube factory. The Japanese steelmaker has also signed an agreement with Malaysian forestry company Samling Strategic to start producing torrefied pellets at a facility in Sarawak, Malaysia, with an initial production capacity 300,000 t/yr. The firms aim to scale up output to 1mn-2mn t/yr in the future. The Australian arm of Kobelco is targeting the development of both biochar and torrefied pellet production in Australia, Nakamura said. By Marta Imarisio Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

US biofuel tax rule may help resellers, farmers: Update

26/02/03

US biofuel tax rule may help resellers, farmers: Update

Updates with details from draft regulations, industry reactions New York, 3 February (Argus) — President Donald Trump's administration expects to update the rules around a low-carbon fuel tax credit to allow more types of fuel sales to qualify and to encourage farmers to grow crops more sustainably. The US Department of Treasury on Tuesday released a long-awaited proposal spelling out how to qualify for the "45Z" tax credit, which kicked off in 2025 and was extended by Republicans' tax and energy bill last summer. The general structure of the credit — which offers a sliding scale of subsidies to alternative fuel producers based on greenhouse gas emissions — is known, but industry has been pushing for more clarity on thorny eligibility questions. The proposed regulations Tuesday clarify, for instance, that producers can claim 45Z tax breaks for fuel that is sold to intermediaries. Sales to wholesalers or traders are common in fuel markets, but lawyers interpreted partial guidance issued in the waning days of former-president Joe Biden's term as potentially requiring that fuel must be sold to end users to qualify. The fuel sale question had left many refiners unclear as to how to qualify for an incentive crucial to their margins and had snarled logistics in key biofuel markets. Major biofuel producers idled facilities last year too, in part because of the lack of final rules around what was then a new and unfamiliar tax break. Producers of biofuels such as ethanol, biodiesel and sustainable aviation fuel have been closely watching for the 45Z tax guidance, especially since the Trump administration is late setting new biofuel blend mandates and Congress has punted on a proposal to allow a higher-ethanol gasoline blend year-round. The proposed regulations, which will go through a public comment period that includes a 28 May public hearing, will still need to be finalized. But they signal how the Trump administration is thinking about the complicated incentive and will allow producers to rely on existing guidance when preparing their tax returns until final regulations are available. "I think there is going to be a significantly greater sense of certainty going forward — obviously not absolute certainty — but I think people will be willing to start negotiating these contracts assuming the proposed regulations get finalized in substantially the same form," said Liz McGinley, chair of the tax department at law firm Bracewell. More certainty from the proposed rules could lead to "more successful and economically reasonable" tax credit transfer sales too, McGinley said. Some biofuel makers have already signed multimillion-dollar deals to sell their 45Z credits at a discount to their book values, promising revenue from the incentive even before tax season. Others have waited for more clarity. Soil to subsidy Some details still depend on final rules, however. The proposal signals that the Trump administration expects to eventually credit more on-farm emissions reductions, which would effectively reward biofuel producers that source sustainably grown crops with larger subsidies. The Biden administration had released an initial calculator so that corn, soybean and sorghum farmers could track the climate benefits of practices like cover crops and no-till agriculture. But it was unclear whether Trump, a skeptic of climate science, would continue the effort at all. The Tuesday proposal was unexpectedly far-reaching in those plans for rewarding sustainably grown crops, suggesting that the agriculture program could mean larger tax breaks not just in the future but for fuel sold last year. A tool for incorporating carbon reductions from farm practices will "likely" be added to a Department of Energy emissions tracking model this year, the Tuesday proposal said. Treasury expects to issue additional recordkeeping and verification requirements too. "We have a seat at the table, but we do not have the details yet," said Mitchell Hora, an Iowa farmer and the chief executive of soil health tracking platform Continuum Ag. Biofuel and farm groups were encouraged by the proposal — particularly the clarity around fuel sales — but said they needed more information too, including an updated version of the Department of Energy (DOE) emissions tracking model. A Treasury official told Argus that DOE was working on model updates "in the near term". DOE did not immediately respond to requests for comment. The Department of Agriculture said that fuel producers should treat the farm emissions tracking tools issued under the Biden administration as "preliminary and should not rely upon them". Legislation signed by Trump in 2025 already restricts the 45Z credit starting this year to US producers of fuels sourced from North American feedstocks, and the Tuesday proposal signals that the administration could require additional recordkeeping for feedstocks imported from Canada and Mexico. The law also changed how regulators track land use emissions, effectively hiking subsidies this year for crop-based fuels even before accounting for on-farm practices. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

US biofuel tax rule to benefit resellers, farmers

26/02/03

US biofuel tax rule to benefit resellers, farmers

New York, 3 February (Argus) — President Donald Trump's administration expects to update the rules around a low-carbon fuel tax credit to allow more types of fuel sales to qualify and to encourage farmers to grow crops more sustainably. The US Department of Treasury on Tuesday will release a long-awaited proposal spelling out how to qualify for the "45Z" tax credit, which kicked off in 2025 and was extended by Republicans' tax and energy bill last summer. The general structure of the credit — which offers a sliding scale of subsidies to alternative fuel producers based on greenhouse gas emissions — is known, but industry has been pushing for more clarity on thorny eligibility questions. The proposed regulations Tuesday will clarify, for instance, that producers can claim 45Z tax breaks for fuel that is sold to intermediaries, according to Treasury officials. Sales to wholesalers or traders are common in fuel markets, but lawyers interpreted partial guidance issued in the waning days of former-president Joe Biden's term as potentially requiring that fuel must be sold to end users to qualify. The fuel sale question had left many refiners unclear how exactly to qualify for an incentive crucial to their margins and snarled logistics in key biofuel markets. Major biofuel producers idled facilities last year too, in part because of the lack of final rules around what was then a new and unfamiliar tax break. 45Z tax guidance has been closely awaited by producers of biofuels like ethanol, biodiesel and sustainable aviation fuel, especially as the Trump administration is late setting new biofuel blend mandates and Congress has punted on a proposal to allow a higher-ethanol gasoline blend year-round. The proposed regulations, which will go through a 60-day public comment period after publication in the Federal Register , will still need to be finalized. But they signal how the Trump administration is thinking about the complicated incentive, and will allow producers to rely on existing guidance when preparing their tax returns until final regulations are available. Some details will depend on final rules, however. The proposal will signal that the Trump administration expects to eventually credit more on-farm emissions reductions, which would effectively reward biofuel producers that source sustainably grown crops with larger subsidies, Treasury officials said. The Biden administration had released an initial calculator so that corn, soybean and sorghum farmers could track the climate benefits of practices like cover crops and no-till agriculture. But it was unclear whether Trump, a skeptic of climate science, would continue the effort at all. Treasury expects to publish additional guidance on recordkeeping and verification requirements and will also need to coordinate with other agencies to fully incorporate new data on agricultural practices into a government model for tracking emissions. Legislation signed by Trump last year already restricts the 45Z credit starting this year to US producers of fuels sourced from North American feedstocks. The law also changed how regulators track land use emissions, effectively hiking subsidies this year for crop-based fuels. By Cole Martin Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Australia pledges $42mn to boost EV sales

26/02/03

Australia pledges $42mn to boost EV sales

Sydney, 3 February (Argus) — The federal government of Australia will spend $A60mn ($42mn) to subsidise loans for electric vehicles (EVs), in a bid to increase the uptake of lower-emissions cars. Money allocated by the federally-funded agency Clean Energy Finance (CEFC) will go towards subsidising interest rates for new EVs available for purchase through Hyundai Capital Australia, an arm of the South Korean carmaker, energy minister Chris Bowen said on 3 February. Discounts of 0.5-1pc will be offered for loans on eligible Hyundai- and Kia-branded EVs, with a 1pc discount on a A$70,000 loan over five years cutting A$1,900 in interest costs, Bowen said. Transport remains a major source of Australia's emissions, with 98.7mn t of CO2 equivalent (CO2e) in the year to 30 June 2025, or 22.5pc of total emissions of 437.5mn t . Canberra's New Vehicle Efficiency Standard (NVES) is taxing manufacturers based on CO2e emissions , which it projects is likely to drive up EV sales. But transport emissions rose by 0.3pc to 98.7mn t CO2 equivalent (CO2e) in 2024-25 on the back of a rise in diesel consumption for road transport and jet fuel demand. A ban on new gasoline and diesel registrations may be needed to reach a goal of 50pc of new car sales being EVs by 2030 to drive down emissions, industry body the EV Council has said. But 2025 was a record for EV sales, with 156,000 purchased. But about one-third were plug-in hybrid vehicles which can also run on gasoline or diesel. The NVES has provided policy certainty and increased availability of EVs in Australia but has so far had little effect on EV demand, the Federal Chamber of Automotive Industries (FCAI) has said. FCAI data show just 8.3pc of new vehicle sales were battery EVs last year. Australia's fuel tax rebate scheme has also been targeted by lobbyists demanding it be capped to reduce diesel demand , but industry insists that the road-user tax should not apply to businesses not using public infrastructure. Australia's gasoline sales are dipping. Gasoline sales averaged 271,000 b/d for January-November 2025, compared with 278,000 b/d during January-November 2024 and 276,000 b/d during January-November 2023, according to data from Australian Petroleum Statistics. Consumption was 298,000 b/d for the same period in 2019 before the Covid-19 pandemic. By Tom Major Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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India’s Varaha secures finance for CO2 removal projects

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