This week’s energy and economic landscape was marked by pivotal policy shifts, regulatory updates, and market turbulence, as governments and businesses navigate a rapidly evolving environment.

Carbon Markets

• Germany Approves Long-Awaited EU ETS Reform
  Germany has officially incorporated the latest EU Emissions Trading System (ETS) regulations into national law, closing a prolonged legislative gap. This move ensures that Europe’s largest economy aligns with updated carbon pricing mechanisms designed to accelerate emissions reductions and strengthen market stability.
• Carbon Crediting for Peatland Rewetting Under Scrutiny
  A new study has raised concerns that existing carbon crediting methodologies for peatland rewetting may overestimate climate benefits. Researchers warn that while these projects can store carbon, degradation risks over time could undermine their long-term effectiveness. The findings add pressure on regulators to refine carbon credit accounting and ensure projects deliver genuine emissions reductions.

Renewables & Biofuels

• German Wind Output Falls to Four-Year Low, Impacting Renewable Firms
  Germany’s wind power generation has plunged to its lowest levels since 2020, straining profitability for major renewable operators. The unexpected slowdown in wind speeds has increased reliance on fossil fuels, pushing up electricity prices and highlighting the ongoing challenge of grid stability during seasonal fluctuations. Energy giants such as Ørsted and RWE are bracing for financial setbacks, although higher wholesale power prices may provide some compensation.
• Denmark Pauses Offshore Wind Tenders to Revise Subsidy Model
  The Danish government has announced a temporary halt to all offshore wind tenders, citing an ineffective subsidy-free framework. With rising costs and supply chain bottlenecks putting pressure on the industry, policymakers now plan to introduce state-backed financial support to stimulate new investments. The government has also unveiled plans to co-finance a hydrogen pipeline to Germany, aiming to bolster cross-border green energy infrastructure by 2030.
• EU Ends Energy Crisis Gas Price Cap
  The European Union has allowed its emergency gas price cap to expire, signalling confidence that the worst of the energy crisis has passed. Introduced in response to soaring prices following Russia’s gas supply cut-offs in 2022, the cap was never triggered. With European gas storage levels remaining high and alternative supply sources secured, policymakers see no immediate need to renew the intervention. However, market analysts warn that geopolitical risks and demand fluctuations could still drive volatility.

Macroeconomics & Policy

• Trump Imposes Sweeping Tariffs on Canada, Mexico, and China
  US President Donald Trump has announced new tariffs on key trading partners, citing national security and economic sovereignty concerns. Canada and Mexico face a 25% tariff on imports, while Chinese goods will be subject to a 10% levy. Markets reacted sharply, with the Mexican peso and Canadian dollar slipping, while global stocks saw declines. Both Canada and Mexico have vowed retaliatory measures, raising fears of a renewed trade war. Trump has also hinted at similar actions against the European Union, further unsettling investors.
• US Democratic Lawmakers Challenge Trump’s Block on Clean Energy Grants
  A group of Democratic senators has demanded explanations from federal agencies over the freezing of clean energy grants. Lawmakers argue that the decision violates federal spending laws and could drive up energy costs for American households. The move follows the administration’s broader strategy of prioritising fossil fuel expansion, sparking concern among renewable industry advocates and state governments reliant on federal funding for green energy projects.
• New Zealand Coalition Partner Suggests Exiting Paris Climate Agreement
  New Zealand’s ACT Party leader and incoming Deputy Prime Minister, David Seymour, has floated the idea of withdrawing from the Paris Climate Agreement. While the government remains committed to emissions reductions, Seymour argued that with major global players reconsidering their commitments, New Zealand should reassess its participation. His remarks signal potential policy friction within the ruling coalition and could impact the country’s climate targets ahead of the next election.

‍

Looking Ahead

‍As regulatory landscapes shift and global markets react to policy decisions, the coming weeks will be critical for energy transition efforts, carbon pricing strategies, and economic stability. Stay tuned for next week’s updates on the latest developments shaping the energy sector.This version maintains the original meaning while adapting spelling, punctuation, and phrasing to British English conventions. Let me know if you need any further refinements!