Today’s ESG Updates
- Carbon credit coalition launched: Britain, Kenya, and Singapore promote clearer guidelines to boost carbon credit use before COP30.
- EU offers energy price relief: New rules grant temporary electricity discounts to heavy industries with green investment conditions.
- Trump eases Iran oil sanctions: Relaxed U.S. stance on China’s Iranian oil purchases causes oil prices to drop 6%, sparking tensions.
- NATO military spending raises concerns: Increased EU defense budgets risk undermining climate and social priorities.
Britain, Kenya, and Singapore release new coalition to promote carbon credits
A new coalition has been launched by Britain, Kenya and Singapore to encourage companies to purchase carbon credits by establishing guidelines for buyers. Companies can purchase carbon credits to offset their emissions, though the rules for how they can utilise said carbon credits are not well-established yet. Britain, France, Kenya, Singapore and Panama have recently stated their plans to settle on an agreement on basic principles for businesses to abide by the upcoming COP30 in Brazil in November. This was agreed upon to encourage demand for a product that may channel billions of dollars of climate finance to countries in need. Since 2021, the total number of credits used by buyers each year has remained at 160M, though the number of buyers has fallen.
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Further reading: Britain, Kenya, Singapore lead campaign to boost company demand for climate credits
New EU rules to provide temporary price relief for heavy industries
New EU state aid rules, which are to be announced today, will provide temporary electricity price relief for heavy industries. As part of the Commission’s goal to support Europe’s suffering markets with its Clean Industrial Deal, the new rules state that companies can benefit from the electricity price relief for up to three years until December 31, 2030. The EU Commission draft stated that the relief will not cover more than half than of the yearly average wholesale price and not more than 50% of the company’s annual electricity consumption. Member states will also be able to choose the maximum level of state aid, but they will require Commission approval if the funding gap exceeds €200M ($232.4M), or 10% of the project’s budget. Energy-intensive industries will need to make investments using part of the state aid that “contribute to the green transition”. For state aid cases, the Commission will conduct a timely assessment of state aid cases for nuclear supply chains and technologies, including for small modular reactors. Companies can stay updated on the latest policies and regulations using ESG tools.
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Further reading: Heavy industries to get power price relief under new EU rules, draft document shows
Trump Relaxes Sanctions for China’s Iranian Oil Purchases
Trump has recently stated that China can continue to purchase Iranian oil after Israel and Iran agreed to a ceasefire. Following the ceasefire announcement, Trump’s comments about allowing China’s purchases bore a bad sign for oil prices, which dropped by almost 6%. Previously, Trump imposed waves of Iran-related sanctions on China, and the relaxation of these sanctions signifies a return to lax enforcement standards by the U.S. However, larger purchases of Iranian oil by China and other consumers may spark tensions with U.S. ally, Saudi Arabia, which is the world’s largest oil exporter.
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Further reading: Trump signals shift in policy, allows China to buy Iranian oil
Europe’s focus on military spending may jeopardise social and environmental efforts
The head of NATO recently reported that all 32 members have agreed to increase weapons spending. Experts warn that Europe risks prioritising militarism over social and environmental security, undermining climate mitigation and social programmes which are consistently underfunded. The NATO proposals suggest that members would increase spending to 3.5% of GDP for “hard defence” including tanks, bombs and other military hardware, while devoting an extra 1.5% to more security including cyber threats and military mobility. To simply meet the 3.5% target, EU NATO members will need to collectively source an extra €360B per year for military spending. Furthermore, analyses show that the 5% target requires these members to increase spending by €613B per year, which significantly exceeds the annual shortfall in meeting the bloc’s green and social goals, which stands at an estimated €375B to €526B. These military buildups planned by NATO members, excluding the U.S., may increase emissions by almost 200M tonnes per year.
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Further reading: Europe’s pledge to spend more on military will hurt climate and social programmes
Editor’s Note: The opinions expressed here by the authors are their own, not those of impakter.com — Cover Photo Credit: Haim Charbit
