Cameco has signed a major long-term uranium supply agreement with India. The Canadian uranium giant will deliver nearly 22 million pounds of uranium ore concentrate (U3O8) to India over nine years. The contract is valued at about $2.6 billion.
Deliveries will begin in 2027 and continue through 2035. The uranium will power India’s growing fleet of nuclear reactors. The agreement strengthens energy ties between Canada and India at a time when nuclear power is gaining fresh momentum worldwide.
A Strategic Boost for India–Canada Relations
The agreement was celebrated in New Delhi in the presence of Narendra Modi, Mark Carney, and Saskatchewan Premier Scott Moe. Carney’s 2026 visit marked a reset in India–Canada relations.
As we have read and heard earlier, diplomatic ties have been strained in recent years. However, both leaders described this visit as the start of a “new era of partnership.”
The uranium deal was one of the key outcomes of the visit. In addition, both countries renewed efforts to finalize a Comprehensive Economic Partnership Agreement (CEPA) by the end of 2026.
India and Canada also set a bold trade target. They aim to increase bilateral trade to $50 billion by 2030, up from nearly $9 billion in 2024–25.
Both sides agreed to deepen cooperation in:
Critical minerals
Renewable energy
Energy security
Advanced nuclear technologies, including SMRs
This uranium agreement fits directly into that broader economic and strategic framework.
India’s Nuclear Ambitions and Uranium Demand
India currently operates 24 nuclear reactors. However, the country has much larger plans. Under its long-term energy roadmap, India aims to reach 100 gigawatts (GW) of nuclear capacity by 2047.
The Union Budget 2025–26 placed nuclear energy at the center of this strategy. The government launched the Nuclear Energy Mission for Viksit Bharat. This mission focuses on expanding nuclear capacity, cutting fossil fuel use, and boosting energy security.
A key part of the plan is the development of small modular reactors (SMRs) that are smaller, more flexible, and easier to deploy. They can power remote regions and replace retiring coal plants.
The government has allocated $2.4 billion to build at least five indigenously designed SMRs by 2033. This move signals strong policy backing for advanced nuclear technology.
As electricity demand rises due to industrial growth and data centers, nuclear power offers a stable, round-the-clock, low-carbon energy source. Therefore, securing a long-term uranium supply is critical for India’s expansion goals.
For Cameco, the deal aligns perfectly with its disciplined contracting model. The company avoids chasing short-term spot fces. Instead, it focuses on securing long-term contracts with reliable customers.
By the end of 2025, Cameco had about 230 million pounds of uranium under long-term contracts. This provides strong revenue visibility for years.
The new India agreement was already included in the company’s disclosed long-term contracting volumes and price sensitivity analysis. The estimated $2.6 billion value is based on a uranium price of $86.95 per pound, reflecting late February 2026 spot price averages.
Uranium: The Backbone of Cameco’s Business
In 2025, the company reported strong financial results. Earnings before income tax in the uranium segment rose by $50 million year over year. Adjusted EBITDA increased by $76 million.
Source: Cameco
Although fourth-quarter earnings dipped slightly due to sales timing, underlying pricing remained strong. But operationally, Cameco delivered solid production results:
At Cigar Lake, production reached 19.1 million pounds (100% basis), exceeding annual expectations.
At McArthur River/Key Lake, production totaled 15.1 million pounds, meeting revised guidance.
Average realized uranium prices improved as market-linked and escalated contracts reflected higher pricing.
Source: Cameco
Canada’s Expanding Uranium Role
Canada is one of the world’s leading uranium producers. Saskatchewan hosts some of the richest uranium deposits globally. Major mines such as Cigar Lake, McClean Lake, and Rabbit Lake have supplied uranium for decades. Recently, Canada approved its first large-scale uranium mine in over 20 years.
The federal and provincial governments cleared the Phoenix In Situ Recovery (ISR) uranium project. This project is part of Denison Mines’ Wheeler River development in Saskatchewan. Approval allows the construction of both the mine and its processing facilities.
This decision signals Canada’s commitment to supporting global nuclear growth. As more countries expand nuclear capacity, demand for a secure uranium supply continues to rise.
A Deal With Long-Term Impact
Around the world, nuclear energy is regaining policy support. Countries are seeking reliable, low-carbon power to meet climate targets and rising electricity demand. India stands out as one of the fastest-growing nuclear markets. Its target of 100 GW by 2047 represents a massive expansion from current levels.
To reach that goal, India will need a steady uranium supply, new reactor builds, and strong international partnerships. The Cameco deal addresses one key piece of that puzzle: fuel security.
Overall, this agreement goes beyond a simple supply contract. It reflects deeper economic and strategic alignment between the two major democracies. While India secures uranium to power its future reactors, Canada strengthens its role in the global nuclear fuel market. Meanwhile, bilateral trade and diplomatic ties gain fresh momentum.
As nuclear energy returns to the global spotlight, long-term fuel partnerships will become even more important. In that context, Cameco’s $2.6 billion agreement with India marks a decisive step toward a more secure and low-carbon energy future for both nations.
Google has announced a new climate finance commitment. The company pledged $50 million by 2030 to fund projects that aim to eliminate superpollutants. These are greenhouse gases (GHGs) that heat the atmosphere much faster than carbon dioxide (CO₂) .
Google said it will work alongside other corporations in a collective effort called the Superpollutant Action Initiative. In total, participating companies have committed $100 million to this cause.
Short-lived GHGs include methane, fluorinated gases like hydrofluorocarbons (HFCs), and black carbon. These gases trap heat in the atmosphere far more effectively than CO₂ in the short term, making them a key target for near-term climate action.
“As we continue to support superpollutant elimination projects, we’ll ensure our impact is catalytic and accurately measured and pave the way for additional companies and governments to follow. Since common superpollutants like methane are shorter lived than CO2, taking action against them helps address near-term rather than long-term warming, complementing our ongoing carbon removal efforts.”
What Are Superpollutants and Why They Matter
Superpollutants are greenhouse gases with high global warming potential (GWP). This means that each ton of these gases can trap much more heat in the atmosphere than a ton of CO₂.
Methane (CH₄), for example, warms the planet about 80 times more than CO₂ over a 20-year period. Other short-lived GHGs, such as HFCs used in refrigeration, can be thousands of times more potent per ton than CO₂.
Unlike CO₂, which can stay in the atmosphere for centuries, many short-lived GHGs break down much faster. Reducing them can deliver significant cooling benefits in the near term due to their high potency and short lifespan.
Scientists say that superpollutants, like methane and black carbon, cause almost half of all global warming observed so far.
Source: IPCC
How Google’s Bold Pledge Fits Into Broader Climate Goals
Google will spend $50 million to fund projects that remove short-lived GHGs worldwide by 2030. The company plans to back initiatives that make a real difference for the climate. It also aims to help more companies and governments take similar steps.
The pledge focuses on both methane and fluorinated gases, which come from sources such as:
landfills and waste operations
refrigeration and air-conditioning systems
industrial leaks and fuel systems
This funding boosts the tech giant’s climate work. It includes buying carbon removal and investing in clean energy.
Source: Google
The company aims to reach net‑zero emissions across all operations and its supply chain by 2030. This includes running on carbon‑free energy 24/7 and cutting emissions from data centers, offices, and supply chains.
By 2024, Google’s data centers ran on an average of 64% carbon‑free energy, even as electricity use grew 27% due to AI and other services. The company has also avoided 44 million tonnes of CO₂-equivalent emissions since 2011 through renewable energy and efficiency measures.
Source: Google
In 2024, Google added 2.5 GW of clean energy from new projects and signed contracts for 8 GW more, the largest annual total in its history. These projects include geothermal and nuclear SMRs in Asia and the U.S.
The $50 million superpollutant pledge complements these efforts. Reducing superpollutants gives fast climate benefits while Google continues long-term CO₂ reductions and clean energy expansion.
Partnership Power: Corporates Team Up for Global Impact
Google is not acting alone. A group of top global companies, including Amazon, Salesforce, Autodesk, Figma, JPMorgan Chase, and Workday, launched the Superpollutant Action Initiative with Google. They will invest $100 million through 2030 to reduce superpollutants.
The initiative will fund high-impact projects worldwide that cut these short-lived but potent pollutants. The goal is to deliver climate, health, and economic benefits while accelerating progress where it’s most needed.
The tech giant has also signed partnerships with third‑party organizations that focus on reducing these planet-warming GHGs.
In 2025, Google teamed up with Recoolit and Cool Effect. Their goal is to cut over 25,000 tons of superpollutants by 2030. These partnerships focus on capturing and destroying harmful gases. This includes HFCs from cooling systems in Indonesia and methane from landfills in Brazil.
Recoolit, an Indonesian company, has partnered with Google. They will sell 250,000 carbon credits. These credits come from destroying refrigerant gases found in HVAC systems.
Moreover, Google and its partners backed a project with Vaulted Deep. This project aims to permanently remove 50,000 tonnes of CO₂ and methane emissions. They use technology that injects organic waste underground for storage.
The tech giant’s partnerships aim to reduce superpollutants. They also strengthen the science behind measuring and certifying these efforts.
Near‑Term Impact, Long‑Term Strategy
Climate scientists emphasize that reducing the pollutants can produce rapid climate benefits. Because these gases are potent but short‑lived, cutting them can slow warming quickly, within years rather than decades.
Analysts and climate assessments show that cutting methane quickly can slow warming. Some studies suggest that strong reductions could lower global temperature rise by about 0.4–0.5 °C by 2050. This is compared to a scenario without these cuts.
Source: Global Methane Initiative
A peer-reviewed study found that cutting global methane by 40% by 2050 could lower warming by about 0.4 °C by mid-century. Bigger reductions might push this down to 0.5 °C during that time.
Superpollutant mitigation also has public health benefits. Methane and black carbon contribute to ground‑level ozone and air pollution, which can cause respiratory and cardiovascular issues. Cutting them can improve local air quality while also addressing climate change.
Google and its partners plan to track and report the impact of funded projects regularly. The Superpollutant Action Initiative will work with scientists and research groups. They aim to create global plans to boost action.
Markets and Money: Carbon Credits Meet Corporate Action
Google’s pledge comes at a time of rising corporate climate commitments worldwide. Many companies are boosting their spending on carbon credits. They are also investing in carbon removal technologies and emissions measurement tools.
Many corporate climate efforts aim to cut CO₂ emissions. However, superpollutants are now in the spotlight. Reducing them can quickly improve the climate, while also supporting long-term CO₂ strategies.
Compliance systems like emissions trading schemes now also recognize the role of powerful greenhouse gases beyond carbon dioxide.
Google teaming up with big companies shows that corporate collaboration on climate issues is increasing. This group aims to scale funding and knowledge sharing on superpollutants at a global level.
A Tactical Move for Near‑Term Climate Impact
Google’s $50 million pledge to reduce the GHGs through 2030 highlights a growing focus on near-term climate action.
Superpollutants, though short-lived, have outsized warming effects that make them a critical target for climate mitigation. Google and its partners fund elimination projects and work with experts and non-profits. They aim to speed up progress on global warming beyond what CO₂ reductions can achieve alone.
This initiative also reflects corporate climate strategy trends. As markets for carbon credits and climate solutions expand, companies are committing capital and resources beyond traditional carbon focus areas. In doing so, they aim to bring scalable, measurable progress in areas that can deliver both immediate and long-lasting climate benefits.
The United States took a major step toward the next generation of nuclear energy after the U.S. Nuclear Regulatory Commission approved a construction permit for TerraPower’s first Natrium reactor.
The permit allows the company to begin building Kemmerer Unit 1, a commercial-scale advanced nuclear power plant in Wyoming. Notably, this is the first advanced reactor project in the U.S. to receive such approval, marking an important milestone for the future of clean energy and nuclear innovation.
Developed by TerraPower in partnership with GE Vernova Hitachi Nuclear Energy, the Natrium system combines a 345-megawatt sodium-cooled fast reactor with a molten salt energy storage system. The project is also supported through the U.S. Department of Energy Advanced Reactor Demonstration Program.
With regulatory approval secured, TerraPower plans to begin construction within weeks and aims to complete the plant by 2030.
A Long Regulatory Journey Reaches a Breakthrough
Securing approval for a new nuclear design is a rigorous and lengthy process. TerraPower spent more than four years working closely with regulators to reach this stage.
The company first engaged with the NRC through extensive pre-application consultations. These discussions helped refine the reactor’s design and ensured regulators fully understood the new technology. TerraPower then submitted its official construction permit application in March 2024, and the NRC formally accepted the filing in May 2024.
Initially, the regulator expected the review process to take 27 months. However, the timeline moved faster than anticipated.
Several factors helped accelerate the review:
TerraPower submitted a comprehensive technical application.
The company responded quickly to regulator questions.
NRC staff prioritized the project’s review.
Federal policies encouraged faster licensing of advanced reactors.
As a result, the approval process finished in 18 months, making it one of the fastest regulatory reviews for a new nuclear technology in the United States.
This milestone positions TerraPower as a first mover in the advanced reactor market, which many experts see as essential for meeting future energy demand while reducing emissions.
Natrium: A New Kind of Nuclear Reactor
Unlike traditional nuclear plants, the Natrium system uses sodium instead of water as its coolant. This design change brings several operational advantages.
Source: TerraPower
Most existing nuclear facilities rely on light water reactors, which operate under high pressure. In contrast, the Natrium reactor runs at low pressure and high temperatures, reaching more than 350°C (662°F) while remaining far below sodium’s boiling point.
Because of this design, the reactor can rely on natural forces such as gravity and thermal convection for cooling. This passive safety approach reduces the need for complex emergency systems and lowers construction costs.
Another key innovation is the plant’s integrated energy storage system.
The reactor continuously produces 345 megawatts of electricity, ensuring stable baseload power. Meanwhile, molten salt storage can hold excess heat and release it later to boost output to 500 megawatts during periods of high demand.
Instead of running at a constant power level like traditional nuclear plants, the system can adjust electricity production based on grid needs. That flexibility allows it to complement renewable energy sources such as wind and solar.
Thus, this capability makes the Natrium plant unique among advanced reactor designs.
In addition, the design separates the nuclear reactor from the energy storage and power generation systems. This “decoupling” means non-nuclear teams can operate components such as steam turbines and salt tanks outside the nuclear island, improving safety while reducing operational costs.
Supporting Decarbonization Beyond Electricity
The Natrium plant is designed to deliver more than just electricity.
Because the reactor produces high-temperature heat, it can also supply industrial steam and thermal energy. This opens opportunities to decarbonize sectors that are traditionally difficult to electrify, including heavy industry and manufacturing.
The technology can therefore support multiple applications:
With an expected operational life of up to 80 years, the Natrium system could provide reliable low-carbon energy for decades.
Nuclear Power’s Role in America’s Energy Strategy
The approval of TerraPower’s Natrium project comes as the United States seeks to significantly expand its nuclear power capacity.
The U.S. already leads the world in nuclear generation, producing roughly 30% of global nuclear electricity. According to the Energy Department, the country has about 100 gigawatts of nuclear capacity today.
However, the government aims to quadruple that capacity to 400 gigawatts by 2050 to meet growing electricity demand and climate targets.
Federal policies are increasingly focused on rebuilding the nuclear supply chain and accelerating the deployment of new reactors.
Recent initiatives include:
$2.7 billion investment in uranium enrichment was announced in January 2026 to strengthen the domestic nuclear fuel supply.
$800 million in funding for small modular reactors was awarded in December 2025 to support projects led by utilities and developers.
A $1 billion loan to restart the Crane Clean Energy Center nuclear plant in Pennsylvania.
These measures reflect a broader push to ensure the United States maintains leadership in advanced nuclear technology.
Several companies are already developing next-generation reactors, including Oklo, Kairos Power, and X-energy. However, many of those projects are expected to deploy in the mid-2030s.
That timeline makes TerraPower’s Natrium project one of the earliest large-scale demonstrations of advanced reactor technology in the United States.
Rising Power Demand From AI and Data Centers
Another factor driving interest in nuclear energy is the rapid growth of data centers and artificial intelligence infrastructure.
Large technology companies, or the hyperscalers, are building massive data centers to support AI systems and cloud computing. These facilities consume enormous amounts of electricity and require reliable, constant power. As demand grows, many tech companies are exploring nuclear energy to secure their own supply rather than relying solely on public grids.
This trend could reshape the energy landscape. Governments must balance the needs of fast-growing digital industries with the need to keep electricity affordable for households and businesses.
The outcome may also influence the global AI competition between the United States and China, where access to reliable power could become a strategic advantage.
Nuclear Generation Remains Strong in the U.S.
Despite maintenance cycles, nuclear power continued to provide stable and high levels of electricity in 2025. According to the Energy Information Administration (EIA), U.S. nuclear generation stayed consistently strong throughout the year. Output typically dipped during scheduled maintenance periods but rebounded quickly afterward.
The year ended on a particularly strong note. December 2025 recorded about 72–73 million megawatt-hours of nuclear generation, one of the highest monthly totals of the year.
This reliability is one reason policymakers continue to support nuclear energy as a key component of the country’s low-carbon power system.
In conclusion, the construction permit for the Natrium plant signals that advanced reactors are moving from concept to reality. And for TerraPower, the next step is clear: begin construction and prove that advanced nuclear technology can deliver reliable, carbon-free power at commercial scale.
Three major global investors have joined forces to build a new renewable energy platform in North America. Brookfield Asset Management, Norges Bank Investment Management (NBIM), and British Columbia Investment Management Corporation (BCI) have launched a new company, Northview Energy.
Jehangir Vevaina, Chief Investment Officer for Brookfield’s Renewable Power & Transition group, remarked:
“This partnership marks the creation of a scalable platform for Brookfield and our partners. Northview Energy will be an owner of high-quality operating assets that deliver affordable and clean power to the grid, and the framework for future acquisitions provides a clear growth pathway for the vehicle to add de-risked, high-quality, cash-yielding assets delivering strong returns.”
Norway’s $2 Trillion Sovereign Fund Enters North American Renewables
The Northview Energy platform will own and acquire renewable energy infrastructure across the United States and Canada. It begins with a large portfolio of operating solar and wind projects.
The initial portfolio includes 22 utility-scale renewable assets with a total operating capacity of about 2.3 gigawatts (GW). The projects include 17 solar plants and five onshore wind farms.
These assets are spread across 11 U.S. states and six regional power markets. The projects are already operational and supply electricity to the grid.
Source: Northview Energy
The portfolio has an estimated enterprise value of about $2.6 billion. Each of the three partners will hold an equal 33.3% ownership stake in the new platform.
The launch of Northview Energy also marks an important step for NBIM. The firm manages Norway’s sovereign wealth fund, officially known as the Government Pension Fund Global. It is the largest sovereign wealth fund in the world, with assets of about $2 trillion.
NBIM will invest about $425 million to acquire its one-third stake in the renewable portfolio. This deal represents NBIM’s first renewable infrastructure investment in North America.
The partnership allows the fund to expand its real asset portfolio while supporting the growth of clean energy. Renewable infrastructure investments can generate stable income and help diversify long-term portfolios.
Institutional investors, such as pension funds and sovereign wealth funds, are putting more money into renewable energy. This trend has grown in recent years. These assets often offer predictable cash flows through long-term electricity contracts.
A Portfolio Built on Long-Term Power Contracts
The Northview platform focuses on operating renewable assets with contracted revenue. This model reduces investment risk. All projects in the initial portfolio have long-term power purchase agreements (PPAs) with strong buyers. These contracts have a weighted average remaining term of about 16 years.
PPAs allow companies to sell electricity at pre-agreed prices for many years. Utilities, corporations, and data centers often sign these contracts to secure a stable power supply.
For investors, long-term contracts create predictable revenue streams. This helps protect returns from energy price volatility.
Brookfield managed renewable companies that developed the projects. These include Deriva Energy, Scout Clean Energy, and Urban Grid. These developers built the wind and solar assets before transferring them to the new platform.
The partners plan to expand the platform beyond the initial portfolio.
Northview Energy has already signed a framework agreement to pursue future renewable acquisitions. The partners may deploy up to $1.5 billion in additional equity capital for new investments.
Future acquisitions will focus on operating renewable assets across North America. These may include:
The platform structure allows investors to buy multiple projects through a single vehicle. This approach can improve efficiency in operations, financing, and asset management.
The new platform will have a management team. They will oversee operations and future acquisitions. Subject to regulatory approvals, Northview Energy is expected to launch formally in the second quarter of 2026.
Strong Demand for Renewable Power in North America
North America remains one of the world’s most active markets for renewable energy investment. Demand for electricity is rising as industries electrify and digital infrastructure expands.
In 2024, renewable sources provided around 24.2% of total electricity in the U.S. This is an increase from 23.2% in 2023, as reported by the U.S. Energy Information Administration (EIA).
Source: EIA
Growth is expected to continue. By 2025, renewable energy accounted for nearly 26% of U.S. electricity generation and more than 36% of installed power capacity.
Wind and solar power are the main drivers of this growth. In 2024, the United States generated about 756,621 gigawatt-hours (GWh) of electricity from wind and solar combined. Wind produced 453,454 GWh, while solar generated 303,167 GWh.
Most new power plants are now renewable. Renewable energy made up over 90% of all new electricity capacity added in the U.S. in 2024, according to the Federal Energy Regulatory Commission (FERC). Solar alone represented over 81% of the new capacity added that year.
In 2026, US clean energy additions, led by solar and batteries, will shatter records with over 90% of new capacity from renewables. Despite challenges like grid limits, growth surges toward decarbonization goals.
Source: EIA
Corporate demand for clean electricity is also growing rapidly. North America now leads the global corporate renewable procurement market. The region accounts for about 40% of global PPA activity, supported by strong demand from technology firms, manufacturers, and data-center operators.
These trends make operating renewable energy projects especially attractive to investors. Wind and solar assets can produce electricity immediately and generate stable revenue through long-term power contracts.
Large institutional investors, like Brookfield, BCI, and NBIM, use platforms like Northview Energy. These platforms give them access to a fast-growing market for clean electricity infrastructure in North America.
Institutional Investors are Driving the Energy Transition
The launch of Northview Energy highlights a broader trend in global infrastructure investment. Big pension funds, sovereign wealth funds, and asset managers are putting billions into renewable energy. They are also investing in clean infrastructure.
These investors typically seek assets with stable cash flows and long operating lives. Renewable energy projects often meet these criteria because they generate electricity for decades.
The partnership between Brookfield, BCI, and NBIM brings together three large pools of capital:
Brookfield manages more than $1 trillion in assets globally, including about $247 billion in infrastructure.
BCI manages approximately C$295 billion in assets for public-sector clients in Canada.
NBIM oversees Norway’s sovereign wealth fund, valued at roughly $2 trillion.
The three investors can team up to build bigger renewable portfolios and enter new markets.
Platforms like Northview Energy also allow investors to scale investments quickly. Once the platform is established, it can acquire additional projects and grow its generation capacity over time.
A Long-Term Bet on Clean Power Infrastructure
Northview Energy is designed as a long-term infrastructure investment vehicle. With 2.3 GW of renewable capacity already in operation, the company starts with a significant footprint in the U.S. power market. The partners are also able to add more projects through the planned $1.5 billion equity investment pipeline.
If it succeeds, the platform could grow into more regions and technologies. This could happen as the North American energy shift speeds up.
For institutional investors, the model offers a way to deploy large amounts of capital into clean energy infrastructure while generating predictable returns. And for the broader energy system, investments like this help expand the supply of renewable electricity needed to meet future demand.
The European Union (EU) is considering a new policy that could allow the use of international carbon credits to help meet its ambitious 2040 climate target. If implemented carefully, the plan could unlock significant climate finance for projects in developing countries, particularly initiatives that expand access to clean cooking technologies.
At a recent clean cooking summit hosted by the International Energy Agency (IEA), France’s climate ambassador Benoît Faraco suggested that the EU could become a major investor in carbon credit projects. These investments could help accelerate efforts to replace polluting wood and biomass stoves with cleaner alternatives across Africa and other regions.
However, the proposal has also revived a long-standing debate in climate policy. Supporters argue that carbon credits can finance climate solutions globally, while critics warn that poorly designed projects can exaggerate emissions reductions and undermine climate integrity.
As global demand for carbon credits grows, the EU’s upcoming rules could shape the future of the voluntary carbon market.
EU’s 2040 Climate Target and the Role of Carbon Credits
The European Union plans to cut greenhouse gas emissions by 90% from 1990 levels by 2040, making it one of the most ambitious climate targets globally. To support this goal, policymakers are exploring allowing a limited share of emissions reductions to come from high-quality international carbon credits.
Under the emerging framework, these credits could account for up to about 5% of the emissions reductions needed to meet the 2040 goal. The mechanism would likely begin in 2036 and would include strict safeguards designed to ensure environmental integrity.
EU officials believe this approach could ease pressure on domestic industries while still maintaining the bloc’s overall climate ambition. At the same time, it could channel new climate finance into developing countries where emissions reductions can often be achieved at lower costs.
However, the European Commission has not yet finalized the rules governing which projects would qualify or how these credits would be sourced and verified.
Clean Cooking Projects Could Benefit
One area that could receive significant investment is clean cooking technology. During the IEA summit, Benoît Faraco suggested that EU participation in carbon markets could help scale up efforts to replace traditional cooking methods with cleaner alternatives such as liquefied petroleum gas (LPG).
Across many developing countries, households still rely heavily on wood, charcoal, or biomass for cooking. These fuels create severe indoor air pollution and contribute to deforestation and greenhouse gas emissions.
Globally, the challenge remains enormous:
More than two billion people still lack access to clean cooking
Indoor air pollution linked to traditional cooking contributes to millions of deaths every year
Most of those without access live in rural areas where energy infrastructure remains limited.
Expanding access to modern cooking technologies requires large investments in equipment, fuel distribution systems, and consumer financing. Carbon credit funding could help close these financial gaps.
Private companies are already experimenting with this approach. TotalEnergies, for example, has invested in LPG infrastructure aimed at expanding clean cooking access across Africa and India.
One notable initiative involves a cookstove project in Rwanda developed with the organization DelAgua. The program aims to distribute 200,000 high-performance cookstoves to rural households.
Within a year, the project is expected to benefit more than 800,000 people living in rural communities. Compared with traditional open fires, the improved cookstoves significantly reduce pollution and fuel consumption.
The new stoves cut harmful smoke emissions by about 81% and reduce wood use by roughly 71%. Over ten years, the initiative could prevent more than 2.5 million tonnes of carbon dioxide equivalent emissions.
These avoided emissions generate carbon credits that companies can purchase as part of their climate strategies. The program also supports Rwanda’s national goal of providing universal access to clean cooking by 2030.
Global Carbon Markets Are Expanding
Recent developments in international climate policy suggest that clean cooking projects may play a growing role in carbon markets.
In February 2026, a United Nations body approved the first carbon credits to be issued under the global carbon market established by the Paris Agreement. The approved activity focuses on distributing efficient cookstoves in Myanmar.
The project aims to reduce household air pollution and limit pressure on forests by lowering fuelwood consumption. Some of the credits will be used within South Korea’s emissions trading system, while the remaining credits will support Myanmar’s own climate commitments.
UN climate officials highlighted the broader benefits of clean cooking initiatives. These projects not only cut emissions but also improve health, protect forests, and reduce the burden on women and girls who often spend hours collecting firewood.
Meanwhile, data from the voluntary carbon market shows growing activity. A report from SCB Group found that carbon credit issuances increased by 28% quarter-on-quarter in the second quarter of 2025.
During that period, about 68 million credits were issued globally. Cookstove projects accounted for the largest share of these credits, representing roughly 29% of total issuances. Wind projects followed with about 20%, while forest conservation initiatives made up around 13%.
Most cookstove credits were certified under the Verra and Gold Standard programs.
Source: Green.Earth
Concerns About Credit Integrity
Despite their potential benefits, cookstove carbon credits have long been controversial. Some climate experts argue that many projects exaggerate their emissions reductions.
Monitoring real-world stove usage can be difficult. Households may receive improved stoves but continue using traditional cooking methods alongside them. In such cases, the actual emissions reductions may be smaller than estimated.
Environmental organizations have also raised concerns about weak monitoring systems and inconsistent verification standards across carbon markets.
An expert from the Brussels-based NGO Carbon Market Watch warned that relying on credits that have repeatedly failed to meet expectations could pose significant risks for climate policy.
These concerns reflect lessons from earlier offset systems, including the Clean Development Mechanism under the Kyoto Protocol. Several projects approved under that framework later faced criticism for overstating emissions reductions.
Because of this history, regulators are now under pressure to ensure that any new carbon credit systems deliver real and measurable climate benefits.
Strong Standards Will Be Critical
EU policymakers say the success of their carbon credit strategy will depend on strict oversight and transparency.
Future rules are expected to focus on three key principles:
strong monitoring and independent verification
clear safeguards to prevent double-counting of emissions reductions
proof that projects deliver additional climate benefits beyond the host countries’ own targets
If implemented effectively, these standards could strengthen confidence in international carbon markets.
At the same time, critics argue that carbon credits should only play a limited role in meeting climate targets. They warn that over-reliance on external offsets could delay necessary emissions reductions within Europe itself.
A Major Global Challenge Remains
The clean cooking challenge illustrates why new financing mechanisms are urgently needed. IEA estimates that around 300 million people must gain access to clean cooking solutions every year to achieve universal access by 2030.
Sub-Saharan Africa accounts for roughly half of the population still relying on traditional cooking fuels. Many rural communities lack access to modern energy infrastructure and affordable alternatives.
Replicating the progress achieved in countries such as China, India, and Indonesia will require large investments and coordinated policy efforts. Carbon finance could become an important tool to accelerate this transition.
Source: IEA
Overall, the European Union’s potential use of international carbon credits could reshape the global carbon market and unlock new funding for climate solutions in developing countries.
Clean cooking projects represent one of the most visible opportunities. They deliver clear health and environmental benefits while reducing greenhouse gas emissions.
However, the debate over carbon credits highlights a deeper challenge. Policymakers must ensure that these credits represent real, measurable emissions reductions rather than accounting shortcuts.
If the EU succeeds in designing a robust framework with strict quality standards, international carbon markets could channel billions of dollars into projects that improve lives and reduce emissions worldwide.
The carbon removal industry is expanding fast, with new projects moving from the pilot stage to the commercial scale. Companies are racing to build infrastructure that can permanently remove carbon dioxide from the atmosphere. One of them is a Canadian carbon management company, Svante Technologies, which announced that it acquired Carbon Alpha Corporation. This move brings together carbon capture technology with carbon dioxide removal (CDR) project development.
The acquisition strengthens Svante’s role in the carbon capture and storage (CCS) value chain. It also adds Carbon Alpha’s development portfolio to Svante’s operations.
Claude Letourneau, President & CEO of Svante, remarked:
“This project is a game-changer for Svante and a pivotal moment for scaling verifiable, durable engineered carbon removal solutions working in tandem with nature. By integrating Carbon Alpha’s team, we’re accelerating the delivery of high‑integrity CDR credits at commercial scale in partnership with the MLTC leadership, who is closely coordinating with us on the North Star Project.”
The North Star Project: A New Source of Carbon Removal Credits
The key asset in the deal is the North Star Bioenergy Carbon Capture and Storage (BECCS) project in Saskatchewan. The facility will capture carbon dioxide from the Meadow Lake Tribal Council Bioenergy Centre. This is how it works:
This plant produces renewable electricity and heat using forestry waste biomass from nearby sawmills.
Phase one of the project is designed to capture up to 140,000 tonnes of CO₂ per year from biomass combustion emissions.
The captured carbon dioxide will move through a dedicated pipeline to a deep saline aquifer. There, it will be stored permanently underground.
This process removes carbon from the natural cycle because biomass absorbs CO₂ while growing. Capturing and storing that carbon after combustion results in net negative emissions.
The project will generate durable carbon dioxide removal credits. Each credit represents one ton of CO₂ removed. These credits can be sold to companies seeking verified carbon removal to meet climate targets.
Carbon Alpha had already developed the project structure and storage system before the acquisition. Svante now takes over development and integration. The next step will be a front-end engineering design (FEED) study and test-well drilling program. A final investment decision is expected in early 2027.
Industry analysts say deals like this show how the carbon removal sector is shifting from research to deployment. Companies are now building full systems that include capture, transport, and long-term storage.
The acquisition expands Svante’s strategy to build an integrated carbon management company. It develops modular carbon capture systems that use nanoengineered solid sorbent filters to capture CO₂ from industrial emissions.
The technology is designed for industries that are difficult to decarbonize. These include cement, steel, hydrogen production, and power generation.
Before the acquisition, Svante already had expertise in capture technology. Carbon Alpha adds expertise in project development, geological storage, and carbon credit generation. This combination creates a full value chain for CCS in Canada:
Capture CO₂ from industrial sources or biomass energy
Transport the CO₂ through pipelines
Store the carbon permanently underground
Generate verified carbon removal credits
Industry experts say this type of integration is important. Carbon removal projects often fail because separate companies handle capture, storage, and financing.
The strategic acquisition includes Carbon Alpha’s development expertise, North Star Carbon Solutions LP’s ownership structure, and eligibility for Canada’s 50% CCUS investment tax credit, positioning Svante to scale multiple BECCS projects rapidly.
By combining these elements, Svante aims to scale projects faster.
First Nations Partnership Anchors the Project in Saskatchewan
The North Star project is being developed in partnership with the Meadow Lake Tribal Council (MLTC). The organization represents nine First Nations communities in northwest Saskatchewan.
Under the project structure, MLTC will be a co-owner of the BECCS facility alongside Svante. The partnership focuses on three main goals: local economic development, job creation, and long-term environmental leadership.
The bioenergy facility already produces renewable electricity and heat using forestry residues. The carbon capture system adds another layer of value. It turns the facility into a carbon removal hub that can produce verified CDR credits.
The project also includes the development of a regional CO₂ pipeline and storage hub. This infrastructure could support other emitters in the region.
Biogenic carbon sources from forestry, agriculture, or bioenergy plants could connect to the same storage network. This approach could turn the region into a carbon removal cluster.
Global Demand for Carbon Removal Is Rising Fast
The acquisition comes at a time when demand for carbon removal is increasing worldwide. Most countries now include carbon removal in long-term climate plans. Industry groups expect global carbon removal markets to reach hundreds of millions of tonnes of capacity by the 2030s.
Source: McKinsey & Company
Boston Consulting Group (BCG) outlines three demand scenarios for 2030–2040: low (40–80 MtCO₂/year), medium (70–230 MtCO₂/year), and high (200–870 MtCO₂/year). McKinsey also estimates durable CDR demand could hit 100 MtCO₂ by 2030, with announced supply at ~50 MtCO₂, creating a supply-demand gap.
The Intergovernmental Panel on Climate Change says that limiting global warming to 1.5°C will require removing billions of tonnes of CO₂ annually by mid-century. Many climate models further show that 5 to 10 billion tonnes of carbon removal per year may be needed by 2050. That translates to between $6 – $16 trillion of investment by mid-century.
Today, global carbon removal capacity is still very small. Most engineered projects remove only thousands or tens of thousands of tonnes annually.
However, investment is rising quickly. Major corporations such as Microsoft, Stripe, and Alphabet have signed large contracts for high-quality carbon removal credits.
Governments are also supporting the sector. In Canada, carbon capture projects can receive financial support through the CCUS investment tax credit. This covers up to 50% of eligible capture equipment costs, depending on project type. These incentives aim to help scale early infrastructure.
Source: Natural Resources Canada.
At 140,000 tCO₂/year, North Star Phase 1 represents about 35x the capacity of Climeworks‘ Orca plant. It also aligns with Microsoft‘s annual CDR purchasing scale, demonstrating commercial viability for durable removal credits.
Why BECCS Is a Key Carbon Removal Technology
Bioenergy with carbon capture and storage is one of the most widely studied carbon removal technologies. BECCS combines three steps:
Biomass absorbs CO₂ while growing.
The biomass is used to produce energy.
Carbon emissions are captured and stored underground.
This creates net negative emissions. The technology also produces electricity or heat, which can improve project economics. However, large-scale BECCS projects require several conditions, including:
Canada has strong potential for BECCS development because of its forestry resources and suitable geological formations. Western Canada already hosts major CCS infrastructure. For example, large carbon storage reservoirs exist in Alberta and Saskatchewan.
Map of Canada showing saline formations and sedimentary basins
Data source: North American Carbon Storage Atlas. Image from Natural Resources Canada.
This geological capacity could store billions of tonnes of CO₂ over time. Developers say regional storage hubs will be essential for scaling carbon removal.
The Next Phase for Carbon Removal Infrastructure
The acquisition of Carbon Alpha marks an important step in the industrialization of carbon removal. Instead of isolated pilot projects, companies are now building complete carbon management systems.
For Svante, the deal strengthens its ability to build and operate large carbon removal projects. For the broader market, it shows how carbon removal is moving from concept to infrastructure.
As governments and companies push toward net-zero targets, the demand for durable carbon removal credits is expected to keep rising. Projects like North Star may become an important part of the global climate strategy.
A war in the Middle East may increase demand for carbon credits if it continues for a long time. Analysts say energy supply disruptions from the conflict could push some industries back to higher‑emission fuels like coal. This, in turn, could raise emissions and force companies in regulated markets to buy more carbon credits.
The Middle East conflict has already disrupted liquefied natural gas (LNG) supplies. Qatar, a top LNG producer, has halted output at its largest LNG plant. This is due to disruptions in transport routes through the Strait of Hormuz. Qatar supplies about 20% of global LNG output.
LNG provides cleaner fuel for power generation than coal. When gas costs rise sharply or supply is limited, utilities sometimes increase coal use to meet electricity demand. Higher coal use increases carbon emissions. This can lead to higher demand for carbon credits in compliance markets.
Carbon Credits 101: How the Market Responds
A carbon credit represents one tonne of greenhouse gas emissions reduced, avoided, or removed from the atmosphere. Companies must hold carbon credits to meet emissions limits in regulated markets. These markets are part of government climate policy.
Compliance carbon markets, like emissions trading systems (ETS), require companies to lower their emissions. If they can’t, they must buy credits to stay within a limit.
Over 113 carbon pricing systems are in use worldwide. This includes ETS and carbon taxes, which cover about 28% of global greenhouse gas emissions.
In compliance markets, rising emissions usually increase demand for allowances or carbon credits. If companies cannot reduce emissions fast enough, they buy credits to stay compliant. Strong or rising demand can also influence credit prices.
Voluntary carbon markets exist separately from compliance markets. In voluntary markets, companies buy credits to meet internal climate goals, not legal limits.
The voluntary market is smaller but growing. The global voluntary carbon credit market is expected to rise from $1.88 billion in 2025 to $2.29 billion in 2026. It could reach $4.92 billion by 2030.
From Gas to Coal: When Utilities Flip the Switch
The Middle East conflict has pushed energy prices higher. Global natural gas and oil prices climbed because of risks to supply routes such as the Strait of Hormuz, a key passage for crude oil and LNG.
Source: TradingView
When gas prices rise, utilities may switch from gas‑fired generation to coal, which is cheaper but emits more CO₂. Analysts observed that fuel switching happened in 2022 after Russia invaded Ukraine. European gas supply was disrupted, so utilities turned to burning more coal.
Coal prices have also risen in response to supply pressures. Some markets saw thermal coal prices climb about 26%, reaching highs not seen in more than two years.
Source: Trading Economics
Such shifts can put pressure on emissions limits in regulated markets. Higher emissions would require companies to buy more compliance credits to avoid penalties. This dynamic is central to why analysts say carbon credit demand could rise if disruptions persist.
Compliance Markets Under Pressure, So Who Pays the Price?
Compliance carbon markets form the largest portion of carbon credit demand. These include emissions trading systems in Europe, China, and the U.S., and expanding carbon pricing schemes globally. The Middle East conflict could affect these markets, which shows how energy security and climate policy are connected.
Demand for carbon credits depends on how countries and companies aim to meet climate goals, like those in the Paris Agreement. This agreement aims to limit global warming to below 2°C. Compliance markets set legal limits, and voluntary markets support corporate climate goals.
If more companies switch to coal, emissions per unit of energy could go up, and compliance markets might see a higher demand for allowances or credits. This happens as companies try to stay within legal limits. This could result in higher carbon prices and tighter markets, depending on how regulators respond.
Source: GECF
Here is a sample scenario for better understanding:
Coal’s higher emissions factor (~0.35 tCO2/MWh vs. gas’s ~0.20 tCO2/MWh, per IPCC data) means switching boosts shortfalls against free allocations (often benchmarked low, e.g., 0.3 tCO2/MWh). Using this estimation, a firm generating 1 million MWh yearly will have this result:
This scenario creates ~46,000 extra allowances demanded firm-wide, scaling market-wide with multiple switchers.
In the European Union Emissions Trading System (EU ETS), companies must hold allowances equal to their emissions, or face fines. The EU is considering reforms to improve market stability and balance supply and demand for allowances. This scheme has been a key tool for reducing emissions in Europe since 2005.
In addition, more sectors are entering compliance markets. For example, China’s national ETS covers key industrial sources. It accounts for a big part of emissions from the world’s largest emitter.
Any rise in emissions from fuel switching could increase demand in these established markets. However, the exact impact will depend on how long energy disruptions continue and whether regulators adjust compliance caps or other rules.
Voluntary Market Volatility: Green Goals on Hold?
Global carbon pricing revenues topped over $100 billion in 2023 and in 2024. The World Bank reports that around $69 billion came from emissions trading systems and $33 billion from carbon taxes. This amount covers nearly 24% of global greenhouse gas emissions, which reflects the growing scale of these markets.
While compliance demand may rise if emissions increase, the outlook for the voluntary market could differ.
According to analysts, an energy crisis may temporarily constrain corporate spending on voluntary credits. High energy prices raise operating costs. This may lead companies to delay voluntary purchases as they will focus more on their core operations instead.
High-integrity voluntary markets have grown recently. This growth is driven by corporate net-zero commitments and new standards. Companies increasingly seek credits that meet quality criteria such as compliance eligibility, durability, and third‑party verification.
Sudden economic strains or changes in energy costs could quickly change how companies buy.
The Ripple Effect: Energy Security Meets Climate Action
A prolonged Middle East conflict could have ripple effects beyond energy prices. Disruptions to LNG supply may push some utilities toward higher‑emission fuels, raising emissions levels. That could drive demand for carbon credits in regulated markets where companies must meet emissions limits.
At the same time, short‑term pressures from high energy costs could slow voluntary demand as companies focus on operational priorities. The overall direction of carbon credit demand will depend on the duration of energy supply disruptions, policy responses by regulators, and the pace of the global energy transition.
Carbon markets are an evolving part of climate policy, linking energy markets and climate goals. As energy security concerns grow, the role of carbon credits in balancing compliance and emissions reductions may attract more attention from policymakers, investors, and companies in the coming years.
Disseminated on behalf of Alaska Energy Metals Corporation.
Global nickel prices advanced by 0.30% today (Aug 15, 2026), reaching $16,772.94 per ton, with Chinese markets trading at ¥113,103 per ton. This upward momentum is primarily driven by supply-side constraints in Indonesia, specifically tightened RKAB mining quotas and ongoing smelting production cuts. Although high exchange inventories present a macroeconomic headwind, these strict Indonesian policy controls continue to provide critical fundamental support, effectively anchoring the base metal's valuation against broader market pressures.
The global nickel market enters 2026 after a bruising and uneven year. In 2025, macroeconomic stress, trade disruptions, and deep supply imbalances reshaped pricing and sentiment. Although short-term rallies have returned, the underlying structure of the market remains fragile. As a result, 2026 is shaping up to be a year defined by volatility rather than a sustained recovery.
A Challenging Backdrop from 2025
To understand where nickel is headed, it helps to revisit the environment it emerged from. In 2025, global trade flows came under pressure after the US implemented new tariff policies. These measures disrupted supply chains and dampened confidence across industrial commodities. At the same time, global manufacturing growth slowed, weighing heavily on the broader nonferrous metals complex.
SMM reported highlighted some significant points. Adding to the uncertainty, the US Federal Reserve sent mixed signals throughout the year. Expectations around interest rate cuts shifted repeatedly. Each change altered risk appetite and triggered sharp moves across commodity markets. Nickel, already vulnerable due to oversupply, struggled to attract sustained buying interest.
China attempted to offset some of these pressures. Policymakers rolled out proactive fiscal measures and maintained a moderately accommodative monetary policy. They also focused on boosting domestic demand and diversifying export routes to reduce exposure to trade frictions. In July, China introduced its “anti-involution” policy, aimed at curbing destructive price competition across industries.
Even so, nickel underperformed. While other nonferrous metals showed mixed results, nickel remained constrained by a clear mismatch between supply and demand. Prices trended lower for most of the year. LME nickel opened near $15,365 per tonne and slid to lows around $13,865 per tonne, marking a sharp reset in the price center.
2026 Nickel Price Outlook: A Volatile Start to the New Cycle
Momentum shifted suddenly toward the end of the year. From mid-December, nickel prices began climbing rapidly.
By early January, LME prices had surged past $18,000 per tonne, the first time in more than a year. In just 12 trading sessions, prices jumped nearly 20%, catching many traders off guard.
Several factors fueled this rebound. Demand signals from China improved modestly, particularly from stainless steel mills and EV battery producers. At the same time, speculative positioning adjusted as supply risks from Indonesia returned to the spotlight.
Trading Economics analysis stated that Indonesia, the world’s largest nickel producer, hinted at a potential 34% reduction in output for this year. Meanwhile, Vale temporarily halted operations at its Pomalaa and Bahodopi mines while waiting for regulatory approvals. Although its flagship Sorowako mine continued operating, these pauses added to market caution.
Still, the rally faced clear limits. Inventory levels remained elevated. Combined LME registered and off-warrant stocks jumped nearly 58% last year, reaching more than 367,000 tonnes. In addition, large shadow inventories in Singapore and Kaohsiung continued to hang over the market. As a result, every price spike met resistance.
Price Expectations Remain Capped
Most analysts expect nickel prices to settle into a narrow band rather than trend sharply higher. Forecasts largely cluster between $15,000 and $16,000 per tonne. Several major institutions attribute the restrained outlook to ongoing surpluses.
Trading Economics data indicated that nickel futures moved back up to nearly $17,800 per tonne, reversing last week’s steep decline as buyers stepped back into the market.
Analysts consider that the differences in price forecasts primarily reflect contrasting views on how strictly Indonesia will enforce production limits and how quickly global manufacturing activity is expected to recover.
Stainless steel: remains the dominant driver, accounting for about 70% of total demand. Consumption may rise to roughly 2.45 to 2.5 million tonnes. China’s production recovery offers support, while infrastructure projects in emerging markets add incremental demand. Still, no major surge is expected.
Battery and EV application: They make up roughly 13% to 15% of demand. Nickel use in this segment could reach up to 500,000 tonnes. High-nickel cathodes continue to support premium EV models.
According to Benchmark Mineral Intelligence, demand for battery-grade nickel is expected to surge, tripling by 2030. This growth will largely be due to mid- and high-performance EVs in Western markets.
Other uses, including alloying, plating, aerospace, and electronics, provide steady but smaller contributions. A broader manufacturing recovery and net-zero investments could lift demand slightly, while faster EV adoption remains the main upside risk.
According to SMM, the nickel market will remain oversupplied through the year, remaining between 120,000 and 275,000 tonnes. While short-term rallies may continue, oversupply will remain the dominant force.
On the supply side, Indonesia’s refined nickel output stays high, supported by sunk investments and low operating costs. On the demand side, growth remains steady but unspectacular.
Source: AEMC
Ewa Manthey, a commodities strategist at London-Based ING Group, explained that the global nickel market is still set to remain oversupplied, with a projected surplus of about 261,000 metric tonnes. As a result, any production cuts would need to be deep and sustained to meaningfully shift market fundamentals.
China’s real estate support policies may provide limited relief for stainless steel consumption. However, a strong housing rebound appears unlikely, and any improvement is expected to be gradual. Similarly, demand from ternary batteries faces structural headwinds. Solid-state batteries remain years away from large-scale commercial use, and near-term battery chemistry trends do not favor a sharp jump in nickel intensity.
As a result, the average price level may drift lower over time. Tightening ore supply could briefly push prices above $16,000 per tonne. However, high inventories and excess capacity will take longer to absorb.
Why Nickel Matters for US Critical Mineral Independence?
Nickel plays a critical role in military-grade alloys, advanced weapons systems, electric vehicle batteries, grid-scale energy storage, and broader clean energy infrastructure. Despite its importance, the United States remains almost entirely dependent on imports for nickel, while China controls much of the global processing and supply chain. This reliance has become a clear strategic risk, one that domestic resources need more exploration.
And this is the reason America’s push to secure its critical mineral supply is gaining real momentum.
Spotlight: Alaska Energy Metals – America’s Nickel Backbone
At the center of this shift is Alaska Energy Metals Corporation (TSX-V: AEMC, OTCQB: AKEMF) and its Eureka deposit, the largest documented nickel resource in the United States. As Washington intensifies efforts to reshore critical supply chains for national security and clean energy goals, AEMC’s Nikolai Project in Alaska is steadily gaining recognition as a strategic domestic asset.
At the same time, the project aligns closely with the Trump administration’s executive orders focused on critical minerals and Alaska resource development. Those directives sought to speed up domestic production, curb reliance on foreign suppliers, and reinforce US security interests.
Against this backdrop, Nikolai stands out as a fully US-based “Sulphide nickel and battery metal project” to meet the country’s metal needs for the energy transition. Significantly, it has two claim blocks: Eureka and Canwell.
Source: AEMC
Eureka: The Largest Known Nickel Resource in the US
The Eureka deposit is not just large—it is nationally strategic. It hosts nickel alongside copper, cobalt, chromium, iron, and platinum group metals, including platinum and palladium. This metal mix makes Eureka highly relevant for both defense systems and the expanding clean energy economy.
According to the 2025 Mineral Resource Estimate, Eureka contains:
Indicated Resource of 814 million tonnes grading 0.42% nickel equivalent, representing 5.62 billion pounds of nickel in situ.
Inferred Resource of 896 million tonnes grading 0.39% nickel equivalent, totaling 9.38 billion pounds of nickel in situ.
Combined, the deposit contains more than 15 billion pounds of nickel, enough to support American demand for decades.
FAST-41 Listing Accelerates the Nikolai Project
A major step forward came when the Nikolai Project was accepted onto the FAST-41 Transparency Dashboard by the Federal Permitting Improvement Steering Council.
The initial phase focuses on infrastructure upgrades, including rehabilitation and extension of the Rainy Creek Mining Trail, installation of temporary bridges, and development of an on-site camp.
These improvements will lower exploration costs, improve safety, enable better site access, and speed up the transition to advanced exploration and development at Eureka. Just as important, FAST-41 provides transparency, inter-agency coordination, and defined permitting milestones.
Source: AEMC
Live Nickel Spot Price
Unit: USD/Tonne
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Key catalysts ahead
AEMC is entering a phase with several near- and mid-term value drivers. These include a first-pass metallurgical study to assess metal recovery, the potential for a major US Department of Defense grant, completion of a Preliminary Economic Assessment, and continued drilling at the Angliers target. Each step strengthens the investment and strategic case for Eureka.
Nickel Oversupply Overseas, Opportunity in the US
In summary, the nickel market faces another complex year. Structural oversupply, elevated inventories, and cautious demand growth define the landscape. Although policy shifts in Indonesia and short-term demand improvements can trigger sharp rallies, fundamentals continue to cap sustained upside. For now, nickel remains a market driven more by volatility than by balance.
As the US rebuilds its domestic critical mineral supply chain, assets like Eureka are becoming indispensable. With its scale, multi-metal profile, federal permitting support, and alignment with national policy priorities, Alaska Energy Metals Corporation is positioning itself as a key player in America’s push for resource security. In a world increasingly defined by competition for critical metals, Eureka has the potential to become the backbone of the US nickel supply for generations.
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Forward-looking information is based on several key expectations and assumptions, including, without limitation, that the Company will continue with its stated business objectives and will be able to raise additional capital as required. Although management of the Company has attempted to identify important factors that could cause actual results to differ materially, there may be other factors that cause results not to be as anticipated, estimated, or intended.
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Global nickel prices advanced by 0.30% today (Aug 15, 2026), reaching $16,772.94 per ton, with Chinese markets trading at ¥113,103 per ton. This upward momentum is primarily driven by supply-side constraints in Indonesia, specifically tightened RKAB mining quotas and ongoing smelting production cuts. Although high exchange inventories present a macroeconomic headwind, these strict Indonesian policy controls continue to provide critical fundamental support, effectively anchoring the base metal's valuation against broader market pressures.
Nickel has moved from being a niche industrial metal to a critical pillar of the global energy transition, along with copper, lithium, and uranium.
Once primarily used in stainless steel, nickel is now critical for high-energy-density batteries, electric vehicles (EVs), grid storage, aerospace alloys, and emerging hydrogen infrastructure.
Essentially, it’s now another mineral on that list, albeit one that seems to have largely flown under most investors’ radars thus far. However, it’s understandable why that’s been the case – after all, the primary use for mined nickel has long been industrial, with over three-quarters of global nickel demand being for things like alloy production or electroplating.
Distribution of primary nickel consumption worldwide in 2024, by industry
Nickel Basics: Types, Grades, and Industrial Uses
Nickel is a silvery-white transition metal with high corrosion resistance, ductility, and thermal stability. Its unique properties make it indispensable in alloys and electrochemical applications.
Nickel is generally classified into two main categories:
Class 1 nickel: High-purity nickel metal, powders, briquettes, and salts such as nickel sulfate. These are essential for battery cathodes, advanced alloys, and aerospace applications.
Class 2 nickel: Ferronickel and nickel pig iron (NPI), primarily used in stainless steel production.
Historically, stainless steel accounted for roughly two-thirds of nickel consumption, providing a stable demand base. However, batteries have emerged as the fastest-growing segment, particularly for nickel-rich cathode chemistries such as NMC (nickel-manganese-cobalt) and NCA (nickel-cobalt-aluminum).
Aerospace, defense, and superalloys also rely heavily on nickel for high-temperature and corrosion-resistant applications.
This dual-market nature—spanning bulk industrial use and high-tech energy transition applications—makes nickel one of the most structurally complex metals in the critical minerals ecosystem.
Nickel Processing Technologies: The Backbone of the EV and Steel Boom
Not all nickel is equal, and processing technology determines where it ends up. Nickel processing is the set of industrial methods used to extract nickel from its ores and turn it into usable forms for various industries, including stainless steel, batteries, and alloys. Essentially, it’s how raw nickel in rocks becomes the high-purity metal or chemical compounds needed for manufacturing.
Nickel is mined mainly from two types of ores:
Sulfide ores – Found deep underground, easier to process, high purity.
Laterite ores – Found near the surface, lower nickel content, more challenging to process.
The Case Of Battery Grade Nickel
In order to be used in an electric vehicle, nickel must first be refined to extremely high purities, creating what’s known as “battery grade” nickel. Following this, it then needs to be dissolved in sulphuric acid to create nickel sulphate, which can then be used to produce battery cathodes.
Nickel’s high energy density, which allows it to hold more charge for less weight, makes high-nickel battery chemistries more desirable in EV batteries. While the first iterations of the lithium-ion battery used equal proportions of nickel, manganese, and cobalt, modern ones use as much nickel as manganese and cobalt combined.
And as technology continues to progress, it’s expected that the ratio will rise to as much as 80% nickel, or even more.
Now here’s a simple breakdown of the processing technologies:
Pyrometallurgy Still Dominates Stainless Steel
High-temperature smelting remains the most common route for nickel extraction. Rotary kiln–electric furnace (RKEF) and flash smelting convert sulfide and laterite ores into ferronickel or nickel pig iron (NPI). These products suit stainless steel, but they consume large amounts of energy and emit significant CO₂.
Notably, NPI and ferronickel continue to anchor global supply.
Hydrometallurgy Powers Battery-Grade Nickel
Hydrometallurgical routes, especially high-pressure acid leaching (HPAL), are becoming critical for EV batteries. HPAL converts laterite ores into mixed hydroxide precipitate (MHP) and then into nickel sulfate for cathodes.
Refining and Recycling Gain Momentum
Electrorefining and solvent extraction deliver high-purity Class 1 nickel. Refined products made up around 60% of the nickel market in 2024. Recycling is also rising as a low-carbon supply source.
In short, nickel processing is splitting into two markets: low-cost NPI for steel and high-purity nickel for batteries. This divide is reshaping supply chains, investment flows, and decarbonization strategies across the metals industry.
The Volatile Nickel Price Cycle
Unlike lithium, the nickel market is much more complex. The metal sits at the crossroads of geopolitics, industrial demand, and changing battery technology. Over the past five years, nickel prices have been highly volatile.
For example, during the 2022 LME squeeze, prices spiked above $100,000 per tonne. Then they dropped sharply to around $13,900 per tonne in early 2025.
Since then, they have started to recover, reaching about $17,200 per tonne by February 2026.
This volatility shows how sensitive nickel is to supply, demand, and global events. As EV demand grows, the nickel market will continue to face swings.
This volatility reflects a structural mismatch between supply expansion and shifting demand patterns. Massive Indonesian production growth has flooded the market, while battery chemistry trends toward lithium iron phosphate (LFP) have reduced nickel intensity in mass-market EVs. At the same time, premium EVs and aerospace applications continue to rely heavily on Class 1 nickel, creating a bifurcated market structure.
For investors, policymakers, and corporates, nickel represents a critical test case for the energy transition economy. Understanding its supply chain, macro drivers, and long-term price scenarios is essential for navigating the next decade of critical minerals markets.
Global Nickel Supply: Indonesia’s Dominance and Market Impact
Source: IEA
Indonesia has reshaped the global nickel market more than any other country. In 2024, its nickel in mine production was 2.2 million tonnes (mt), an increase of 158% over the previous five years. Its rise was fueled by a combination of raw-ore export bans, massive Chinese-backed investments in downstream processing, and the rapid deployment of high-pressure acid leach (HPAL) facilities for battery-grade nickel.
By consolidating both mining and smelting, Indonesia has established a vertically integrated nickel ecosystem capable of supplying both stainless steel and battery markets at low cost.
Policy Controls and Quota Management
Despite its dominance, Indonesia’s nickel supply faces tightening government controls in 2026. The government sharply reduced the nickel ore production quota (RKAB) to 250–260 million wet metric tonnes (wmt), down from 379 million wmt in 2025 and 298 million wmt initially approved for 2025—a cut of roughly 34%.
The move aims to align ore output with domestic smelter capacity, curb oversupply, and support prices. Following the announcement, LME nickel prices surged past $18,000/t before stabilizing near $17,200/t in February 2026.
Delays in RKAB approvals have already halted operations at mines such as PT Vale Indonesia, signaling enforcement risks for the policy. Meanwhile, demand growth is tempered by slower stainless steel uptake and the structural shift toward LFP batteries, which has helped sustain a global surplus forecast of 261–288 kt in 2026 despite production cuts.
Indonesia’s strategic approach—resource nationalism, controlled expansion, and downstream integration—has fundamentally altered global nickel pricing. Low production costs and government-backed industrial policy allow Indonesian producers to remain profitable even during periods of weak prices.
However, S&P Global noted that, “Indonesia is still projected to more than double its production over the next decade to an estimated 4.97 MMt by 2035.”
Source: S&P Global
China’s Role in the Nickel Supply Chain
China continues to dominate the processing of nickel intermediates and battery materials. Chinese firms have financed and built much of Indonesia’s upstream infrastructure, including HPAL plants and mixed hydroxide precipitate (MHP) facilities.
It is also the single largest consumer of nickel, driven by domestic stainless steel production and battery manufacturing. Policy shifts, stimulus measures, and industrial planning decisions in China have an outsized impact on global nickel markets, influencing both price and supply chain dynamics.
Other Global Producers
Beyond Indonesia and China, major nickel-producing countries include Russia, the Philippines, Canada, Australia, and New Caledonia. However, many high-cost producers have struggled to compete with Indonesia’s integrated, low-cost production model. For example, BHP suspended operations at its Nickel West facility in Western Australia amid persistent low prices, highlighting the competitive pressures faced by high-cost producers.
This dynamic has accelerated consolidation in the global nickel industry, with strategic repositioning focused on securing downstream processing and high-grade nickel for energy transition applications.
Nickel Demand Dynamics: Stainless Steel vs. Batteries
Stainless Steel: The Legacy Anchor
Stainless steel remains the primary driver of nickel demand, accounting for roughly two-thirds of consumption. Demand is closely tied to construction, infrastructure, and manufacturing activity. China, the world’s largest stainless steel producer, remains a key macro driver for nickel demand globally.
Class 1 Nickel: Powering the EV Boom
Nickel demand for batteries has grown fast over the past decade. Class 1 nickel, with purity above 99.8%, is key for high-energy NMC and NCA batteries. These batteries power premium EVs, giving longer driving ranges and lighter, more efficient vehicles. Advanced cathodes now contain 60–80% nickel, with some designs targeting 90%+ nickel content.
By 2030, nickel-heavy batteries could reach 1,320 MWh globally, covering about 80% of all EV lithium-ion batteries. Battery demand is expected to use over 50% of Class 1 nickel by 2027, growing at 12–15% per year. The average EV battery now contains 28–30 kg of nickel.
But there are risks:
LFP batteries, which contain no nickel, are growing in lower-cost EVs, especially in China. Nickel intensity per vehicle has fallen nearly one-third since 2020.
Policy differences affect supply: China held 63.5% of global nickel demand in 2025, Europe prioritizes allied supply, and US policies are less stable.
Source: Crux Investor
The Lights Are Green for Nickel
Forecasts from the International Energy Agency (IEA) project nickel demand more than doubling by 2035 under current pledges, potentially tripling in net-zero scenarios driven by EVs and storage.
Source: IEA
IEA also projects that nickel use in EV batteries, renewables, and stainless steel is projected to push nickel demand above 5.5 Mt by 2035. As Indonesia tightens output and China dominates downstream processing, Western economies face rising exposure to supply disruptions and geopolitical leverage. Even conservative outlooks show 8-9x EV battery demand growth by 2050, despite late-decade plateaus from chemistry shifts.
Long-Term Supply Outlook: From Oversupply to Potential Deficit
As per INSG last year, supply vastly outpaced demand, hitting 209-212 kt global surplus. Recently, S&P Global projected a 156,000-tonne surplus in 2026. However, the same analysis also says that today’s surplus will not last forever.
The report projects that global nickel stocks will peak around 2028. After that, inventories will begin to fall as demand improves and supply growth slows. By the early 2030s, the market balance will flip.
By 2031, S&P Global expects the primary nickel balance to turn negative. EV battery demand will grow as electrification expands. Stainless steel consumption will recover alongside global manufacturing. Significantly, Indonesian supply growth will slow as easy expansions may run out, and regulatory risks can increase.
Once inventories drop below comfortable weeks-of-consumption levels, prices respond quickly. S&P Global points to nickel prices rising toward $25,000 per tonne or higher, especially for Class 1 material.
Data source: S&P Global
Policy and Geopolitics: Resource Nationalism and Market Fragmentation
Indonesia exemplifies modern resource nationalism. The government’s export bans, production quotas, and mine suspensions aim to capture downstream value and stabilize prices.
Western governments are responding with critical minerals strategies, including subsidies, domestic mining support, and restrictions on Chinese supply chains. This could fragment the global nickel market into competing blocs, heightening geopolitical risk for downstream industries.
Most importantly, the Trump administration sees developing U.S. nickel supply chains as key to reducing dependence on foreign sources and boosting the domestic industry. Efforts include promoting new mining projects, speeding up permits for critical mineral operations, and exploring tariffs or other trade measures to support local production. One major example is a copper-nickel project in Minnesota, led by a joint venture between Glencore and Teck Resources.
Macro Drivers: Energy Transition, Industrial Demand, and Monetary Policy
Nickel is highly sensitive to macroeconomic and policy conditions. Industrial demand tracks global manufacturing cycles, while battery demand depends on EV adoption rates, subsidies, and consumer behavior.
Interest rates, inflation, and currency fluctuations affect nickel through speculative flows and production financing costs. Meanwhile, energy transition policies, carbon pricing, and ESG mandates are reshaping supply chains, pushing automakers and battery manufacturers to secure long-term nickel supply agreements.
Nickel’s Role in Carbon Markets and Net-Zero Strategies
Nickel’s importance extends beyond industrial use. Battery supply chains are central to decarbonization, embedding nickel demand in national net-zero strategies. Companies increasingly link nickel sourcing to ESG frameworks, carbon disclosure requirements, and sustainability-linked financing.
At the same time, nickel production drives greenhouse gas (GHG) emissions. According to a disclosure from the International Finance Corporation (World Bank Group), under a scenario accounting for declining ore grades and cleaner grids, emissions could rise 90% from 2020 to 2050. Additionally, a lack of decarbonization could push emissions to 164%.
Source: IFC
Most emissions come from processing rather than mining. Pyrometallurgical routes for Class 2 nickel (used in stainless steel) are coal-intensive, while Class 1 battery-grade nickel has lower emissions. Shifting to EV-focused, Class 1 production can help limit emissions growth.
Thus, cleaner processing, low-carbon production, and recycling could give automakers and battery makers a competitive edge, while decarbonized electricity is key to controlling nickel emissions as production rises.
Top 3 Nickel Producers Signal Tight Supply Heading into 2026
The global nickel market entered 2026 with cautious signals from its largest producers. Industry analysts revealed that mining output stayed broadly flat, disruptions persisted, and companies focused more on battery-grade processing than expanding supply. This reinforced expectations of a structurally tight nickel market.
Nornickel
Norilsk Nickel, or Nornickel, reported stable but slightly lower production in 2025. The company produced 199,000 tonnes of nickel, down 3% year-on-year, mainly due to a shift toward lower-grade disseminated ore. Production recovered in the fourth quarter, rising 9% quarter-on-quarter to 58,000 tonnes after scheduled maintenance in Q3. Nearly all nickel came from the company’s own Russian feedstock, highlighting its self-reliant supply chain.
For 2026, Nornickel guided nickel output between 193,000 and 203,000 tonnes, signaling flat production with no major expansion plans. Nornickel’s market capitalization stood at about $31 billion as of February 2026, underscoring its role as a major global supplier despite geopolitical constraints.
The lack of growth from one of the world’s key Class 1 nickel producers suggests limited incremental supply from Russia.
Vale
Brazil’s Vale continued to position itself as a strategic player in the battery metals supply chain. The company plans a nickel sulfate refinery in Bécancour, Québec, with deliveries to General Motors targeted for the second half of 2026, pending regulatory approvals. This move highlighted Vale’s push toward high-purity battery materials rather than bulk nickel mining.
Vale’s market capitalization was around $69–70 billion in early 2026, making it one of the largest diversified miners with significant nickel exposure. It produced 175,000 tonnes of nickel in 2025, reaching the high end of its guidance. Growth came from Canadian operations in Sudbury and Long Harbour and restarts in Brazil.
Looking ahead, Vale Indonesia warned its 2026 mining quota won’t meet demand for new nickel smelters. The approved quota is only about 30% of what the company requested, raising concerns that upcoming processing plants could face ore shortages.
Vale and partners are building three HPAL plants for EV battery nickel. The Pomalaa plant, starting in August 2026, will need 21 million tonnes of limonite ore per year, while Bahodopi will require 10.4 million tonnes annually. These projects represent over $6.5 billion in investment and highlight the growing pressure on Indonesia’s nickel supply.
Glencore
Glencore’s 2025 Full‑Year Production Report showed nickel output from its own sources at 71,900 tonnes, down about 7% from 82,300 tonnes in 2024. This decline was driven by lower production at both Integrated Nickel Operations (INO) and the Murrin Murrin operations. The reported figure excludes 5,000 tonnes from the Koniambo project, which is in care and maintenance.
In the fourth quarter of 2025, nickel production (including third‑party feed) was around 35,300 tonnes, slightly below the prior quarter. Glencore also gave 2026 nickel guidance of 70,000–80,000 tonnes, reflecting a relatively flat outlook after the 2025 drop.
Its nickel business is part of a broader diversified metals portfolio, with the company also producing copper, zinc, cobalt, coal, and other commodities. Nickel remains important to its strategy, especially given rising EV battery demand, but output challenges and asset transitions affected annual totals.
As of February 2026, Glencore’s market capitalization is widely reported to be around $58–61 billion (USD) based on its London Stock Exchange listing and share price.
This positions Glencore as a major diversified mining and commodity trading company, though smaller in market value than some of its peers like Rio Tinto or BHP. The company’s valuation reflects its breadth across metals, energy, and marketing operations, and its prospects are often shaped by commodity price swings and operational performance.
Source: Company reports
Risks and Opportunities for Investors and Policymakers
The top nickel producers showed limited growth in mining output while accelerating investments in battery-grade processing. Ore quality challenges, regulatory delays, and operational disruptions continued to constrain supply. At the same time, electric vehicle demand and energy transition needs kept rising.
The lack of aggressive supply expansion from major producers suggests the nickel market could remain structurally tight through the late 2020s, especially for high-purity Class 1 nickel required in batteries.
This is why nickel stocks present a unique combination of risks and opportunities. Supply concentration, policy interventions, and technological disruption create price volatility. Conversely, long-term demand from electrification, aviation, and hydrogen infrastructure provides structural upside.
Investors must navigate cyclical price swings, while policymakers balance industrial policy with market stability. Strategic supply agreements, diversification, and technology adoption will be crucial for managing risk.
Conclusion: Nickel’s Strategic Decade Ahead
Nickel is entering a decisive decade. The metal is so vital for the global energy transition, but faces structural uncertainty from supply expansion and evolving battery technology.
The next ten years will determine whether nickel becomes a stable metal of clean energy supply chains or a cautionary case study in commodity oversupply and industrial policy missteps. For institutions, understanding nickel’s macro dynamics, supply chains, and policy risks is essential. The metal’s trajectory will shape not only battery markets but also the geopolitics of the global energy transition.
Europe’s carbon market is facing new political pressure. Europe’s largest business lobby group has called for reforms. At the same time, Italy has asked for a temporary suspension of the system. These calls focus on the European Union Emissions Trading System (EU ETS).
The EU ETS is the world’s largest carbon market. It covers around 40% of the EU’s total greenhouse gas emissions. It sets a cap on emissions from power plants, heavy industry, and aviation within Europe.
Under this scheme, companies must hold allowances for each ton of carbon dioxide (CO₂) they emit. They can buy and sell these allowances on the market. Recent carbon price swings and concerns about industrial competitiveness have triggered a new debate.
Inside the System: How Europe’s Carbon Market Operates
The EU ETS started in 2005. It now operates in its fourth phase, which runs from 2021 to 2030. The cap on emissions declines each year. This ensures that total emissions fall over time.
Under the reforms agreed in 2023, the annual cap will decline faster. The linear reduction factor increased to 4.3% per year from 2024 to 2027 and to 4.4% per year from 2028 to 2030.
The EU also decided to cut the total cap by 90 million allowances in 2024 and 27 million allowances in 2026.
In 2023, emissions from sectors covered by the EU ETS fell by about 15.5% compared to 2022, according to the European Commission. Power sector emissions dropped sharply due to higher renewable energy use and lower gas demand. Since 2005, emissions from ETS sectors have fallen by around 47%.
The EU aims to cut net greenhouse gas emissions by at least 55% by 2030 compared to 1990 levels. This target is part of the European Climate Law. The EU ETS is a key tool to meet that goal.
Source: European Commission
From €10 to €100: The Price Swings Shaping the Debate
Carbon prices in the EU ETS have risen strongly in recent years. In 2018, prices were below €10 per ton. By early 2023, prices reached record highs of around €100 per ton.
However, prices fell in 2024. By early 2025, EU carbon prices were trading closer to €60–€70 per ton. Slower industrial activity, lower energy demand, and market expectations about future supply influenced this drop.
Most recently, EU prices have fluctuated, trading around €70–€75 per tonne of CO₂ in early March 2026, after rising from their lows in late 2025. On March 3, 2026, EU carbon allowances were around €74.20 per tonne. This is a slight rise from recent lows, but still below the peaks above €90 from earlier in the year.
Data source: TradingEconomics
The Market Stability Reserve (MSR) adjusts the supply of allowances. It removes surplus allowances from the market when supply is high. In 2023, the MSR continued to absorb allowances to support market balance.
Despite these controls, industry groups say price volatility creates uncertainty. Energy-intensive sectors such as steel, cement, chemicals, and aluminum face higher costs when carbon prices rise.
BusinessEurope represents national business federations across the EU. In early 2026, it called for reforms to the EU carbon market.
The group warned that high energy and carbon costs are hurting European industry. It said the EU risks “deindustrialization” if companies move production outside Europe. This could lead to carbon leakage, where emissions shift to countries with weaker climate rules.
BusinessEurope asked EU policymakers to review the Market Stability Reserve. It also called for measures to reduce excessive price swings. The group stressed the need to align climate policy with industrial competitiveness and reduce energy prices in the short term.
Source: BusinessEurope
The lobby group noted in its paper:
“The enabling conditions and incentives to create a viable business case for decarbonisation are still largely missing. The EU has yet to put in place effective short-term measures to lower energy costs and close the related cost competitiveness gap faced by European companies compared to their global competitors… Moreover, EU climate and energy policies continue to lack a genuinely technology-neutral approach. For example, state aid thresholds still differentiate between technologies, making it harder for industries to invest in the technologies needed to achieve Europe’s climate neutrality targets.”
At the same time, the EU has introduced the Carbon Border Adjustment Mechanism (CBAM). CBAM will apply a carbon price on imports of cement, steel, aluminum, fertilizers, electricity, and hydrogen.
The goal is to level the playing field between EU and non-EU producers. The system is in its transitional phase from 2023 to 2025. Full financial obligations begin in 2026.
Italy’s Bold Proposal: Hit Pause on Carbon Pricing?
Italy has taken a stronger position. Italian officials have called for a temporary suspension of the EU ETS. They argue that high carbon prices increase electricity costs and hurt households and businesses.
“The ETS, as currently conceived, represents an additional tax on European companies, affecting costs and limiting their competitiveness.”
Italy relies on gas for a large share of its power generation. When gas prices rise, electricity prices also increase. Adding a carbon price can raise costs further. Italian leaders say this creates pressure on industry and families.
However, suspending the EU ETS would require agreement at EU level. The carbon market is governed by EU law. A single member state cannot stop it alone.
The European Commission has defended the system. It argues that the EU ETS reduces emissions in a cost-effective way. It also generates revenue for member states. In 2023, EU ETS auction revenues reached tens of billions of euros across the bloc. These funds support climate action, energy transition, and social measures.
Billions at Stake: Where Carbon Market Revenues Go
EU member states receive most revenue from auctioning carbon allowances. From 2013 to late 2025, total auction revenues have exceeded €245 billion, per official EU sources.
In 2024 alone, revenues totaled around €39 billion (down from €44 billion in 2023), with €24.4-25 billion going directly to member states despite lower average prices of €64.76/tCO2.
Source: Argus Media
At least 50% of auction revenues must be used for climate and energy-related purposes. Many countries report using much more than this minimum share.
The EU ETS also funds innovation. The Innovation Fund supports low-carbon technologies in industry and energy. It is financed by the sale of 450 million allowances from 2020 to 2030. The Modernisation Fund supports lower-income EU countries in upgrading their energy systems.
These funds aim to help the industry reduce emissions rather than relocate.
What Could Reform Look Like?
The European Commission has signaled a review of the ETS later in 2026. This review comes as part of the broader European Green Deal, the EU’s plan to reach net-zero emissions by 2050.
Reform proposals could include:
Adjusting the pace at which free allowances are phased out.
Modifying how carbon prices are calculated or allocated.
Changing how new sectors like transport and buildings are integrated into the system.
Some industry representatives also want changes to the CBAM. CBAM is a carbon tariff on certain imported goods, such as steel, cement, and fertilisers, starting in 2026. It aims to prevent carbon leakage by making non-EU products pay a carbon cost similar to EU goods.
However, the European Commission recently rejected calls to suspend carbon levies on fertilisers, saying the CBAM must remain stable to protect EU producers.
Reform could seek a balance between climate goals and business competitiveness. How to achieve this balance remains a key question for EU policymakers.
The Road Ahead: Reform, Resistance, or Reinforcement?
The debate reflects a broader tension. The EU wants to cut emissions quickly. At the same time, it wants to protect industrial jobs and economic growth.
The European Commission will continue monitoring the carbon market. It publishes regular reports on supply, demand, and price trends. Any major reform would require agreement from the European Parliament and EU member states.
For now, the EU ETS remains central to Europe’s climate policy. It has helped drive a nearly 50% cut in emissions from covered sectors since 2005. But political pressure is rising. The outcome will shape Europe’s path toward its 2030 target and its longer-term aim of climate neutrality by 2050.
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