Vietnam Earns $56.5M From Forest Carbon Credits Paid by The World Bank

Vietnam Earns $56.5M From Forest Carbon Credits Paid by The World Bank

Vietnam has earned $56.5 million from the World Bank after cutting 10.3 million metric tons of carbon dioxide (CO₂) through forest protection and better land management.

The payment covers verified emissions reductions from 2018 to 2019 in Vietnam’s North Central Region. It was made under the Emission Reductions Payment Agreement (ERPA) of the Forest Carbon Partnership Facility (FCPF), a World Bank program that rewards countries for reducing emissions from forests.

The program covers six provinces: Thanh Hoa, Nghe An, Ha Tinh, Quang Binh, Quang Tri, and Thua Thien Hue.

More than 70% of the payment will go directly to forest owners, local communities, households, and organizations that helped protect and restore forests. The remaining funds will support forest management, monitoring, and future conservation work.

The payment is one of Southeast Asia’s largest jurisdictional forest carbon transactions. It also marks another step in Vietnam’s plan to build a stronger carbon market.

Forests Are Key to Vietnam’s Net-Zero Goal

Vietnam sees its forests as one of its biggest climate assets. At the COP26 climate summit, the country pledged to reach net-zero emissions by 2050.

It also improved its climate target in the updated Nationally Determined Contribution (NDC). The goal is to cut emissions by 15.8% by 2030 using domestic resources. If it gets international support, the target could rise to 43.5%, compared to its usual scenario.

Vietnam’s emissions have surged in the last twenty years due to economic growth. The energy sector is now the biggest source of greenhouse gases in the country. To reverse this trend, the government is investing in renewable energy, improving energy efficiency, expanding electric transport, and developing green hydrogen.

It has launched a pilot phase for a national emissions trading system, which includes the power, steel, and cement industries. Together, these industries make up about 50% of the country’s CO₂ emissions.

Forests remain a key part of this strategy. They help clear carbon dioxide from the air. They also protect biodiversity, water sources, and rural livelihoods.

According to the Food and Agriculture Organization (FAO), forests cover about 43% of Vietnam’s land area. Years of reforestation and stronger forest protection have helped increase forest cover across the country.

vietnam forest
Source: Tran Quoc, C. et al (2023). Journal of Forest Research, 28(3), 159–167. https://doi.org/10.1080/13416979.2023.2182259

By combining forest conservation with clean energy and industrial decarbonization, Vietnam aims to build a more balanced pathway toward its 2050 net-zero goal.

Vietnam also plans to launch a pilot carbon exchange, which will start before the full market opens. This will create new chances for forest carbon credits and other emissions reduction projects.

Why High-Quality Forest Credits Are in Demand

Vietnam’s latest payment comes as global demand for high-quality forest carbon credits continues to grow.

Companies are facing greater pressure to reduce emissions and invest in credible climate projects. Buyers are now more selective. They want carbon credits that have strong science, independent verification, and clear benefits for local communities.

Forest carbon credits remain the largest segment of the voluntary carbon market (VCM) in 2026, making up 37% of all retired credits. However, buyers are placing greater focus on credit quality, transparency, and project integrity than ever before.

Across the entire VCM, total retirements reached between 168 million and 173 million credits, per Sylvera data. That means roughly 62 million to 64 million forest carbon credits were permanently retired by end-users in 2025.

forest carbon credit market
Sources: Sylvera Carbon Markets Report; AlliedOffsets VCM Review; Ecosystem Marketplace SOVCM Data; Market Growth Reports (Voluntary Carbon Offsets for Forestry).

Jurisdictional forest programs, like Vietnam’s, are set to gain from this trend. They measure emissions over large areas, not just single projects. This boosts transparency and cuts the risk of double-counting.

Vietnam joins a growing list of countries receiving results-based payments through the FCPF’s ERPA program. Since its start, the FCPF has helped 47 developing countries. It has raised around $1.3 billion to cut emissions from deforestation and forest degradation. Other successful participants include Mozambique and the Dominican Republic.

Costa Rica, Chile, Ghana, Guatemala, Lao PDR, Nepal, and Indonesia have also signed ERPAs worth millions. This shows that results-based forest finance is key to protecting forests. It also helps rural livelihoods and supports national climate goals.

FCPF ERPA payments received
Source: World Bank

Nature-Based Carbon Markets Continue to Expand

Forests are expected to play a growing role in global climate action.

The Intergovernmental Panel on Climate Change (IPCC) states that we must protect and restore forests. This is crucial for limiting global warming. alongside significant reductions in fossil fuel emissions.

At the same time, the United Nations considers forests one of the most cost-effective natural climate solutions available today.

For Vietnam, carbon finance offers more than environmental benefits. It creates a new source of income for rural communities while encouraging long-term forest conservation.

As governments strengthen climate policies and more companies seek high-quality carbon credits, jurisdictional forest programs could attract more investment. Vietnam’s latest agreement with the World Bank shows how healthy forests can deliver both climate benefits and long-term economic value.

Forest Carbon Is Becoming More Valuable

Forest carbon credits are changing. Buyers are no longer looking only for large volumes. They also want projects with strong environmental benefits and reliable verification.

According to MSCI, companies are paying $40 to $50 per credit to secure future supplies of high-quality nature-based carbon credits. That is three to five times higher than the average market price for this carbon credit.

nature-based carbon credits price

The report also found that just 3% of companies in the MSCI ACWI Investable Market Index retired nature-based carbon credits in 2024, but they accounted for 65% of all disclosed retirements. This shows that demand is becoming concentrated among a small group of large corporate buyers.

Market forecasts also point to strong long-term growth. McKinsey & Company estimates that global demand for carbon credits could hit 1.5 billion to 2 billion metric tons annually by 2030. Nature-based solutions could be one of the biggest market segments.

For countries like Vietnam, this creates new opportunities to earn climate finance while protecting forests.

Vietnam Is Building a Larger Carbon Economy

The World Bank payment is only one part of Vietnam’s broader climate strategy.

The government plans to launch a pilot carbon trading exchange before expanding into a full carbon market later this decade. This follows new regulations that establish the legal framework for carbon credit trading and emissions reporting.

Vietnam is also working with international partners to develop more forest carbon projects and improve carbon accounting. These efforts could help the country attract more investment from companies seeking high-integrity carbon credits.

Beyond carbon markets, healthy forests support biodiversity, protect watersheds, reduce soil erosion, and strengthen rural livelihoods. They also make communities more resilient to floods, droughts, and other climate risks.

A Model for Other Forest-Rich Countries

Vietnam’s $56.5 million carbon credit payment rewards actual emissions reductions. It also gives financial support to the people and communities that protect the forests. This creates a stronger incentive to preserve forests instead of clearing them for other land uses.

Challenges remain. Forest carbon projects need strong monitoring, transparency, and long-term protection. This keeps buyer confidence high. At the same time, countries will need clear policies and strong governance to expand these programs successfully.

Even so, Vietnam has shown that jurisdictional forest carbon programs can deliver measurable climate benefits at scale. Governments want net-zero goals, and companies need high-quality carbon credits. With this, similar programs may play a bigger role in the global carbon market.

For Vietnam, the latest payment is more than a financial milestone. It shows that protecting forests can generate lasting economic value while helping the world move closer to its climate goals.

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Amazon’s Biggest Forest Carbon Bet in South Africa Shows Why Nature-Based Climate Finance is Winning

Amazon's Biggest Forest Carbon Bet in South Africa Shows Why Nature-Based Climate Finance is Winning

Amazon is making one of its biggest investments in nature-based carbon removal. The company has agreed to buy about half of the carbon credits expected from South Africa’s Bacon Tree Restoration Project. The large project will restore degraded land in the Eastern Cape while removing carbon dioxide from the atmosphere.

The project is expected to generate up to 18 million carbon credits over 30 years. It will restore native vegetation across thousands of hectares of damaged land.

For Amazon, the deal is more than a carbon credit purchase. It shows how large companies are changing the way they buy carbon credits. Many are choosing long-term agreements instead of short-term purchases. This helps them secure high-quality credits years in advance.

Kara Hurst, Amazon’s chief sustainability officer, stated:

“Spekboom is a natural wonder, but it can’t heal the land without help from the people who call the Eastern Cape home. This project will restore the ecosystem and create jobs—a model for how nature-based solutions can enable both climate action and economic development.”

Restoring Nature While Removing Carbon

The timing of the project is also important. The voluntary carbon market (VCM) is showing signs of recovery after several difficult years. Buyers are now focusing more on credit quality than on low prices. They want projects that remove carbon, protect nature, and deliver clear benefits for local communities.

carbon credit retirements H1 2026
Source: AlliedOffsets

AlliedOffsets reports that in 2026, over 200 million carbon credits were retired worldwide. This set a new record and shows that companies want high-quality credits more than ever.

The Bacon Tree Restoration Project is one of Africa’s largest forest restoration efforts. The project will restore degraded subtropical thicket using native plants, especially Spekboom (Portulacaria afra). This hardy plant, locally known as elephant bush, can store large amounts of carbon while surviving in dry conditions.

Spekboom thrives in dry conditions where many other plants cannot grow. It can be planted from simple cuttings placed directly into the soil, making large-scale restoration practical. As it grows, it helps restore soil, reduce erosion, and create conditions for native plants and wildlife to return.

Spekboom (Portulacaria afra)
Source: Shutterstock

Today, the project area supports 165 recorded plant and animal species, including several considered vulnerable.

South Africa has lost an estimated more than one million hectares of subtropical thicket because of decades of overgrazing and land degradation. Researchers estimate that restoring these ecosystems could remove well over 100 million metric tons of CO₂ over time while improving biodiversity and soil health.

Unlike commercial tree plantations, the project aims to rebuild a natural ecosystem spanning 50,000 hectares. Restoring native plants helps pull carbon dioxide from the air. It also improves soil health, cuts down erosion, and supports wildlife.

By the end of 2028, the project will plant 180 million spekboom cuttings to help restore the Albany thicket, a unique ecosystem that has been declining for decades.

The project is also expected to create 11,000 jobs for local communities through planting, land management, and environmental monitoring. These benefits make the project attractive to companies looking for carbon credits that deliver both climate and social value.

A New Way to Finance Carbon Projects

Large restoration projects need significant funding before they can generate carbon credits. That has slowed many projects because developers often wait years before earning any revenue.

The Bacon Tree project uses a different approach. It secured about $91 million in blended finance by combining private investment with support from development finance partners and climate investors.

Amazon’s long-term purchase agreement also helps reduce financial risk. It gives developers confidence that there will be buyers for future carbon credits. This makes it easier to raise money and move the project forward.

The tech giant has committed to buying 1.95 million tons of carbon removal credits from the project. This long-term purchase agreement also helped the World Bank launch the Spekboom Outcome Bond.

The bond gave investors confidence because the project already had a major buyer for its future carbon credits. Companies that qualify can buy these credits through Amazon’s carbon credit service.

Moreover, the credits will meet some of the world’s highest standards for nature-based carbon removal, including the ABACUS label and Climate, Community & Biodiversity (CCB) certification.

This financing model is becoming more common across the carbon market. More companies are signing long-term offtake agreements instead of waiting for credits to become available. The same trend is now spreading across direct air capture, biochar, and other carbon removal technologies.

Many experts think these agreements will matter more as demand for high-quality carbon removals increases.

Amazon Builds on a Bigger Net-Zero Strategy

The Bacon Tree deal is part of Amazon’s wider climate plan. In 2019, Amazon co-founded The Climate Pledge, committing to reach net-zero carbon by 2040, ten years ahead of the goals set in the Paris Agreement.

The company says its priority is cutting emissions across its business. It continues to invest in renewable energy, electric delivery vehicles, cleaner buildings, and more efficient operations.

Amazon has already become the world’s largest corporate buyer of renewable energy. By the end of 2025, it had supported more than 700 wind and solar projects worldwide. The company says these projects can generate enough clean electricity to power millions of homes each year.

Amazon renewable energy portfolio 2025

Still, Amazon recognizes that some emissions are difficult to eliminate. These include emissions from aviation, heavy transport, and some industrial processes.

The company reports that its renewable energy portfolio now tops 40 gigawatts (GW). This makes it the largest corporate buyer of renewable energy in the world for five years running.

For those remaining emissions, the company is investing in high-quality carbon removals.

Besides the Bacon Tree project, Amazon has backed direct air capture (DAC), reforestation, biochar, and other carbon removal technologies. The company says these investments will help address emissions that cannot yet be avoided.

Demand for High-Quality Nature-Based Carbon Credits Is Growing

Amazon’s latest purchase reflects a broader shift in the VCM. Companies look for carbon credits that do more than just cut emissions; they must also restore nature, support local communities, and pass strict verification standards.

Demand is expected to keep rising. The International Energy Agency (IEA) states that industries like aviation, shipping, cement, and steel will keep depending on carbon removals. This helps tackle emissions that are hard to get rid of.

Nature-based carbon markets are becoming more concentrated around high-quality projects. According to MSCI, only 3% of companies in the MSCI ACWI Investable Market Index retired nature-based carbon credits in 2024, yet those firms accounted for 65% of all disclosed retirements.

nature-based carbon credits sources 2024
Source: MSCI

Buyers are also willing to pay $40–$50 per credit—three to five times the current market average—to secure future supplies of high-integrity projects. This shows strong long-term demand for premium nature-based credits.

Also, the UN Decade on Ecosystem Restoration estimates that every $1 spent on restoration can bring $7 to $30 in economic benefits.

Projects like Bacon Tree show how carbon removal can also restore ecosystems and support local communities. However, experts stress that carbon credits should complement, not replace, direct emissions cuts.

A Blueprint for Future Climate Finance

Amazon’s investment in the Bacon Tree project shows that major companies are becoming long-term partners in building the next generation of carbon removal projects. Funding before credits are issued helps developers. It allows them to restore larger areas, lower financial risk, and attract more investment.

For Amazon, the agreement supports its goal of reaching net zero by 2040 while helping restore one of South Africa’s most important ecosystems.

For the wider carbon market, the deal sends a clear message. Companies are no longer looking only for carbon credits. They are investing in projects that can remove carbon, restore nature, and create lasting benefits for local communities.

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Bitcoin Price Falls Below $60K, But Its Biggest Story Is the Green Revolution in Mining

Bitcoin Price Falls Below $60K, But Its Biggest Story Is the Green Revolution in Mining

Bitcoin is back in the spotlight after a sharp price drop. After climbing above $126,000 late last year, the world’s largest cryptocurrency has fallen below $60,000, losing more than half its value.

Investors have responded to weaker economic conditions. Higher interest rates, profit-taking, and a lower appetite for risk also played a role. While much of the attention is on Bitcoin’s price, another shift is taking place behind the scenes.

The Bitcoin mining industry is becoming cleaner.

For years, Bitcoin faced criticism for its high electricity use and carbon emissions. Environmental groups compared its energy use to that of whole countries. This raised concerns about whether the cryptocurrency can fit into a low-carbon future.

Bitcoin price
Source: Binance

Today, that picture is changing.

Many mining companies are investing in renewable energy. They are capturing methane that would otherwise go into the atmosphere. This helps support power grids and improve energy efficiency. These efforts aren’t removing Bitcoin’s environmental footprint.

However, they do lessen its impact. Governments, investors, and businesses are now focusing more on sustainability and net-zero emissions.

Bitcoin’s Energy Appetite Remains Massive

Bitcoin remains one of the world’s most energy-intensive digital networks. According to the Cambridge Centre for Alternative Finance, Bitcoin mining consumes electricity on a national scale. Demand changes with mining activity but remains among the highest of any digital infrastructure systems.

The International Energy Agency (IEA) notes that cryptocurrency mining, data centers, and artificial intelligence are among the fastest-growing sources of global electricity demand.

Mining relies on specialized computers that solve complex mathematical problems to secure the Bitcoin network. As Bitcoin’s value grew over the last ten years, companies added more machines. This also raised electricity demand.

However, electricity use tells only part of the story. The environmental impact also depends on where that power comes from.

After China banned commercial Bitcoin mining in 2021, many miners relocated. They moved to places like the United States, Canada, Iceland, Norway, Paraguay, and other parts of Latin America. Many of these locations offer cleaner electricity or abundant renewable energy, helping lower the industry’s carbon intensity.

Renewables Are Rewriting Bitcoin’s Energy Mix

Bitcoin mining is steadily shifting toward cleaner energy.

The latest Cambridge Digital Mining Industry Report shows that 52.4% of the electricity used by miners comes from sustainable sources. This includes renewables and nuclear power. Hydropower, wind, and solar account for much of that supply.

bitcoin electricity by source
Source: Cambridge Centre for Alternative Finance

Natural gas remains the largest single fuel source because many miners use excess gas that would otherwise be flared at oil fields. This marks a major shift from several years ago, when coal supplied much of the industry’s electricity.

Today, miners increasingly build operations where electricity is affordable, reliable, and cleaner. Hydropower supports mining in Canada, Paraguay, and Scandinavia, while wind and solar continue to attract miners in Texas and other parts of the United States. Nuclear energy is also emerging as another source of carbon-free electricity.

Some companies generate electricity from landfill gas and agricultural biogas. This helps reduce methane emissions that would otherwise enter the atmosphere.

These changes do not make Bitcoin carbon neutral, but they are lowering the emissions linked to every Bitcoin mined.

Methane: From Waste Gas to Digital Gold

One of the industry’s fastest-growing sustainability strategies focuses on methane. Methane traps about 80 times more heat than carbon dioxide over a 20-year period, making it one of the most powerful greenhouse gases.

Some Bitcoin miners use mobile data centers to turn methane into electricity. This helps stop methane from escaping from oil wells, landfills, or wastewater facilities.

Companies including MARA Holdings, Crusoe Energy, and Upstream Data have helped pioneer this approach in North America.

The process cuts methane emissions while generating electricity for Bitcoin mining. Studies show that burning methane can help the climate. This is important because methane has a much stronger warming effect in the short term.

Methane-powered mining is still a small part of the industry. But analysts expect it to grow. Energy producers want new ways to cut emissions and use stranded gas resources.

Bitcoin annual carbon emissions to 2100
Source:

The Biggest Bitcoin Miners Are Going Green

Many of the world’s largest Bitcoin mining companies now see sustainability as part of their long-term strategy.

MARA Holdings, the world’s largest publicly traded Bitcoin miner by market value, is expanding its use of landfill gas, methane capture, and renewable electricity. The company has also invested in technologies that convert stranded natural gas into electricity instead of flaring it.

CleanSpark continues to grow its U.S. operations by acquiring energy-efficient facilities powered by lower-carbon electricity. The company says cleaner energy helps reduce operating costs while supporting long-term growth.

Riot Platforms works with the Electric Reliability Council of Texas (ERCOT) through a demand response program. During periods of high electricity demand, Riot can temporarily reduce mining operations and return power to the grid. This helps improve grid reliability while creating another source of revenue.

bitcoin mining companies going green

Other miners are following similar strategies. Iris Energy powers its facilities mainly with hydroelectric energy in Canada. Bitfarms also relies heavily on hydropower across Canada and South America.

TeraWulf gets most of its electricity from nuclear and hydro sources. Meanwhile, Hut 8 is growing its energy-efficient mining and digital setup across North America.

Together, these companies show how access to cleaner and more reliable electricity is becoming a competitive advantage.

Can Bitcoin Help Stabilize the Power Grid?

Bitcoin miners were once seen only as major electricity users. Today, some utilities view them as flexible energy consumers that can help balance the power grid.

Unlike factories or hospitals, Bitcoin mining operations can shut down within minutes when electricity demand spikes. This allows miners to reduce consumption during heat waves, storms, or other periods of grid stress.

In Texas, some mining companies join demand response programs. They temporarily shut down equipment when electricity demand is high. This allows more power to flow to homes and businesses.

Mining can also support renewable energy projects. Wind and solar farms often produce more electricity than the grid needs during certain hours. Instead of wasting that excess power, miners can use it until demand increases. This improves project economics while reducing wasted renewable energy.

Now, some analysts say Bitcoin mining is a flexible industrial load. It can support renewable energy rather than compete with it.

The Green Transition Is Far From Complete

Despite this progress, Bitcoin’s environmental concerns are still evident:

  • Bitcoin mining still uses large amounts of electricity, and coal-powered operations continue to produce high emissions.
  • Electronic waste is growing as older mining machines are replaced with newer, more efficient models.
  • Inconsistent sustainability reporting makes it harder for investors to compare environmental performance, increasing the need for clearer disclosures.

Bitcoin’s Future May Depend on More Than Price

Bitcoin’s recent drop below $60,000 has renewed attention on the cryptocurrency market. Yet, its biggest long-term story may be unfolding beyond price charts.

In recent years, the industry has moved toward cleaner electricity and renewable energy. It focuses on reducing methane and integrating more closely with power grids. At the same time, new mining equipment has become more energy efficient, helping lower electricity use per unit of computing power.

Challenges remain, but sustainability is becoming an important factor in how mining companies compete for investment and future growth.

As governments, investors, and businesses continue pursuing net-zero goals, Bitcoin’s environmental performance is likely to receive as much attention as its market value. The next phase of the industry’s growth may depend not only on the price of Bitcoin, but also on how successfully it reduces its environmental footprint.

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ASEAN Could Unlock an $8.5 Billion Carbon Market Opportunity Through CORSIA

The aviation industry is under pressure to cut emissions, and carbon credits are crucial in this effort. A recent report from Abatable suggests that Southeast Asia has a strong chance of benefiting. If the Association of Southeast Asian Nations (ASEAN) governments approve more carbon credits under the global offsetting scheme, the region could earn between US$1.6 billion and US$8.5 billion in the next decade.

ASEAN is already a vital source of carbon credits under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA). However, much of its potential remains untapped. With the right policies, ASEAN can help airlines meet climate goals while attracting investment, creating jobs, and promoting sustainable development.

CORSIA Is Creating a New Global Carbon Market for Aviation

Aviation has limited options for quickly cutting emissions, especially for long-haul flights. While sustainable aviation fuel (SAF) and cleaner aircraft will help over time, airlines will still depend on carbon credits to meet targets.

CORSIA allows airlines to offset emissions from international flights by buying high-quality carbon credits that meet ICAO’s strict rules. As more countries join and airline traffic recovers, demand for these credits is expected to rise sharply. This presents a significant opportunity for countries that can develop credible carbon projects.

CORSIA ASEAN
Source: Abatable

ASEAN Holds a Strong Position

CORSIA, set up by the International Civil Aviation Organization (ICAO), requires airlines to offset a portion of their emissions using approved carbon credits called CORSIA Eligible Emissions Units (CEEUs).

Currently, ASEAN contributes a small share of the global supply, but this could grow significantly.

The report categorizes ASEAN’s carbon credit supply into three groups:

  • CORSIA-eligible credits that airlines can use right away.
  • CORSIA-aligned credits that meet ICAO’s standards but need government approval.
  • Pipeline projects that could issue credits in the future.

Right now, ASEAN has four CORSIA-eligible projects in Cambodia and Laos. Together, they have issued 2.6 million eligible carbon credits, making up 7.1% of the global supply as of June 1, 2026.

Though this is only 1.3% of expected global demand during CORSIA’s First Phase, these projects have room to grow. If they continue operating, they could generate an additional 6 million to 20 million carbon credits by 2035.

  • At today’s prices, these credits are worth around US$26 million to US$59 million.
corsia carbon credits
Source: Abatable

Millions of Credits Are Waiting for Government Approval

The biggest opportunity lies in credits not yet approved.

Across ASEAN, 54 carbon projects already meet ICAO’s standards but lack the necessary Letter of Authorization (LoA) from their governments. Without this approval, airlines cannot use these credits for CORSIA compliance.

  • These projects have already issued 18.2 million carbon credits.

If governments authorize them in the next 18 months, these credits could enter the market and add an estimated US$182 million to US$419 million in value.

  • Furthermore, extending these projects through 2035 could yield another 5 million to 26 million eligible credits, providing airlines with more supply as demand rises.

Most of these projects are in Vietnam, Laos, and Thailand, which together account for over 90% of ASEAN’s CORSIA-aligned supply. Clean cookstove initiatives contribute 13.1 million credits from 35 projects, mainly in Vietnam.

Pipeline Projects Could Transform ASEAN Into a Global Supplier

The report suggests ASEAN’s long-term potential is much greater than its current supply. The region has around 100 pipeline carbon projects that could produce up to 302 million carbon credits by 2035 if authorized.

Combined with current eligible credits, ASEAN could potentially supply 348 million CORSIA-eligible credits over the next decade.

  • At current market rates, this could be worth between US$1.6 billion and US$8.5 billion.

This would significantly boost the global supply of aviation carbon credits as airlines face rising compliance demands.

However, governments must balance these exports with their climate commitments under Nationally Determined Contributions (NDCs). Authorizing credits may have limited effects on national climate targets, especially if projects yield reductions beyond existing policies.

Source: Abatable

Beyond Carbon Credit Sales

The opportunity extends beyond just selling carbon credits. It also includes strengthening ASEAN’s role in global carbon markets. Much of the CORSIA-eligible supply currently comes from Africa, with one project in Guyana providing nearly 68% of all eligible credits.

Expanding ASEAN’s project pipeline would diversify global supply and reduce reliance on a few regions. This could enhance market stability and give airlines more options for sourcing high-quality credits.

Demand for Carbon Credits Is Rising Rapidly

While supply is limited now, airline demand is expected to grow sharply over the next decade.

Globally, CORSIA demand is projected to reach between 201 million and 219 million carbon credits during its First Phase, then surge to between 1.25 billion and 1.78 billion credits in the Second Phase by 2035.

Europe is expected to be the largest demand source, but Asia and the Middle East will become increasingly important as more countries get involved.

In ASEAN, 39 airlines participate in CORSIA, though emissions data is available for only 26. These airlines are expected to need around 17 million to 18 million carbon credits in the First Phase.

By 2035, demand could rise nearly five to seven times, reaching as much as 118 million credits.

Three countries lead regional demand:

  • Singapore
  • Thailand
  • Indonesia

Together, they represent over 95% of ASEAN’s offset needs.

Four airlines—Singapore Airlines, Thai Airways, Scoot, and Garuda Indonesia—will likely account for about 75% of ASEAN’s total CORSIA demand, needing around 13 million credits in the First Phase and 65 million in the Second Phase.

This concentration means decisions by a few major airlines could significantly impact the regional carbon market.

Unlike many emerging carbon markets, ASEAN airlines have started buying eligible credits.

  • Singapore Airlines and Scoot retired 150,000 CORSIA-eligible credits from a clean cookstove project in Laos. This is the second-largest retirement of CORSIA credits by any airline globally, following Japan Airlines’ retirement of 250,000 credits.
  • Malaysia Aviation Group has also completed pilot transactions, showing growing interest in the region.

These early purchases help build market confidence and encourage developers to invest in new carbon projects.

AIRLINE
Source: Abatable

Supply Could Still Fall Behind Future Demand

Despite ASEAN’s potential, the report warns that the region may face a supply gap if new projects aren’t developed quickly.

Modeling shows that available supply could briefly exceed ASEAN airline demand in 2027, reaching around 8 million credits, slightly above the expected demand of 7.7 million tonnes.

However, from 2028 onward, airline demand will keep rising, eventually hitting 18.9 million tonnes by 2035. Meanwhile, annual supply will stay around 8 million credits through 2030 before declining as existing projects reach the end of their crediting periods.

Without new investments and project approvals, ASEAN’s supply would only cover about 60% of aviation demand by 2035.

The outlook varies by country.

Singapore and Thailand are expected to remain net buyers, hosting large international airlines but having limited domestic CORSIA-eligible supply. In contrast, Vietnam and Laos are set to become net suppliers, while Cambodia, Indonesia, and the Philippines could balance both demand and supply by expanding domestic carbon projects.

ASEAN Corsia credit demand and supply
Source: Abatable

Carbon Markets Could Deliver Broader Economic Benefits

Beyond aviation compliance, expanding CORSIA participation could yield broader economic and social benefits for ASEAN.

Many current projects focus on distributing clean cookstoves, improving energy efficiency, and conserving forests. These efforts reduce indoor air pollution, lower fuel costs, enhance public health, and create new income for local communities.

The report says that current and future CORSIA projects might create about 32,000 direct jobs in the region over the next ten years. This could also draw in new private investment for sustainable development.

Outlook: ASEAN Has the Building Blocks to Become a Carbon Market Leader

ASEAN already has the projects, growing airline demand, and favorable conditions to become a leading supplier of aviation carbon credits. However, seizing this opportunity requires government action.

Faster approvals for current projects and ongoing investment in new initiatives will influence how much of the US$1.6 billion to US$8.5 billion opportunity ASEAN can capture. Clear policies that connect international trade with national climate goals will also play a key role.

As CORSIA enters its next phase and airline demand grows, ASEAN has a chance to boost its carbon markets and low-carbon economy. If countries act quickly, the region could become a key hub for high-quality aviation carbon credits. This move could bring lasting environmental, economic, and social benefits.

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Google’s Carbon Emissions Fall, But AI Makes Its Net-Zero “Moonshoot” Goal Harder Than Ever

Google's Carbon Emissions Fall, But AI Makes Its Net-Zero "Moonshoot" Goal Harder Than Ever

Google has reached another important climate milestone. Yet, the company says its biggest environmental goal is becoming more difficult to achieve.

In its 2026 Environmental Report, Google announced a 2% reduction in its operational greenhouse gas emissions (Scope 1 and market-based Scope 2) for 2025. This came even though the company saw its highest annual rise in electricity use.

At the same time, the company acknowledged that its long-term climate “moonshot” is facing growing pressure. This is due to artificial intelligence rapidly expanding demand for data centers, electricity, and construction materials.

The report marks an important shift in Google’s climate story. Kate Brandt, Chief Sustainability Officer at Google, remarked:

“While the path to achieving our climate ambitions will not be linear — given our AI infrastructure buildout is currently accelerating faster than the grid is decarbonizing — we remain focused on scaling abundant and affordable clean power globally and progressing technological innovations that drive down emissions across our operations and the broader industry.”

Cleaner Operations, Bigger Climate Challenge

For years, the company focused on reducing emissions from its own operations. Today, the bigger challenge lies outside its direct control. Supply-chain emissions are growing faster than operational emissions. This increase is mainly due to Google expanding its AI infrastructure and purchasing more servers, semiconductors, and other equipment.

“Our climate moonshot is getting harder,” Google said in the report. They point to these reasons:

  • rising electricity demand,
  • slow grid connections,
  • supply chain bottlenecks, and
  • limited availability of carbon-free energy in many regions.

The report highlights a broader trend across the technology industry. As companies rush to develop AI infrastructure, they discover that reducing emissions becomes tougher. This is true even as they invest heavily in clean energy.

Google’s operational progress remains significant.

The company reported combined Scope 1 and market-based Scope 2 emissions of about 2.9 million metric tons of CO₂e in 2025, down 2% from 2024. This is the second year of operational gains after a 12% drop in 2024. Google’s investments in clean energy and efficient data centers are showing real results.

However, the broader picture is more challenging.

Google ghg carbon emissions 2025
Data from Google 2026 Environmental Report

Google’s ambition-based emissions hit around 14.5 million metric tons of CO₂e in 2025. This is an 18% rise from last year and 81% higher than its 2019 baseline. About 80% of emissions came from Scope 3. This includes purchased goods, construction materials, transportation, and manufacturing in its global supply chain.

The biggest driver is AI.

Google’s data center footprint continues to expand to support products such as Gemini and other AI services. The company reported a 37% increase in electricity load year over year. Improvements in AI hardware and software helped control demand, keeping it from rising even more.

This reflects a growing challenge across the technology sector. The International Energy Agency (IEA) says that electricity demand from AI, data centers, and digital tools will increase rapidly in the coming years. This makes clean electricity a top priority for the industry.

Clean Energy Is Central to Google’s Climate Strategy

The tech giant continues to invest heavily in clean energy as electricity demand grows. In 2025, the company signed deals for over 12 GW of new clean energy. It also launched more than 25 projects, adding nearly 2 GW to the grids that power its operations. It also maintained its goal of matching 100% of its annual electricity use with renewable energy purchases.

Google clean energy portfolio
Source: Google

Google is investing in advanced geothermal, nuclear, and other carbon-free energy. This will help provide reliable power for AI data centers.

Its global data centers reached an average Power Usage Effectiveness (PUE) of 1.09. This makes them some of the most energy-efficient in the world. Google states that cleaner electricity grids are crucial. Efficiency alone can’t match the fast growth of AI.

google data center construction emissions intensity
Source: Google

RELATED: Google’s Wild AI Strategy: 500 MW Solar Deal and Potential SpaceX Orbital Data Centers

The Hardest Emissions Now Come From Google’s Supply Chain

Google’s biggest climate challenge is no longer running its offices or data centers. It is building them.

In 2025, Scope 3 emissions made up nearly 80% of Google’s total carbon footprint. Most came from purchased goods and services, capital equipment, and construction materials needed for AI infrastructure. The company says demand for servers, chips, networking equipment, and new data centers continues to grow as AI adoption accelerates.

Google 2025 ghg emissions by scope
Source: Google

To address this, Google is working directly with suppliers.

The company launched a Clean Energy Addendum. It asks key hardware suppliers to use 100% clean electricity by the end of 2029. Google estimates the program could cut up to 8 million metric tons of CO₂e. It also helps suppliers create cleaner manufacturing operations, and more than 75 of them have already signed the agreement.

The tech giant is also helping suppliers with clean electricity buying programs and financing tools. This is especially true in Asia, where many electronics makers still depend on fossil fuels for power.

The company states that cutting supply chain emissions needs teamwork across the whole tech sector, not just one company acting alone.

Carbon Removals: Can It Help Close the Gap?

Google acknowledges that clean electricity alone will not eliminate all emissions.

Some emissions from aviation, construction materials, and semiconductor manufacturing remain difficult to avoid. To address these, the company is investing in high-quality carbon removal solutions.

Its portfolio includes direct air capture, biochar, enhanced rock weathering, forest restoration, and nature-based carbon removal projects. Google states these technologies will help reduce emissions that can’t be eliminated by operational improvements alone.

At the same time, the company continues to strengthen its climate governance.

Google’s net-zero goal is backed by the Science Based Targets initiative (SBTi). It also reports its progress through well-known climate disclosure frameworks. The company states that transparent reporting is crucial. Investors, regulators, and customers want clear proof of corporate climate action.

Overall, the sustainability report showed a big 18% jump in greenhouse gas emissions from high energy use in AI data centers. But Wall Street is focusing on Alphabet’s 21.8% revenue growth and strong “Buy” ratings from investors.

Google GOOG stock price

Google’s Moonshot Reflects a Broader Industry Challenge

Google’s latest environmental report tells two stories at once.

On one hand, the company continues to reduce emissions from its own operations while expanding one of the world’s largest portfolios of clean electricity projects. Improvements in renewable energy procurement, efficient data centers, and supplier engagement show that meaningful progress is still possible.

On the other hand, AI is changing the scale of the challenge.

Building the infrastructure needed for the next generation of computing requires more electricity, more materials, and more complex global supply chains. These factors are making net-zero targets harder to achieve—not only for Google but for much of the technology industry.

The company’s experience highlights a broader shift in corporate sustainability. The climate conversation is no longer just about reducing emissions from day-to-day operations. It is increasingly about transforming entire value chains while supporting the rapid growth of AI and other digital technologies.

For Google, operational emissions are moving in the right direction. The harder task now is ensuring that the infrastructure powering the AI era can grow without leaving a larger carbon footprint behind.

The post Google’s Carbon Emissions Fall, But AI Makes Its Net-Zero “Moonshoot” Goal Harder Than Ever appeared first on Carbon Credits.

World Bank Ends 45% Climate Finance Target: What Changes Now?

The World Bank has made a major change to its climate strategy. It has dropped its target of directing 45% of its annual financing to climate-related projects after pressure from the United States. Although the bank says climate action remains a priority, the decision changes how it will measure its support for clean energy and climate resilience.

The move comes at a critical time. Climate disasters are becoming more frequent, and developing countries need billions of dollars to build clean energy, protect communities, and adapt to rising temperatures. Many experts worry that removing the target could weaken accountability, even if climate funding continues.

Why Did the World Bank Drop the Target?

The World Bank has decided to remove both its 35% and 45% climate finance targets under its Climate Change Action Plan (CCAP). Instead of tracking the percentage of lending that supports climate goals, the bank says it will focus on broader development results and the needs of borrowing countries.

As per reports, the change followed months of pressure from the United States, the bank’s largest shareholder. U.S. Treasury Secretary Scott Bessent argued that fixed climate targets could pull the World Bank away from its main mission of reducing poverty and boosting economic growth.

According to the bank, future lending will be client-driven. This means countries will decide which projects they want to finance. If a country wants more renewable energy or climate resilience projects, the World Bank says it will continue to support them.

World Bank President Ajay Banga also stressed that the institution is not abandoning climate finance. Instead, it wants to give countries more flexibility while keeping climate action part of their development plans.

Unlocking World Bank’s Climate Finance Program

Climate finance is money that helps countries fight climate change while supporting economic development. The World Bank uses these funds to finance projects that lower greenhouse gas emissions or help communities prepare for climate impacts.

Instead of offering separate climate loans, the bank includes climate goals in many development projects. For example, it may finance roads that can withstand floods, renewable power plants, water conservation systems, or climate-smart farming.

The World Bank measures these investments through “climate co-benefits.” This refers to the share of a project’s funding that directly supports climate action.

The projects generally fall into two main categories:

  • Climate mitigation, such as renewable energy, clean transportation, energy-efficient buildings, and lower-carbon industries.
  • Climate adaptation, including flood protection, drought management, climate-smart agriculture, stronger water systems, and disaster preparedness.

This approach became the foundation of the bank’s Climate Change Action Plan, launched in 2021. The goal was to make climate action part of everyday development projects instead of treating it as a separate program.

Climate Finance Has More Than Doubled

Ironically, the World Bank removed its target after reaching record levels of climate finance.

According to its latest figures, climate financing increased from about $17 billion in 2020 to more than $39 billion in fiscal year 2025. That is an increase of well over 100% in just five years.

the world bank
Source: The World Bank

In fiscal year 2025, the bank reported:

  • More than $39 billion in climate finance.
  • 48% of total lending delivered climate co-benefits.
  • Around $22.6 billion supported emissions reduction and clean energy projects.
  • About $16.6 billion went toward climate adaptation and resilience.

Across the wider World Bank Group, including the International Finance Corporation (IFC), total climate-related financing reached about $50.8 billion.

These numbers show that climate finance has become one of the bank’s fastest-growing areas of investment.

Why Did the Target Matter?

The 45% target was more than just a percentage. It helped governments, investors, and environmental groups measure the bank’s progress.

The target also encouraged teams inside the World Bank to include climate solutions in projects involving transport, agriculture, water, and infrastructure.

Most importantly, it showed that the bank was committed to supporting the goals of the Paris Agreement.

Without a clear target, some experts worry that it will become harder to track whether climate finance is growing or shrinking in the future. The World Bank says it will continue reporting climate data, but many believe a numerical target provides stronger accountability.

climate finance
Source: The World Bank

How Could This Affect Developing Countries?

The decision is unlikely to stop climate funding immediately. However, it could change how future projects are selected.

Developing countries face huge climate challenges. They need money to:

  • Build renewable energy.
  • Upgrade electricity grids.
  • Protect communities from floods and droughts.
  • Improve water security.
  • Make agriculture more resilient.

Many low-income countries cannot afford these investments on their own. They depend on low-cost loans and grants from institutions like the World Bank.

Under the new approach, countries that request climate-related projects can still receive funding. However, governments that focus on other development priorities may receive less climate financing than before.

This could create differences in climate investment across regions and make long-term planning more difficult.

Here’s a breakdown of climate finance by region in the last year:

climate finance
Source: The World Bank

Global Climate Finance Faces a New Test

The World Bank plays a major role in international climate finance. Its decisions often influence other multilateral development banks.

At the COP29 climate summit in Baku, multilateral development banks pledged to provide $120 billion every year for low- and middle-income countries by 2030. They also committed another $42 billion annually for high-income countries.

The World Bank is expected to remain the largest contributor to these efforts.

However, removing its own climate finance target has raised new questions. Some analysts believe other investors may wonder whether the bank will continue increasing climate lending at the same pace.

Others argue that the bank is simply changing how it measures success rather than reducing funding.

Investors Are Watching Closely

So far, the World Bank has continued to finance clean energy projects.

Just days after announcing the policy change, it approved $265 million for a pumped-storage hydropower project in Morocco. The project will improve renewable energy integration and strengthen the country’s electricity grid.

This suggests that the bank still plans to support clean energy, climate adaptation, and resilient infrastructure.

Still, investors, governments, and environmental groups will closely watch future lending data. Without a formal target, the annual climate finance figures will become the best way to judge the bank’s commitment.

The Bottom Line

The World Bank’s decision to remove its 45% climate finance target marks an important shift in global development finance. The bank says climate action remains part of its mission, but it will now focus on development outcomes instead of meeting a fixed lending target.

For developing countries, climate funding is expected to continue. However, the lack of a measurable goal makes it harder to know whether support will keep growing in the years ahead.

The world needs trillions of dollars to expand clean energy, cut emissions and protect communities from climate change. Whether the World Bank can maintain its leadership without a formal climate finance target will become clear only through its future lending decisions.

In the end, the numbers will matter more than the policy. If climate finance continues to rise, the change may prove to be mostly administrative. But if funding slows, this decision could become a defining moment for global climate finance and the world’s transition to a low-carbon economy.

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Brookfield and Bloom Energy Scale AI Data Center Power Partnership to $25 Billion, Sending BE Stock Upward

Brookfield and Bloom Energy Scale AI Data Center Power Partnership to $25 Billion

The artificial intelligence (AI) industry has seen one of its largest energy infrastructure partnerships. Brookfield Asset Management and Bloom Energy have expanded their strategic partnership from $5 billion to $25 billion. The fivefold increase will finance and deploy on-site power systems for AI data centers across the United States.

The companies say the agreement will speed up the delivery of electricity to hyperscale facilities facing long waits for grid connections.

The deal reflects a growing problem across the technology sector. AI data centers are using electricity faster than ever. Utilities are struggling to keep up with the growing need for generation and transmission capacity.

Many tech companies are now skipping long waits for new grid connections. Instead, they are investing in on-site power systems that can be set up quickly. More broadly, the partnership shows how energy infrastructure is becoming a key part of the AI economy.

A Bigger Partnership for AI Infrastructure

The new agreement allows Brookfield and Bloom Energy to finance and deploy up to $25 billion in power projects. This is a big jump from their original $5 billion partnership.

Brookfield’s infrastructure financing skills mix with Bloom Energy’s fuel-cell tech. This helps deliver electricity to large data centers faster than usual utility connections.

Bloom says its Energy Server systems can be installed within months instead of waiting years for new transmission infrastructure. That speed has become increasingly important as AI developers race to add computing capacity.

power system comparison fuel cell bloom energy

The partnership also supports Brookfield’s broader AI strategy. This year, the company started a $100 billion AI Infrastructure Fund. It will invest in data centers, renewable energy, power generation, transmission, and digital infrastructure.

Sikander Rashid, Head of AI Infrastructure at Brookfield, remarked:

“Scaling this partnership further strengthens Brookfield’s position as one of the leading global AI infrastructure investors, capable of delivering end-to-end solutions, from electrons to tokens, for some of the world’s most sophisticated customers.”

These investments will give customers reliable electricity all day, every day. At the same time, utilities are expanding the grid.

Power Demand Is Reshaping AI Infrastructure

AI is driving a sharp rise in electricity demand, putting growing pressure on power grids worldwide.

The International Energy Agency (IEA) predicts that electricity use in data centers will more than double by 2030. It will reach around 945 terawatt-hours (TWh), mainly due to AI driving this growth.

A United Nations University report says AI data centers might use as much electricity by 2030 as Pakistan, Bangladesh, and Nigeria combined—almost three times their total use. AI now accounts for about 20% of data center electricity demand, and that share could double by the end of the decade.

Ai energy use vs 3 nations

As demand grows, many utilities find it hard to connect new data centers. This is due to limited transmission capacity, old infrastructure, and lengthy permitting processes. McKinsey estimates that global demand for data center capacity might triple by 2030. This change will need hundreds of billions of dollars in new investment.

Developers face challenges that push them to find faster power solutions. These include on-site generation, battery storage, microgrids, nuclear power, geothermal energy, and fuel cells. The shift is creating new opportunities for companies that can deliver reliable and scalable electricity for AI infrastructure.

Fuel Cells Offer a Faster Solution

Bloom Energy believes its fuel-cell technology can help meet that demand. Unlike conventional power plants, Bloom’s solid oxide fuel cells generate electricity through an electrochemical process instead of combustion.

The systems mainly use natural gas today, but they can also run on biogas. They are designed to support hydrogen as supplies become more common.

Fuel cells provide steady electricity no matter the weather. This makes them ideal for AI data centers that run all day.

Another advantage is speed. New transmission lines and big power plants can take years to build. In contrast, modular fuel-cell systems can be installed much faster. This allows data centers to begin operating while permanent grid upgrades are still underway.

Bloom has grown in the AI market by partnering with companies like Oracle, Equinix, and American Electric Power. These firms need dependable electricity for high-performance computing.

The systems mainly use natural gas, but they create fewer air pollutants than traditional combustion generators. They can also support renewable energy as power grids work to reduce carbon emissions.

Brookfield Is Building AI’s Energy Backbone

The Bloom Energy partnership is part of Brookfield’s broader AI infrastructure strategy.

This year, the company started a $100 billion AI Infrastructure Fund. It will invest in power generation, transmission networks, data centers, fiber infrastructure, and digital connectivity. These investments support the rapid growth of AI while addressing one of its biggest challenges—access to reliable electricity.

Brookfield estimates that AI infrastructure will require trillions of dollars in global investment over the coming decades. As demand grows, electricity has become a key factor in where and how new data centers are built.

Brookfield trillion dollar AI infrastructure

The company also owns one of the world’s largest renewable power portfolios through Brookfield Renewable. Its hydroelectric, wind, solar, storage, and distributed energy assets offer over 46 gigawatts (GW) of installed renewable power. Plus, the development pipeline tops 200 GW.

Brookfield has also committed to reaching net-zero greenhouse gas emissions across its operations by 2050. It keeps investing in renewable energy, energy storage, carbon capture, and grid upgrades to support that goal.

Bloom Expands Beyond Fuel Cells

AI has become an increasingly important growth market for Bloom Energy.

The company positions its solid oxide fuel cells as a cleaner alternative to conventional diesel backup generators. Bloom claims its systems create almost no particulate pollution. They also lower nitrogen oxide and sulfur oxide emissions much more than combustion-based technologies.

Beyond AI, Bloom continues expanding its hydrogen and carbon capture businesses. Its fuel cells already operate on biogas and are designed to transition to hydrogen as supplies increase.

The company has made solid oxide electrolyzers. They create hydrogen more efficiently than traditional electrolysis systems. These technologies support broader efforts to reduce industrial emissions while improving long-term energy resilience.

Investors Bet on AI Power Infrastructure

The expanded partnership also drew attention from investors. Bloom Energy’s shares climbed after the announcement. Investors saw the fivefold increase as a clear sign of strong demand for AI power infrastructure.

Bloom Energy BE stock price

Analysts noted that the agreement boosts Bloom’s role in a fast-growing energy market. It also gives long-term financing support through Brookfield.

The deal also suggests that distributed power systems will be more important, while developers keep facing delays in getting grid connections.

The Next AI Race Is About Electricity

Artificial intelligence is reshaping not only the technology sector but also global energy markets. Brookfield’s new $25 billion deal with Bloom Energy shows a key trend: reliable electricity is now as crucial as advanced chips and cloud computing.

As AI data centers continue to grow, developers will need power solutions that can be deployed quickly and operate around the clock. Fuel cells, renewable energy, battery storage, and modernized power grids are all expected to play important roles.

For Brookfield, the partnership strengthens its position in one of the fastest-growing infrastructure markets. For Bloom Energy, it expands opportunities in the rapidly growing AI sector.

More broadly, the agreement shows that the next phase of AI growth will depend not only on computing power, but also on the energy infrastructure needed to support it.

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Copper Under Pressure as Ferrari, BMW, and Tesla Embrace Cheaper Aluminum Wiring

The automotive industry is quietly reshaping one of its oldest engineering standards. After relying on copper wiring for nearly two centuries, leading automakers are increasingly replacing it with aluminum, particularly in electric vehicles (EVs).

According to Reuters, Ferrari and BMW have expanded the use of aluminum wiring in their latest models, joining Tesla and several Chinese EV manufacturers. The move is driven by a combination of lower costs, lighter weight, and growing concerns over copper supply constraints.

While copper remains the preferred conductor for many automotive applications, rising prices and tightening supplies are pushing manufacturers to rethink their material choices. Analysts now believe this trend could gradually reshape global demand for both metals over the coming decade.

Copper vs. Aluminum: Rising Prices Are Changing the Equation

Copper has long been the industry standard because of its superior electrical conductivity, durability, and flexibility. However, economics are increasingly working against it.

As we have seen and read before, copper prices had climbed to nearly $15,000 per metric ton earlier this year. Supply shortages and soaring demand from clean energy projects, power grids, data centers, and electric vehicles supported it.

copper prices
Sourced from Reuter’s report

In contrast, aluminum currently trades at roughly $3,100 per metric ton, making it nearly four times cheaper. The price difference has become difficult for manufacturers to ignore, especially as EV production continues to scale.

aluminum prices

However, apart from lower prices, the shiny white metal offers three major financial and engineering advantages:

  • It is approximately 3.3 times lighter than copper.
  • It costs roughly one-quarter as much as copper.
  • Lower vehicle weight can improve driving range and overall energy efficiency.

The tradeoff is conductivity. Aluminum carries electricity less efficiently than copper, requiring cables with a larger cross-sectional area to deliver the same electrical performance. Engineers must also carefully design connectors because aluminum naturally forms an oxide layer that can reduce electrical contact quality if not properly managed.

Despite these challenges, advances in cable design and manufacturing have made aluminum increasingly practical for selected automotive applications.

Ferrari and BMW Expand Aluminum Wiring Across New Models

Reuters reported that Ferrari began using aluminum power cables in its 296 hybrid sports car last year before extending the technology to additional vehicles, including the newly launched Luce, the company’s first fully electric model.

According to Ferrari communications executive Dario Esposito, switching materials reduced total wiring weight by as much as 20%. Esposito told Reuters that performance and not cost was the primary motivation behind Ferrari’s decision.

The company already relies heavily on aluminum in vehicle bodies, chassis, and engines, making wiring a natural extension of its lightweight engineering strategy.

BMW has followed a similar path, although its transition began much earlier.

The German automaker first introduced aluminum conductors in the BMW 1 Series in 2011. Since then, the company has gradually expanded their use across hybrid and electric vehicles.

Today, BMW incorporates significant amounts of aluminum wiring in both high- and low-voltage systems within its latest eDrive electric vehicle platform introduced last year.

Reuters also cited an industry source indicating that Stellantis has recently started replacing copper wiring with aluminum in some applications, although the company declined to comment.

China Is Accelerating the Shift

China appears to be moving even faster.

Chinese government encouraged manufacturers to substitute copper with aluminum in a March 2025 policy paper. The recommendation reflects broader concerns over securing long-term supplies of critical industrial metals while lowering manufacturing costs.

SMM View

According to Shanghai Metals Market (SMM), the policy reflects China’s long-term strategy to transform its aluminum industry through greater recycling, resource efficiency, and green innovation.

  • SMM believes the target of producing 15 million metric tons of recycled aluminum annually is both realistic and strategically significant.

The consultancy noted that expanding recycled aluminum production will help meet growing demand from sectors such as electric vehicles, renewable energy, and advanced manufacturing while reducing reliance on primary aluminum.

It will also help ease supply constraints created by China’s cap on primary aluminum production, supporting a more sustainable and circular aluminum industry over the long term.

Tesla Sets a Benchmark for Chinese EV Makers 

Several Chinese EV makers have already adopted aluminum wiring.

Tesla also pioneered many of these design choices. It introduced aluminum wiring in the Model Y in 2019 and expanded its use in the Cybertruck. Woychowski noted that Tesla’s engineering decisions have become important benchmarks for Chinese automakers, many of which closely study the company’s manufacturing techniques.

The timing is significant.

China’s highly competitive EV market continues to experience intense price pressure, leaving manufacturers searching for every possible cost reduction. At the same time, lighter vehicles offer longer driving ranges without increasing battery size, creating an additional incentive for aluminum adoption.

Reuters also reported that approximately 85% of electrical busbars—the components connecting EV batteries to vehicle systems—are still made from copper, suggesting considerable room for future substitution.

Lightweight Design Supports EV Efficiency

Weight reduction has become one of the most valuable engineering strategies for electric vehicles.

Unlike conventional gasoline cars, every kilogram removed from an EV can contribute to improved efficiency, longer driving range, or smaller battery requirements.

This broader industry trend is also reflected in research from DUCKER Research and Consulting. Its report, Aluminum Content in Passenger Vehicles (Europe), projects average aluminum content per passenger vehicle will increase from 205 kilograms in 2022 to approximately 256 kilograms by 2030.

The report estimates aluminum usage will continue growing, supported primarily by electrification, battery housings, electric drive systems, high-voltage components, and large structural castings.

According to the study, reducing vehicle weight remains essential for improving driving range while lowering battery-related costs.

As manufacturers pursue greater efficiency, aluminum is becoming increasingly attractive across multiple vehicle systems beyond body structures.

Aluminum in vehicles
Source: Ducker; *CPV of 179 kg in EA study 2019 as second set of OE wheels was included

Copper Demand Faces Growing Pressure

The increasing use of aluminum is beginning to influence global metals markets.

Reuters reported that analysts at JPMorgan expect aluminum substitution to affect approximately 2% of global copper demand this year.

  • Looking further ahead, the bank outlined a scenario in which aluminum could replace about 6% of annual copper demand by 2030 if adoption continues across transportation, power infrastructure, and manufacturing.
  • Reuters further highlighted that Chinese consultancy Zhuochuang estimates that 25% to 30% of copper components, measured by metal volume, could shift to aluminum across the automotive, power, and home appliance industries by 2030.

Although these percentages may appear modest, they represent substantial volumes within the world’s largest industrial metal markets.

Copper demand is simultaneously being supported by renewable energy installations, electricity transmission upgrades, artificial intelligence infrastructure, and rapidly expanding data centers.

As a result, substitution may help alleviate supply pressures rather than eliminate demand altogether.

Copper Still Holds Important Advantages

Despite growing momentum behind aluminum, copper is unlikely to disappear from automotive manufacturing.

Copper continues to outperform aluminum in several critical areas.

Its higher electrical conductivity allows manufacturers to use thinner cables while delivering greater power. Copper also offers superior flexibility, making it better suited for compact spaces, repeated movement, and demanding electrical systems.

For these reasons, aluminum is expected to remain concentrated in applications where weight savings outweigh conductivity advantages.

These include:

  • High-voltage EV cables
  • Long-distance power runs
  • Battery connection systems
  • Applications where reducing vehicle mass delivers measurable efficiency gains

Meanwhile, copper will likely continue dominating compact electronics, high-performance circuits, and systems requiring maximum reliability.

A Gradual Transition, Not a Complete Replacement

The growing adoption of aluminum wiring reflects a broader transformation occurring throughout the automotive industry.

Manufacturers are balancing performance, cost, material availability, and sustainability while responding to rapidly changing supply chains.

Reuters’ reporting suggests this is no longer an isolated experiment. Instead, aluminum is becoming an increasingly mainstream engineering solution across global automakers—from premium brands like Ferrari and BMW to mass-market EV manufacturers in China.

Even so, the transition is expected to remain selective rather than universal. Copper’s superior electrical performance ensures it will continue playing a central role in vehicle electrification.

Instead of replacing copper entirely, aluminum is emerging as a complementary material that helps manufacturers reduce costs, lower vehicle weight, and manage growing pressure on global copper supplies.

As EV production accelerates worldwide, the balance between these two metals could become one of the defining material trends shaping the next generation of electric mobility.

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Airlines Face a $127 Billion Carbon Credit Bill as CORSIA Supply Tightens

Airlines Face a $127 Billion Carbon Credit Bill as CORSIA Supply Tightens

The global aviation industry is facing a new climate challenge. Airlines might soon face challenges in getting enough quality carbon credits to follow international emissions rules. This could lead to an extra $127 billion in costs over the next ten years.

An MSCI Carbon Markets analysis, as first reported by Financial Times, warns of a carbon credit shortage. This shortage under the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) could drive prices near $100 per metric ton by 2035. That would be a big jump from current levels. It could raise compliance costs for airlines around the world.

Why CORSIA Is Reshaping Aviation’s Climate Strategy

The warning comes as international air travel continues to recover. The International Air Transport Association (IATA) predicts that global passenger numbers will surpass 5.2 billion in 2025. Airline revenues are also expected to exceed $1 trillion. More flights also mean more emissions, increasing demand for high-quality carbon credits.

CORSIA is the world’s first global market-based system designed to reduce emissions from international aviation. The International Civil Aviation Organization (ICAO) created a rule that requires airlines to offset emissions growth on eligible international routes. They must do this by buying approved carbon credits.

The program entered its first compliance phase in 2024 and will expand over the coming years as more countries participate. More than 120 nations have committed to CORSIA, making it one of the world’s largest international carbon markets.

CORSIA compliance requirements abatable
Source: Abatable

CORSIA is different from the broader voluntary carbon market (VCM). It only accepts credits from programs that follow strict standards. These include environmental integrity, permanence, transparency, and independent verification. ICAO has approved only a limited number of carbon credit standards and methodologies.

As a result, airlines cannot simply buy the cheapest credits. They must compete for a much smaller pool of eligible credits, increasing the risk of shortages as demand grows.

MSCI Carbon Markets says the market might get tight after 2027. This is when more airlines will need to comply, and demand will rise.

A Growing Gap Between Supply and Demand

The expected shortage is not caused by a lack of carbon projects. Instead, too few projects meet CORSIA’s eligibility requirements.

The VCM has issued billions of carbon credits over the past two decades. However, many older credits do not qualify under ICAO’s stricter rules. At the same time, developers need years to create, validate, verify, and register new projects before credits can reach the market.

CORSIA eligible carbon credits supply
Source: MSCI

MSCI estimates this imbalance could leave airlines competing for a limited supply of eligible credits throughout the 2030s. Under its tighter supply scenario, compliance costs could reach $127 billion between 2024 and 2035.

The report predicts that CORSIA-approved credits might reach nearly $100 per metric ton by 2035. This is much higher than the current prices in the wider voluntary carbon market.

Some airlines face greater exposure than others. Long-haul international carriers like Emirates, Qatar Airways, and United Airlines will likely need the most eligible credits. This is due to their vast global networks.

  • Emirates could face $8 billion in compliance costs, followed by Qatar Airways ($6 billion) and United Airlines ($5 billion), per FT report.

The challenge comes as many airlines are already dealing with higher fuel costs, aircraft shortages, and growing investments in sustainability.

Aviation’s Climate Challenge Continues to Grow

The pressure reflects aviation’s broader emissions challenge.

According to the International Energy Agency (IEA), aviation accounts for around 2% of global energy-related carbon dioxide emissions. Yet, it remains one of the fastest-growing transport sectors because passenger demand continues to outpace efficiency gains.

The Air Transport Action Group (ATAG) estimates that in 2024, commercial aviation emitted around 942 million metric tons of CO₂. This is nearly back to pre-pandemic levels. Without stronger climate action, emissions could keep rising over the coming decades.

Airline aviation sector ghg emissions 2024 IATA
Source: IATA

The industry has responded with ambitious climate goals. Through IATA, airlines have committed to reaching net-zero emissions by 2050. To reach that target, we need better aircraft, sustainable aviation fuel (SAF), operational upgrades, hydrogen and electric planes, and carbon removal.

Most experts agree that carbon credits will still be vital during the transition. This is especially true for emissions that we can’t eliminate yet.

Sustainable Aviation Fuel Cannot Close the Gap Alone

The aviation industry sees sustainable aviation fuel as its biggest long-term tool for cutting emissions. Depending on the feedstock and production method, SAF can reduce lifecycle greenhouse gas emissions by up to 80% compared with conventional jet fuel.

However, supply remains well below demand.

According to IATA, SAF production reached about 2.4 million metric tons in 2025, or roughly 2.5 billion liters. Despite rapid growth, it will supply only about 0.7% of global jet fuel demand this year.

SAF production
Source: ICAO

The industry aims to expand production much faster. Under IATA’s net-zero roadmap, SAF could deliver about 65% of aviation’s emissions reductions by 2050. Reaching that goal will require hundreds of billions of dollars in investment and a major expansion of production capacity worldwide.

Until then, airlines will continue relying on carbon credits to offset emissions that cannot yet be avoided. That is why analysts expect demand for high-quality credits to remain strong over the next decade.

Higher Credit Prices Could Reshape Carbon Markets

Growing CORSIA demand could affect the broader carbon market. In recent years, voluntary carbon markets have struggled with low prices and concerns about credit quality. Many lower-quality credits traded for only a few dollars per metric ton as buyers became more selective.

CORSIA could help reverse that trend.

CORSIA carbon credit supply, demand, and prices
Source: Allied Offsets

ICAO only accepts credits that meet strict environmental standards. This gives developers a strong reason to create high-quality carbon removal and avoided-emissions projects. These projects can then qualify for compliance markets.

This change could boost investment in several areas:

  • Reforestation,
  • Afforestation,
  • Direct air capture (DAC),
  • Bioenergy with carbon capture and storage (BECCS),
  • Improved soil carbon, and
  • Other lasting carbon removal projects.

Market analysts expect buyers to continue prioritizing quality over low prices. That trend is already visible as companies pay premiums for credits backed by stronger verification and long-term climate benefits.

Higher prices could help project developers. This change can improve project economics and make it easier to fund carbon removal technologies that have had trouble attracting investment.

The Aviation Transition Will Require More Than Offsets

Carbon credits alone will not solve aviation’s climate challenge. Airlines need to invest in:

  • Fuel-efficient aircraft,
  • Sustainable aviation fuel,
  • Operational improvements, and
  • Future technologies like hydrogen and electric aircraft, when possible.

Governments will also need to support SAF production, modernize air traffic systems, and encourage investment in low-carbon aviation infrastructure. Even so, carbon markets will remain an important bridge during the transition.

The growing shortage of CORSIA-eligible credits reflects a broader shift across global carbon markets. Buyers are no longer looking for the cheapest offsets. They increasingly want credits that meet higher standards for quality, transparency, and measurable climate impact.

For airlines, this means climate compliance is becoming more complex and more expensive. For the carbon market, it signals a move toward higher-value credits backed by stronger environmental integrity.

If current projections prove correct, the next decade will not be defined by how many carbon credits are available. Instead, it will depend on how many truly high-quality credits the market can deliver.

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