According to theasianbanker.com, the European Parliament adopted its negotiating position on 15 September to expand the Carbon Border Adjustment Mechanism (CBAM) to downstream steel and aluminium products—including screws, wire, springs, appliances, and auto parts—while China unveiled an RMB 800 billion ($111 billion) carbon reduction support tool to finance emission cuts and carbon allowance-backed lending.
Singapore-China Green Finance Cooperation Enters Implementation Phase
On 17 September, the Monetary Authority of Singapore (MAS) and the People’s Bank of China held their fourth annual Green Finance Taskforce (GFTF) meeting in Nanning, Guangxi, co-chaired by MAS Chief Sustainability Officer Gillian Tan and PBOC Research Bureau Director Wang Xin. Over 50 regulatory and industry representatives attended. The two sides agreed to extend taxonomy interoperability cooperation beyond green activity mapping to include transition activities, boost green panda bond issuance, and deploy technology for sustainable financing solutions.
The meeting marked a strategic pivot from framework development to substantive expansion—adding transition finance, biodiversity credits, climate resilience and adaptation insurance, and cross-border carbon market connectivity to the agenda. Industry roundtables explored commercial financing pathways for climate-resilient infrastructure. With global transition finance standards still fragmented, Singapore and China’s joint work offers a regional demonstration model for green finance connectivity in Asia.
This shift follows the 2023 start of CBAM’s transitional period and precedes the EU’s parallel move toward formal international carbon credit trading by 2036, up from a planned pilot in 2031.
EU Parliament Approves Largest CBAM Expansion Since 2023
The European Parliament voted on 15 September to broaden CBAM’s scope, with 464 votes in favour, 50 against, and 159 abstentions. The Council had agreed its general approach on 12 June. Trilogue negotiations between the Parliament and Council will now begin. CBAM’s definitive phase—featuring mandatory certificate surrender—has been in effect since January 2026.
This expansion extends CBAM coverage from raw materials to finished goods, directly affecting manufacturing supply chains exporting to Europe. Major exporters—including China, Turkey, and India—now face heightened exposure. The move also strengthens anti-circumvention rules and adds new compliance layers, including data verification and certificate surrender requirements for non-EU installation operators.
Ten definitive-phase guidance documents published by the EU in September further codify these obligations. Final scope remains contingent on trilogue outcomes.
China Advances Cross-Border Carbon Trading Framework
In mid-September, Zhang Xin, Deputy Director of the National Centre for Climate Change Strategy and International Cooperation, confirmed that China’s Measures for the Administration of Cross-Border Carbon Trading had entered public consultation. The six-chapter, 29-article framework—prepared under the Ministry of Ecology and Environment—is expected to become a departmental regulation. Its legal foundation includes the Ecological Environment Code, effective since 15 August, and recent Central Committee and State Council directives.
Meanwhile, Lukas Visek, Head of Unit at the European Commission’s DG Climate Action, stated the EU has shifted from a 2031 pilot to formal international carbon credit trading by 2036. Joint supervision and a cross-border trading platform under development by the Beijing Green Exchange aim to connect domestic voluntary emission reductions with international markets.
Yet scalability hinges on resolving critical gaps: data quality, mutual recognition of monitoring, reporting and verification (MRV) systems, and legal clarity on carbon credit ownership.
PBOC Rolls Out $111 Billion Tool to Monetize Carbon Allowances
On 16 September, PBOC Deputy Governor Zou Lan announced at the China Carbon Market Conference that the central bank had established an RMB 800 billion ($111 billion) carbon reduction support tool. Launched in 2021, it was expanded in early 2026 to cover energy-efficiency retrofits and green upgrades, and extended through the end of 2027.
The tool provides low-cost relending to financial institutions, directing capital toward emission reduction. It also supports banks in developing carbon allowance pledge loans and repo financing—enabling emissions-controlled firms to use allowances as collateral and improve liquidity. Wider adoption depends on clear rules for ownership, registration, custody, reliable valuation, and management of carbon-price volatility.
These measures seek to broaden the role of carbon assets in financing beyond mere compliance, creating new risk-control requirements for financial institutions.
ExxonMobil Launches Two Major CCS Projects in US
On 16 September, ExxonMobil began carbon capture and storage (CCS) operations at Nucor’s direct reduced iron (DRI) plant in Convent, Louisiana. The facility captures, transports, and stores up to 800,000 tonnes of CO₂ annually—the largest low-carbon DRI capacity in North America. It is ExxonMobil’s third CCS project for a third-party customer and its second to commence operations in 2026.
On the same day, the Texas Railroad Commission approved ExxonMobil’s Rose carbon storage project in Jefferson County. It comprises three Class VI injection wells with capacity to store up to five million tonnes of CO₂ annually for 13 years. Both projects signal growing commercial activity in integrated CCS for hard-to-abate sectors like steelmaking.
However, deployment remains constrained by capture costs, pipeline availability, storage capacity, long-term liability, and dependence on policy support—including the US 45Q tax credit.
Source: theasianbanker.com
Compiled from international media by the SCI.AI editorial team.
