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Rob talks with Charm Industrial cofounder Peter Reinhardt about “liquid smoke” and how it can store greenhouse gas at gigaton scale.
On Trump’s power pledge, America’s offshore nuclear, and Japan’s offshore wind
Current conditions: Tropical Depression Two is set to strengthen into Tropical Storm Bertha as the system widens over the Gulf Coast from Texas to Tampa Bay, Florida • Temperatures will top 112 degrees Fahrenheit in Khartoum, the capital of war-ravaged Sudan • Canadian wildfire smoke may have largely cleared in the Northeastern United States, but nearly 900 blazes are still burning, and Chicago is still under an air quality warning.
Feel the Burnham. Carl Court/Getty Images
Andy Burnham, the new leader of the British Labour Party and the likely next prime minister of the United Kingdom, has vowed to uphold a contentious ban on exploration licenses for oil and gas drilling in the North Sea. While deputy party leader Lucy Powell told the BBC on Sunday that fossil fuels from the North Sea would remain part of Britain's energy mix, the so-called “king of the north,” who previously led the industrial metropolis of Manchester as its mayor, has instead stuck by the party’s original plan. “If they don’t reverse the ban on new exploration then the industry will be very unhappy indeed,” one industry source told the Financial Times. The decision comes after rumors had swirled that Burnham may support increasing domestic fossil fuel production in a bid to bring down energy prices. In a post on his Truth Social network, Trump wrote: “The People of Aberdeen, in Scotland, are dancing in the streets because the new Prime Minister, Andy Burnham, has stated that he will be opening up, all the way, the invaluable North Sea Oil!”
Scotland is, on the other hand, getting more of Trump’s least favorite energy source. The American president’s antipathy toward offshore turbines, so goes the lore, began with an unsuccessful bid to block a project he considered unsightly off the coast of his golf course there. Last week, Renewables Now reported that offshore wind developer Ocean Winds secured the Scottish government’s approval for a 2-gigawatt offshore wind farm called Caledonia, the name Romans gave the area of Britain that ultimately became Scotland and its frontier with England. Located 25 miles off Moray Firth, the project is poised to begin construction in 2030.
In the U.S., the Trump administration has limited plans for carbon removal facilities. In Canada, as Emily has written, Prime Minister Mark Carney has opened the door to direct air capture companies looking for a new home base. But in the European Union, Brussels is already weaving carbon removal into the bloc's carbon-trading market. The EU’s highest governing body, the European Commission, proposed allowing carbon removal into its EU Emissions Trading System for the first time. “Under the current rules, companies cannot use carbon credits of any kind to comply with the regulations,” Emily wrote last week in a piece previewing the proposal. “But as 2040 grows closer, the EU plans to rely on carbon removal to offset some of the residual emissions from industries that are the most difficult to decarbonize.” For now, the scheme will be limited to direct air capture and bioenergy with carbon capture and sequestration.
Last month, New York Attorney General Letitia James headed a group of Democratic-led states in a lawsuit challenging the Trump administration’s deals to kill offshore wind projects, as my colleague Emily Pontecorvo has written. Now many of those same blue states are seeking to join private developers’ litigation seeking to thaw President Donald Trump’s freeze on approving wind projects. Last week, the states filed a motion to intervene on behalf of wind companies that accuse the administration of unfairly targeting their businesses. The states argue, according to Bloomberg Law, that the halt to federal permitting “pushes up electricity costs” and “hurts their attempts to curb fossil fuel emissions.”
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Claude-maker Anthropic is set to lease computing power for its artificial intelligence data centers from Meta, making what The New York Times described as “a potential step toward a new AI for the social networking company.” Under the deal, Anthropic would pay the Facebook parent company $10 billion over two years, in monthly increments. The agreement is roughly a third the size of the deal that the AI giant signed with Elon Musk’s xAI in May for $45 billion of computing power over three years. That deal has drawn blowback given the vast arrays of gas turbines that power xAI’s biggest data center, Colossus, which is the subject of an air pollution lawsuit filed by the NAACP. As for Meta, insiders Heatmap talked to at the end of last year put it in the bottom of hyperscalers based on its decarbonization efforts. One social scientist told us, “Google is the best, Meta is the worst. Evil corporation.”
Russia’s state-owned nuclear company has at least 18 new nuclear projects underway at home, Rosatom announced. The Kremlin-owned company said the projects are in “various stages of implementation” throughout Russia, and don’t count the more than two dozen under construction overseas in places such as Bangladesh, India, and Turkey. In a speech published in the company’s in-house magazine and shared with World Nuclear News, Rosatom Director General Alexei Likhachev said the firm aims to increase revenues to $51.3 billion by 2028 — a nearly 18% increase from this year. Improving profits, however, means reducing costs by 5% that same year.
Meanwhile, the Kremlin’s nuclear regulator, Rostekhnadzor, has issued licenses for the first two proposed units of the new Kola nuclear station in northwest Russia, near Finland. The plant is expected to begin construction next year, NucNet reported, and ultimately include four VVER-S medium-capacity pressurized water reactors.
Tesla has a fierce new competitor in the European market. The Chinese automaker Xpeng just released its compact L03 crossover. The starting price in the German market, $40,700, undercuts the Tesla Model Y’s $44,480. The vehicle, per InsideEVs, is the first Chinese car to be fully integrated with Google Maps.
Proposed reforms to Europe’s Emissions Trading System could see the EU itself become a carbon credit customer.
The European Union is on the verge of making major changes to its carbon market, including integrating carbon removals into the scheme for the first time.
The bloc’s highest governing body, the European Commission, is expected to publish a proposal on Friday to reform the EU Emissions Trading System, or ETS, to align it with the EU’s 2040 emissions target. Under the current rules, companies cannot use carbon credits of any kind to comply with the regulations. But as 2040 grows closer, the EU plans to rely on carbon removal to offset some of the residual emissions from industries that are the most difficult to decarbonize.
Friday’s proposal will cover which types of carbon removal will be accepted, how many carbon removal credits can enter the market and when, and who will be allowed to buy them. One leading approach would have the EU government buy carbon removal directly, which would give the industry unprecedented market certainty.
“The ETS could be the single biggest driver of demand for carbon removal for the next decade,” Felix Grey, a policy manager for the carbon registry Isometric, told me.
The ETS enforces a cap on emissions that declines over time. Large emitters located in the EU must buy “allowances” for each ton of carbon they release, while the pool of available allowances shrinks apace with the emissions cap. Last year, the EU set a new target to reduce emissions 90% below 1990 levels by 2040, building off its earlier target of a 55% reduction by 2030. The upcoming proposal will address how the market should operate between 2030 and 2040 to achieve that goal.
There are many contentious questions surrounding this next phase, including how quickly the cap should decline over the decade. Another question is how many free allowances the EU should give to energy-intensive facilities such as steelmakers and fertilizer producers, which it does to prevent them from leaving Europe due to higher operating costs. Now that the EU has launched its carbon border adjustment mechanism, which taxes higher-carbon imports of these goods, free allowances may not be as necessary.
The integration of carbon removal is also controversial. At best, it could be an opportunity to improve and scale up nascent technologies that take carbon out of the atmosphere. At worst, it could enable polluters to avoid cutting their own emissions by purchasing carbon credits that don’t represent real climate benefits. Then there’s the possibility that removals will be so expensive that their integration into the ETS will have no effect at all — that is, it will be less expensive for companies to pursue emissions reductions than to buy their way out. The outcome will depend on the rules the EU Commission proposes and what its member states ultimately agree to.
Today, most carbon removal efforts are supported by research grants and voluntary carbon credit purchases from companies like Microsoft. A common mantra in the industry is that it will never reach a meaningful scale without government backing. Carbon removal startups aren’t selling a product with inherent value, they are selling a waste management solution. Unless governments require polluters to clean up their carbon waste, or else handle the job themselves as a public good, carbon removal will never take off.
Some governments have already dabbled in state-sponsored removals. Under the Biden administration, the U.S. launched a carbon removal purchase pilot prize, dedicating $35 million to buy carbon removal from a handful of promising companies. It never got past the initial award phase, however, and the Trump administration has not continued the program. A number of cities and counties across the U.S. have set up their own, much smaller purchasing programs in an effort to support the industry. Making carbon removal part of a regulatory program like the EU’s ETS could open the industry to a much bigger market.
As of today, there are a few knowns and a few unknowns about what the Commission plans to propose. For example, it’s relatively clear what methods of carbon removal the European Commission will allow into the market. Earlier this year, the EU finalized regulations for certifying three kinds of carbon removal under its official Carbon Removal and Carbon Farming scheme — direct air capture, biomass with carbon capture, and biochar projects — laying out criteria for quality as well as monitoring and reporting rules. For now, only these three project types can be considered.
Here’s the problem: Direct air capture and biomass with carbon capture are two of the most expensive project types. The average carbon removal credit from these methods costs hundreds of dollars. The average price of an allowance in the ETS, by contrast, has hovered between $70 and $90 over the past few years. Depending on how the Commission chooses to incorporate the credits into the market, it’s possible that no one will buy them.
The European Commission has said it is considering three options. The leading proposal is for the EU to create a central purchasing authority that buys removals using revenues from the ETS. For each removal credit the government acquires, it would issue an additional allowance into the market on top of the established cap. This would enable regulated facilities to emit a bit more than they could otherwise — a tradeoff that Grey argued would help them stay competitive. At the same time, it would also ensure that there’s demand for carbon removal regardless of the price.
The second option is to leave it to the market, giving emitters the option to purchase carbon removal credits as an alternative to purchasing allowances. In this version, similar to the first, the carbon removal credits would enter the market as an addition to the established amount of allowances. Whether or not anyone actually buys carbon removal will depend on how tight the allowance market is.
In the third option, emitters would be able to use carbon removal credits in lieu of allowances, but those credits would operate “below the cap,” so to speak. For every credit counted toward the ETS, regulators would reduce the number of allowances available to purchase by the same amount. It is hard to see why any company would purchase carbon removal in this version unless and until the price of a credit drops below the price of an allowance, however.
Carbon Market Watch, a nonprofit watchdog group, isn’t excited about any of these options. In a recent white paper on ETS reforms, it argued that Europe should support carbon removal separate from the ETS. “Direct integration of CDR in the ETS is either a dead end, or the start of a slippery slope,” the group warned. Carbon Market Watch also has concerns about the integrity of the EU’s carbon removal certification scheme. The group has formally challenged the methodologies for certifying biochar and biomass with carbon capture projects, arguing that they do not account for all the emissions associated with these processes, lack sustainable biomass sourcing safeguards, and in the case of biochar, are missing monitoring requirements. If ETS credits are built on faulty science, the EU could end up spending billions of dollars to little climate benefit.
The other big question about the integration is the amount of carbon removal the EU will allow into the market. Even if the bloc decides to create a central purchasing authority, its potential to help the industry scale will depend on how much it commits to buying. Grey, of Isometric, argued that staying on course for net zero by 2050 would require the EU to remove about 100 million metric tons of carbon per year by 2040.
“A strong proposal on Friday will confirm carbon removal’s integration from 2031, commit to buying removal at the scale required to meet net zero, and treat every credible method equally rather than picking winners,” he said.
