Other Notable Developments

EU’s Climate Report: The European Environment Agency, an EU agency tasked with providing information on the environment to support sustainable development, has published its periodic report on the status of the EU’s environment, climate and sustainability. The report concludes that a “profound shift towards responsible stewardship of our natural capital is urgently needed” to safeguard the needs of future generations. The report also found a 35% reduction in GHG emissions from 2005 to 2023 and a slight increase in the circularity rate, namely the share of recycled materials, in Europe.

West Africa’s Sustainable Investments: The Economic Community of West African States Bank for Investment and Development has announced over $300 million in new investment projects focused on clean energy, industrial development and sustainable growth.

EU: European Council Approves Simplification of Carbon Border Adjustment Mechanism

On September 29, 2025, the Council of the European Union formally adopted a regulation amending the EU’s Carbon Border Adjustment Mechanism (“CBAM”) as part of the EU’s Omnibus legislative simplification package.

CBAM, a component of the European Green Deal announced in December 2019, is a system of carbon certificates. CBAM requires EU importers of certain carbon-intensive goods to purchase carbon certificates corresponding to the carbon prices that would have been paid had the goods been produced in the EU. By ensuring equivalent carbon costs between imported and EU-produced goods, CBAM seeks to minimize the risk of carbon leakage and incentivize non-EU producers to decarbonize their production processes.

The amending regulation introduces a new de minimis threshold, which will exempt imports of up to 50 tons per importer, per year, from CBAM’s requirements. The main beneficiaries of this exemption are importers of small quantities of goods such as SMEs and individuals. The regulation also simplifies procedural requirements for all importers of CBAM goods, such as those relating to authorization, data collection, verification, and emissions and financial liability calculations. The regulation also introduces transitional arrangements to prevent importers from disruptions while they await CBAM registration once CBAM comes into full effect on January 1, 2026. Notwithstanding the simplifications, the Council press release reports that roughly 99% of embedded emissions in imported CBAM goods remain covered.

The regulation will enter into force on the third day following the date of its publication in the EU’s Official Journal, expected in late October 2025.  

Links:
EU Council Press Release

Regulation amending Regulation (EU) 2023/956

Legislative status of Regulation


U.S.: CARB Issues GHG Emissions Reporting Template

On October 10, 2025, the California Air Resources Board (“CARB”) published a draft template for reporting Scopes 1 and 2 greenhouse gas (“GHG”) emissions under the Climate Corporate Data Accountability Act (“SB 253”). In its disclosure template memo, CARB clarified that reporting entities’ use of the template is voluntary for the 2026 reporting cycle. CARB’s intention in publishing the template is to streamline reporting, particularly for entities reporting GHG emissions for the first time. (For more on CARB’s draft reporting template, see our Debevoise Update.)

The draft template covers (1) organization information, (2) third-party verification, (3) inventory boundary, (4) Scope 1 and Scope 2 disclosure, (5) methodology, (6) de minimis/minor sources (covering emissions excluded based on specific materiality thresholds) and, if applicable, (7) disclosure of a potential reporting obligation under the California Mandatory Reporting Regulation and (8) emissions reductions. The draft reporting template follows CARB’s August 21 public workshop. (For additional background on California’s climate disclosure laws and on the August 21 public workshop, see our Debevoise Update and ESG Update respectively.)

CARB has solicited public feedback on the structure and content of the reporting template. The template and an accompanying memo remain open for public comment through October 27, 2025.

Separately, on October 14, 2025, CARB announced that it is proposing to delay issuing implementing regulations under the California climate laws until the first quarter of 2026 due to the volume of public comments received. CARB has separately indicated that further guidelines on the scope and implementation of SB 253 are forthcoming as soon as this October. We will continue to provide updates on further developments.

Links:

Background

Emissions Disclosure Template

Disclosure Template Memo


Global: ICVCM Approves New Carbon Removal Methodologies

On October 1, 2025, the Integrity Council for the Voluntary Carbon Market (the “ICVCM”), an independent standard-setting body for high-integrity carbon credits, announced that it has approved a new suite of methodologies for carbon dioxide removal (“CDR”). This decision extends the ICVCM’s “Core Carbon Principles” label to six new CDR methodologies: (1) accelerated carbonation of concrete aggregate, (2) biomass geological storage, (3) bio-oil geological storage, (4) subsurface biomass carbon removal and storage, (5) biogenic carbon capture and storage, and (6) direct air capture. 

The Core Carbon Principles label is assigned based on science-based criteria to carbon credits with a verifiable climate impact towards the ICVCM’s target temperature limit of 1.5 degrees Celsius above pre-industrial levels. While CDR accounts for less than 1% of issued carbon credits, the ICVCM’s decision is significant as it expands access to high-integrity credits when governments in the EU and UK are preparing to integrate CDR into regulated emissions trading systems. This decision also assists in supporting viable net-zero pathways, as CDR methodologies are increasingly deemed necessary to stay within the 1.5 degrees Celsius temperature limit.

Link:

ICVCM Press Release


Global: Net-Zero Banking Alliance Votes to Cease Operations

On October 3, 2025, the Net-Zero Banking Alliance (the “NZBA”), a UN-backed coalition of banks formed to advance global net-zero goals through science-based targets, announced that it has ceased operations. According to a spokesperson, the NZBA decided, through a member vote, to “transition from a membership-based alliance and to establish its guidance as a framework.”  Specifically, individual banks worldwide will be able to “continue to use and reference [the NZBA’s] resources to help develop and deliver on their own net-zero transition plans.”  The NZBA’s activities have been paused since August 27, 2025, when the NZBA Steering Group initiated the vote that resulted in this decision.

The NZBA’s decision to cease operations follows the departure from the alliance of several major banks, as well as subsequent efforts to revise the alliance’s standards and address the concerns of its remaining member banks. This month, the NZBA also published a further revised version of its climate target-setting guidelines, which remains accessible through the UN’s Net-Zero Banking Resources web page. For more on the NZBA’s March 2024 update to its climate-target-setting guidelines, see here; for more on its April 2025 revisions following member departures, see here. 

Links:

August Update from the Net-Zero Banking Alliance

Guidance for Climate Target Setting for Banks

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