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Japan’s largest polluters are rushing to buy carbon credits ahead of the launch of the country’s mandatory emissions trading system. Trading activity on the Tokyo Stock Exchange (TSE) has surged as companies prepare for tighter climate rules and try to meet their corporate sustainability targets before the fiscal year ends.

According to Bloomberg, major Japanese companies are already purchasing credits on the TSE’s voluntary market in anticipation of the GX-ETS launch.

This buying spree highlights growing anxiety about future compliance costs. At the same time, it signals that Japan’s carbon market is shifting from a voluntary experiment to a central pillar of its climate strategy.

What Is the GX-ETS and Why Does It Matter

The Green Transformation Emissions Trading System (GX-ETS) is Japan’s national carbon trading program. The government launched it in 2023 under the GX League, a public-private platform designed to accelerate corporate decarbonization.

The GX-ETS mirrors the European Union’s emissions trading system. Companies receive or buy emissions allowances and can trade them. If they emit less than their cap, they can sell extra allowances. If they exceed limits, they must buy more or face penalties.

Timeline and Key Features

Japan is rolling out the GX-ETS in stages:

  • Phase 1 (2023–2025): Voluntary participation and market testing
  • Phase 2 (2026 onward): Mandatory participation for large emitters
  • Future phases: Auctions, price bands, and fuel levies

Japan plans to introduce power sector auctions around 2033 and a fossil fuel importer levy by 2028. Policymakers are also considering price bands of ¥4,000 to ¥6,000 per tonne by 2027, with potential increases by 2030. Significantly, the compliance market will include a price ceiling and phased expansion with additional policy tools.

The system integrates voluntary credits into compliance trading. Companies can trade GX credits via call auctions on the TSE, with unmatched orders carried forward. This design aims to improve liquidity and price discovery.

Japan’s Path to Net-Zero by 2050

Japan made modest progress in reducing emissions in the first half of 2025. The Ministry of the Environment reported a 2.8% decline compared with the same period in 2024. For the full year, emissions are estimated at 1,070 million tonnes of CO₂ equivalent, down from about 1,272 million tonnes in 1990.

Much of this improvement came from energy efficiency gains in the industrial sector. However, Japan still relies heavily on fossil fuels, and transport emissions remain difficult to reduce. Consequently, current policies are projected to cut emissions by 31% to 37% below 2013 levels by 2030, which still falls short of the country’s 46% national climate target, excluding land-use emissions.

Japan emissions
Source: Climate Scorecard

Heavy industries—such as steel, chemicals, cement, and power generation—account for more than 60% of national emissions, making them key GX-ETS targets. Therefore, the GX-ETS is expected to cover roughly 60% of Japan’s greenhouse gas emissions and support the country’s goal of achieving net zero by 2050.

Japan’s carbon tax remains low at about ¥289 per tonne (roughly $2.16), emphasizing the need for stronger market-based mechanisms. As a result, policymakers view the GX-ETS as a critical lever to accelerate emissions reductions and drive the nation toward net-zero.

Who Must Participate in the GX-ETS

Phase 1 of the GX-ETS was voluntary. However, Phase 2 will become mandatory in spring 2026. Companies emitting more than 100,000 tonnes of CO₂ per year must participate.

This rule affects roughly 300 to 400 companies. Together, they account for about 60% of Japan’s total emissions. Key sectors include steel, chemicals, cement, power generation, automotive manufacturing, and aviation.

Under current proposals, companies can use carbon credits to offset up to 10% of regulated emissions. Therefore, credits complement emissions cuts rather than replace them.

Pre-Compliance Buying Surge Among Big Polluters

Large Japanese companies are buying voluntary credits aggressively before the mandatory launch. TSE officials see strong demand driven by companies preparing for GX-ETS and rushing to retire credits before the fiscal year ends.

Reports also reveal that members of the GX League, such as Toshiba, Tokyo Gas, and Isuzu Motors, have already participated in voluntary trading. Analysts expect steelmakers, utilities, and other heavy industries to dominate future purchases.

This early buying strategy helps companies hedge against future allowance shortages. It also reduces the risk of penalties once compliance rules take effect.

Japan’s Carbon Credits: Demand Soars Ahead of Mandatory GX-ETS

Japan’s carbon credit market is expanding fast. It was valued at about $28.2 billion in fiscal 2023 and could reach more than $121 billion by 2031, growing at roughly 20% annually.

Trading on the TSE began in 2023 and focuses on GX credits, including:

  • J-Credits from domestic renewable and efficiency projects
  • JCM credits from international projects under Japan’s Joint Crediting Mechanism

However, demand already exceeds supply. J-Credit issuance averages around 1 million tonnes per year. Analysts expect demand to reach about 3 million tonnes annually once the mandatory phase begins.

Therefore, limited supply could push prices higher and increase compliance costs for heavy emitters.

Carbon Credit Prices and Market Dynamics

Bloomberg also highlighted that carbon credit prices on the TSE have fluctuated as the market matures. Renewable electricity credits peaked at about ¥6,600 per tonne in early 2025. Since then, prices have fallen by nearly 25%.

The Ministry of Economy, Trade and Industry has proposed a price ceiling of ¥4,300 per tonne for the compliance market. Renewable-linked credits still trade above that level, reflecting strong demand and limited supply. And the prices across voluntary credit categories are converging ahead of the mandatory phase. This trend suggests growing liquidity and market confidence.

carbon credit Japan
Source: Bloomberg

Challenges Facing the GX-ETS

Despite strong momentum, several challenges remain. Limited credit supply could push prices higher if demand grows faster than new issuances. Credit quality also poses a risk, as regulators must ensure offsets deliver real and permanent emissions reductions to avoid greenwashing.

At the same time, Japan still depends heavily on coal, gas, and oil, meaning carbon trading alone cannot transform the energy system. Transport emissions also remain a major hurdle, especially in the road and aviation sectors, where decarbonization is progressing slowly.

Past regional trading systems, such as Tokyo’s cap-and-trade program, achieved emissions reductions of around 15% to 27%. However, scaling that success nationwide will require strict enforcement, transparent monitoring, and strong policy support.

Strategic Role of Carbon Credits in Japan’s Transition

For hard-to-abate sectors such as steel and power, carbon credits provide a temporary bridge while low-carbon technologies mature. Companies can offset a small share of emissions while investing in hydrogen, electrification, and carbon capture.

Early purchases also hedge against future price spikes. If allowance supply tightens, companies holding credits will face lower compliance costs.

Globally, Japan wants J-Credits to align with international carbon markets and potential EU carbon border rules. This strategy could strengthen Japan’s role in Article 6 carbon trading frameworks.

In conclusion, the surge in carbon credit buying shows Japanese companies are taking the GX-ETS seriously. The market is transitioning from a voluntary pilot to a compliance-driven system that will shape corporate strategies for decades.

As climate pressures mount, Japan must close the gap between current policies and its 2030 target. The GX-ETS could become one of the country’s most powerful tools to drive emissions cuts, attract investment, and accelerate clean energy deployment.

However, success depends on credit supply, price stability, and strong governance. Industry analysts and experts suggest early credit buying reflects corporate hedging strategies as Japan’s carbon market moves toward full compliance.

If Japan manages these challenges, the GX-ETS could transform its carbon market and set a model for other Asian economies.

The post Japan’s GX-ETS Sparks Carbon Credit Surge as Major Polluters Prep for Compliance appeared first on Carbon Credits.

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CATL & CHANGAN Make History with World’s First Mass-Production Sodium-Ion Passenger EV

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China’s CHANGAN Automobile and battery giant CATL have unveiled the world’s first mass-production passenger vehicle powered by sodium-ion batteries. The launch event took place in Yakeshi, Inner Mongolia, and the vehicle is scheduled to reach the market by mid-2026.

The press release explains that this milestone marks a shift from laboratory research and pilot projects to real-world consumer electric vehicles. It also signals the start of a dual-chemistry battery era, where sodium-ion and lithium-ion technologies work together to meet diverse electric mobility needs.

Why Sodium-Ion Batteries Are Gaining Momentum

Lithium-ion batteries have dominated electric vehicles for more than a decade. However, concerns over lithium supply, cost volatility, and environmental impacts have pushed researchers to explore alternatives. Sodium-ion batteries emerged as one of the most promising contenders.

Sodium is abundant, widely distributed, and inexpensive. Unlike lithium, it can be extracted from seawater and common salt deposits, reducing geopolitical risks and environmental strain. This makes sodium-ion batteries attractive for countries seeking greater energy independence.

Cold-weather performance is another major advantage. Lithium-ion batteries lose significant capacity in freezing temperatures, which limits EV adoption in colder regions. Sodium-ion batteries, by contrast, maintain strong performance even in extreme cold, opening new markets for electric mobility.

                          Lithium-ion batteries vs Sodium-ion batteries 

sodium ion

sodium ion battery

Analysts see 2026 as a turning point, when sodium-ion technology begins large-scale commercialization in vehicles and energy storage.

CATL’s Naxtra Sets New Benchmarks for Sodium-Ion Performance

CATL began sodium-ion research in 2016 and invested nearly RMB 10 billion in the program. The company developed close to 300,000 test cells and assembled a dedicated team of more than 300 R&D engineers, including 20 PhDs.

Research focused on fast-ion transport pathways, composite low-temperature electrolytes, and high-safety electrolyte systems. CATL also leveraged its vast battery management data from millions of deployed units to improve range accuracy and reliability.

This long-term investment highlights how major battery breakthroughs require years of sustained research, testing, and industrial scaling.

Under the partnership, CATL will supply its Naxtra sodium-ion batteries across CHANGAN’s full brand lineup, including AVATR, Deepal, Qiyuan, and UNI. The collaboration positions both companies as early leaders in what could become one of the most disruptive battery technologies of the decade.

Urban and Suburban EVs Made Practical

CATL’s Naxtra sodium-ion battery achieves an energy density of up to 175 Wh/kg, which currently sets a benchmark for mass-produced sodium-ion cells. While this is still lower than leading lithium-ion batteries, it is high enough to support practical passenger vehicles.

Combined with CATL’s Cell-to-Pack (CTP) architecture and intelligent battery management system, the technology enables a pure-electric range exceeding 400 kilometers. As the supply chain matures and chemistry improves, CATL expects future sodium-ion EVs to reach 500–600 kilometers per charge. Range-extended and hybrid configurations could achieve 300–400 kilometers on electric power alone.

These figures cover more than half of the typical daily driving needs in the global new energy vehicle market. For many urban and suburban drivers, sodium-ion vehicles could provide sufficient range at a lower cost.

Cold-Climate Performance Could Transform EV Adoption

One of the biggest barriers to EV adoption is winter performance. Lithium-ion batteries often lose capacity and charging speed in cold conditions, which reduces driving range and convenience.

CATL claims:

  • Its sodium-ion battery delivers nearly three times the discharge power of comparable LFP batteries at –30°C.
  • Capacity retention remains above 90% at –40°C, and the system continues to provide stable power at –50°C.

This performance could make sodium-ion batteries particularly attractive in regions such as Northern Europe, Canada, Russia, and northern Japan. In these markets, winter range anxiety has slowed EV adoption despite strong policy support.

If sodium-ion batteries deliver on these claims, they could unlock electric mobility in some of the world’s most challenging climates.

Safety Advantages Strengthen Consumer Confidence

Battery safety remains a top concern for automakers and consumers. CATL subjected its Naxtra cells to extreme tests, including crushing, drilling, and sawing. The batteries reportedly showed no smoke, fire, or explosion and continued delivering power even after physical damage.

These results suggest sodium-ion batteries could offer inherent safety advantages over some lithium-ion chemistries. Reduced thermal runaway risk could lower insurance costs, simplify thermal management systems, and improve consumer confidence.

Safety improvements are also critical for regulatory approval and large-scale adoption, especially in densely populated cities.

CATL
Source: CATL

A Dual-Chemistry Future for Electric Mobility

Both companies emphasized that sodium-ion batteries will not replace lithium-ion batteries. Instead, both chemistries will coexist and complement each other.

Lithium-ion batteries will remain dominant in high-energy applications such as long-range EVs, aviation, and premium vehicles. Sodium-ion batteries are likely to excel in cost-sensitive segments, cold-climate markets, entry-level EVs, and stationary energy storage.

This dual-chemistry ecosystem could accelerate electrification by offering tailored solutions for different use cases. It also diversifies supply chains and reduces reliance on critical minerals.

Choco-Swap Network Could Supercharge Sodium-Ion EV Growth

To support sodium-ion adoption, CATL plans to deploy more than 3,000 Choco-Swap battery swap stations across 140 Chinese cities by 2026. Over 600 of these stations will be located in colder northern regions.

Battery swapping could reduce charging times from hours to minutes, improving convenience for drivers and commercial fleets. It also allows centralized battery management, which can extend battery life and optimize grid integration.

If successful, this infrastructure could give China a major advantage in next-generation EV ecosystems.

Market Outlook: Rapid Growth Across Multiple Sectors

Gao Huan, CTO of CATL’s China E-car Business

“The arrival of sodium-ion technology marks the beginning of a dual-chemistry era.
CHANGAN’s vision shows both its responsibility for energy security and its strategic
foresight. Much as it embraced electric vehicles years ago, CHANGAN is once again
taking the lead with its sodium-ion roadmap. At CATL, we value the opportunity to
work alongside such an industry leader and fully support its strategy, combining our
expertise to bring safe, reliable, and high-performance sodium-ion technology to
market.” 

According to data released by SPIR:

  • Global sodium-ion battery shipments reached 9 GWh in 2025, representing a 150% year-on-year increase.
  • Analysts expect strong growth in energy storage, light-duty vehicles, and passenger EVs starting in 2026.
  • By 2030, sodium-ion batteries could reach 580 GWh in energy storage and over 410 GWh in automotive applications. This would be enough to support around 10 million new energy users.

Energy storage is expected to be the largest early market, followed by entry-level EVs and commercial vehicles. Passenger cars are now entering the commercialization phase, signaling broader industry confidence.

Supply Chain Security and Geopolitical Implications

One of the most strategic benefits of sodium-ion batteries is supply chain resilience. Sodium is around 1,000 times more abundant in the Earth’s crust and roughly 60,000 times more abundant in oceans than lithium.

This abundance reduces the risk of supply shortages, price spikes, and geopolitical conflicts associated with lithium, cobalt, and nickel. Countries without lithium resources could still build domestic battery industries using sodium.

For governments, sodium-ion technology offers a pathway to greater energy independence and localized manufacturing.

Environmental and Lifecycle Benefits

Sodium-ion batteries also offer environmental advantages across their lifecycle. Sodium extraction is less water-intensive than lithium brine mining, which has raised concerns in South America’s lithium triangle. Production often uses less hazardous materials, such as iron and carbon-based cathodes.

Research suggests sodium-ion battery production could reduce carbon emissions by up to 60% per kWh compared with some lithium-ion chemistries. Recycling processes may also be simpler and more energy-efficient.

However, sodium-ion batteries currently require more material per kWh due to lower energy density, which could offset some emissions benefits. Continued improvements in chemistry and manufacturing are expected to close this gap.

China’s Strategic First-Mover Advantage

China is taking a lead in next-generation battery technologies by moving sodium-ion batteries from lab research to large-scale commercialization.

Mordor Intelligence report shows that lithium-ion dominated with a 75.5% share in 2025, while sodium-ion is expected to register the fastest CAGR of 18% between 2026 and 2031. Through advanced R&D, robust manufacturing, and supporting infrastructure, Chinese companies are turning experimental technology into market-ready solutions.

china battery market
Source: Modor Intelligence

The CHANGAN–CATL partnership illustrates this shift. Their sodium-ion passenger car, launching in 2026, marks one of the first instances of mass-produced vehicles powered by this chemistry. The technology promises lower costs, enhanced safety, strong cold-weather performance, and more secure supply chains, making it a practical complement to lithium-ion batteries.

As the dual-chemistry era unfolds, sodium-ion batteries are set to expand the possibilities for electric mobility and energy storage. By combining affordability, reliability, and environmental advantages, they could play a central role in the global transition to clean energy and reshape the future of electric vehicles.

The post CATL & CHANGAN Make History with World’s First Mass-Production Sodium-Ion Passenger EV appeared first on Carbon Credits.

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ICVCM Adds New CCP-Approved Carbon Credit Methods for Isometric, Gold Standard and ACR

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ICVCM Adds New CCP-Approved Carbon Credit Methods for Isometric, Gold Standard and ACR

The Integrity Council for the Voluntary Carbon Market (ICVCM) published new decisions under its Core Carbon Principles (CCP) program. The update covers three carbon credit methodologies, also called “categories” in ICVCM’s system. One methodology received full approval, and two received conditional approval.

ICVCM’s CCP label is meant to help buyers spot carbon credits that meet a clear, minimum integrity bar. ICVCM uses an Assessment Framework to apply its label. This framework checks how programs and methods handle key issues, including quantification, additionality, monitoring, and verification.

According to Annette L. Nazareth, Chair of the Governing Board, ICVCM

“Demand for CCP-labelled credits has grown steadily, commanding price premiums that reflect buyers’ renewed trust. Policymakers, multilateral institutions, and standard-setters have incorporated the CCPs into their own frameworks, recognising the Integrity Council’s role in building coherence across voluntary and compliance markets.”

The three decisions were:

  • Isometric: ISM Reforestation Protocol v1.1 — CCP Approved
  • Gold Standard: Methane emission reduction by adjusted water management practice in rice cultivation v1.0 — CCP Approved (Conditional)
  • American Carbon Registry (ACR): Improved Forest Management (IFM) on Non-Federal US Forestlands v2.0 — CCP Approved (Conditional)

How the CCP Label Works and When Conditions Apply

A CCP-approved method can earn credits for the CCP label. Projects need to follow the method and the program’s usual rules. In this ICVCM update, the Isometric reforestation method was approved without conditions. This means credits issued under it can get CCP labeling immediately.

A CCP-approved but conditional methodology can still earn the label, but only if specific conditions are met. These conditions can apply to how projects prove additionality. They can also apply to how projects account for risks. Finally, they may apply to how projects set baselines and leakage deductions.

ICVCM also published a market-level snapshot with its February 2026 decisions. It approved eight carbon-crediting programs as CCP-Eligible. It also approved 38 methodologies.

However, 22 methodologies did not meet the requirements. About 105 million credits were approved for the CCP label. Of these, 52 million are available, while 53 million have been retired or canceled. Globally, here’s ICVCM’s carbon credit achievement:

ICVCM carbon credit facts global
Source: ICVCM

Isometric Sets a First for Nature-Based CCP Credits

ICVCM granted full CCP approval to Isometric’s ISM Reforestation Protocol v1.1, which Isometric published in October 2025. The protocol outlines rules for measuring carbon removals from reforestation. This refers to restoring forest cover on land that was once forested. ICVCM placed it under the broader Afforestation, Reforestation, and Revegetation (ARR) category.

ICVCM said the assessment found the protocol met all relevant criteria in the CCP Assessment Framework. Because the body approved it with no conditions, it stated that all credits issued under the methodology will be eligible for CCP labels.

The Integrity Council also shared early activity indicators for this protocol. It said no credits had been issued yet, but 20 project developers were already registered under the methodology. The organization added that Isometric expects to issue over 4 million credits annually by 2030 under this protocol.

Isometric announced this week that the approval makes its Reforestation Protocol the first nature-based protocol with the CCP label.

ICVCM core carbon principles
Source: ICVCM

Rice Methane Credits Get a Conditional Green Light

ICVCM gave conditional CCP approval to Gold Standard’s method for cutting methane emissions. This method focuses on adjusting water management in rice cultivation (version 1.0). The Integrity Council announced that it published the methodology in July 2023. It is the first approved method for avoiding methane in rice cultivation.

The basic idea behind adjusted water management is simple. Flooded rice fields can produce methane because organic matter breaks down without oxygen. Changing water levels during the growing season can reduce methane formation.

Gold Standard’s documentation states that methane forms in flooded fields with low oxygen. It also notes that the methodology helps water regime changes that reduce methane emissions.

ICVCM also pointed to recent research on the scale of rice methane. A Nature Research Highlight from May 2025 said that a new inventory found rice paddy methane emissions were over 39 million metric tonnes in 2022.

Why Some Credits Qualify, and Others Don’t

The Integrity Council said the rice methodology qualifies for CCP approval only when specific conditions are met. The conditions show how a project proves additionality in some cases. They also explain a rule update about soil organic carbon loss risk in the methodology.

ICVCM also gave credit volume and pipeline estimates. It said about 50,000 credits had been issued under this methodology so far. However, the body understood that none of those credits complied with the first condition. As a result, the organization said those already-issued credits will not be eligible for the CCP label.

ICVCM noted that Gold Standard plans to issue up to 3.2 million credits in the next five years. This is based on its current project pipeline projections. It also listed the main project locations as India, plus activities in Pakistan, Vietnam, Bangladesh, Cambodia, Ghana, Indonesia, Lao PDR, Nepal, and Thailand.

ACR’s Forest Credits Face Tighter Baseline Tests

Same with Gold Standard, ICVCM also granted conditional CCP approval to ACR’s Improved Forest Management (IFM) on Non-Federal US Forestlands v2.0. IFM projects aim to change forest management practices to increase stored carbon or avoid emissions compared with a baseline scenario.

ICVCM explained that v2.0 is an earlier version of an IFM methodology that its Governing Board had already approved in August 2025 (v2.1). For v2.1, ICVCM had set a condition tied to leakage.

  • A leakage deduction is needed for projects that cut wood product output by less than 5%. This keeps treatment consistent with projects that exceed that threshold.

For v2.0, ICVCM set two additional conditions. The methodology can earn CCP labeling if:

  • A dynamic evaluation of the baseline is verified in line with ACR’s tool for dynamic baseline evaluation (developed with v2.1), and/or
  • Removal credits are generated using a specified equation in the methodology (ICVCM references Equation 30).

ICVCM also quantified the immediate impact. It said 2.7 million credits were expected to be immediately eligible for the CCP label out of 13.3 million issued credits under this methodology.

The Integrity Council also stated that past and future removal credits from this method can get CCP labels. Future emission reduction credits can qualify, too, if they use the dynamic baseline evaluation tool.

ACR said the CCP label will soon activate for 2.7 million eligible IFM 2.0 credits in the ACR registry. They linked eligibility to the same baseline evaluation tool.

What CCP Expansion Means for Buyers and Developers

These ICVCM decisions matter because they expand the set of methodologies that can produce credits with the CCP label. For buyers, the label can act as a quick screen when building procurement rules. CCP decisions can influence method evolution for project developers and standards bodies. Conditional approvals often need updates to methods or stricter project tests.

At the same time, the details show that CCP labeling is not automatic. For example, ICVCM’s conditions for the rice methodology mean that some already-issued credits will not qualify. In the IFM case, ICVCM tied eligibility to specific approaches for baselines and the type of credit (removals versus emission reductions).

The approvals expand high-integrity CCP-labeled credits. They also signal growing supply for buyers while enforcing strict standards on baselines, additionality, and verification—shaping voluntary carbon markets toward greater quality and scale.

The post ICVCM Adds New CCP-Approved Carbon Credit Methods for Isometric, Gold Standard and ACR appeared first on Carbon Credits.

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Amazon Signs 15-Year Offshore Wind Deal with RWE in Germany as Energy Demand Rises

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Amazon Signs 15-Year Offshore Wind Deal with RWE in Germany as Energy Demand Rises

Amazon has signed a new long-term clean energy purchase agreement with RWE, one of Europe’s largest renewable energy developers. The deal is a Power Purchase Agreement (PPA) for 110 megawatts (MW) of power. This electricity comes from RWE’s Nordseecluster B offshore wind project in the German North Sea.

RWE and Amazon stated that the contracted power would produce enough clean electricity for over 139,000 German households every year.

For Amazon, the deal supports its climate commitment to reach net-zero carbon across its operations by 2040 under The Climate Pledge. For RWE, the contract helps finance a large new offshore wind build-out and adds a stable, long-term buyer for the project’s output.

Rocco Bräuniger, Amazon Country Manager for Germany, Austria, and Switzerland, stated:

“Germany is transitioning toward a modern, carbon-free energy system, and this agreement with RWE helps advance that vision. As Amazon works toward net-zero carbon by 2040, we continue enabling projects that strengthen Germany’s renewable energy capacity for generations to come.”

Nordseecluster: A Two-Phase Offshore Wind Giant in the North Sea

Nordseecluster is a major offshore wind development that RWE is building in two phases. The project sits in the German North Sea. Nordseecluster B is the phase tied to Amazon’s new 110 MW contract.

RWE Nordseecluster
Source: RWE website

According to reporting based on company details, Nordseecluster A has a total capacity of 660 MW and is currently under construction. It is scheduled to begin operations in early 2027. Nordseecluster B adds another 900 MW and is expected to begin commercial operation in 2029.

  • RWE said Nordseecluster is a joint project between RWE (51%) and Norges Bank Investment Management (49%).

The Amazon deal is a corporate PPA. That means the tech giant agrees to buy a defined amount of clean electricity tied to a specific project over a long period. These long-term contracts often help developers secure financing because they reduce revenue uncertainty. RWE’s press statement also framed PPAs as important tools for accelerating decarbonization while supporting supply security.

Ulf Kerstin, CCO at RWE Supply & Trading, noted:

“Power Purchase Agreements like this one with Amazon are crucial for accelerating Germany’s decarbonisation while strengthening long-term security of supply. By enabling large-scale offshore projects such as Nordseecluster, we can bring more reliable, carbon-free electricity onto the grid and support a resilient energy system.”

The image below shows RWE’s offshore wind portfolio in the German territory.

RWE offshore wind portfolio Germany
Source: RWE website

Rising Power Demand Meets Long-Term Clean Energy

Amazon’s electricity needs are rising, especially from logistics and fast-growing data infrastructure. Data centers also require reliable electricity 24 hours a day. That creates demand for large amounts of power, and it increases pressure to source cleaner electricity.

Amazon has made carbon-free energy a key part of its climate strategy. The company’s sustainability site states it plans to use more carbon-free energy. This is part of its goal to achieve net-zero carbon emissions by 2040.

The company has also expanded its renewable energy procurement rapidly. In its 2024 Amazon Sustainability Report, Amazon said that as of January 2025, it had invested in 621 renewable energy projects globally. It said 124 of those projects were added in 2024. Together, these projects represent 34 gigawatts (GW) of carbon-free energy capacity.

Amazon Renewable Energy Portfolio 2024
Amazon Renewable Energy Portfolio 2024

Amazon reported that for the second year in a row, it matched 100% of the electricity used in its global operations with renewable energy. This was highlighted in its 2024 report and summaries. This does not mean every Amazon site runs on renewables every hour.

The company usually buys enough renewable energy to cover its yearly electricity use. This is done through PPAs and certificates, which vary by region and structure.

In Germany, Amazon has built a growing clean energy portfolio. RWE and Amazon said the Nordseecluster agreement is the tech company’s fourth large-scale offshore wind PPA in Germany.

Amazon also has six on-site solar projects in the country. Together, Amazon’s 10 renewable projects in Germany total more than 790 MW of capacity. When fully operational, they should generate enough renewable electricity to power over 1,000,000 German homes each year.

That “homes powered” figure is an equivalency used to help readers understand scale. It does not mean Amazon supplies those homes directly. It means the wind and solar output from these projects is similar to what many households would use.

Amazon’s Net Zero Goals: Powering Growth While Cutting Carbon

Amazon has pledged to achieve net-zero carbon emissions by 2040. This goal is part of The Climate Pledge, which it helped create in 2019 with Global Optimism. The goal is ten years ahead of the Paris Agreement’s target. More than 500 companies have now signed the pledge.

In its 2024 Sustainability Report, Amazon announced it matched 100% of the electricity used in its global operations with renewable energy. This is the second year in a row it achieved this goal, hitting the target five years early. 

Amazon’s total carbon emissions increased from about 64.4 million tonnes of CO₂e in 2023 to around 68.3 million tonnes of CO₂e in 2024. This rise is partly due to business growth and the expansion of data centers. However, the company reduced its carbon intensity (emissions per dollar of sales), showing improved efficiency.

Amazon net zero 2040 journey
Source: Amazon report

The company is also moving to reduce emissions in other ways. It is growing its electric delivery fleet. It increased from around 19,000 to over 31,000 electric vans in 2024. The goal is to reach at least 100,000 electric delivery vehicles by 2030.

Amazon also works to cut packaging waste, improve energy efficiency, and support suppliers in reducing their emissions. These efforts connect to Amazon’s rising energy demands. This is particularly true as it expands its data centers and logistics sites.

By scaling renewable energy, electrifying transportation, and improving energy efficiency, Amazon aims to balance growth with long-term climate progress.

Corporate PPAs Power the Next Wave of Offshore Wind

Germany continues to expand offshore wind because it can produce large volumes of electricity near major demand centers. Offshore wind also tends to generate more consistently than onshore wind, although it still varies with weather and season.

Germany offshore wind capacity additions 2034

Corporate PPAs have become an important part of this market. They add demand from buyers beyond utilities and heavy industry. They also help fund projects by guaranteeing long-term revenue streams.

The Amazon–RWE deal also connects to a broader partnership between the two companies. The agreement builds on a Strategic Framework Agreement signed in June 2025. RWE backs Amazon’s goal for carbon-free energy. In return, Amazon helps RWE with digital changes using cloud services, AI, and data analytics from Amazon Web Services (AWS).

This pairing is becoming more common in the clean energy market. Utilities need digital tools to manage grids with higher shares of wind and solar. Tech firms need reliable clean energy for data infrastructure and long-term contracts can serve both sides.

What’s Next? Delivery Timelines, Grids, and the Next Energy Mix

The 110 MW deal adds another major offshore wind purchase to Amazon’s Germany portfolio. It also shows that long-term corporate PPAs remain important for financing offshore wind.

Several practical issues will shape the outcome. Nordseecluster B is due to start operating in 2029, but delays could shift when Amazon receives power. Grid integration is another challenge. Offshore wind output varies, and matching electricity use hour by hour is harder as data center demand grows.

Amazon’s broader energy strategy also matters. By January 2025, it had 621 clean energy projects and 34 GW of carbon-free capacity worldwide. The company is expanding beyond wind and solar, including nuclear investments, to support round-the-clock power needs.

Overall, the Amazon–RWE deal signals continued demand for long-term clean electricity as offshore wind expands in Germany’s North Sea and beyond.

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