South Korea’s K-GX combines public spending and climate finance to back industrial decarbonisation and clean-energy growth. Thailand’s second sovereign sustainability-linked bond is the first in Asia-Pacific to include a nature-related indicator, while Masdar has expanded its finance framework to cover selected offshore renewable projects.

Regional financing vehicles are also taking shape. The proposed Caribbean Sustainability Bond would pool projects under a single regional issuance, while the Pacific Resilience Facility is building a Pacific-owned grant pool, with $190 million in commitments against its $500 million initial target.

Read more on the week's key developments:

1. K-GX puts KRW 1 quadrillion behind South Korea’s industrial transition

South Korea announced its Korea Green Transformation (K-GX) on 7 October. Over 2026–35, the government will provide about KRW 1,000 trillion ($747.0 billion) in fiscal and policy finance, including KRW 200 trillion ($149.4 billion) in fiscal funding and at least KRW 790 trillion ($590.1 billion) in climate finance through five policy-finance institutions. Companies separately announced KRW 220 trillion ($164.3 billion) in investments in K-GX flagship projects. The strategy targets steel, petrochemicals, cement, refining, semiconductors and displays, with goals of 100GW of renewable capacity by 2030 and electric or hydrogen vehicles accounting for more than 70% of new-car sales by 2035.

The financing package now assigns more than half of policy-bank climate finance to regional areas and at least 70% to small and mid-sized businesses. K-GX also supports existing manufacturers under the country’s 2035 nationally determined contribution, which calls for net emissions to fall 53%–61% from 2018 levels. Sector roadmaps and project-level emissions criteria will show which industrial investments receive support and what reductions they are expected to deliver.

2. China’s wind and solar reach 48.5% of power capacity as grid use lags

China’s wind and solar capacity reached 1.992 terawatts by the end of August, or 48.5% of national power capacity, according to the National Energy Administration (NEA). Solar capacity, at 1.297TW, exceeded coal-fired capacity for the first time. From January to August, wind and solar generated 1.71 trillion kilowatt-hours, equal to 23.8% of electricity consumption.

The gap between wind and solar’s share of installed capacity and their share of electricity use puts grid connection, storage and market access at the centre of the next investment phase. China’s 2025 reform also moved new renewable output towards market-based pricing, with a settlement mechanism intended to reduce revenue volatility. State Grid plans RMB 4.0 trillion ($574.0 billion) in grid investment from 2026 to 2030, underlining that the transition now requires capital for the networks that move and balance renewable power as well as for generation.

3. Pacific Resilience Facility remains $310 million short of initial target

At Fiji’s Pre-COP31, Pacific governments pressed for climate finance to reach vulnerable communities and adopted the Taku Pakasoa Declaration on the 1.5°C goal, resilience and ocean protection. New commitments of $13.3 million from Fiji, Denmark and the Netherlands took total pledges to the Pacific Resilience Facility (PRF) to $190 million. The Pacific-owned facility has an initial capitalisation target of $500 million and a longer-term goal of $1.5 billion.

The PRF is designed to provide grants for smaller, community-led resilience projects that can be difficult to finance through larger climate funds. It is operational, and its chief executive told Reuters that 14 projects had received funding. The latest pledges leave $310 million to reach the initial target, but pledged sums are not the same as capital already paid into the facility and available for grants.

4. EU publishes 2025 ETS compliance data as ETS2 auctions approach

The European Commission published the 2025 surrender and compliance data on 5 October, covering shipping’s second year in the EU Emissions Trading System (ETS). Shipping companies had to surrender allowances in 2026 for 70% of their 2025 emissions, up from 40% of 2024 emissions in 2025. Full coverage applies from 2027, including emissions reported for 2026. The European Energy Exchange (EEX) has also published the 2027 auction calendars for the existing ETS and the new ETS2 market.

The new EU Emissions Trading System 2 (ETS2) is a separate carbon market covering fuel suppliers for buildings, road transport and additional sectors. Its first auctions are scheduled for 18 January 2027, with a provisional 293.2 million allowances planned for the year, including 140 million allocated to the Social Climate Fund. The calendar includes early auctioning of 2028 allowances and remains provisional. For suppliers, the schedule gives an initial view of allowance supply before ETS2 becomes fully operational in 2028.

5. EU sets Q3 CBAM certificate price at EUR 82.32 per tonne

The European Commission set the third-quarter 2026 Carbon Border Adjustment Mechanism (CBAM) certificate price at EUR 82.32 per tonne of carbon dioxide equivalent ($92.23 per tonne), up 9.4% from EUR 75.28 ($84.34) in the second quarter. The price follows the weighted average of EU ETS auction prices. In 2026, a quarterly price applies to the embedded emissions of covered goods imported during that quarter, although importers will buy the certificates from February 2027.

CBAM covers selected imports of iron and steel, cement, aluminium, fertilisers, electricity and hydrogen. Importers will make their first annual declaration and surrender certificates by 30 September 2027 for 2026 imports. They can deduct eligible carbon prices already paid in the country of production, so exporters’ costs depend on embedded-emissions data as well as the treatment of local carbon charges.

6. Masdar adds offshore renewables to its blue-finance framework

Abu Dhabi Future Energy Company, known as Masdar, has updated its Green Finance Framework to include blue financing instruments. The framework’s eligible blue projects are floating solar, offshore wind and transmission infrastructure connecting offshore renewable generation to shore. Blue instruments must direct proceeds exclusively to eligible blue projects. Masdar says the framework follows international blue-finance guidance and has received Moody’s SQS1 (Excellent) sustainability assessment.

The eligible categories make this a channel for financing marine renewable energy rather than a broad expansion into fisheries, water or ocean-conservation projects. Its framework covers financing at home and overseas through bonds, loans, private placements and sukuk. No blue issuance or project allocation has been announced.

7. Caribbean Sustainability Bond to pool regional projects under one issuance

The Caribbean Sustainability Bond was launched in Barbados on 7 October with a target to raise up to $250 million for climate-resilient infrastructure, renewable energy, water and wastewater management, and other development projects. Caribbean Sustainability Investments Limited is the proposed issuer, the CARICOM Development Fund is project sponsor, and JMMB Securities is lead arranger and broker. The bond has been launched as a financing vehicle but has not yet been issued.

The bond would bring eligible projects from different Caribbean markets into one regional issuance, giving investors access to a broader pool than a single-country or single-project bond. The project pipeline, bond terms and reporting arrangements will determine whether the $250 million target draws investor demand.

8. Thailand’s second sovereign SLB adds a biodiversity target

Thailand issued a 15-year sovereign sustainability-linked bond on 17 September, raising THB 25.0 billion ($0.75 billion) against an initial THB 15.0 billion ($0.45 billion) offer. The book received THB 42.1 billion in subscriptions, 2.8 times the original target. The bond links government borrowing to two targets, keeping net greenhouse-gas emissions below 152 million tonnes of carbon dioxide equivalent by 2035 and conserving at least 30% of terrestrial and inland-water areas by 2030. Proceeds finance the government budget rather than a set of earmarked projects. For each KPI, the coupon rises by 2.5 basis points if the target is missed and falls by 2.5 basis points if it is achieved, creating a two-way coupon adjustment.

Thailand’s second sovereign sustainability-linked bond follows its 2024 climate-focused issue and is the first in Asia-Pacific to include a nature-related indicator. Sustainability-linked bonds made up 82.3% of Thailand’s sustainable bond issuance in 2025, mainly from the public sector, placing the biodiversity target within an established sovereign financing instrument.

9. FoSDA says reporting standards align in principle but diverge in the data

The Future of Sustainable Data Alliance (FoSDA) says sustainability reporting standards can align in principle while producing data investors cannot compare directly. Its 1 October report examines the International Sustainability Standards Board (ISSB), European Sustainability Reporting Standards (ESRS) and Global Reporting Initiative (GRI). ISSB focuses on financially material risks and opportunities, ESRS uses double materiality and GRI focuses on company impacts. Definitions of sustainability-linked executive pay and transition-plan disclosure requirements also differ.

Companies and data providers must reconcile these requirements, while investors risk treating similarly named metrics as comparable. FoSDA proposes common disclosures, definitions, units and digital tagging, supported by detailed mapping of requirements. The proposals remain open for consultation and preserve differences reflecting jurisdiction-specific priorities.

10. Investors oppose delay to EU methane-import requirements

On 6 October, 56 investors representing more than EUR 9 trillion ($10.1 trillion) in assets under management renewed their call for the EU to keep the Methane Emissions Regulation and its implementation timetable. The regulation applies to crude oil, natural gas and coal entering the EU market. From January 2027, importers with relevant contracts concluded or renewed since 4 August 2024 that remain in force must demonstrate that producers’ monitoring, reporting and verification (MRV) systems meet EU-equivalent standards. Earlier contracts are subject to a reasonable-efforts requirement. That same day, Commission President Ursula von der Leyen said exporters would receive another year of flexibility on methane requirements. The regulation still sets 1 January 2027 as the start date for importer obligations, so any delay to the legal timetable would require a formal amendment approved by the European Parliament and Council.

The dispute concerns whether supply-chain complexity warrants changing the timetable or can be addressed through guidance. The Commission updated importer guidance on 22 September and issued July recommendations on contract clauses and penalties. These support compliance but do not amend the law. Investors say delaying MRV requirements would reduce predictability for companies preparing supplier contracts and data systems, while slowing methane cuts.