Emission allowances already apply to a quarter of the planet (ICAP 2026)
The International Carbon Action Partnership (ICAP) has published its annual overview of the state of global emissions trading systems (ETS). Despite geopolitical turbulence, carbon markets are moving from the periphery to the centre of global climate policy:
- 41 ETS systems are currently operating and cover 26 % of global greenhouse gas emissions.
- 3 new national systems will launch in 2026 – Japan, India and Vietnam. Another 16 systems are in the preparation phase or under consideration.
- Record ETS revenues reached almost $80 billion in 2025 – the money is directed to clean energy and support for households affected by the transition.
- ETS operates in 14 of the 20 G20 countries. Jurisdictions with emissions trading together account for 63 % of global GDP and more than half of the world’s population.
Established systems are accelerating the pace:
- China is moving to an absolute emissions cap by 2027 and expanding coverage to all major industrial sectors.
- The EU is preparing the launch of ETS 2 (buildings and transport) for 2028, while the CBAM has entered the compliance phase and is pushing carbon pricing onto trade partners as well.
- California extended its system until 2045, Korea is strengthening auctions and the stabilization reserve.
- Brazil, Chile, Colombia have approved legislation and are preparing implementation. Turkey is completing preparations for a pilot system.
An interesting development is also the shift in the design of new ETS – countries are combining cap-and-trade with offset mechanisms and carbon taxes into hybrid frameworks tailored to local conditions.