EU, Brazil and China created the Compliance Carbon Markets Coalition
At the constitutional meeting in Florence on May 7, 2026, the EU, Brazil and China officially launched the Open Coalition on Compliance Carbon Markets – potentially a key multilateral climate initiative of the year. It follows the declaration signed at COP30 in Belém in November 2025.
Why is it important?
- today there are ~80 carbon pricing systems operating worldwide in 50 countries – ETS and carbon taxes
- the coalition brings together 3 of the largest emitting blocs around a shared carbon pricing agenda
- the goal is to increase the efficiency, transparency and integrity of carbon markets
Three technical priorities:
- MRV systems (monitoring, reporting, verification)
- Carbon accounting methodologies – consistency across jurisdictions
- High-integrity offsets – a response to repeated scandals over credit credibility
Brazil chairs for the first 2 years, the EU and China as Co‑Chairs.
Other members are Germany and New Zealand, sub‑national entities (California, Québec) may be observers. The coalition is open to all countries with national compliance markets.
A key milestone will be the Carbon Market Conference in Wuhan (China) on 15 September 2026, which will test whether the coalition can move from declarations to technical outputs.
EU priorities for the coalition:
- race to the top on carbon‑credit quality (building on Article 6.4 of the Paris Agreement Crediting Mechanism)
- harmonisation of accounting methods (important for CBAM)
- strengthening pressure on national carbon‑pricing systems
What to take away from this?
1. Multilateralism is alive – at a time when the US under Trump is rolling back climate‑disclosure rules (see the recent SEC move), this coalition is a strong signal that the rest of the world is moving forward.
2. EU-China climate diplomacy - cooperation between the EU and China on carbon markets is a surprisingly stable pillar in otherwise tense trade relations. The technical level (MRV, accounting) is more resilient to political fluctuations than, for example, CBAM.
3. For the CBAM signal - harmonisation of accounting methodologies across jurisdictions is crucial for the real functioning of CBAM. If the Chinese ETS, Brazilian market and EU ETS use comparable metrics, CBAM will be able to better recognise carbon tax payments in the country of origin – reducing the administrative burden for exporters.
4. Relevance for the Czech Republic – future Chinese and Brazilian compliance markets could affect the competitiveness of Czech exporters (steel, chemicals, automotive). It is worth monitoring the outcomes from Wuhan in September.