The International Carbon Action Partnership (ICAP) has issued its Emissions Trading Worldwide Status Report 2025, which reveals continued global momentum for emissions trading systems (ETSs), particularly across emerging economies.
As of 2025, 38 ETSs are in operation, with another 20 systems under development or consideration, collectively covering 19% of global greenhouse gas emissions.
Emerging markets such as Brazil, India, Indonesia, Türkiye, and Vietnam are at the forefront of this new wave, crafting innovative system designs tailored to local needs.
Many of these systems are expected to include offsetting provisions and domestic crediting mechanisms, making them key tools in achieving net-zero targets.
Meanwhile, established ETSs are evolving. Notably, China’s upcoming expansion could boost its coverage by an additional 3 billion tons of carbon dioxide equivalent (CO2e), roughly 5% of global emissions.
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Both the European Union (EU) and the UK are also advancing reforms to expand sector coverage and improve system design.
With the rise of carbon markets, carbon leakage remains a concern. Tools like Carbon Border Adjustment Mechanisms (CBAMs)—already in progress in the EU and UK—are increasingly important in ensuring fair competition and environmental integrity.
“It is encouraging to see the growth and spread of emissions trading systems around the world as a response to the climate crisis,” Stefano De Clara, Head of the ICAP Secretariat, said.
De Clara also stressed the importance of public acceptability and a just transition, emphasizing the need to reinvest ETS revenues into climate and social initiatives.
Overall, the report underscores that emissions trading is a vital and growing tool in the global effort to meet climate goals.
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