Report
ICAP Emissions Trading Worldwide Report 2025
Description
As the world confronts increasingly urgent climate challenges, emissions trading systems (ETS) have emerged as powerful tools for reducing greenhouse gas emissions.
Emissions Trading Gains Momentum, Led by Emerging Economies
The number of Emissions Trading Systems (ETSs) continues to grow, with 38 systems operational globally and 20 more in development as of 2025, now covering 19% of global greenhouse gas emissions.
Emerging economies like Brazil, India, Indonesia, Türkiye, and Vietnam are at the forefront of this expansion, implementing innovative designs and emphasizing offsetting and domestic crediting.
Meanwhile, existing systems are expanding and evolving — China’s ETS is set to grow significantly, potentially covering an additional 3 billion tons of CO₂e, while the EU and UK plan to include more sectors.
Carbon leakage and competitiveness remain key issues, driving interest in Carbon Border Adjustment Mechanisms (CBAMs).
Public support is crucial for ETS success. As ICAP notes, reinvesting auction revenues into climate action and social equity is essential for a just transition in the face of rising global temperatures.
