Carbon markets: 5 things to look for in 2025

After a period of consolidation, carbon markets are proving to be increasingly important parts of corporate and national climate strategies in both compliance and offset spaces.

What are the developments to look out for in the year ahead? In Carbon markets: 5 things to look for in 2025, we make our predictions.

Fill in the form for a complimentary copy of the full report, and read on for a brief introduction to some of the themes we explore.

Taxing carbon at the border expands beyond the EU

In 2025, the EU is expected to provide more clarity regarding its carbon border adjustment mechanism (CBAM) expansion. Keen points of interest include:

• will indirect emissions in steel, aluminium and hydrogen sectors be covered in the definitive period?
• will transportation emissions be covered?
• will other input materials and sectors like organic chemicals and polymers?
• what's the timetable for the progressive extension to other EU ETS sectors by 2030?

Meanwhile, carbon border taxes are spreading beyond the EU. The UK and Australia are progressing their own CBAMs, and Chile and Taiwan have incorporated carbon border taxation into the development of their domestic pricing mechanisms.

Will we see similar mechanisms in other countries? Read the full report for more on carbon border tax development.

Momentum in compliance carbon pricing will continue

We are seeing increased momentum behind the implementation of compliance carbon pricing. Announced developments that will proceed in the coming year include:

• Turkey prepares to launch its national emissions trading system (ETS) with a pilot phase in 2025 (and expects full operation in two years).
• Colombia looks to start its national ETS will an enrolment phase in 2025.
• Compliance carbon pricing in the US will continue to develop at the state level, with New York state set to launch its ETS in 2025.
• Several carbon taxes are scheduled, including Taiwan region, Indonesia, Thailand, Morocco and Denmark.

Innovative mechanisms that integrate different forms of carbon pricing are increasing – in Japan and India for instance. For more on this, and the evolution of established compliance regimes, read the full report.

Also in Carbon markets: 5 things to look for in 2025…

Carbon offsets’ endless strive for high quality continues, companies await greater clarity on carbon offset usage and claims – and will COP29 prove to be a catalyst for carbon offset market growth?

Fill in the form at the top of the page for your complimentary copy of the full report.