China, EU, and Brazil Launch Open Coalition on Compliance Carbon Markets

The governments of China and Brazil and the European Commission have announced the launch of the Open Coalition on Compliance Carbon Markets, a new international initiative to strengthen cooperation on carbon pricing across national emissions trading systems and carbon taxes. New Zealand and Germany are the first additional members to join the coalition.

The coalition is open to countries with nationwide compliance carbon markets — either emissions trading systems or carbon taxes. Key focus areas include robust monitoring, reporting, and verification systems; sound carbon accounting methodologies; and the potential use of high-integrity offsets. The EU's Emissions Trading System, established in 2005, covers GHG-intensive sectors including electricity, oil refining, steel, cement, and aviation. China's national ETS — the world's largest — was launched in 2021, and Brazil passed legislation in 2024 to establish its own emissions trading system.

With approximately 80 carbon pricing schemes in place across 50 countries, the coalition aims to promote best practices, raise global standards, and advance carbon pricing as a cost-effective emissions reduction tool. The initiative comes as the EU reviews its own ETS amid geopolitical pressures on energy-intensive industries, and as Brazil prepares to host COP30 follow-up activities. The coalition's formation reflects a push by major emitters to maintain momentum on compliance carbon markets even as some countries pull back from voluntary net zero commitments.

A work plan for the coalition is expected to be adopted at the Carbon Market Conference on 15 September 2026 in Wuhan, China. For India, which is developing its own Carbon Credit Trading Scheme under the Energy Conservation (Amendment) Act 2022 and preparing to operationalise its Perform, Achieve and Trade mechanism, the formation of this coalition raises the prospect of future alignment or linkage between India's compliance carbon market and internationally recognised systems. Participation in or alignment with such frameworks could influence access to global carbon finance and affect competitiveness of carbon-intensive Indian exports.

Key figure — Approximately 80 carbon pricing schemes currently operating across 50 countries