Latest Developments in Global Carbon Market Jurisdictions

Germany: Germany launched its national carbon market in 2021, covering heating and transport fuels not included in the EU Emissions Trading System (EU ETS). In February 2025, Parliament passed legislation to transition to the EU ETS2—a supranational mechanism subsequently postponed by one year to 2028. The government plans to expand sectoral coverage but has explicitly excluded combustion emissions from agriculture. Waste incineration remains within the national system pending further EU-level analysis. A second assessment report was published in January 2025, and auction procedures for the upcoming price corridor phase have been finalized. Kazakhstan: Kazakhstan’s carbon market has entered its 14th operational year. In October 2025, a draft National Allowance Allocation Plan for 2026–2030 was released, proposing annual caps reduced by 10.4% to 23% relative to 2025 levels. Since 2021, allowances have been allocated primarily via benchmarking, with preparations underway to introduce auctions. Montenegro: Montenegro launched its carbon market in 2020, covering large power and industrial facilities. In September 2025, the government completed a draft Climate Act, which was adopted in December and will enter into force in May 2026. This revised law aligns key design elements of the national carbon market—including monitoring, reporting, and verification (MRV); allowance allocation; and use of revenues—with EU regulations. With the adoption of the revised Climate Act, drafting of updated carbon market regulations has commenced urgently and is expected to be adopted before May 2026. Switzerland: Switzerland established its carbon market in 2008 and linked it to the EU ETS in 2020. In 2025, an amended law entered into force, tightening the cap reduction factor to align with EU reforms and permitting carbon capture to count toward compliance. Free allowances for aviation will be phased out gradually, while a new incentive mechanism will offset the cost of sustainable aviation fuel. An external evaluation found the system’s impact on emissions reductions to be minimal. Turkey: Turkey is preparing to launch its national carbon market, with a pilot phase expected to begin in 2026. In July 2025, the government enacted its first Climate Law, establishing the legal foundation for the carbon market and creating a dedicated committee tasked with deciding key design elements—including cap setting, allowance allocation plans, free allocation, and upper limits on carbon offsets. A draft implementing regulation was subsequently released for stakeholder consultation. The country submitted its NDC 3.0 at the end of 2025 and will host the 31st Conference of the Parties (COP31) in 2026. Ukraine: Ukraine continues developing the regulatory framework for its national carbon market. In February 2025, the Ukrainian government approved an ‘Action Plan’ for establishing the national carbon market. The document stipulates that the pilot phase should commence in 2028, while full operation shall not begin earlier than three years after the current martial law is lifted. United Kingdom: The UK carbon market launched in 2021 and is maturing through key reforms implemented in 2025 and preparations to broaden its scope. The UK and the EU have agreed to pursue linkage of their respective carbon markets—enabling mutual recognition of allowances—and to create conditions for mutual exemption from the Carbon Border Adjustment Mechanism (CBAM).

The 31st Conference of the Parties to the UNFCCC Will Be Held in Turkey in November 2026 | Highlights of COP31

The genesis of the 31st Conference of the Parties (COP31) to the United Nations Framework Convention on Climate Change (UNFCCC) itself unfolded with dramatic tension—reflecting the complex geopolitical landscape of today’s global climate governance. Since 2022, both Australia and Turkey submitted bids to host the conference—and neither side yielded. Australia proposed hosting in Adelaide, South Australia, jointly with Pacific Island nations, aiming to spotlight sea-level rise as an existential threat to small island states and underscore climate justice. Turkey sought to host in the resort city of Antalya, intending to elevate its international profile as a Eurasian hub and demonstrate regional leadership in energy transition. Under UNFCCC rules, if no single candidate can be agreed upon within the same regional group, the meeting defaults to Bonn, Germany. To avoid this ‘lose-lose’ outcome, after years of diplomatic negotiation, the two countries reached a historic compromise at COP30 in late 2025: the first-ever co-hosting model featuring a separation between host country and presiding party. Turkey will serve as host, responsible for providing the venue, logistical support, head-of-state-level hospitality, and organization of side events. Australia will assume the role of presiding party, with its Minister for Climate Change and Energy leading the core intergovernmental negotiations—ensuring the agenda reflects the concerns of both small island states and advanced economies. Additionally, a special pre-conference event—co-organized by Australia and Pacific Island nations—will be held ahead of the formal summit, focusing specifically on sea-level rise. ▼ Related Coverage from ‘Tides of the World’: COP30 Presidency Launches Dual-Track Roadmap Consultation to Accelerate Fossil Fuel Phase-Out and Halt Deforestation; COP30 President: Why Climate Multilateralism Needs ‘Dual Speed’—The Brake Is Applied, But the Accelerator Remains Unreleased!; COP30 Releases ‘2025 Global Methane Assessment Report’ ▲ Above: Official promotional poster for the 31st Conference of the Parties (COP31), released by the Ministry of Environment, Urbanization and Climate Change of the Republic of Turkey. Rendered in a thick oil-painting style, the image depicts green terraced farmland, white wind turbines, and solar panels on the left, against a backdrop of blue sky, white clouds, and the sun. Centered is the white slogan ‘See you at COP31! Türkiye’. At the top appears the official COP’31 logo featuring a colorful ring design; at the bottom are the official emblem and English name of the host ministry—immediately signaling this year’s distinctive hosting highlights. Source: Turkish Ministry of Environment. A Critical Juncture Entering the Implementation Era COP31 has been defined by the Executive Secretary of the UNFCCC as ‘a critical juncture entering the implementation era’. Unlike previous COPs focused primarily on setting long-term goals, this conference will prioritize concrete, on-the-ground action. First, a comprehensive review of the Paris Agreement. 2026 marks a pivotal milestone—the first major assessment since the Agreement’s adoption—and countries will submit and review updated Nationally Determined Contributions (NDCs) targeting 2035. The conference will focus on evaluating whether countries have translated their 2030 emission reduction pledges into specific domestic legislation and sectoral policies. Second, addressing the ‘last-mile’ challenge of climate finance.

COP31 Host Turkey, AIIB Strike Record $1.6 Billion Climate Policy Deal

15 hours ago

The Asian Infrastructure Investment Bank agreed to a record $1.6 billion financing deal with Turkey to support climate policy reforms, targeting emissions trading in steel and cement sectors and agricultural water efficiency.

reuters

2026-11-11

COP31 Host Turkey, AIIB Strike Record $1.6 Billion Climate Policy Deal

COP31 Host Turkey, AIIB Strike Record $1.6 Billion Climate Policy Deal

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