转型中的碳市场：通往2030年之路研究报告（英文版）

GHGMarketSentimentSurvey

2024/25

CARBONMARKETSINTRANSITION:

THEPATHTO2030

Inassociationwith

01

EXECUTIVESUMMARYPg05

02MESSAGEFROMTHEPRESIDENTPg06ANDCEOOFIETA

03

ABOUTTHESURVEYPg08

04EMISSIONSTRADINGSYSTEMS(ETS)Pg10

05CARBONBORDERADJUSTMENTPg15MECHANISM(CBAM)

06CORSIAPg20

07ARTICLE6Pg24

08VOLUNTARYCARBONMARKETPg29

09CARBONPRICEPROJECTIONSPg34

ABOUTPWC

PWCUKHELPSORGANISATIONSANDINDIVIDUALSCREATETHEVALUETHEY’RELOOKINGFOR.WE’REAMEM-BEROFTHEPWCNETWORKOFFIRMSIN149COUNTRIESWITHMORETHAN370,000PEOPLECOMMITTEDTODELIVERINGQUALITYINASSURANCE,TAXANDADVISORYSERVICES.THESTRATEGY&VALUECREATIONTEAMATPWCUKHELPSBOTHPUBLICANDPRIVATESECTORCLIENTSADDRESSTHESPECIFICANDIMMEDIATEISSUESRELATINGTOSUSTAINABILITY,ASWELLASWITHLONGER-TERMSTRATEGICTHINKING.YOUCANFINDOUTMOREBYVISITINGUSAT

WWW.PWC.COM/UK

.

ABOUTIETA

THEINTERNATIONALEMISSIONSTRADINGASSOCIATION(IETA)ISANON-PROFITBUSINESSASSOCIATIONWITHAMEMBERSHIPOFOVER330LEADINGINTERNATIONALORGANISATIONSOPERATINGINCOMPLIANCEANDVOLUNTARYCARBONMARKETS.SINCEITSFOUNDATIONIN1999,IETAHASBEENTHELEADINGVOICEOFBUSI-NESSONMARKETBASEDAMBITIOUSSOLUTIONSTOCLIMATECHANGE.WEAREATRUSTEDADVISERTOGOV-ERNMENTSTOSUPPORTTHEMINBUILDINGINTERNATIONALPOLICYANDMARKETFRAMEWORKSTOREDUCEGREENHOUSEGASESATTHELOWESTCOST,INCREASEAMBITION,ANDBUILDACREDIBLEPATHTONET-ZEROEMISSIONS.SEE

WWW.IETA.ORG

FORMOREINFORMATION.

ACKNOWLEDGEMENT

PWCAUTHORS:BRYANHARTLIN,SUSHMITASEELAM,CHRISTOPHERTHEAKER,ELOISECONLEY,ISABELLEBOWSHER

IETAAUTHORS:ANDREABONZANNI,ADARSHSRINIVASAN,NADINELIMSHUYAN

DESIGN:HCM©(HITMANCREATIVEMEDIAINC.)

3

IETAINASSOCIATIONWITHPWC

THISYEAR’SKEYFINDINGS

01

CAUTIOUSOPTIMISMDEFINESCARBONMARKETSENTIMENT.WHILEPARTICIPANTSREMAINCONFIDENTINTHELONG-TERMEXPANSIONANDLINKAGEOFNATIONALETS,UNCERTAINTYAROUNDINTEGRATIONTIMELINESANDPOLICYDESIGNHASGROWNSINCE2023.

02

INTEGRITYANDTRUSTAREDRIVINGANEWPHASEFORTHEVOLUN-TARYCARBONMARKET.RESPONDENTSHIGHLIGHTSTRONGERGOV-ERNANCE,QUALITYSTANDARDS,ANDALIGNMENTWITHCOMPLIANCESYSTEMSASKEYTOREBUILDINGCONFIDENCEANDCREDIBILITY.

03

RESPONDENTSREMAINCONFIDENTTHATCARBONPRICESWILLIN-CREASEINTHELONGTERM,THOUGHEXPECTATIONSHAVEMODER-ATED.ASTEADYPRICEGROWTHISANTICIPATEDTO2030,DRIVENBYHIGH-INTEGRITYCREDITS,DESPITENEAR-TERMDECLINESANDSOFT-ERPROJECTIONSTHANIN2023.

04

IETAMEMBERSDONOTANTICIPATETHAT,BY2030,PRICEINCREAS-ESINANYNATIONALETSWILLBESUFFICIENTTOREACHTHELEVELSREQUIREDTOACHIEVEEITHERTHE1.5°COR2°CGOALSOFTHEPARISAGREEMENT.

05

CONFIDENCEINARTICLE6HASGROWNSHARPLYAMONGSTIETAMEMBERS,WITH91%OFRESPONDENTSANTICIPATINGITWILLBEAKEYDRIVEROFFUTURECLIMATEACTIONS,COMPAREDWITH45%INTHE2023SURVEY.

4GHGMARKETSENTIMENTSURVEY2024/25

EXECUTIVESUMMARY

01.ETS:Overallsentimentreflectsreservedconfidence.WhilerespondentsbroadlysupporttheexpansionandlinkageofnationalETS,confi-denceintimelinesandintegrationhasweakenedsince2023.Uncertaintyaroundimplementationanddesigndetailspersists,butexpectationsforlong-termconvergenceandinclusionofremovalsremainstrong.

02.CBAM:AttitudesremainoptimisticthatEUCBAMwillprotectEUcompaniesfromcarbonleakage.RecentchangestheEUhasmade,tight-eninganti-circumventionrulesandreducingtheadministrativeburdenofCBAM,areinlinewithrespondentsviewsonthemainconsiderationsforensuringthelong-termsuccessofCBAM.Howev-er,despiteaclearlegalframework,stakeholdersstilldoubtwhetherthesaleofCBAMcertificateswillcommenceontime.

03.CORSIA:Respondentsexpressmutedcon-fidenceinCORSIAsabilitytoachievePhase1compliance,withthemajorityanticipatingunder-supplyofcreditsby2027andonlyasmallminori-tyexpectingmarketbalance.Viewsareshapedbyscepticismovercreditavailability,fragmentedpolicyalignmentbetweentheEUandICAO,andweakenforcementcapacity.Whilerecentreformsimprovetransparencyandreduceoffsetdemand,sentimentremainscautious,mostseeCORSIAssuccesshingingonscalingeligiblesupply,ensur-ingconsistentglobalenforcement,andclarifyinglong-termdesigntosecureparticipation.

04.ARTICLE6:ConfidenceinArticle6strength-enedin20242025,with91%ofrespondentsviewingitasakeydriverofclimateactionfollowingtheCOP29playbook.However,concernspersistaroundcomplexmethodologies,limitedhost-coun-trycapacity,andweakmarketdemand,underscor-ingtheneedforgreaterclarityandcoordinationtorealiseitsfullpotential.

05.VCM:In20242025,thevoluntarycarbonmarketenteredaphaseoftransformation,within-tegrity,transparency,andtrustemergingascoreprioritiesamidtighteningstandardsandevolvingmethodologies.Despiteongoinguncertaintyanddecliningtransactionvolumes,respondentswerecautiouslyoptimisticthatstrongergovernance,growingalignmentwithcompliancemarkets,andrisingdemandforhigh-qualityremovalcreditsaresignallingamorecredibleandresilientmarketahead.

06.PRICEPROJECTIONS:Sentimenttowardsfuturecarbonpricesremainsbullishdespitefallingaveragepricesinthevoluntaryandsomecompli-ancemarketsin2024.Lowerpriceshavereducedconfidenceinthescaleofpriceincreasesexpect-edincompliancemarketswithallpredictionslowerthanprevioussurveyresultsin2023and2022.Inthevoluntarymarket,pricesareexpectedtoin-creaseby2030,drivenbyalignmentwithArticle6andnationalETS.Superimposedonthistrend,thepricepremiumofhigh-qualitycreditsisexpectedtocontinuetoincreaseto2030.

THEABSENCEOFAFULLYFUNCTIONINGREGISTRY

ANDTHELIMITEDNUMBEROFACCREDITEDVERIFIERSAPPEARTOBESLOWINGTHEPIPELINEANDDELAYINGMARKETCONFIDENCEINARTICLE6.4ACTIVITIES.

-RESPONDENTQUOTE

IETAINASSOCIATIONWITHPWC5

MESSAGEFROMTHE

PRESIDENT&CEOOFIETA

ThisisIETAs20242025MarketSentimentSurvey,conductedwiththeexcellentassistanceofPwCUK.

Lookingback,thissurveyhasreviewedtheupsanddownsofnewandemergingcarbonmarketssincetheirinception.ImgladthatIETAmembershaveap-preciatedthevalueoftakingthemarketspulseonaroutinebasis,suchthatnowwehavealong-runningdatasettodrawupon.

Intheveryearlydays,wedidnothavesuchaprofes-sionalsurveyastheonepresentedtoday.LongbeforemytimeasCEO,IrememberanIETAgatheringinaWashingtonDChotelaround2001.Aquestionaroseinasessionaboutwhattheglobalaveragecarbonpricewouldbein2020?

Therewasnotmuchmarketdata,onlyresultsofafewvoluntarymarketpurchases,wherepricingwasoc-casionallyreportedbybrokers.CompliancemarketswereonlybeginningtoemergeintheUKandDen-mark.TheEUETSwasadistantdream,thesubjectofasimulationthenunderwaybyEurelectric,theIEAandPwCUK.

AsanIETAmember,Isuggestedthatthegroupattheeventmightprovideasgoodareferenceasany.So,weagreedthateverybodywouldwriteapredicted2020priceonapieceofthehotelnotepaperasaninformal“secretballot.”Wefoldedthemtoprotectanonymity,andstaffpassedahataroundtheroomtocollectthepapers.WehadrepresentativesfromPwCUKandArthurAndersontallytheresults.AsIrecall,thegroupcameupwithanaveragepriceofaround$20for2020.(Itseemedlikeahighpricein2001!)

Soonthereafter,then-CEOAndreiMarcuhadthegoodsensetoprofessionalisethesurveybyretainingthehelpofPwCUK.Andso,theIETAMarketSenti-mentSurveybegan.

Nowtothisyearssurvey.In2024,wesawmassivepoliticalshiftsaroundtheworld,aselectionstookplaceincountriesrepresentingoverhalfoftheworldspopulation.In2025,newleadersareinoffice.Newagendasbegantoformonenergy,climateandecon-omies.Butthepoliticaldiscordhascontinued,withanumberofworldleadersstrugglingtostayinpower.

Thisyear,surveyrespondentsleftnodoubtthatthegeopoliticaltensionsareimpactingcarbonpricingsentiment.TheongoingglobalconflictsandtheTrumpadministrationstariffagendapresentuncer-taintiesforenergyandcarbonmarkets.

Theriseofcarbonborderadjustmentmechanisms(CBAM)addsanotherdimension,asdotherespons-esofmanycountriesinsettinguptheirownemissionsmarkets.Thesenewmarketswillnotonlyblunttheim-pactofCBAMs,buttheywillalsocontributetonewnationallydeterminedcontributions(NDCs)totheParisClimateAgreement.

Carboncreditingmarketsshowsignsofsignificantimprovement,giventheprogressoftheICVCMandtheestablishmentoftheArticle6.4mechanism(knownnowas“PACM”).Butthesentimentisstillcau-tious.Trustishardtorestore.Respondentsindicatethatitmaytaketimetorestorethetrustandconfi-denceneededtoacceleratemarketgrowth.Buttherearepositivesignsofmarketconvergencearoundhighintegritycreditsandtheexpectationofpremiumprices.

Whilethereiscautiousoptimismacrossbothcom-plianceandvoluntarymarkets,itseemsthatmarketsentimentforreachingnetzeroattheParisgoalsof1.5°Cto2°Cisdoubtfulgiventhecurrentgeopoliticaldynamics.

Incontrast,itisencouragingtoseethatthesurveysmostpositivemessageistheturnaroundinconfi-denceinArticle6marketsas91%ofrespondentsseeArticle6asakeydriveroffutureclimateaction.AfterthebreakthroughagreementatCOP29lastyearinBaku,thecommitmenttoactionisrebuildingandwecantakethisasasignalthatbusinessisreadytoengagemoreininternationalmarketsasgovern-mentssettheirsightshigher.

DIRKFORRISTER

IETACEO&President

6GHGMARKETSENTIMENTSURVEY2024/25

“THEMARKET’SEXPECTATION

FORRISINGCARBONPRICESIS

ENCOURAGING,BUTTHEREALITY

ISSOBERING,THEYREMAIN

INSUFFICIENTTOPUTUSONTRACKTOMEETTHEPARISAGREEMENT.

THISDISCONNECTUNDERSCORESTHENEEDFORSTRONGERPOLICYSIGNALSANDMARKETREFORMS.”

TOMBEAGENT

Partner,PwCUnitedKingdom

IETAINASSOCIATIONWITHPWC7

ABOUTTHESURVEY

THESURVEYHASBEENSHAREDWITHIETAMEMBERS,OFWHICH,28%CON-STITUTEOBLIGATEDENTITIESUNDERACARBONPRICINGMECHANISMAND63%HAVEBEENACTIVEINCARBONMARKETSFOROVER10YEARS.WERE-CEIVEDRESPONSESFROM143IETAMEMBERREPRESENTATIVESFROMABROADRANGEOFLOCATIONSANDORGANISATIONS.MULTIPLERESPONSESWEREPROVIDEDBYSOMEMEMBERCOMPANIES.

143

SURVEY

RESPONSES

28%

OBLIGATEDENTITIESUNDERACARBONPRICINGSCHEME

63%

ACTIVEFOR

10+YEARS

Figure1.

Respondentsworktypes.

Oil&Gas

Industry

PowerProducer/Utility

15%

6%

3%

Finance&Investment

Other

7%

10%

4%

8%

Technology&Data

Trade&Brokerage

9%

ServiceProvider

11%

Registry/Exchange

27%

ProjectDeveloper

8GHGMARKETSENTIMENTSURVEY2024/25

FOLLOWINGTHECONVERGENCEOFGLOBALCARBONMARKETSOVERTHEPASTTWOYEARS,THE2024-2025IETAGREENHOUSEGAS(GHG)MARKETSENTIMENTSURVEYHASBEENSTRUCTUREDTOFOCUSONTOPIC-LEDDIS-CUSSIONSINSTEADOFTHEREGIONALAPPROACHADOPTEDINPREVIOUSYEARS.SIXKEYTOPICSHAVEBEENSELECTEDTOFEATUREINTHISREPORTASTHEMOSTRELEVANTTOCARBONMARKETSINTHEPASTTWOYEARS.THESELECTEDTOPICSREPRESENTTHEKEYREGULATORY,VOLUNTARY,ANDMAR-KET-DRIVENFORCESSHAPINGGLOBALCARBONPRICINGANDEMISSIONSTRADING.THESIXTOPICSANDSECTIONSAREASFOLLOWS:

01ETS02CBAM

03

CORSIA

04

ARTICLE6

05

VCM

06

PRICEPROJECTIONS

Figure2.

Whichofthefollowingbestdescribesyourlocation?

Canada

10%

UK

12%

EUand

USA

22%

EFTA

countries

29%

China

1%

(excludingChina)

12%

Asia

MiddleEast

andAfrica

3%

LatinAmerica

andCaribbean

8%

Australia,NewZealand

andthePacific

2%

●0-4%●5-9%10-14%20%+

IETAINASSOCIATIONWITHPWC9

10GHGMARKETSENTIMENTSURVEY2024/25

EMISSIONSTRADINGSYSTEMS(ETS)

OVERALLSENTIMENTREFLECTSRESERVEDCONFIDENCE.WHILERESPONDENTSBROADLYSUPPORTTHEEXPANSIONANDLINKAGEOFNATIONALETS,CONFIDENCEINTIMELINESANDINTEGRATIONHASWEAKENEDSINCE2023.UNCERTAINTYAROUNDIMPLEMENTATIONANDDESIGNDETAILSPERSISTS,BUTEXPECTATIONSFORLONG-TERMCONVERGENCEANDINCLUSIONOFREMOVALSREMAINSTRONG.

56%OF

RESPONDENTSEXPECTALINK

BETWEENEU

ETSANDUKETSBY2030

Since2023,globalcarbonmarketshaveenteredaphaseofevolution,withtheEU,UK,Korea,ChinaandsubnationalUSschemesannouncingplanstoexpandETScoverageandexplorecross-borderlinkages.Respondentsexpressgrowinguncer-taintyoverthepaceanddirectionofthistransition:confidenceintheintegrationofETS2intotheEUETS(ETS1)markethassoftenedsince2023,andopinionsremaindividedontheEUsfutureuseofArticle6credits.Despitethis,sentimentremainslargelypositive,withmostrespondentsexpectingalinkagebetweentheEUandUKETSby2030andanticipatinggradualinclusionofremovalsinEUETS.Thisindicatescautiousoptimismthatbroadercooperationandmarketmaturitywillulti-matelyenhanceefficiencyandimpact.

ETSMARKETEXPANSION

SectoralexpansionisunderwayacrossfourETSanalysed.TheUKETSisaddingupstreamoilandgas,maritimetransport,andenergy-from-wasteincinerationby20281.TheEUhasalreadyexpand-editsETStoincludemaritimeemissionsandwilllaunchETS2in2027tocoverbuildings,transport,andsmallindustry.ChinasETS,currentlylimitedtothepowersector,ispreparingtoincludesteel,cement,andaluminiuminthecomingyears.Mean-while,SouthKoreasETSisbroadeningcoverage

towaste,buildings,andpartsofthetransportsector,alongsidetighteningcapsandallowanceadjustments.Overall,allfourETSareprogressive-lywideningcoveragebeyondheavyindustryandpower.

RespondentsaredividedintheirexpectationsfortheintegrationofEUETS2withtheEUETS.Nearlyhalf(46%)believeETS2willmergeintotheETS1,with13%expectingthiswillhappenbefore2030and33%expectingintegrationafter2030.Only14%expectnofutureintegrationand40%areunsure.Thisrepresentsasofteninginconfidencecomparedto2023,when65%anticipatedinte-grationwithETS1suggestinggrowinguncertaintyaroundthetimelineandfeasibilityofintegration.

MOSTRESPONDENTSEXPECTALINK

BETWEENTHEEUANDUKETSBY2030

InMay2025theEUandUKagreedtobeginex-ploringalinkagebetweentheircarbonmarkets.Whilethedetailsareyettobedefined,54%ofre-spondentsexpectalinkbetweenEUandUKETStocomeintoforcebetween20262030,asmallincreasefromthe48%ofrespondentsin2023.Suchanarrangementisexpectedtostabilisecar-bonpricesandaccelerateemissionsreductionsinbothjurisdictions2.

Figure3.

Whendoyouexpectthelink

betweentheUKandEUETStocomeintoforce?

BY20262%

BETWEEN2026-203056%

AFTER203017%

UNSURE27%

EMISSIONSTRADINGSYSTEMS(ETS)

IETAINASSOCIATIONWITHPWC11

Figure4.

TheEuropeanCommissionisexpectedtosubmitareporttotheEuropeanParliamentandtheCouncilonhowcarbonremovalscouldbecoveredbyemissionstrading.Wouldyouexpectcarbonremovalstobe

includedintotheEUETS?

YES,IEXPECTTHEEUWILLINCLUDECARBONREMOVALS(ETS1)BY2030

29%

YES,IEXPECTTHEEUWILLINCLUDECARBONREMOVALS(ETS1)AFTER2030

34%

YES,IEXPECTCARBONREMOVALSTOBEINCLUDEDINETS2

6%

NO,IEXPECTTHEEUWILLSETASEPARATESYSTEMFORCARBONREMOVALS

11%

UNSURE

20%

RESPONDENTSANTICIPATETHE

INTEGRATIONOFCARBONREMOVALSINTOEUETSINTHENEXTDECADE

Followingdevelopmentsoverthepasttwoyears,sentimenttowardtheinclusionofcarbonremov-alsintheEUETShasstrengthenedcomparedto2023.Thisyear,69%ofrespondentsexpectcar-bonremovalstobeincorporatedintotheEUETSinsomecapacity,upfrom61%in2023.Ofthisgroup,thelargestshareofrespondents(34%)believestheintegrationofremovalswillbeafter2030,29%before2030,and6%inETS2.Only11%believeaseparatesystemwillbeestablished,while20%areunsure.Commentsindicatethatwhileconfidenceineventualintegrationisgrowing,respondentslargelyexpectaphasedandselectiveapproach,focusedinitiallyonengineeredremovalssuchascarboncaptureandstorage,withnature-basedremovalsexpectedtofacestricterlimitationsduetoconcernsoverpermanenceandmeasurementreliability.

TheintegrationofcarbonremovalswithinETSre-mainsalivedebate.TheUKhascommittedtoin-cludingGreenhouseGasRemovals(GGRs)inUKETSby20293,whiletheEUsignalledsimilarintentandplanstopresentadetailedproposalmid-nextyear.

RESPONDENTSDIVIDEDONTHEEU’SFUTUREUSEOFARTICLE6CREDITS

RespondentsaredividedontheEuropeanCom-mission’sproposaltoallowupto3%oftheEU’s

2040emissionstargettobemetthroughArticle

6credits.Only9%ofrespondentssee3%asanappropriatevolume,64%believetheshareshouldbehigherandonly6%believethefigureshouldbelower.Commentsalsosuggesttheproposedlevelistooconservative,withcallsforgreaterambition,clearermethodology,andstrongeralignmentwithmitigationintegrity.Overall,respondentssupportinclusionofArticle6creditsbutstressthatthede-signandcalibrationofthemechanismwilldeter-mineitscredibilityandimpact.

HIGHUNCERTAINTYREMAINSONTIMELINESOFFUTURENATIONALETSUPTAKE

2024–2025haswitnessedaccelerationinglobalETSuptake,mostnotablywithVietnambegin-ningapilotETSschemein2025aheadofa2029launch.

Despiterecentadvancements,thereissignificantuncertaintyamongstrespondentsoverwhentheybelievesurveyedcountrieswouldfullyoperation-aliseanationalETS,with49–69%ofrespondentsunsureoftimelinesdependingonthecountry.However,ofthoseexpressingaspecificexpec-tation,Taiwan,VietnamandChileemergeasmostlikelytoimplementanETSby2027.AlthoughtheUSAisalreadypartlycoveredbytwoexistingre-gionalETS,namelytheRegionalGreenhouseGasInitiative(RGGI)andtheWesternClimateInitiative(WCI),respondentswidelyseetheUSAasunlike-lytoimplementanationalETSbefore2033,withmultiplerespondentscitingfederallimitationsasbarriertoanationalETSeverbeingimplemented.Comparedwith2023,expectationsforETSim-plementationacrossAsia-Pacificshiftedfurtherout.Fewerrespondentsnowexpectnear-termadoption(before2027),withmostanticipatingfulloperationalisationbetween2027and2033.WhileMalaysiaandVietnamremainasleadingcandi-dates,timelineshavelengthenedoverall,indicatingwaningshort-termoptimismaboutnationalETSrollouts.

Despiteanticipateddelayedtimelinesfornewschemes,existingschemesareadvancingtowardstrictercompliance:Chinaplanstoimposeabso-lutecapsforsomeindustriesbeginningin2027aheadoftransitioningtoanationwideabsolutecapsystemby2030,andJapan’sGXLeagueisexpectedtotransitiontomandatorycomplianceby2026.

FOLLOWING

DEVELOPMENTSOVERTHEPASTTWOYEARS,

SENTIMENT

TOWARDTHEINCLUSION

OFCARBON

REMOVALSIN

THEEUETSHASSTRENGTHENEDCOMPAREDTO

2023.

EMISSIONSTRADINGSYSTEMS(ETS)

12GHGMARKETSENTIMENTSURVEY2024/25

Figure5.

WhendoyouexpectthefollowingcountriestofullyoperationaliseanationalETS?

ARGENTINA

BANGLADESH

BRAZIL

CHILE

COLOMBIA

MALAYSIA

PAKISTAN

PERU

THAILAND

THEPHILIPPINES

TÜRKIYE

TAIWAN

UNITEDARABEMIRATES

USA(NATIONALLEVELETS)

VIETNAM

0%

By2027

20%40%60%80%100%

●Between2027-2030Between2030-2033●Beyond2033

Figure6.

Whatdoyoubelievearetheconditionsforensuringthelong-termsuccessofETS?

24%

20%

19%

16%

14%

3%

3%

INTEGRATINGCARBONCREDITSINTOTHEETSTOCONTAINCOSTSANDBROADENPARTICIPATION

ESTABLISHINGINTERNATIONALLINKAGESORMUTUALRECOGNITIONAGREEMENTSWITHOTHERETS

CREATINGASECONDARYMARKETTOSUPPORTLIQUIDITYANDFINANCIALINSTITUTIONINVOLVEMENT

TIGHTENINGTHECAPANDGRADUALLYALLOCATINGALLOWANCESTHROUGHAUCTIONS

EXPANDINGTHEETSTOOTHERSECTORS,BEYONDENERGYANDINDUSTRIALS

DELIVERINGSOUNDINTEGRATIONWITHEMERGINGSUBNATIONALSYSTEMS,IFPRESENT

UNSURE

69%

THISYEAR,69%OF

RESPONDENTSEXPECT

CARBONREMOVALSTOBE

INCORPORATEDINTOTHEEUETSINSOMECAPACITY,UP

FROM61%IN2023.

IETAINASSOCIATIONWITHPWC13

EMISSIONSTRADINGSYSTEMS(ETS)

14GHGMARKETSENTIMENTSURVEY2024/25

Overhalfofrespondents(51%)areunsureoftheproportionofChina’sallowancesthatwillbeauc-tionedby2035,indicatingsignificantuncertaintyaboutfuturemarketdesign.Amongthosewhoexpressedaview,thelargestshare(11%)expects10–20%ofallowancestobeauctioned,withsmall-erproportionsanticipatinghigherorlowerlevels.

OUTLOOK

Across2024–2025,ETShavestrengthenedtheirpositionasacentraldecarbonisationmecha-nism.Advancedsystemsarebroadeningsectoralscope,emergingmarketsarematuringtoward

compliance,andglobaluptakeisacceleratingde-spitesentimentanticipatingslowertimelinesthanin2023.

Respondentsaredividedoverthekeyfuturecon-ditionsrequiredtoensurethelong-termsuccessofanETS.24%ofresponsesviewintegratingcar-boncreditsasakeycondition,while20%suggestcreatinginternationallinkageswithotherETS,and19%identifythecreationofsecondarymar-ketstosupportliquidity.Commentshighlightedtheimportanceofcost-effectivenessandCBAMalignmentforbuildingamoreefficientandcon-nectedcarbonmarket.

WHILE

CHALLENGES

REMAIN,

SENTIMENTPOINTSFIRMLYTOWARD

ETSBEINGAKEY

PILLAROFGLOBALCLIMATEPOLICY.

onindustrialallocationofcredits.Theextensionlawsre-movedapreviousrequirementforadecliningcapadjust-mentfactor.CARBisempoweredtoadjusttheAllowancePriceContainmentReserve(APCR)triggerandpriceceil-ingtobetterprotectconsumers.Previously,bothwereonafixedescalationpath,increasingby5%ayearplusinflation.California’supdatedETSintroducesseveralmeasurestodirectlyassistconsumersandratepayers.AlongstandingfeatureofCalifornia’sETSistheCaliforniaClimateCredit,whichisfundedthroughallowanceauctionsandprovidesarebateonelectricitybillsformostresidentialconsumers.Savingsfromthecreditwillbemademoreexplicitoncus-tomerbillssothatthereisaclearmentalassociationbe-tweentheCap-and-Investprogramandcheaperelectricity.Undertheextension,thecreditmustbeavailabletosmallbusinessesandemissions-intensivetrade-exposedretailconsumersaswell.

BUILDINGCONSUMERAFFORDABILITYINTOETS:THECASEOFCALIFORNIA

InSeptember2025,CaliforniapassedbillsextendingitsCap-and-Investsystemuntil2045.Uponsigningthebills,GovernorNewsomdeliveredremarksemphasisingaddi-tionalmeasuresoncostcontainmentandminimisingcon-sumerburden.California’sexampleillustrateshowtomain-tainpopularsupportandpoliticalviabilityforanETSamidstaffordabilityconcernsandageneralretreatfromclimateambition.

Californiaistransitioningfreeallocationofallowancesfromnaturalgascompaniestoelectricaldistributioncompanies,inabidtopassmoreofthecostreliefontoconsumers.TheCaliforniaAirResourcesBoard(CARB)isnowrequiredtoconsiderthecostimpactofCap-and-Investwhiledeciding

credits.Ifthetaxissetabovethemarketpriceofallowanc-es,itcouldserveasanincentivetoparticipateinthemarket.Sanctionsforoutrightnon-complianceincludesignificantreductionsinallowanceallocationforthefollowingcompli-anceperiod.

AlongsidedevelopingtheETS,IndonesiaisbuildingrobustcarbonmarketinfrastructuretosupportthetransactionofbothETSallowancesandVerifiedCarbonCredits(VCCs).Indonesiadevelopeditsownregistrysystem,SistemReg-istriNasional(SRN),whichtracksdetailslikevintage,retire-ment,andcancellation.TheIndonesianStockExchange(IDX)launchedasecondarymarketforcarboncreditsandallowancesknownasIDXCarbon,whereinternationalcreditbuyersandfinancialinvestorscanparticipateinthecarbonmarketalongsidecomplianceentities.TheFinancialSer-vicesAuthority,OJK,isresponsibleforregulatingtheIDX-Carbonmarketandpreventingfraud.

BUILDINGINDONESIA’SCARBONMARKET:

THECASESTUDYOFINDONESIA

In2023,IndonesiamadeheadlinesasthefirstcountryinSoutheastAsiatolaunchanationwidemandatoryETS.Cur-rently,theETSexclusivelyappliestothepowersector,andonlylargecoalandgas-firedpowerplantsarerequiredtoparticipate.Thesystemusesintensity-basedcapsandfirmswithexcessemissionsabovethecapmustpurchaseallow-ancesfromothercompaniesorbuyoffsetcredits.Themar-ketpriceforallowancesislow,ataroundUS$0.76/tCO2e.WhileIndonesia’sETSisstillinitsinfancy,thegovernmentisworkingtoincreasemarketactivityandthepriceofcarbon.ThereareplanstoextendtheETStootheremissions-in-tensivesectorssuchascement,fertilisers,andsteel,whichwouldincreasethedemandforallowancesandcredits.ThesystemwilltransitiontoahybridETS/carbontaxwherecomplianceentitiescanpayataxtoaccountforemissionsabovetheintensitylimitinsteadofpurchasingallowancesor

IETAINASSOCIATIONWITHPWC15

CARBONBORDERADJUSTMENTMECHANISM(CBAM)

ATTITUDESREMAINOPTIMISTICTHATEUCBAMWILLPROTECTEUCOMPANIESFROMCARBONLEAKAGE.THERECENTCHANGESTHEEUHASMADE,TIGHTENINGANTI-CIRCUMVENTIONRULESANDREDUCINGTHEAD-MINISTRATIVEBURDENOFCBAM,AREINLINEWITHRESPONDENTS’VIEWSONTHEMAINCONS