Carbon Market Watch — April 20, 2026
EU ETS prices face renewed political pressure after the IMF issued a stark warning against suspending the bloc's emissions trading system, calling it a move carrying "huge" risks to climate investment. Global compliance markets hit a record $79 billion in revenue in 2025, according to a new ICAP report, underlining the system's growing financial weight even amid reform debates. Türkiye launched its own carbon trading system this week, marking a significant expansion of the global carbon market landscape.
Carbon Market Watch — April 20, 2026
EU ETS Price Update
EU ETS allowance prices are trading at approximately €75/tonne in Q1 2026, according to BloombergNEF projections that see the price averaging €86/tonne for the full year 2026 before climbing toward €185/tonne by 2035. The price trajectory is being closely watched as political debates over potential market intervention intensify.
The IMF weighed in directly this week, urging the European Union not to pause its emissions trading system, warning that suspension would come with "huge" risks that might jeopardize long-term climate investment. The warning comes as some EU member states, including Italy, have previously called for ETS reform or suspension amid energy cost pressures.
Compliance Markets Roundup
Global ETS Revenue Record (2025) Global emissions trading systems generated a record $79 billion in revenues in 2025, the International Carbon Action Partnership (ICAP) reported on April 14. This marks a historic high and underscores the expanding financial significance of compliance carbon markets worldwide.
Türkiye — New ETS Launch Türkiye this week adopted carbon trading, becoming the latest major economy to launch a domestic emissions trading system. The move arrives amid shifting EU climate debates and ongoing geopolitical pressures including US tariffs and energy disruptions linked to the Iran war-related energy crisis — developments that are reshaping the calculus for carbon pricing across the region.
EU ETS Emissions Trend EU ETS-covered emissions fell 1.3% in 2025, continuing a long-term decline that has halved total covered emissions since 2005. The power sector, driven by strong solar growth, and falling industrial output both contributed to the downward trend, keeping the EU nominally on track for its 2030 target of a 62% reduction from baseline levels.
Voluntary Carbon Market
Q1 2026: Quality Over Quantity Carbon credit retirements fell 8% in Q1 2026 compared to the prior year, but average prices rose as compliance-linked and investment-grade supply gained ground. The trend reflects a structural shift in the voluntary carbon market: buyers are increasingly demanding higher-quality, compliance-proximate credits, squeezing out lower-integrity supply.
CORSIA Voluntary Phase Ending Participation in the aviation sector's CORSIA offsetting scheme has been voluntary through 2026, after which it is slated to become mandatory for ICAO member states. The transition is drawing increased attention from airlines and carbon credit project developers preparing for a significant step-up in demand.
Policy & Regulation
CBAM: First Certificate Price Published On 7 April 2026, the European Commission published the first quarterly CBAM (Carbon Border Adjustment Mechanism) certificate price, set at €75.36 per certificate for Q1 2026. This landmark release marks the full operational phase of the world's first carbon border adjustment fee — affecting importers of steel, aluminium, cement, fertilisers, electricity, and hydrogen entering the EU. The price is derived from the weekly average EU ETS auction price.
UK CBAM — Parliament Briefing Updated The UK House of Commons Library updated its research briefing on the UK Carbon Border Adjustment Mechanism this week (April 17), outlining the UK government's plans to introduce its own CBAM in parallel with the EU's implementation. The briefing addresses international trade implications and the need for global cooperation on carbon pricing to avoid competitiveness distortions.
Climate Leadership Council: CBAM Guide for U.S. Stakeholders The Climate Leadership Council published a comprehensive guide to the EU CBAM's full operational phase this week, prepared by Sidley Austin. The analysis examines the implications for U.S. exporters facing the new carbon intensity fee on goods shipped into Europe, noting that U.S. domestic carbon pricing could reduce or eliminate CBAM obligations.
Analysis: IMF Warns Against EU ETS Suspension — What's at Stake
The IMF's intervention this week represents a notable escalation in the debate over the EU Emissions Trading System's future. With energy costs still elevated and certain member states pressing for market relief, pressure to suspend or significantly water down the ETS has mounted in recent months. The IMF's warning — characterizing suspension as carrying "huge" risks to investment — adds significant institutional weight to the pro-market camp.
The core risk flagged by the IMF is credibility and capital allocation. Investors in clean energy, industrial decarbonization, and carbon removal technologies rely on a predictable, rising carbon price to underwrite long-term project economics. A suspension, even a temporary one, would send a signal that the EU's carbon price is subject to political override — fundamentally undermining the investment case for decades of infrastructure.
BloombergNEF projections published this week reinforce the stakes: analysts see the EU ETS price moving from roughly €75/tonne in Q1 2026 to an average of €86/tonne for the full year, then rising steeply to €185/tonne by 2035. These projections are premised on the existing cap trajectory holding. Any political interference that expands supply or pauses auctions would compress that price path and likely delay the clean energy investments the EU needs to meet its 2030 targets.
The backdrop of the ICAP record revenue figure — $79 billion globally in 2025 — adds a further dimension: compliance carbon markets are now major fiscal instruments, generating revenue that EU member states are using to fund energy transition programs. Suspending the ETS would forfeit that revenue precisely when governments need funds to manage the energy transition. With Türkiye's new ETS launching this week, the global trend is clearly toward more carbon pricing, not less — making EU backsliding all the more conspicuous.
What to Watch Next Week
- CORSIA transition preparations: With mandatory participation beginning after 2026, watch for ICAO communications and airline compliance disclosures as the voluntary phase winds down.
- EU CBAM Q1 implementation data: Early operational data from the first quarter's CBAM certificate system could surface, revealing how many importers submitted declarations and which sectors face the largest exposure.
- EU ETS auction results: Weekly ETS auction volumes and clearing prices will be closely watched for any sign that the IMF warning has dampened speculation about market interventions.
- Türkiye ETS design details: Follow-up reporting on Türkiye's new carbon trading system is expected, including details on covered sectors, initial price levels, and linkage prospects with the EU ETS.
- Voluntary carbon market Q1 data: Additional reporting on the 8% drop in credit retirements in Q1 2026 may emerge, with breakdowns by sector and project type that could signal where demand is consolidating.
This content was collected, curated, and summarized entirely by AI — including how and what to gather. It may contain inaccuracies. Crew does not guarantee the accuracy of any information presented here. Always verify facts on your own before acting on them. Crew assumes no legal liability for any consequences arising from reliance on this content.
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