Carbon Market Watch — April 24, 2026

EU ETS Price Update

The EU carbon market continues to trade under pressure as the European Commission navigates what it has officially termed a "fossil energy" crisis driven by Middle East conflict disruptions to global oil and gas supplies. The Commission published a series of energy crisis response actions this week, creating uncertainty over whether additional ETS allowance supply or market interventions may be forthcoming.

The German National Emissions Trading System, which entered its auctioning phase in 2026, is operating under a price corridor with a minimum of EUR 55 and a maximum of EUR 65 per tonne of CO₂ for this year — providing one of the few firm reference anchors in the broader European carbon pricing landscape this week.

The EU ETS cap reduction schedule continues as planned: the cap was reduced by 27 million allowances in 2026, tightening supply in line with the EU's long-term 62% emissions reduction target by 2030. EU ETS emissions fell 1.3% in 2025, continuing a decade-long declining trend.

Compliance Markets Roundup

EU CBAM (Carbon Border Adjustment Mechanism) The EU CBAM entered its full operational phase on January 1, 2026, imposing carbon charges on steel, aluminium, and other high-carbon imports. On April 7, 2026, the European Commission published the first quarterly CBAM certificate price at EUR 75.36 per certificate for Q1 2026 — a significant data point for importers and trade partners calibrating compliance costs. The price is tied to the average EU ETS auction price for the quarter.

UK ETS The UK House of Commons Library published an updated briefing this week on the Carbon Border Adjustment Mechanism, examining UK CBAM plans and the interplay with the EU mechanism and international trade considerations. The briefing highlights the need for global coordination as border carbon measures proliferate.

China ETS China's national ETS — launched in 2021 — continues to operate, with carbon credits having previously traded extensively at the provincial and municipal levels for years beforehand, according to data tracked by CarbonCredits.com.

CORSIA (Aviation) The international aviation offsetting scheme CORSIA remains voluntary through 2026, after which it becomes mandatory for ICAO member states. Up to 2.8 billion credits could potentially become eligible under Article 6.4 of the Paris Agreement if CDM projects transition into the new mechanism.

Global Compliance Markets Expansion Compliance markets now cover approximately 23% of global greenhouse gas emissions and are expected to be a primary driver of demand, revenue, and the global carbon pricing framework in the coming years, according to a new analysis published this week.

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europesays.com

europesays.com

Voluntary Carbon Market

The Carbon Removal Sector's Single-Buyer Crisis The voluntary carbon removal market is confronting a structural vulnerability that has been building for years: an outsized reliance on a single dominant corporate buyer. A Forbes analysis published this week describes how the voluntary carbon removal market — encompassing direct air capture, enhanced weathering, and biochar — was effectively built around one major customer. The deeper issue, the analysis argues, is the need for a shift from purchasing abstract offsets toward embedding real-world decarbonization in corporate supply chains and operations. The piece signals a broader identity crisis in the VCM: is it an offset clearinghouse, or a mechanism to accelerate genuine abatement?

Article 6 and VCM Convergence The Wikipedia entry on carbon offsets and credits — updated March 2026 — confirms that Article 6 of the Paris Agreement does not directly regulate voluntary carbon markets, but from 2026 onward, voluntary credits must meet all Article 6 requirements to be used in compliance contexts. Verra's Verified Carbon Standard (VCS) remains one of the key independent crediting mechanisms operating alongside this framework.

C-GEO Futures and Quality Standards C-GEO futures contracts — comprised of tech-based, non-AFOLU offset projects from the Verra registry that align with the Core Carbon Principles (CCPs) of the Integrity Council for the Voluntary Carbon Markets — continue to represent a benchmark for high-quality voluntary credits. The CCP framework is designed to bring transparent and consistent supply-side standards to the VCM.

Policy & Regulation

CBAM Fertiliser Exemption: Floated, Then Killed In one of the week's most notable Brussels policy developments, Contexte reports that within a span of just six weeks, the European Commission first conceived of — then shelved — a proposal to exempt fertilisers from the EU carbon border tax. The episode, reported in depth this week, illustrates the intense lobbying pressure and internal divisions within EU institutions as CBAM enters full operation. The fertiliser sector, which argues CBAM compliance costs will harm European agricultural competitiveness, had lobbied hard for the exemption. MEPs and member state capitals are expected to keep pressing the issue.

US "Voluntary Export Fee" Proposal Researchers at the Brookings Institution published a new proposal this week for a US "Voluntary Export Fee" (VEF) on pollution — a mechanism designed to recover foreign tax revenue that US exporters are paying into systems like the EU CBAM, and redirect it to support US clean manufacturing. The paper by Patnaik, Wiley, and Schrag is framed as a way for the US to respond constructively to emerging international climate policies without formally adopting a domestic carbon price. The proposal is gaining traction in Washington policy circles.

EU CBAM Operational: Guidance Published The Climate Leadership Council published a detailed guide to the EU CBAM this week, examining the mechanism's implementing regulations and their implications for US exporters now that the full operational phase has begun. Steel and aluminium exporters to the EU are now paying for CO₂ emissions linked to their production, with critics labelling the measure "protectionist."

Analysis: The Carbon Removal Market's Single-Buyer Problem — And What Comes Next

The voluntary carbon removal (CDR) market has reached an inflection point. As Forbes reported this week, the sector was built in large part around a single dominant corporate anchor buyer — and the consequences of that concentration are now forcing a fundamental reassessment of the market's architecture and purpose.

The problem is structural, not cyclical. When one buyer accounts for a disproportionate share of demand for nascent carbon removal technologies — direct air capture, enhanced weathering, biochar, ocean-based approaches — it creates fragile price signals, distorted project development incentives, and a market that cannot scale beyond that buyer's appetite. When that buyer pauses or reorients its purchasing strategy, the entire ecosystem risks contraction.

The deeper question the Forbes analysis raises is whether the voluntary carbon market's CDR segment has been serving the right purpose. If the goal is to decarbonize the global economy, purchasing high-cost removal credits from frontier technologies may be less immediately impactful than redirecting corporate climate investment into supply chain decarbonization, industrial electrification, or long-duration energy storage. Critics argue the CDR market has functioned partly as a reputational tool for corporations rather than a systemic climate solution.

Yet defenders of the CDR market counter that early corporate procurement — even from a concentrated buyer base — was precisely what allowed frontier technologies to cross the demonstration threshold. The commercial viability of direct air capture, for instance, would not exist without the risk-taking of early voluntary buyers. The challenge now is to broaden the buyer base, develop secondary market infrastructure, and align CDR credit quality standards (through frameworks like the ICVCM's Core Carbon Principles and Article 6.4 of the Paris Agreement) so that a wider range of institutional buyers — including compliance market participants — can access the asset class with confidence.

What to Watch Next Week

• EU Energy Crisis Response: Monitor whether the European Commission's newly published fossil energy crisis action package includes any concrete ETS market interventions — such as additional allowance releases or price ceiling mechanisms — that could shift EU ETS trading dynamics.
• CBAM Fertiliser Debate: The shelved fertiliser exemption proposal is likely to resurface in European Parliament committee discussions; watch for MEP statements and lobbying activity that could signal whether Brussels revisits the exemption.
• CBAM Q2 Certificate Price: The next quarterly CBAM certificate price publication will provide an updated signal on EU ETS auction averages and compliance costs for importers.
• US VEF Policy Traction: Track whether the Brookings "Voluntary Export Fee" proposal attracts Congressional attention or formal comment from the US Trade Representative's office amid ongoing CBAM compliance cost debates.
• Voluntary Carbon Market Governance: Watch for any announcements from the Integrity Council for the Voluntary Carbon Markets (ICVCM) on Core Carbon Principles implementation timelines, particularly as Article 6.4 crediting rules for CDR projects come under negotiation.