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Albania ETS

Alberta TIER

The Technology Innovation and Emissions Reduction (TIER) Regulation is a baseline-and-credit ETS. It covers large emitting facilities, with the ability for lower emitting facilities to opt in to the regulation. Covered entities must reduce their emissions intensity (emissions per unit of production) by a set percentage each year. The reduction requirement is based on a facility’s average emissions intensity over a three-year historic period or compared to a sector-specific benchmark. Covered entities that outperform their targets generate emissions performance credits (EPCs), which can be sold or used in future compliance years. Those that exceed their limits are required to provide compensation by either (1) purchasing EPCs from other covered facilities, (2) paying into the TIER fund to purchase a fund credit for each tonne of excess emissions, or (3) purchasing emission offset credits generated within Alberta under an approved offset protocol or sequestration credits.

Argentina ETS

Australia Safeguard Mechanism

The Safeguard Mechanism assigns mandatory emissions baselines for over 200 large facilities in Australia. Facility-level baselines are calculated using output-based benchmarking based on emissions intensity. Facilities emitting above their baseline must offset excess emissions by surrendering Safeguard Mechanism Credits (SMCs) or Australian Carbon Credit Units (ACCUs). In some cases, facilities can also apply to average their emissions over a longer period or borrow from a future year. The Safeguard Mechanism was introduced in 2016 but had not been classified as a baseline-and-credit system as no tradeable permits were issued. However, as of July 2023, the government issues SMCs to facilities that over-achieve on their baseline. This reform was accompanied by a tightening of baselines and a default decline rate of 4.9% per year, to align the outcome with Australia’s 2030 targets.

Austria ETS

Austria launched its national emissions certificate trading system (Nationales Emissionszertifikatehandelsgesetz – NEHG) for fossil fuels not already covered by the EU ETS in October 2022. Although the NEHG does not establish a carbon tax, the carbon pricing instrument follows in central parts the logic of existing energy taxes (fuel tax, coal tax, and natural gas tax). Thus, if a certain event is taxable under the existing energy taxes regime, an obligation to buy allowances arises under the NEHG. Taxable events are the production, import, or release of energy products from a tax warehouse in Austria or the supply of coal and natural gas to consumers. In practice, only a limited number of energy distributors and oil companies are subject to the NEHG 2022. The NEHG aims to cover emissions outside the EU ETS, encompassing predominantly emissions in the buildings and transport sectors. Between 2022 and 2025, the system operated with an annually increasing fixed price and a flexible cap, such that more allowances will be available for entities if needed. The NEHG is being phased in gradually. The system has been designed in line with the reduction targets for non-EU ETS sectors as defined by the “European Effort Sharing Regulation” (ESR). The system may eventually transfer into the EU ETS 2.

Beijing pilot ETS

The Beijing pilot ETS is a cap-and-trade system. The total amount of emission allowances and cap-setting is determined bottom-up. Covered entities must surrender allowances for all their covered emissions.

Brazil ETS

In 2009, Brazil adopted the “National Policy on Climate Change” (Política Nacional sobre Mudança do Clima, PNMC), aiming to identify, plan, and coordinate actions and measures for GHG abatement and to adapt to climate change. The PNMC lays out the basis for a carbon pricing regulation. Law No. 15042/2024 was approved in 2024, which formally established the regulatory framework for Brazil's ETS for implementation. Between 2016 and 2020, as part of its activities under the World Bank’s Partnership for Market Readiness, the government carried out studies on the possible implementation of market instruments to meet its emissions targets and reduce overall mitigation costs. The federal government's proposal for the establishment of the Brazilian Greenhouse Gas Emissions Trading System (Sistema Brasileiro de Comércio de Emissões de Gases de Efeito Estufa, SBCE) was guided by the recommendations of the PMR Brazil project, which indicated the adoption of a cap-and-trade scheme as the most desirable carbon pricing option within the PNMC. Under draft bill (Projeto de Lei, PL) “PL 412/2022” the government proposal was approved with minor modifications by the Senate in October 2023. Under draft bill “2148/2015”, the Chamber of Deputies modified and approved the establishment of the SBCE in late December 2023. The reviewed proposal will be sent back to the Senate for new appreciation under PL 2148/2015, and the National Congress is expected to approve it in 2024. PL 2148/2015 would establish the governance framework and the legal foundation for obligations by covered entities, with key design elements (such as scope, cap, and allocation) to be determined in the coming years.

BC OBPS

Starting in April 2024, the B.C. Output-Based Pricing System (B.C. OBPS) replaced the province’s carbon pricing mechanism for industrial operators, which had included the provincial carbon tax and a baseline-and-credit system under the CleanBC Program for Industry. The CleanBC Program for Industry had been in place since April 2019 and included the CleanBC Industrial Incentive Program (CIIP) and the CleanBC Industry Fund (CIF); the CIIP will be discontinued, and the CIF is under review and will continue under the new mechanism. The B.C. OBPS follows the Canadian federal carbon price path and ensures a price incentive for industrial emitters to reduce GHG emissions through a performance-based system. Facilities that emit under their annual emission limit earn credits. For facilities that emit over their emission limit, the B.C. OBPS provides flexible compliance options to meet compliance obligations. Flexible payment options include using earned credits, B.C. offsets, or making a direct payment. Banking is allowed. Borrowing is not allowed.

California CaT

The California Cap-and-Invest Program requires covered entities to surrender allowances for all their covered emissions. Allowances are distributed via a combination of auction, free allocation, and free allocation with consignment.

Canada ETS

Canada federal OBPS

The pan-Canadian approach to carbon pricing was adopted in 2016. The approach requires all Canadian provinces and territories to have a carbon pricing system in place that aligns with the federal standard. A federal carbon pricing backstop system comes into effect, in whole or in part in any province or territory that requested it or that does not have a price on carbon in place that meets the federal standard. The federal consumer fuel charge was eliminated on April 1, 2025, and currently a baseline-and-credit ETS for emissions-intensive and trade-exposed industrial facilities called the Output-Based Pricing System (OBPS) is the only federal backstop for large industrial emitters. To comply with the national system, provinces need to implement systems that meet the minimum national carbon price. The minimum national carbon price was set at CAD 65 (USD 48.15) in 2023, increasing by CAD 15 (USD 11.11) each year to reach CAD 170 (USD 125.93) in 2030. As cap-and-trade systems set maximum emissions levels rather than minimum carbon prices, for these systems the minimum carbon pollution price is translated into an equivalent cap on emissions.

Chile ETS

In June 2022, Chile enacted its “Framework Law on Climate Change”, which sets a 2050 carbon neutrality goal and describes the national, regional, and local climate policies that Chile will implement to achieve it. These include Chile’s NDC, Long-Term Climate Strategy, Climate Change Financial Strategy, and sectoral mitigation and adaptation plans. Article 14 of the law mandates the Ministry of Environment to specify GHG emissions limits set by technology, sector, or activity. GHG emissions limits may be set as emissions benchmarks for individual installations or in aggregate, for a group of installations or a sector. If set in aggregate, GHG emissions limits could be akin to a cap. According to Article 15, installations that perform better than their benchmark will have their surplus emissions reductions certified, which may then be used by other regulated entities for compliance with their respective emissions limits. The specific design of the emissions limits system is not yet defined and could be implemented either as an ETS or a tradable performance standard. In November 2023, the Ministry of Environment published the “Draft Rules for the Development of GHG Emissions and Short-Lived Climate Pollutant Limits” for public consultation. The document specifies procedures and characteristics of the emission limits to be developed under the Framework Law. The draft law was approved in March 2024 and published in July 2025 as Supreme Decree DS No 12/2025 Based on Article 37 of the Law, which provides a basis for the development of market-based, fiscal, and financial instruments to address the negative impacts of GHG emissions, the country’s “2022-2026 Energy Agenda” states that a pilot ETS project for the energy sector will be developed. Work around this will be supported by the World Bank’s Partnership for Market Implementation. Chile has had a carbon tax in place since 2017. The country’s “Long-Term Climate Strategy”, presented in October 2021, specifies that Chile will set an increasing trajectory for its carbon price between 2025 and 2030. It also specifies that the country seeks to have an integral carbon pricing portfolio to deliver coherent and predictable price signals. In line with this, the government launched its “National Energy Policy by 2050”, which states that carbon prices in Chile should reach USD 35/tCO2e by 2030 and USD 80/tCO2e by 2040.

China national ETS

China’s national ETS began operating in 2021. It regulates more than 3300 companies from the power (including combined heat and power, as well as captive power plants in other sectors), steel, cement, and aluminum sectors with annual emissions of more than 26,000 tCO2e. Covered entities must surrender allowances for all their covered emissions, and allocation is based on intensity, with allowances freely allocated using benchmarks and based on actual production levels. Compliance obligations are currently limited and vary between different types of power generation. The system’s coverage will expand to key industrial emitters by 2027. The national ETS builds on the experience of pilot and subnational carbon markets implemented in eight regions. These systems continue to operate in parallel with the national ETS, covering sectors and entities not included in the national system. As the national system expands, entities covered by regional systems are expected to be integrated into it.

Chongqing pilot ETS

The Chongqing pilot ETS is a cap-and-trade emissions trading scheme. Auctioning was introduced in 2021. While the scheme implemented absolute caps until 2021, a revision of the scheme in 2022 changed the allocation approach such that there are no longer absolute caps and allocation is determined on a bottom up intensity basis.

Colombia ETS

In 2018, Colombia adopted a law for climate change management, which outlines basic provisions for the establishment of an ETS, or the “National Program of Tradable GHG Emission Quotas” (Programa Nacional de Cupos Transables de Emisión de Gases de Efecto Invernadero – PNCTE). Covered entities will have to surrender allowances for all their covered emissions. The Ministry of Environment and Sustainable Development (Minambiente) will determine the number of allowances in line with Colombia’s national mitigation targets. Minambiente is also in charge of allocation, which will take place primarily via auctions. Non-compliance is to be punishable by a fine of up to double the auction price. Auction revenues, as updated by Article 262 of Law 2294 of 2023, will now be allocated to the “Fund for Life and Biodiversity” (formerly the “Fund for Sustainability and Climate Resilience”). These funds are designated for purposes set by the national carbon tax, as well as for administering the PNCTE and the Mandatory Emissions Report under Law 2169 of 2021. The Climate Change law also includes crediting provisions: voluntary actions of non-regulated entities that generate GHG emissions reductions or removals may be issued allowances if they are verified, certified, and registered in the National Emission Reductions Registry (Registro nacional de reducción de emisiones de GEI – Renare), and deemed eligible for the program. The PNCTE will complement Colombia's revised carbon tax, according to Resolution 12 of 2023 by the National Directorate of Taxes and Customs. The 2018 “Climate Change Management Law” states that the government may recognize tonnes paid through the carbon tax as part of the compliance obligation of regulated entities under the PNCTE. The ETS design is currently being analyzed by the government. The 2021 “Climate Action Law” (Ley de Acción Climática) sets a goal to fully implement the ETS by 2030. This has also set an obligation for legal persons to report direct and indirect GHG emissions, following criteria to be set by Minambiente. It also appoints an independent group of experts (the Study Commission) to provide recommendations and promote and develop carbon markets in Colombia. These recommendations are to be considered by the environment and finance ministries.

Colorado GHG crediting trading system

In October 2023, the Colorado Air Quality Control Commission (AQCC) adopted regulations establishing an ETS covering large in-state manufacturers, beginning with the first compliance year in 2024 The GHG credit trading system is established by the start of December 2024. The first auction took place on 30 June 2025.

Dominican Republic ETS

The Dominican Republic is currently in the design phase of a pilot ETS. The development is led through the National Council for Climate Change and Carbon Market (CNCCMC)

EU ETS

Operational since 2005, the European Union Emissions Trading System (EU ETS) is the oldest cap-and-trade system in force. It is a cornerstone instrument of the EU’s policy framework to combat climate change under the “European Green Deal” and reduce GHG emissions cost-effectively. The EU ETS is currently in its fourth trading phase (2021 to 2030). Every year, covered entities must surrender allowances for their emissions under the EU ETS. Auctioning is the main method of distributing allowances, with free allocation, based on benchmarks, used to address carbon leakage.

EU ETS2

In July 2021, the European Commission proposed the “Fit for 55” package of reforms to align EU climate and energy policy with the objectives of the “European Green Deal”, most importantly the ambitious 2030 climate target of reducing net emissions to at least 55% below the 1990 level. The package included important amendments to the EU ETS framework, including a proposal to extend emissions trading to new sectors. These amendments were adopted in the first half of 2023 and are now in force. A new, separate emissions trading system (ETS 2) will be established for emissions from fuels used for combustion in buildings, road transport and additional sectors (mainly small industry not covered by the existing EU ETS). The ETS 2 will complement other policies of the European Green Deal in the covered sectors, helping Member States achieve their emission reduction targets under the “Effort Sharing Regulation” (Regulation (EU) 2018/842). The ETS 2 is based on the ‘cap-and-trade’ principle. It will cover emissions upstream, meaning the obligation to surrender allowances will fall on the fuel suppliers rather than end-consumers. The ETS 2 cap will be set to bring emissions down by 42% by 2030 compared to 2005 levels. The ETS 2 is due to become fully operational in 2028, following a decision in September 2025, finalized in March 2026, to delay implementation by one year. A share of revenues from the ETS 2 will be used to support vulnerable households and micro-enterprises through a dedicated Social Climate Fund, created as part of the “Fit for 55” package. Member States will be required to use the remaining ETS 2 revenues for climate action and social measures.

Fujian pilot ETS

The province of Fujian launched its ETS in September 2016. It covers around half of the province’s emissions and nearly 300 entities. Covered entities must surrender allowances for all their covered emissions, and allocation is based predominantly on free allocation, using benchmarking or grandparenting based on production levels. Auctioning may take place when considered appropriate by the ETS authorities. The Fujian ETS pilot has a special focus on carbon sinks. In 2017, the Fujian government outlined a plan to promote forestry offset projects in the province. By the end of 2024, 4.1 million forestry offset credits had been traded in Fujian pilot ETS.

Germany ETS

Germany launched its national ETS (Nationales Emissionshandelssystem) for heating and transport fuels in 2021. With the introduction of the ETS, a wide range of sectors in Germany are now subject to a carbon price. The national ETS complements the EU ETS by covering all fuel emissions not covered by the bloc’s system. It is being phased in gradually, with an increasing fixed price per tCO2 from 2021 to 2025. In 2026, allowances are auctioned within a price corridor of EUR 55 to EUR 65/tCO2, with an additional fixed-price option of EUR 68/tCO2 available after the auctioning period if the cap is exceeded. During the fixed price and price corridor phases, the cap is flexible. Covered entities must surrender allowances for all their covered emissions, and allocation is based on auctions or free allocation. The national ETS was established through the 2019 “Fuel Emissions Trading Act” 2019, which was amended in 2020, 2022 and again in 2023.

Guangdong pilot ETS

The Guangdong ETS was launched in December 2013. It covers around 40% of the province’s emissions. It covers emissions from more than 250 entities in the petrochemicals, paper, domestic aviation, ceramics sectors. Covered entities must surrender allowances for all their covered emissions. Since its launch, its scope has expanded to include ceramics, textiles, and data centres. The ETS has an absolute cap that is announced annually.

Hubei pilot ETS

The Hubei pilot ETS launched in April 2014 and is one of the largest Chinese pilots, with the second highest spot trading volume after Guangdong. It is one of the few Chinese pilots to use forward trading of allowances, and uses both grandparenting and benchmarking for free allocation. Hubei has played a central role in the national ETS, hosting the National Carbon Market registry since 2017 (operated by the China Carbon Emissions Registration and Clearing Co.). The Hubei pilot operates in parallel with the national ETS, with covered sectors transferred to the national system over time.

India ETS

The Carbon Credit Trading Scheme (CCTS) was created through a 2022 amendment to the Energy Conservation Act, 2001, and notified by the government in June 2023. The detailed compliance regulations followed in July 2024. The scheme works as an intensity-based baseline-and-credit market where each obligated entity gets a target in tCO2e per unit of product, set for three years at a time. The CCTS builds on the existing Perform, Achieve and Trade (PAT) scheme, a mandatory energy efficiency program covering more than 1,000 entities across 13 energy-intensive sectors. A phased transition from PAT to the compliance mechanism began in 2025, with seven sectors (aluminium, cement, chlor-alkali, pulp and paper, petroleum refining, petrochemicals, and textiles) moving to the CCTS from FY2026. Targets for these sectors were notified in two phases: the first four sectors in October 2025, the remaining three in January 2026. Approximately 490 entities are covered under the first compliance period (FY2026–FY2027), using FY2024 emissions data as the baseline.

Indonesia ETS

Indonesia’s Economic Value of Carbon, or Nilai Ekonomi Karbon (NEK), Trading Scheme is a mandatory, intensity-based, baseline-and-credit ETS for the power sector launched in early 2023. In its first phase spanning from 2023 to 2024, it exclusively targets coal-fired power plants connected to the Perusahaan Listrik Negara (PLN) grid with a capacity of 25 MW or more99 installations in 2023 and 146 in 2024. Phase 2, which commenced in 2025, extended coverage to captive CFPPs not connected to the PLN grid and to gas-fired, gas-engine, and combined-cycle power plants. By 2025, 563 installations were covered, representing the majority of the country's regulated power generation capacity. Covered entities receive intensity targets known as Persetujuan Teknis Batas Atas Emisi (PTBAE), which determine the number of allowances allocated per MWh of electricity generated. Entities must surrender allowances for all covered emissions; allocation is based on PTBAE benchmarks, prior-year emissions intensity, and prior-year average emissions. Additionally, entities have the option to purchase allowances via auctions. Presidential Regulation No. 110/2025 established the national legal framework for a domestic carbon pricing system comprising an ETS, a carbon levy functioning as a compliance backstop, and a results-based payment mechanism tied to Article 6 of the Paris Agreement. The Indonesian Carbon Exchange (IDXCarbon), launched at the Indonesia Stock Exchange in September 2023 under the supervision of the Financial Services Authority (OJK), operates the secondary market for allowances and offset credits. In 2025, OJK and the Ministry of Environment operationalized IDXCarbon as the national carbon exchange, with participation from more than 130 entities and transactions totaling approximately 0.6 MtCO2e.

Japan ETS

Japan's GX-ETS ran as a voluntary baseline-and-credit system from FY2023 through FY2025, with participation from more than 700 companies accounting for over 50% of national GHG emissions. In April 2026, the GX-ETS transitioned to a mandatory baseline-and-credit system for Phase 2 (FY2026–FY2032). Companies with annual direct CO? emissions of 100,000 tonnes or more are covered, regardless of sector. Under the mandatory phase, covered companies receive individual company-level emissions limits (baselines) set for the entire compliance period. The total emissions cap is the sum of these individual baselines and is fixed ex-ante. Allocation uses a combination of fixed benchmarking and grandparenting, depending on the sub-sector. From FY2033, auctioning will be introduced for high-emitting corporations in the power sector. Upper and lower price limits apply to market trading. Japan's broader decarbonization policy combines several instruments: a carbon tax on fossil fuels in place since 2012, the GX-ETS, and a GX-Surcharge on fossil fuel importers and domestic extractors, planned from FY2028. These form part of the Basic Plan for the Green Transformation (GX) Policy, Japan's ten-year decarbonization roadmap. Japan participates actively in international carbon markets. Its Joint Crediting Mechanism (JCM) supports decarbonizing technologies and mitigation actions in 31 partner countries. JCM credits are eligible for use in the GX-ETS. Japan also leads the Article 6 Implementation Partnership, a global capacity-building initiative with 90 partner countries and over 300 participating organizations.

Kazakhstan ETS

Kazakhstan launched its ETS (KAZ ETS) in January 2013. It covered around half of Kazakhstan's CO2 emissions in 2024, stemming from 229 installations across the power, centralized heating, extractive industries, and manufacturing sectors. Covered entities must surrender compliance units for all their covered emissions. The cap is based on historical production volumes and established benchmarks, with a reserve available to covered entities that increase production and to new entrants. The system entered Phase 6 in 2026, covering the period through 2030. It was briefly suspended in 2016 and 2017 to address operational issues and reform allocation rules, though MRV obligations continued during the suspension. A domestic offsetting standard, the Qazaq Green Certificate Program, was developed in 2023. Credits certified under this standard are not currently eligible for use in the KAZ ETS.

Korea ETS

The Republic of Korea launched its national ETS (Korea ETS) in 2015, the first national cap-and-trade system in operation in East Asia. The total amount of emission allowances is determined top-down. Covered entities must surrender allowances for all their covered emissions, and allocation is done via auctions or free distribution. At least 10% of allowances must be auctioned. Free allocation is provided for EITE sectors based on production cost and trade intensity benchmarks. The K-ETS was established under the Framework Act on Low Carbon, Green Growth (2010), preceded by a two-year pilot phase and a mandatory Target Management System (TMS) launched in 2012, which still applies to smaller entities below the K-ETS threshold.

Malaysia ETS

The Malaysian Ministry of Environment and Water (KASA) published the “National Guidance on International Voluntary Market Mechanisms” in September 2021, which indicates its intent to implement a domestic ETS. The Malaysian government, in close cooperation with the World Bank, is conducting the Malaysia Partnership for Market Implementation (MY PMI). It is looking into the implementation of carbon pricing instruments such as a carbon tax and an ETS in Malaysia and is covering several key aspects such as policy and market design frameworks, national registry development, and alignment with international standards. On 25 September 2025, the Cabinet approved the National Climate Change Policy 2.0 (NCCP 2.0), which identifies carbon pricing instruments and carbon markets as mechanisms to unlock climate financing and positions a forthcoming Climate Change Act as the basis for regulating these mechanisms. A consultation paper for a Climate Change Bill, released in 2024, includes provisions for the legal establishment of a domestic ETS. Under the 13th Malaysia Plan (2026–2030), the government announced it will introduce a National Carbon Market Policy and launch a domestic ETS to incentivize private sector GHG reductions. On 18 October 2025, during the Budget 2026 tabling, the Prime Minister announced the introduction of a carbon tax on the iron, steel, and energy industries by 2026, to be aligned with the National Carbon Market Policy and the forthcoming Climate Change Bill. At the subnational level, in November 2023 the state of Sarawak passed a climate bill that includes provisions to introduce mandatory emissions thresholds for certain industrial emitters. According to Sarawak officials, covered entities will be required to report their annual emissions to the state regulator and to set themselves binding emissions thresholds. Entities that fail to do so will be subject to a carbon tax, the rate of which is still to be determined by the state Cabinet.

Maryland ETS

In December 2023, Maryland’s Climate Pollution Reduction Plan was published, describing how economy-wide policies, such as a cap-and-invest program, could be necessary for Maryland to achieve its emissions reduction goals. Maryland’s power sector is currently regulated by the Regional Greenhouse Gas Initiative (RGGI), but the 2023 plan includes direction for the state to consider expanding to an economy-wide cap-and-invest program. It cites potential for additional revenues to be invested in clean energy projects, consumer rebates, and other decarbonization programs. The Maryland Department of the Environment (MDE) is exploring how this coverage of additional emission sources could work. In June 2023, the economy-wide cap-and-invest program was proposed by MDE and the University of Maryland’s Center for Global Sustainability as a supportive policy to achieve Maryland’s 2031 target of a 60% reduction in GHG emissions from 2006 levels. The proposal anticipated the program achieving 4.8 MtCO2e of emissions reductions by 2031.

Massachusetts ETS

The Massachusetts Limits on Emissions from Electricity Generators (regulation “310 CMR 7.74”), began operating in 2018. It covers around 8% of the state’s CO2 emissions, all from the power sector. Under this regulation, covered entities must surrender allowances for all of their covered emissions. Since 2021, 100% of allowances have been allocated in quarterly auctions. Since 2022, future vintage allowances have also been sold in the regular auctions. Revenues are used to reduce GHG emissions and fund adaptation programs and projects targeting communities adversely impacted by air pollution. Potomac Economics monitors the market for indications of anti-competitive conduct. The program complements RGGI where electricity generators in the state must comply with both RGGI and the Massachusetts program.

Mexico ETS

The Mexico ETS, the first in Latin America, started in January 2020. It covers direct CO2 emissions from fixed sources in the energy and industry sectors emitting at least 100,000 tCO2 per year, representing around 40% of national GHG emissions and 90% of emissions reported in the National Emissions Registry (RENE). Under the Mexico ETS, participating entities must surrender allowances for all of their covered emissions. Allowances are allocated through grandparenting based on historical emissions, which are verified annually. The Mexican ETS started with a Pilot Program with two phases: a pilot phase between 2020 and 2021, and a transition phase in 2022. The Pilot Program aimed to test system design, contribute to national mitigation goals, and build capacity in emissions trading. The operational phase began in 2025. The pilot regulation remains in force until the regulation for the operational phase is published. Free allocation is expected to decrease from the operational phase onwards, and SEMARNAT is developing the auctioning mechanism.

Montenegro ETS

In December 2019, the Law on Protection from the Negative Impacts of Climate Change (Climate Law) entered into force, providing the legal basis for a national ETS covering the industrial and power sectors. The “Decree on Activities for which a GHG Permit is Issued” (ETS Decree), was adopted in February 2020. This regulation establishes a national ETS covering emissions from the industrial and power sectors. It includes provisions for banking allowances, a minimum reserve price of EUR 24 (USD 26.08), and a linear reduction factor for the emissions cap of 1.5% annually in the period from 2020 to 2030. The ETS formally began operations in February 2020 and applies to three installations: the Pljevlja coal plant, the KAP aluminium plant, and the Tos?elik steel mill. Covered entities must surrender allowances for all their covered emissions, and allocation is based on auctions or free allocation. They received 100% of their allowances for free in 2020 and 2021. For 2022, 64% of all allowances were auctioned.

New Brunswick OBPS

New Brunswick transitioned large industrial emitters from the federal output-based pricing system (OBPS) to a provincial OBPS from January 2021. It is an intensity-based ETS in which each covered entity must surrender compliance units for emissions that exceed the facility’s annual emissions limit. The annual emissions limits are based on emissions intensity benchmarks, which are derived from historical emissions data. The system applies to the same sectors and gases as the federal system, and follows the same price trajectory, rising CAD 15 (USD 11.11) each year until 2030, resulting in a price of CAD 170 (USD 125.93) per tCO2e in 2030.

New Jersey ETS

New York State ETS

New York’s Cap-and-Invest Program (NYCI) is a comprehensive initiative aimed at reducing GHG emissions across the state’s economy while maintaining economic stability and ensuring equitable investments. The program is anchored in the “Climate Leadership and Community Protection Act” of 2019, which requires a 40% reduction in GHG emissions by 2030 and at least an 85% reduction from 1990 levels by 2050. The NYCI program would cover all emitting sectors under a statewide cap. The cap would decrease over time, with the caps for 2030 and 2050 corresponding to statewide GHG emission limits. Various NYS agencies are developing the program rules, including the New York State Energy Research and Development Authority (NYSERDA) and the Department of Environmental Conservation (DEC).

New Zealand ETS

The New Zealand Emissions Trading Scheme (NZ ETS) was launched in 2008 and covers roughly half of the country's emissions. Covered entities must surrender allowances for all their reported emissions. The NZ ETS was originally designed to operate without a specific hard domestic cap as this accommodated carbon sequestration from forestry activities and a full link to the international Kyoto Protocol carbon markets, but in 2015 the allowance supply was restricted to NZUs. The NZ ETS was originally conceived as a nested system under the Kyoto Protocol, with full links to international carbon markets. However, as of June 1 2015, the NZ ETS became a domestic-only system. Extensive legislative reforms of the NZ ETS were implemented in 2020. Agricultural processor-level reporting obligations, along with the prospect of compliance obligations, were repealed in 2024. The agriculture sector now has no obligations under the NZ ETS.

Newfoundland and Labrador PSS

Newfoundland and Labrador’s Performance Standards System (PSS) came into effect in 2019. It is an intensity-based ETS for large industrial emitters, in which each covered entity must surrender compliance units for emissions that exceed each facility’s annual emissions limit. Each facility’s annual emissions limit is based on a combination of historical emission intensity, actual production activity data, and an annually decreasing reduction factor. Special provisions are in place for offshore petroleum facilities which must reduce emissions by an equivalent percentage in absolute terms (regardless of production). The system applies to the same sectors and GHGs as the federal Canadian system, and follows the same price trajectory, rising CAD 15 (USD 11.11) each year until 2030, resulting in a price of CAD 170 (USD 125) per tCO2e in 2030.

Nova Scotia OBPS

The Nova Scotia Output-Based Pricing System for Industry (Nova Scotia OBPS) is part of the province’s approach to reduce GHG emissions from large industrial facilities. The Nova Scotia OBPS was approved by the Canadian federal government in November 2022 and began operating in 2023. It replaced Nova Scotia’s cap-and-trade program, which had been in place since 2019 but was officially phased out after the final compliance deadline in December 2023. Covered entities must surrender allowances (compliance units) for emissions that exceed the facility’s annual emissions limit. The annual emissions limit is based on an emissions intensity benchmark. If a facility’s emissions are below its limit, it earns performance credits (compliance units), which can be banked for future use or sold.

Ontario EPS

Ontario’s Emissions Performance Standards (EPS) program came into effect in January 2022, replacing the federal output-based pricing system (OBPS) that was operational in Ontario from 2019 to 2021. It is an intensity-based ETS for large industrial emitters, in which each covered entity must surrender compliance units for emissions that exceed the facility’s annual emissions limit. The annual emissions limit is based on facility-specific, sectoral, or historical emissions benchmarks, depending on the facility. The system applies to the same sectors and gases as the federal OBPS. The federal fuel charge took effect in Ontario in 2019 and remains in effect, with the price rising CAD 15 (USD 11.11) each year until 2030, resulting in a price of CAD 170 (USD 125.93) per tCO2e in 2030.

Oregon ETS

Oregon's Climate Protection Program (CPP) was adopted by the Environmental Quality Commission (EQC) in November 2024, following the December 2023 court invalidation of a prior program, and entered into force in January 2025. The CPP is an ETS designed to reduce GHG emissions by 50% below the 2017–2019 average by 2035 and by 90% by 2050. Initially launched in 2022, the CPP aimed to reduce GHGs in the state and deliver benefits to Oregon communities. The CPP established a declining cap on regulated emissions for covered entities, which included natural gas utilities (referred to as "local distribution companies") and non-natural gas fuel suppliers. The 2025 cap is 24.1 MtCO2e and planned to reduce each year, to reach 90% below 2017-2019 emissions levels by 2050. Covered entities were allocated yearly allowances based on their emissions. Additionally, the program permitted these companies to meet up to 10% of their emissions reduction obligations using compliance offset credits sourced from within Oregon, a threshold planned to increase to 20% over time. Emissions-intensive, trade-exposed (EITE) industries and direct-use natural gas (DNG) sources are registered in the program from the start but have compliance obligations only from the second compliance period (2028–2029), once DEQ has established emissions-intensity benchmarks for them. Electricity generation and aviation fuels are explicitly excluded.

Pakistan ETS

Pakistan is considering market-based climate policy instruments, including an ETS. The Ministry of Climate Change and Environmental Coordination (MoCC&EC) has received support from the UNFCCC and the World Bank in developing a MRV roadmap, establishing a domestic ETS framework, and in building a communication strategy for carbon pricing. The ongoing work on establishing a registry and MRV system has progressed to the implementation phase. Pakistan launched the National Committee on Establishment of Carbon Markets (NCEC) in December 2019, which coordinated ministerial activities on carbon pricing. Among other responsibilities, the one-year committee was tasked with assessing the role and scope of carbon markets in delivering Pakistan’s NDC and identifying opportunities for and challenges to improving emissions data. The NCEC reviewed existing carbon market designs, deliberated with national stakeholders, and coordinated information-sharing and capacity-building activities. The MoCC&EC is currently advancing the work in these areas under the World Bank’s PMI program where the initial mapping exercise has led to the implementation of activities contributing to four broad outcomes. The country will initiate work on: 1) domestic carbon pricing policy; 2) international carbon market to operationalize Article 6; 3) an MRV framework; and 4) knowledge management/capacity building under the current support in next five years. Besides a domestic ETS, Pakistan aims to launch credit-based trading mechanisms linked to international carbon markets, which would enable it to supply offset credits to partner countries. Policy guidelines are being drafted to provide a roadmap for carbon trading in international markets. This includes the guidelines for developing emission reduction projects and protocols for corresponding adjustment.

Pennsylvania ETS

In October 2019, Pennsylvania’s Governor Tom Wolf signed an executive order directing the state’s Department of Environmental Protection (DEP) to develop and present to the Environmental Quality Board (EQB) a proposal for an ETS covering CO2 emissions from the electric power sector and its linkage to the Regional Greenhouse Gas Initiative (RGGI). In April 2022, the final regulation to establish an ETS in Pennsylvania and to participate in RGGI was published. It set a base cap of 78 million short tons (70.8 MtCO2) if Pennsylvania was a participating state of RGGI as of 1 January 2022. The cap decreases by 3% annually to 58.1 million short tons (52.7 MtCO2) in 2030. Before the regulation took effect, it faced legal challenge, and in November 2023 the Commonwealth Court ruled it unconstitutional on the grounds that RGGI-related revenues constituted a tax requiring legislative approval. Governor Josh Shapiro's administration appealed the ruling. The regulation includes the implementation of both emissions containment and cost containment reserves, as well as quarterly auctions to allocate allowances. It includes additional features such as set-aside accounts (accounts from which allowances may be transferred to the accounts of regulated units or retired on their behalf) for waste coal and cogeneration units (including combined heat and power systems), and a limited exemption for cogeneration units that supply less than 15% of their total energy to the electricity grid.

Philippines ETS

The LCEIA (Low Carbon Economy Investment Act) provides for a carbon pricing framework covering large and medium emitters in the energy, transportation, industry, agriculture, forestry, and waste sectors. The Climate Change Commission (CCC) would consolidate sectoral decarbonization pathways based on entities' submitted plans and determine annual allowance allocations at both the sectoral and individual levels.

Quebec CaT

Québec’s Cap-and-Trade System started in 2013 and covers ~80% of the province’s GHG emissions. The system covers fuel combustion emissions in the power, buildings, transport, and industrial sectors, as well as industrial process emissions. Covered entities must surrender allowances for all their covered emissions. Most emission units are auctioned, with a portion freely allocated to emissions-intensive, trade-exposed (EITE) sectors and to electricity producers with fixed-price sales contracts concluded before the announcement of the system. Québec has been a member of the Western Climate Initiative (WCI) since 2008 and formally linked its system with California’s in 2014.

RGGI

The Regional Greenhouse Gas Initiative (RGGI) launched in 2009 and is the first mandatory GHG ETS in the United States. It started operating with ten states (Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Rhode Island, and Vermont). RGGI’s development was based on the “2005 RGGI Memorandum of Understanding” (MOU) and on the “2006 RGGI Model Rule”. Through statutes or regulations based on the Model Rule, each state then established individual CO2budget trading programs. New Jersey withdrew at the end of the first control period in December 2011 and rejoined in 2020. Virginia joined in 2021 and left in December 2023. Pennsylvania formally participated from 2022 but was prevented from full participation by court injunctions; it withdrew in November 2025. In February 2026, Virginia's Governor signed legislation requiring the state to refile regulations to rejoin RGGI within 90 days. RGGI covers power sector emissions in participating states. In 2020, it covered around 14% of the aggregate participant states’ emissions; in 2021, 228 facilities were covered by the state regulations. The aggregate cap will decrease by 30% compared to 2020 between 2021 and 2030. Under the ETS, covered entities must surrender allowances for all their covered emissions. Covered entities obtain most of their allowances through regular auctions, while some states have “set-aside” accounts from which they may transfer a limited number of allowances to entities’ compliance accounts. RGGI has completed three program reviews. The third review, concluded in July 2025, introduced reforms taking effect from 2027, including a revised cap trajectory, an expanded cost containment reserve, a higher auction price floor, and a phase-out of new offset credit awards.

Saitama ETS

The Saitama ETS is a baseline-and-credit system that sets mandatory emission reduction targets for large buildings and factories. The cap is aggregated bottom-up from annual facility-level emissions limits (‘baselines’). Covered entities must surrender allowances for emissions that exceed the facility-specific baseline, which is based on absolute historical emissions. The baselines are calculated using base-year emissions and a compliance factor, which is set for each period based on regulations established by the Governor of Saitama and expert consultation. Saitama’s ETS is linked to Tokyo’s cap-and-trade program, with credits mutually exchangeable between the two jurisdictions.

Sakhalin ETS

In January 2021, the Russian Ministry of Economic Development, in cooperation with the regional government, approved the “Roadmap for the Implementation of an Experiment to Establish Special Regulation of GHG in the Sakhalin Region”. The overall aim of the roadmap is to ensure that Sakhalin achieves carbon neutrality by 2025, and includes plans for a pilot carbon trading system. In 2022, the State Duma approved a “Federal Law on Conducting an Experiment to Limit GHG Emissions in Selected Federal States of the Russian Federation”, introducing mandatory emissions reporting and verification requirements for regulated entities and obliging them to comply with the allocated emissions allowances. The law also sets a legal basis for allowance circulation between entities. The Sakhalin government approved a list of 50 regulated entities for the new ETS, emitting at least 20,000 tCO2 per year, in 2022, and a carbon registry started operating in test mode in September that year. The first compliance period is set to start in 2024. Covered entities will have to surrender allowances for all their covered emissions, and allocation is expected to be based on free allocation. In 2023, regulated entities submitted their first verified emissions reports for 2022, which became the basis for setting individual caps for 35 entities in September 2023.

Shanghai pilot ETS

The Shanghai pilot ETS is a cap-and-trade system that aims to promote the implementation of carbon emission control responsibilities and support the achievement of Shanghai's emission reduction targets. The pilot covers more than half of the city’s emissions, including industry and non-industrial sectors such as buildings, aviation, and shipping. The total amount of emission allowances is determined through a combined top-down and bottom-up approach based on reported emission data. Coverage has expanded progressively where the system began with power and industrial facilities, then extended to buildings, airports, domestic aviation, shipping, and road transport. Power sector transferred to China national ETS from 2019. The steel and cement sectors transferred to the China national ETS in 2024. The Shanghai Environment and Energy Exchange (SEEE) operates the trading platform for both the Shanghai pilot and China's National Carbon Market, though the two markets remain separate.

Shenzhen pilot ETS

The Shenzhen pilot ETS is the first Chinese pilot ETS, launching an intensity-based cap-and-trade system in the city of Shenzhen. It is the only Chinese pilot at the sub-provincial level. The Shenzhen pilot ETS is seen as a means for stable economic growth and comprehensive sustainable development. The total amount of emission allowances is the bottom-up combination of the free allowances to each covered business entity.

Switzerland ETS

The Switzerland Emissions Trading System is a mandatory cap-and-trade system. The total amount of emission allowances is determined top-down and decreases annually. The ETS started in 2008 with a five-year phase during which companies could voluntarily join as an alternative to facing the Switzerland carbon tax (CO2 levy on fossil fuels). Starting from 2013, the ETS became mandatory for large energy-intensive industries and medium-sized industries could voluntarily join. Participants in the ETS continue to be exempted from the CO2 levy. On January 1, 2020, the linking of the Swiss and EU ETS came into force. Ratification of the agreement by the EU and Switzerland was announced on December 12, 2019 and followed legislative revisions required for the Swiss ETS to be compatible with the EU ETS and comply with the agreement. With the linking agreement now in effect, covered entities in the Switzerland ETS can use allowances from the EU ETS for compliance, and vice versa. However, the two systems run separate auctions. The revised ‘Ordinance on the Reduction of CO2 Emissions (CO2 Ordinance),’ was adopted in November 2020, which embedded the new legal base for the Swiss ETS into the partially revised “CO2 Act” – the core framework of Switzerland’s climate legislation – that entered into force in January 2021. On January 1, 2025, a revised CO? Act entered into force, aligning the Swiss ETS with the 2023 EU ETS 1 revisions, including adoption of the same linear reduction factors and the phase-out of free allocation for aviation by 2026.

Taiwan, China ETS

Taiwan, China enacted the Climate Change Response Act in 2023, amending the 2015 GHG Reduction and Management Act, to legislate a net-zero emissions target by 2050. Covered entities are required to calculate and pay their carbon fees based on 2025 GHG emissions by May 2026. Mandatory emissions reporting for entities with annual emissions above 25,000 tCO?e in the energy and industry sectors has been in place since 2014. The Climate Change Response Act also provides for domestic early action and offset credits, and the recognition of international offset credits under standards to be determined.

Thailand ETS

Thailand is developing a legislative framework for carbon pricing for several years. Building on the 2018 National Reform Plan and more than a decade of voluntary market infrastructure work by the Thailand Greenhouse Gas Management Organization (TGO), the Cabinet approved the Draft Climate Change Act and forwarded it to the Office of the Council of State for legal review prior to parliamentary consideration in December 2025, with enforcement anticipated in 2027. The approved Draft Act establishes an ETS, a carbon tax, a carbon border adjustment mechanism modelled on the EU's CBAM, and a regulated market for carbon credits. It also creates a Climate Fund financed in part through ETS and CBAM revenues. Primary supervisory authority is assigned to the Department of Climate Change and Environment (DCCE), which will be charged with developing up to 50 subsidiary regulations for the ETS, carbon credit markets, and the MRV system. The ETS will operate within industry-specific GHG ceilings set by the DCCE under the National Committee on Climate Change (NCCC). The sectors to be covered will be identified in subsidiary law following a data collection period planned for 2027 and 2028, with a pilot ETS potentially launching in 2029. Allocation plans will be updated every three to five years and will define covered activities, annual caps, offset credit limits, and the auctioned share of allowances for each sector. The DCCE will establish a registry and authorize an allowance trading center; in January 2025, the Securities and Exchange Commission announced plans for a carbon credit trading platform operated by the Stock Exchange of Thailand.

Tianjin pilot ETS

Tianjin launched its pilot ETS in 2013. The Tianjin pilot ETS is a cap-and-trade system. Covered entities must surrender one allowance per tCO2e emitted for all their covered emissions. The system covers petrochemicals, chemicals, oil and gas exploration, papermaking, aviation and building materials. The Tianjin pilot ETS operates in parallel with the China national ETS. Power sector entities transferred to the China national ETS in 2019; steel and cement entities transferred in 2024.

Tokyo CaT

The Tokyo Cap-and-Trade Program is a baseline-and-credit system. Launched in April 2010, the Tokyo CaT is Japan's first mandatory carbon market and is linked to the Saitama ETS. The Tokyo CaT introduced mandatory emission reduction targets for large emitters. Each covered facility has its own cap, which serves as the “baseline” from which it must achieve its reduction target. Facilities’ baselines are calculated using base-year emissions and a compliance factor. Compliance factors are determined based on the type of facility and factors such as expected energy efficiency gains and the extent to which they consume energy supplied by other facilities.

Türkiye ETS

Türkiye has been preparing for the introduction of a national ETS to support its mitigation targets, with the legal framework taking shape in 2025. In July 2025, Türkiye enacted its first Climate Law, establishing the TR ETS and creating the institutional structure to administer it. The Carbon Market Board, chaired by the Minister of Environment, Urbanization and Climate Change, is responsible for approving national allocation plans, setting free allocation volumes, and determining offset credit limits. The Climate Law designates the Department of Climate Change as the competent authority for MRV, which has operated at installation level for energy and industry since 2015. Over 800 facilities are covered under the MRV regulation, encompassing combustion installations with rated thermal input of 20 MW or above. Collectively, these facilities account for around half of Turkey's aggregate GHG emissions. The ETS aligns with Türkiye's "2053 Long-Term Climate Strategy" and the "Medium-Term Program 2026 to 2028", both of which anticipate ETS implementation consistent with EU CBAM requirements. The Climate Law earmarks up to 10% of ETS revenues for just transition measures benefiting vulnerable groups and sectors.

Ukraine ETS

Ukraine plans to establish a national ETS in line with its obligations under the “Ukraine-EU Association Agreement”, which entered into force in September 2017. Issues related to climate change are addressed in Article 365 (c) Title V and in an annex to the agreement, which outlines steps for the implementation of a national ETS The country has since established a national MRV system, with its scope partially covering activities similar to EU ETS activities, to provide a solid basis for the upcoming ETS. Since 2021, the MRV procedures as adopted in the framework law on MRV have been applied by regulated installations. In October 2024, the Parliament approved the "Law on Basic Principles of State Climate Policy", mandating the establishment of an ETS with an absolute cap on covered-sector emissions. Following stakeholder consultation in 2024, a governmental decree approving the "Action Plan for the Establishment of a National GHG Trading System" was adopted in February 2025. The action plan sets the first operational phase of the ETS to commence from 2028, with the launch of a second operational phase starting no earlier than three years after martial law is halted or cancelled.

UK ETS

The UK Emissions Trading Scheme (UK ETS) began operating in January 2021, following the departure of the UK (excluding power operators located in Northern Ireland) from the EU ETS. Verified emissions from stationary UK ETS operators currently cover around a quarter of the UK’s territorial GHG emissions. The first phase of the UK ETS runs until 2030. The UK ETS covers around 1,000 installations in the power and industrial sectors, as well as around 400 aircraft operators. Aviation activity covered includes flights within the UK as well as flights departing the UK to the European Economic Area (EEA) and Switzerland. Domestic maritime emissions will be brought under the scheme from July 1, 2026. Covered entities must surrender allowances for all their in-scope emissions. Allowances are allocated primarily through auctioning, with a portion freely allocated based on product benchmarks to mitigate the risk of carbon leakage. The system operates a cost containment mechanism (CCM) and an auction reserve price (ARP) to support market stability. The UK ETS cap trajectory is consistent with the UK's target of achieving net zero by 2050. Expansion to waste incineration and energy-from-waste (full inclusion from 2028, preceded by a mandatory MRV-only period from January 2026), domestic maritime (from July 2026), and GHG removals (from 2029) is confirmed. A UK Carbon Border Adjustment Mechanism (CBAM) applying to emissions-intensive imports from the aluminum, cement, fertilizers, hydrogen, iron, and steel sectors will enter into force on January 1, 2027. In May 2025, the UK and EU governments announced their intention to work towards linking their respective systems.

Vermont ETS

Vermont participates in the Regional Greenhouse Gas Initiative (RGGI), which covers CO? emissions from the state's power sector. In June 2024, the Vermont State Legislature passed the "Transportation Bill" (Act 148 of 2024), which directed the Agency of Natural Resources and the Agency of Transportation to conduct a study of a cap-and-invest program as a potential approach to meeting the state's climate emission reduction goals. Vermont's 2025 Climate Action Plan included taking steps to join a cap-and-invest program as a priority recommendation, describing it as an overarching policy to deliver predictable GHG reductions in the transportation sector over time.

Viet Nam ETS

Vietnam's national ETS is established under the "Law on Environmental Protection" and "Decree 06/2022/ND-CP", which provide the national framework for GHG mitigation, carbon markets, and monitoring, reporting, and verification. The design and institutional arrangements for the ETS were operationalized by "Decree 119/2025/ND-CP", which entered into force in August 2025. The Ministry of Agriculture and Environment (MAE) serves as the competent authority for allowance allocation, MRV oversight, and ETS administration. The ETS operates in a pilot phase covering 2025 to 2028, divided into two two-year periods. During the pilot, 110 facilities across three sectors are covered: 34 thermal power plants, 25 iron and steel facilities, and 51 cement producers. No numerical emissions threshold applies; facilities are covered if they appear on the approved list of major GHG-emitting facilities under Decree 06/2022 and Decree 119/2025. The system applies an intensity-based approach and allowances are allocated using sector-specific output-based benchmarks, and compliance obligations are determined ex post based on verified emissions. All allowances during the pilot phase are allocated for free. In February 2026, Decision 263/QD-TTg approved aggregate allowance budgets for the first pilot period. The allowance budgets are 243.1 MtCO?e for 2025 and 268.4 MtCO?e for 2026. Installation-level allocation will be finalized by MAE based on these budgets. From 2029, the ETS is expected to introduce auctioning, expand sectoral coverage, and pursue linkages under Article 6 cooperation.

Washington CCA

Washington’s cap-and-invest program began operating in January 2023. It covers around 70% of the state’s emissions, and its cap trajectory is consistent with the long-term target to reduce statewide emissions to 95% below 1990 levels by 2050. The program covers around 100 entities in the energy, industrial, buildings, and transport sectors. Many of the cap-and-invest program’s design elements are similar to those of California’s cap-and-trade program. Covered entities must surrender allowances for all their covered emissions. Allowances are distributed through auctioning and free allocation, with the latter based primarily on benchmarking. The cap-and-invest program was established by the “Climate Commitment Act” (CCA), signed into law by Governor Jay Inslee in May 2021. The CCA directed the Department of Ecology to pursue linkage with the cap-and-invest programs of California and Québec. Senate Bill 6058, designed to facilitate linkage, took effect in January 2025.

Bolivia ETS

Bolivia is considering the establishment of a national ETS under a draft law titled “Regulation of the Market for Greenhouse Gas Emission Credits and Quotas of the Plurinational State of Bolivia” (PL-060/25) introduced to the parliament in November 2025.

Alberta Emission Offset System

Alberta’s greenhouse gas reduction framework including the implementation of its carbon offset crediting system was established in 2007. To be eligible for crediting, all activities must take place within the province of Alberta and meet a number of other system requirements including having a government-approved quantification protocol for the emission reduction activity. The Canadian federal government recognizes the Alberta Emission Offset System under a number of approved protocols to supply a source of credits (called Recognized Units) to the federal-regulated facilities under the federal output-based pricing system program since August 2020. The federal output-based pricing system does not apply in Alberta. Other credit types include: • Emission performance credits, created by regulated facilities whose emissions are less than their allocations; • Associated Emission Offset: Sequestration credits, which occur from converting emission offsets from deep saline aquifer sequestration or enhanced oil recovery and enable the underlying activity to also participate in generating credits under Canada’s Clean Fuel Regulations; and • Capture recognition tonnes, which are converted sequestration credits and can be applied at a regulated facility that captured the carbon dioxide as if it was an on-site reduction.

American Carbon Registry

The American Carbon Registry (ACR), originally the GHG Registry, was founded in 1996 by Environmental Defense Fund as the first independent voluntary offset program in the world. The GHG Registry offered corporate GHG inventory service, VER project registration and a RECs registry, before issuing its first project-based credits in 2002. The GHG Registry rebranded as ACR upon joining Winrock in 2008. ACR issues project-based VERs for projects based in the US. Since its inception, the ACR has branched out to credit emission reductions and removals credits for voluntary and compliance markets, and projects outside the US. The ACR also issues ROCs under the California Compliance Program, which can then be transitioned into ARB Offset Credits under that program.

Australian Carbon Credit Unit Scheme (ACCU)

Australia’s carbon crediting mechanism started registering projects in 2012 following the passing of the Carbon Credits (Carbon Farming Initiative) Act 2011. The Carbon Farming Initiative (CFI) was used to supply offsets to Australia’s Carbon Pricing Mechanism – a national ETS. When the ETS was repealed in 2014, Australia’s carbon crediting policy transitioned to a voluntary scheme, previously known as the Emissions Reduction Fund (ERF). ACCUs issued under the scheme can be used for compliance purposes by entities covered under the Safeguard Mechanism, sold to the Government, or sold on the voluntary market.

Beijing Certified Emission Reduction Mechanism

Beijing Certified Emission Reduction Mechanism was launched in September 2014 after the authority issued Administrative Measures for Carbon Emissions Offsetting in Beijing (Trial). Eligible projects include green architecture, Low-carbon transportation, landscaping, renewable energy and energy saving.

Beijing Forestry Offset Mechanism

The Beijing Forestry Offset Mechanism is a subnational crediting mechanism running in parallel with the China GHG Voluntary Emission Reduction Program (the national crediting mechanism). BFCERs are only eligible for compliance use under the Beijing pilot ETS. The Beijing Forestry Offset Mechanism was established in the same year as China’s national crediting mechanism and focuses on crediting forestry carbon sequestration activities within the Beijing municipality.

Beijing Parking Offset Crediting Mechanism

Similar to the Beijing Forestry Offset Mechanism, the Beijing Parking Offset Mechanism is a subnational crediting mechanism running in parallel with the China GHG Voluntary Emission Reduction Program. The Mechanism was established in 2017. It is mainly an incentive program to encourage citizens to stop using fossil fuel vehicle by providing 0.5 Yuan/day. In April 2020, Beijing Environment and Ecology Bureau extend the scope of application to various low-carbon travel modes such as public transportation, rail, walking, bicycle, and ridesharing. In September 2020, the Beijing Municipal Commission of Transport and the Beijing Municipal Bureau of Ecological Environment launched a carbon inclusive incentive measure for green travel based on the Beijing MaaS platform. In addition, PCERs were made eligible for compliance to use under the Beijing pilot ETS.

British Columbia Offset Program

British Columbia’s crediting mechanism was legislated through the GHG Emission Control Regulation under the Greenhouse Gas Industrial Reporting and Control Act (GGIRCA) in 2014. Emissions reductions from projects within British Columbia can earn British Columbia Offset Units, which can then be sold to facilities regulated under the British Columbia Output Based Pricing System (OBPS) enacted by GGIRCA—a baseline and-credit emissions trading system - to satisfy their legislative requirements. The Canadian Federal Government recognized British Columbia's offset programs as source of credits for the federal OBPS program in August 2020. Operations regulated under an OBPS with emissions reductions less than the emissions limit applicable can hold Earned Credits, which can then be sold to other regulated operations to satisfy their compliance obligation.

California Compliance Offset Program

The California Compliance Offset Program is the mechanism that supplies compliance offset credits for use in California’s Cap-and-Invest Program. The Compliance Offset Program is implemented and overseen by the California Air Resources Board (CARB) and leverages approved Offset Project Registries to assist in administering the offset project registration and credit issuance application processes. The amount of offset credits compliance entities can use to meet their obligations under California’s Cap-and-Invest Program (also called the quantitative usage limit) was reduced from 8% (for 2013-2020 GHG emissions) to 4% for emissions during 2021-2025, and then will be 6% for emissions in 2026 and beyond. In addition, no more than one half of the quantitative offset usage limit can be met from offset credits that do not provide direct environmental benefits within the state of California. A Compliance Offsets Protocol Task Force provides guidance to CARB in approving new and revising current offset protocols. The design of the Compliance Offset Program has been successfully litigated.

Canada Federal GHG Offset System

Canada’s GHG Offset Credit System was launched in June 2022 to provide an incentive to voluntarily implement projects that result in domestic GHG reductions and removals compared to business-as-usual practices. Federal offset credits can be used for compliance under the federal Output-Based Pricing System and under the Clean Electricity Regulations. In addition, federal offset credits can be used by other entities, including governments in Canada, companies, and municipalities, to meet voluntary climate targets or net zero goals, such as greening government operations and under initiatives like Canada’s Net Zero Challenge.

Chile Emission Standards and Reduction Certificates

Article 14 of the Framework Law on Climate Change (21.455) establishes emission standards, whereby the Ministry of the Environment shall establish, through these standards, the maximum amount of a greenhouse gas and/or short-lived climate forcer that may be emitted by an establishment, emission source or group thereof, based on a reference emissions standard by technology, sector and/or activity, in order to meet the objectives of the Long-Term Climate Strategy and the Nationally Determined Contribution. Likewise, Article 15 of said law establishes that, in order to comply with emission standards, certificates accrediting the reduction or absorption of greenhouse gas emissions obtained through the implementation of projects in Chile for this purpose may be used.

Chile Green Tax Emissions Offsetting Scheme

In September 2023, the Ministry of Environment approved Regulation No° 43.664, establishing the obligations and procedures for evaluating, verifying, and certifying emission reduction projects to offset the carbon tax in the country. Some of the key points include: - Regulated entities can offset all or a portion of their carbon tax-covered emissions. - For offsetting, there may be a maximum of three years between the year of reduction of the emissions used to compensate and the year in which the taxed emissions are generated. - The mitigation initiatives generating eligible carbon credits shall be aligned with the country’s NDC. - Emissions may only be offset by implementing projects to reduce emissions of the same pollutant. - Offset projects must be located within Chile. Entities seeking to compensate for their particulate matter emissions must invest in projects located in the same area as the emitting installation. The compensation scheme recognizes VCS, CDM, Gold Standard, Cercarbono and Biocarbon Standard as external certification programs or standards, so credits under these standards can then be used to offset emissions under the carbon tax..

China GHG Voluntary Emission Reduction Program

National Voluntary Greenhouse Gas Emission Reduction Trading Market was established by the Ministry of Ecology and Environment (MEE) in conjunction with the State Administration for Market Regulation in 2023, and launched in 2024. Its predecessor was the China GHG Voluntary Emission Reduction Program established by the National Development and Reform Commission (NDRC) in 2012. The Market is an offset crediting mechanism to support greater control and management of domestic GHG emissions and the promotion of the domestic carbon market. The registration of projects started in 2015 but the registration of new projects was suspended in 2017 while regulations were reviewed. In 2018, because of restructuring, the competent authority of National Voluntary Greenhouse Gas Emission Reduction Trading Market has transferred to the Ministry of Ecology and Environment (MEE). In 2023, the MEE and the State Administration for Market Regulation jointly released the Measures for the Administration of Voluntary Greenhouse Gas Emission Reduction Trading (Trial). CCERs can be used by the compliance entities to offset up to 5% under the national ETS to help meet emission obligations.

Chongqing carbon offset mechanism

The Chongqing carbon offset mechanism was launched in September 2021. Eligible projects include afforestation, landfill methane, green architecture, Low-carbon transportation and (non-hydro) renewable energy. Chongqing Certified Emission Reduction (CQCERs) can either be used for compliance purposes under the Chongqing ETS or for voluntary purposes, such as by individuals and corporations looking to meet carbon neutral goals. The mechanism recognizes emissions reductions generated after September 14 of 2021 and projects must be located within Chongqing and must have commenced after June 19, 2014 The mechanism recognizes emissions reductions generated after January 1 of 2016 and projects must be located within Chongqing and must have commenced after June 19, 2014.

Clean Development Mechanism

The Clean Development Mechanism (CDM) was established under the Kyoto Protocol to credit emission reductions from projects in developing countries.

Climate Action Reserve

The Climate Action Reserve originally began as the California Climate Action Registry and was created by the State of California in 2001 to promote and protect local businesses as they took actions to manage and reduce their GHG emissions. CRTs are mainly used for voluntary offsetting purposes and most (around 97%) are from activities that reduce emissions from landfills, reduce ozonedepleting substances, and forestry.

Climate Credit System

The Catalonian government approved a new carbon credit system in 2023. Initial credits under the scheme will be forestry based, with new methodologies potentially covering soil carbon projects.

Colombia Crediting Mechanism

The law that established Colombia’s carbon tax (Law 1819 from 2016, modified by Law 2277 from 2022) also established a Carbon Tax Exemption Mechanism (Mecanismo de No Causación) for those who offset emissions. Taxpayers can request an exemption by offsetting up to 50% of the GHG emissions that would result in the tax. The offsetting must comply with the necessary characteristics and in the amount corresponding to the projected GHG emissions and the eligibility criteria for the carbon credits to be accepted. In 2022, an amendment (Law 2277 from 2022 - paragraph 1, article 47), established that the carbon tax exemption may not exceed 50% of the GHG emissions that would incur the tax. This is intended to strengthen the price signal for behavioral change in fossil fuel consumption. With the inability to fully offset emissions, taxpayers will need to focus on improving efficiencies or innovating in their processes to reduce emissions. Projects eligible for the exemption mechanism must ensure transparency in their implementation, compliance with the national MRV system, demonstrate a reliable methodological development, publicly register their mitigation results as well as the ownership of the GHG emission reductions or removals achieved, and their results must be verified by an accredited third party (Validation and Verification Bodies - VVBs).

Ecuador Crediting Mechanism

The Ecuador Crediting Mechanism is promoted by the Minstry of the Environment, Water and Ecological Transition and seeks to contribute to the decarbonization of the country's economy. This mechanism aims to reward mtigiation activities for project activities generated in Ecuador from a variety of sectors.

Egypt Crediting Mechanism

Egypt's voluntary offsets market was announced at COP27 in 2022, and activity to establish the new scheme has increased in 2024, with Egypt's Financial Regulatory Authority approving three verification and certification bodies, and the government establishing the legal status of voluntary carbon credits to be traded under the new mechanism.

EU Carbon Removal Certification Framework

The EU is developing a EU carbon removal certification framework to establish a voluntary framework for the certification of high-quality carbon removals. This framework is supposed to boost carbon removal technologies that remove carbon from the atmosphere (sequestration projects) as well as carbon farming.

Fujian Forestry Offset Crediting Mechanism

The Fujian Forestry Offset Crediting Mechanism was launched as a subnational crediting mechanism to credit emission reductions from forestry sequestration activities within the province of Fujian. According to the Measures for the Administration of Fujian Carbon Emission Rights Offset (Trial), forestry carbon sequestration projects are developed in accordance with the methodology of forestry carbon sequestration projects published by Fujian Development and Reform Commission. The carbon sequestration (emission reduction) should be registered in Fujian Voluntary Emission Reduction Trading Registry by Fujian Provincial Department of Ecology and Environment, and then traded on Fujian Carbon Emission Trading Platform (Haixia Equity Exchange).

Gold Standard

The Gold Standard was established in 2003 by international NGOs including the World Wildlife Fund as a crediting mechanism for additional certification on the social and environmental impacts of Certified Emission Reductions and later as an issuer of its own credits. It has requirements that projects must generate sustainable development benefits, such as gender equality and health improvements for local communities, alongside emission reductions. There are also strict safeguards against negative project impacts, based on best-practice international standards such as from the IFC.

Greenhouse Gas Crediting and Offsetting Mechanism (GCOM)

The purpose of establishing the GCOM in the Kingdom is to achieve specific national emission reduction and/or removal levels, aligned with Saudi’s ambitious climate goals, in the most cost-effective manner. It aims to increase cooperation among national entities seeking to fulfil their climate ambitions by helping to mobilize finance in all sectors for a variety of projects and activities. The GCOM also aims to drive positive social, environmental, and economic impacts beyond emission reductions or removals. The ultimate objective of the GCOM is to drive progress towards a path to net zero emissions by allowing interested companies and entities to offset their greenhouse gas emissions by purchasing credits and/or certificates from project proponents that voluntarily reduce or remove greenhouse gas emissions. The Mechanism is also meant to promote high-quality credits and/or certificates by providing guidance, transparent infrastructure, and best practices, including for project-level accounting.

Guangdong Pu Hui Offset Crediting Mechanism

The Pu Hui Offset Crediting Mechanism is a subnational mechanism that credits emission reduction activities within the province of Guangdong. PHCERs are primarily intended to be used by compliance entities under the Guangdong pilot ETS. Similar to other Chinese subnational mechanisms, projects applying for PHCERs are not eligible to apply for CCERs and vice versa.

India Crediting Mechanism

Under the Carbon Credit Trading Scheme (CCTS), the Government of India is envisaging two mechanism: 1. Compliance Mechanism (see "India ETS")– an emission intensity based (target and credit) mechanism where obligated entities will be given GHG emission intensity-based targets and based on the performance against the targets, entities would be issued the credits or will require to surrender the certificates 2. Offset Mechanism – The offset mechanism is voluntary in nature where non obligated entities can register their projects based on meeting the eligibility criteria and other requirements

Indonesia Crediting Mechanism

Under the umbrella of the 2021 presidential framework regulation on carbon pricing, Indonesia’s Ministry of Environment and Forests adopted a ministerial regulation on domestic carbon trading on October 20, 2022. The regulation covers approaches and criteria for allowance-based emissions trading, carbon credit trading, and performance-based mitigation payments. In relation to domestic carbon crediting, the regulation outlines general rules and modalities for the validation and registration of eligible mitigation project activities and for verification, certification, and trading of achieved mitigation outcomes (carbon credits). The ministerial regulation states that carbon credit generation and trading would be eligible in the energy, waste, industrial processes, agriculture, and forestry sectors, as well as other sectors where there is sufficient knowledge and technology to carry out projects. Indonesian government ministries must develop plans for each subsector they are responsible for on how the subsector will meet its share of Indonesia’s nationally determined contribution (NDC) targets. The proposal requires a subsector plan to be in place before credits can be traded. The regulations set out that a proportion of issued credits will be withheld by the government to help ensure Indonesia meets its NDC. Importantly, the regulation also includes provisions for (1) mutual recognition of reputable international carbon standards and (2) corresponding adjustments, including implementation arrangements.

Indo-Pacific Carbon Offsets Scheme

The Indo-Pacific Carbon Offsets Scheme (IPCOS) is a 10-year program that was launched in November 2021 and will run until 2031 with a funding of $104 million. The scheme enables partnerships between Australian Government and Indo-Pacific economies, civil society and industry and aims to help partner countries create and trade credible and robust carbon offsets under the rules of the Paris Agreement. The first partners in IPCOS, announced at COP26, were Fiji and Papua New Guinea.

J-Credit Scheme

The J-Credit Scheme was established in 2013 to support regional efforts to reduce GHG emissions in Japan. This scheme integrates two voluntary crediting mechanisms in the country: Japan’s Domestic Credit Scheme and the Japan Verified Emission Reductions (J-VER). J-credits are predominantly used for voluntary offsetting, in Japan including domestic initiatives such as the Keidanren Carbon Neutral Action Plan, reporting emissions in accordance with the Act on the Promotion of Global Warming Countermeasures (1998), and reporting energy efficiency projects under the Act on Rational Use of Energy (1979). Participants in GX-ETS could procure J-credit to achieve the reduction target (under consideration). The GX-ETS system will start in full swing from 2026.

Joint Crediting Mechanism

The JCM was initiated by Japan as a bilateral crediting mechanism between Japan and partner countries. The partner countries who have established the JCM with the government of Japan host and implement the emission reduction projects. Based on decisions by the Joint Committee, which consists of government representatives from both countries, each government issues JCM credits to approved mitigation outcomes. The JCM facilitates the diffusion of leading decarbonization technology,  and the Japanese government can provide financial support for projects. The JCM credits are to be used to achieve its NDC. 

Joint Implementation

The mechanism known as "joint implementation", defined in Article 6 of the Kyoto Protocol, allows a country with an emission reduction or limitation commitment under the Kyoto Protocol (Annex B Party) to earn emission reduction units (ERUs) from an emission-reduction or emission removal project in another Annex B Party, each equivalent to one tonne of CO2, which can be counted towards meeting its Kyoto target. Joint implementation offers Parties a flexible and cost-efficient means of fulfilling a part of their Kyoto commitments, while the host Party benefits from foreign investment and technology transfer.

Kazakhstan Crediting Mechanism

The legislation mandating the Kazakhstan ETS also sets out the option for compliance entities to utilize domestic offset credits to help meet compliance obligations. The legislation details modalities for how non-ETS sectors can seek to implement offset credit projects under a domestic crediting mechanism. Kazakhstan has a domestic crediting mechanism in place that allows emitters to offset a share of their emissions through domestic projects. Quota units are credited to accounts in the registry for further trading in the ETS. Most projects are in the renewable energy and energy efficiency sector. Additional supporting policies and regulations on processes such as stronger crediting methodologies of forest absorption projects are still in development.

Mexico Crediting Mechanism

The Ministry of Environment and Natural Resources (SEMARNAT) is looking to establish a domestic mechanism for the generation of carbon credits that can be used for compliance obligations by entities covered under its new ETS. Details around eligible mitigation projects or activities are still to be determined but are expected to include domestic projects from non-regulated sectors within the ETS that have been validated and verified under approved protocols. The crediting mechanism is also expected to credit early action activities by projects in Mexico (projects that are already receiving credits from other crediting mechanisms) before the national ETS comes into force. To receive early action credits, these projects would be expected to cancel any credits they have received from other mechanisms to avoid double counting.

Murcia Crediting Mechanism

Murcia published draft legislation in early 2024 for a new voluntary carbon crediting mechanism.

Nova Scotia Crediting Mechanism

Regulated facilities pay the Nova Scotia Government for fund credits when they owe a compliance obligation (i.e., when they have emitted in excess of their emissions limit). The Nova Scotia government may award regulated facilities a performance credit when they have emitted less than their emissions limit. This means that one performance credit is equivalent to one tonne of carbon dioxide equivalent and one fund credit is equivalent to one tonne of carbon dioxide equivalent. The price of fund and performance credits escalates from 2023-2030 according to Canada’s Minimum National Carbon Pollution Price Schedule (2023-2030).

Panama Crediting Mechanism

On December 2021, Executive Decree 142 created the legal structure for the National Carbon Market of Panama (Mercado Nacional de Carbono de Panamá, MNCP), outlining concrete steps for its operations, defined its main components, and created its governing structures. Through MNCP, entities will be able to offset their greenhouse gas emissions, voluntarily acquiring carbon credits from compensation projects at the national level to contribute to low-emission development that is resilient to climate change. The MNCP will promote a low-emissions economy, based on the purchase and sale of National Emissions Reduction Units (Unidades Nacionales de Reducción de Emisiones, UNRE). The three main components of the MNCP are: • National GHG management programs under the National Reduce Your Footprint Program (Reduce Tu Huella, PNRTH) • National Offsetting Mechanism of Panama (Sistema Nacional de Compensación de Gases de Efecto Invernadero de Panamá, SNCP) • Panama Carbon Exchange (Bolsa Panameña del Carbono, BPC) Eligible entities participating in the National Reduce Your Footprint Program (PNRTH) will represent the demand for UNREs resulting from national compensation projects aimed at offsetting or neutralizing their carbon footprint. The SNCP will establish a process for obtaining UNREs, and the Panama Carbon Exchange (BCP) will serve as the marketing platform. Prices for the purchase and sale of UNREs have not yet been determined. The Ministry of Environment is working on the design and development of the MNCP, including a pilot for the SNCP.

Paris Agreement Crediting Mechanism

Peatland Code

The Peatland Code provides a standard for quantifying and verifying climate benefits from reductions in greenhouse gas emissions brought about by peatland restoration. It is administerd by the IUCN UK National Committee and operates alongside the UK's Woodland Carbon Code (WCC) that credits abatement from tree planting projects in the UK.

Plan Vivo

Plan Vivo issues credits for emission reduction and removals from protection, restoration or improved management of land or marine areas. The program has a strong focus on livelihood benefits for local communities. These benefits must extend beyond the financial flows from sale of PVCs or direct employment in a project. Each project must deliver long-term local benefits, including biodiversity conservation, poverty reduction and sustainable livelihoods, and restoration of degraded and degrading ecosystems, and adaptation of natural and managed ecosystems to climate change. Plan Vivo guarantees that, through its Benefit Sharing Mechanism, project participants have access to at least 60% of the money coming from every PVC purchased.

Portuguese Voluntary Carbon Market

The Portuguese government approved a law to establish a voluntary carbon market in December 2023. The new law allows the Portuguese Environment Agency (Agência Portuguesa do Ambiente) to establish a domestic crediting mechanism that includes rules governing additionality, permanence, monitoring, reporting and verification.

Quebec Offset Crediting Mechanism

The government of Quebec established a crediting program that issues Quebec offset credits intended for subject entities wanting to useing them to meet compliance obligations under the ETS. Those credits can also be retired voluntarily by market participants or exchanged on the market. A reform of the offset regulatory framework was adopted in 2021. The reforms allow the Minister to adopt a ministerial offset regulation for each project type (replacing protocols embedded in the ETS regulation), thereby facilitating the revision process and adoption of new regulations.

Republic of Korea Offset Credit Mechanism

The Republic of Korea offset credit mechanism was implemented to provide the offset credits for use within the Korea ETS. The offset credit(KOC) can be issued not only for domestic carbon reduction projects that are not covered by the ETS, but also for the International Korean projects that meet Article 6.2 and 6.4 of Paris Agreement. KOCs must be further converted into Korean Credit Units by the Korean government before it can be used for compliance obligations.

RGGI CO2 Offset Mechanism

The RGGI CO2 Offset Mechanism is designed to credit project-based GHG emission reductions that follows one of the approved crediting protocols and is located within one of the states of the RGGI program. The RGGI CO2 offset allowances are acceptable for compliance in any RGGI participating state, regardless of the state of origin. The 2017 Model Rule eliminated several offset categories but retained the landfill methane capture, avoided agricultural methane, and forestry categories. However, not all states issue RGGI offsets and those that do may not allow all of the project types.

Saitama Forest Absorption Certification System

Saitama Forest Absorption Certification Systemis a system that aims to contribute to society by visualizing the achievements of companies and organizations engaged in forest management activities such as reforestation and thinning. By having the prefecture certify the CO2 absorption amount achieved through forest management activities, this system aims to foster awareness of protecting and nurturing forests throughout society. Saitama Prefecture will issue a certificate to applicants, which companies and organizations can use for public relations activities.

Saitama Target Setting Emissions Trading System

The Saitama prefecture in Japan launched its offset mechanism alongside its ETS in 2011. GHG reductions from small or medium sized businesses can generate credits, as well as renewable energy production.

Sakhalin Oblast Pilot crediting mechanism

Russia’s Ministry of Energy, together with the Ministry of Ecology and Sustainable Development of for Sakhalin Oblast, established the crediting mechanism to complement the planned pilot ETS and support the objective of Sakhalin reaching net zero by 2025. The mechanism is intended to serve as a demonstration of a model that can be rolled out to other oblasts. The mechanism is designed to encourage projects to reduce emissions through capturing, recycling and storing CO2, reforestation, or renewable energy.

South Africa Crediting Mechanism

The South African Carbon Tax Offset system relies on existing international and independent crediting mechanisms. All projects undergo the obligatory processes required for project registration and credits issuance by each specific standard. To be eligible projects must not be activities covered by the carbon tax, projects must be located in South Africa, and projects must be registered/implemented after the commencement of the carbon tax (1 June 2019). Projects that are under taxable activities may be utilized until the first phase of the carbon tax (Regulation 2(2) of the Carbon Offset Regulations)

Spain FES-CO2 Program

The Spanish Carbon Fund for a Sustainable Economy (FES-CO2) was created in 2011 and has supported domestic emission removal projects in sectors that are not covered by the EU ETS through the purchase of carbon credits by the Spanish Government. The FES-CO2 issues call-outs for emission reduction project proposals, with successful projects granted a contract that determine the volume, schedule and price for Reducciones de emisiones verificadas (REVs) or Verified Emission Reductions. Projects can then commence, and after submitting verification reports are issued and paid for REVs. Projects must sign a contract with the FES-CO2 in order to be registered and units credited. The price of a carbon credit started at EUR7.10/tCO2e in 2012 before increasing to EUR9.7/tCO2e in 2015. In the 2021 call-out the FES-CO2 incorporated 2 price modalities for projects: the first one with a fixed price of 9,7 € for small-medium scale projects; the second modality applies to innovative and big projects and consists on an auction where projects could offer a price below 9,7 € (the lowest price offered has been 8,49 €). The FES-CO2 has signed more than 450 contracts to support over 700 project activities. In 2020 the objective and scope of the Fund was broadened, to promote adaptation and removal activities (both new to the FES-CO2) and add new activities to support industrial and energy innovation projects. This is intended to support the additional efforts needed to achieve carbon neutrality by 2050. In 2025 a new Royal Decree on FES-CO2 regulation is expected to be adopted. Its draft already been subjected to public information, and it is envisaged to include adaptation and removal projects, as well as to promote innovative reduction projects in power generation and industry sectors, which are expected to achieve significant reductions in order to help towards decarbonization.

Sri Lanka Carbon Crediting Mechanism

Sri Lanka Carbon Crediting Scheme (SLCCS) is a national offset scheme established to support local clean projects (such as renewable energy projects (solar, wind, hydro), energy efficiency initiatives, and reforestation or afforestation activities), to benefit from climate finance for emission reductions. Project owners can use credits for internal offsetting or trading.

Switzerland CO2 Attestations Crediting Mechanism

Emission reduction projects and programs can receive “attestations” under the Swiss CO2 Act and the CO2 Ordinance. The credits are issued to activities in Switzerland and cannot be traded outside of the country. Companies that produce or import fossil motor fuels can use these credits to compensate for their CO2 emissions and fulfil their compliance obligations under the Switzerland CO2 Act. Additionality requirements apply in such cases. Credits generated in this manner can be traded, and their purpose is to be used by companies obliged to compensate. Voluntary use is not legally prohibited.

Taiwan Voluntary GHG Reduction Program

The program aims to encourage voluntary emission reduction and carbon sequestration enhancement for entities through implementing GHG Voluntary projects that use methodologies either sourced from the CDM and approved by the Ministry of Environment or locally developed.

Thailand Voluntary Emission Reduction Program

Since 2014, Thailand Greenhouse Gas Management Organization (TGO) has developed a voluntary domestic GHG crediting mechanism called Thailand Voluntary Emission Reduction Program (T-VER). T-VER aims to encourage the public and private sector to reduce GHG emissions while enhancing sustainable development. Currently, the credits from T-VER are used domestically. However, TGO continues to consider potential and possible international transactions with the intention to assess and explore potential areas of improvement to ensure comparability with the guidance and rules, modalities and procedures of Article 6, eligibility criteria under CORSIA, and other relevant mechanisms.

Tokyo Cap-and-Trade Program

Tokyo in Japan launched its offset mechanism with the establishment of its ETS in 2010. Credits include small and medium enterprise credits and renewable energy credits (solar—heat and electricity, wind, geothermal, or hydro). Emissions reductions generated by large facilities outside the Tokyo prefecture can also generate credits. These can be used under the Tokyo ETS.

UK Woodland Carbon Code

The Woodland Carbon Code (WCC) is the quality assurance standard for woodland creation projects in the UK, and generates high integrity, independently verified carbon units. Backed by the UK Government, the forest industry and carbon market experts, the Code provides woodland carbon units in the UK. The Woodland Carbon Code is internationally recognised for high standards of sustainable forest management and carbon management and is endorsed by ICROA, the global umbrella body for carbon reduction and offset providers in the voluntary market. Woodland Carbon Code projects provide social and environmental benefits for many communities across the UK. These include biodiversity and habitat creation, improvements in health and wellbeing, benefits for farming, local employment and educational opportunities.

Verified Carbon Standard

The VCS Program was founded by several key carbon market actors including The Climate Group, the International Emissions Trading Association, the World Business Council for Sustainable Development, and the World Economic Forum. Its initial purpose was to certify and credit voluntary emission reduction projects. While the main use of VCUs is still predominantly for voluntary offsetting, VCUs from VCS projects have been used for compliance under the Colombia and South Africa carbon taxes and some will be eligible under the CORSIA. Verra, a non profit organisation, oversees and implements the VCS Program as well as a number of other sustainability programs.

Vietnam Crediting Mechanism

The Government Decree 06/2022/ND-CP established a roadmap to develop and implement a domestic carbon market in Vietnam.

Voluntary Carbon Credit System

Consultation on draft legislation for the proposed Galician Voluntary Carbon Credit System was launched in March 2024. The draft legislation provides for a Technical Committee to approve abatement calculation methodologies.

Washington Crediting Mechanism

The Climate Commitment Act establishes a comprehensive, market-based program to reduce carbon pollution and achieve the greenhouse gas limits set in state law. The program started on Jan. 1, 2023. Covered entities may use offset credits to fulfill a portion of their up to eight percent of their compliance obligation. The remainder must be satisfied through, in addition to allowances which are purchased at: 1) quarterly and reserve auctions, 2) bilateral transactions, and through contracts in multiple futures markets.