EU, Brazil and China Launch Open Coalition to Strengthen 80 Global Carbon Markets

The European Union, Brazil and China have officially launched the Open Coalition on Compliance Carbon Markets, a new international initiative to strengthen global cooperation on carbon pricing. The launch took place at the Coalition's constitutional meeting in Florence, Italy on 7 May 2026 and builds on a declaration endorsed by major world leaders at COP30 in Belem, Brazil in November 2025. The initiative marks one of the most significant multilateral climate cooperation efforts of the year, bringing together three of the world's largest emitting blocs around a shared carbon pricing agenda.

 

The Coalition's Mandate and Working Areas

 

The Coalition is designed to enhance the effectiveness, transparency and integrity of domestic carbon markets worldwide, supporting the implementation of the Paris Agreement. It provides a platform for cooperation on the development and strengthening of domestic carbon markets and carbon pricing policies, with technical work focused on three core areas. These include robust monitoring, reporting and verification systems, sound carbon accounting methodologies and the potential use of high-integrity offsets to promote environmental credibility.

The mandate addresses long-standing concerns about the consistency of carbon market design across jurisdictions, where differing methodologies have created friction for cross-border carbon flows and corporate compliance. By providing a structured forum for technical cooperation, the Coalition aims to raise global standards while preserving the flexibility for each jurisdiction to design schemes suited to its national circumstances. The combination of technical depth and political signalling distinguishes the initiative from earlier informal climate cooperation efforts.

 

Governance Structure and Founding Members

 

With the adoption of the Coalition's Terms of Reference, the initiative is now open to countries operating nationwide compliance carbon markets such as emissions trading systems or carbon taxes. Subnational authorities operating carbon pricing schemes can participate as observers, providing a route for regions such as California or Quebec to engage without requiring full member status. This dual-track structure expands the practical reach of the Coalition while maintaining a clear governance core anchored in national governments.

Brazil will chair the Coalition for the first two years, with China and the European Commission serving as Co-Chairs. New Zealand and Germany are the first additional countries to join as members, with several others expected to follow. The signing ceremony was attended by the European Commission's Director-General for Climate Action Kurt Vandenberghe, the Vice Minister of Ecology and Environment of China Li Gao, and the Extraordinary Secretary for Carbon Markets in Brazil, Cristina Reis. The diversity of founding leadership signals an intent to operate as a genuinely multilateral forum rather than as an extension of any single bloc's climate diplomacy.

 

Why the Coalition Matters Now

 

Around 80 carbon pricing schemes are currently in place across 50 different countries, creating a fragmented global landscape that has grown rapidly but unevenly over the past two decades. The proliferation of schemes has created both opportunity and complexity, since each new system can deliver emission reductions while also adding to the patchwork of methodologies that multinational companies must navigate. Coordinated cooperation among major systems can reduce duplication and improve the credibility of global carbon pricing as a climate policy tool.

For the European Union, the Coalition provides an opportunity to advance carbon pricing as the most cost-effective tool for reducing emissions, building on more than 20 years of experience with the EU Emissions Trading System. For China, the platform offers a route to deepen technical cooperation as it continues to expand and strengthen its national emissions trading scheme. For Brazil, hosting and chairing the Coalition reinforces its leadership role in international climate diplomacy following COP30 and supports the development of its own emerging compliance market.

 

The European Commission's Priorities

 

The European Commission is entering the Coalition with a clear set of priorities for the work plan, beginning with enhancing the effectiveness of domestic carbon pricing systems across member jurisdictions. The Commission is also seeking to encourage a race to the top for carbon credit quality, building on the work of the Article 6.4 Paris Agreement Crediting Mechanism. This focus reflects continued concern about credit integrity in voluntary and compliance markets following several years of high-profile controversies in the sector.

A third priority area involves assessing how carbon accounting methods can be compared across jurisdictions and whether the Coalition can develop suggestions to facilitate corporate compliance across multiple systems. This work will build on the existing efforts of the Climate Club and other international forums focused on industrial decarbonisation and trade-related climate measures. Harmonisation of accounting approaches would directly support the implementation of mechanisms such as the EU Carbon Border Adjustment Mechanism and similar instruments emerging in other jurisdictions.

 

Strategic Implications for Carbon Markets

 

Beyond its technical work, the Coalition sends a strong signal of renewed multilateral cooperation and shared commitment to the Paris Agreement at a time when global climate cooperation has faced political headwinds. It reinforces the role of carbon markets as a central pillar of the global transition to climate neutrality while supporting economic modernisation and competitiveness across participating jurisdictions. The framing positions carbon pricing as both a climate tool and an industrial policy instrument, aligned with broader competitiveness debates.

The Coalition's structure also offers a mechanism through which existing tensions between major economies on trade, industrial policy and climate measures can be partially defused through cooperative technical work. By focusing on shared infrastructure such as MRV systems, accounting methodologies and credit integrity, the Coalition creates common ground that can withstand bilateral political fluctuations. This makes it a potentially durable platform for ongoing climate diplomacy.

 

Outlook for Global Carbon Pricing Coordination

 

Next steps for the Coalition include establishing a Secretariat and developing a work plan that will be adopted at the Carbon Market Conference scheduled for 15 September 2026 in Wuhan, China. The Wuhan conference is expected to be a key milestone for translating high-level political commitments into specific technical deliverables, and will provide an early indication of how effectively the Coalition can operate as a working forum rather than a declaratory body. Continued progress at Wuhan will be closely watched by carbon market participants globally.

Whether the Coalition delivers measurable improvements in carbon market integrity and effectiveness will depend on the speed of technical cooperation, the depth of country engagement and the credibility of resulting standards. Sustained execution would reinforce the role of carbon pricing in the global climate architecture and could accelerate alignment among major emissions trading systems over time. The launch represents a meaningful step in rebuilding multilateral climate cooperation around concrete, implementable instruments.

 

Source: European Commission