Carbon pricing trends in Asia

The report examines the uneven progress of carbon pricing in Asia, contrasting the advanced emissions trading systems (ETS) in Japan and South Korea with the early-stage designs in Vietnam, Indonesia, and the Philippines. It argues that while the EU CBAM poses a financial risk to exporters—particularly in the steel sector—the overall impact is limited and can be mitigated by implementing effective domestic carbon pricing and transitioning to cleaner production technologies. The document provides specific fee estimates for each country and recommends phasing out carbon offsets, implementing absolute emission caps, and shifting toward the auctioning of allowances to drive genuine decarbonisation.

• Carbon pricing development in Asia is uneven: Japan and South Korea have large-scale systems covering 60% and 79% of national emissions respectively, while Vietnam, Indonesia, and the Philippines are in early design and piloting stages.
• The overall financial impact of the EU CBAM on the five studied Asian countries is limited because CBAM-covered goods represent a small share of total exports; estimated fees are in the hundreds of millions of dollars rather than billions.
• In a full pricing scenario from 2034 onwards, South Korea and Japan are projected to pay among the highest EU CBAM fees, estimated at $619 million (1.74% of traded goods value) and $291 million (0.96% of traded goods value) respectively.
• Japan's national GX ETS, which launched its voluntary phase in 2024, is expected to become mandatory in 2026 with a planned price floor of $11 per tonne and a cap of $27 per tonne.
• South Korea's K-ETS is the third largest carbon market globally and is entering its fourth phase in 2026, with the power sector's auctioning share set to rise to 50% by 2030.
• Vietnam's national carbon market will operate a pilot phase from 2025 to 2028, with full operations starting in 2029, covering approximately half of the country's total CO2 emissions.
• Indonesia's ETS currently covers about 18% of its emissions, focusing on the power sector, with plans to expand to all fossil fuel power plants by Phase 3 (2028-2030).
• The Philippines is considering a hybrid "cap-and-invest" mechanism that combines elements of an emissions trading system and a carbon tax.

APA

Tamellini, L., Marullaz, J., Assous, A., Barre, C., & Diab, K. (n.d.). Carbon pricing trends in Asia. Carbon Market Watch. https://carbonmarketwatch.org/wp-content/uploads/2026/04/202601_CMW-briefing-on-5-target-countries_13.04-1.pdf

Chicago

Tamellini, Lidia, Jeanne Marullaz, Adrien Assous, Chloé Barre, and Khaled Diab. Carbon pricing trends in Asia. Carbon Market Watch, n.d. https://carbonmarketwatch.org/wp-content/uploads/2026/04/202601_CMW-briefing-on-5-target-countries_13.04-1.pdf.

Wikipedia

{{cite report |last1=Tamellini |first1=Lidia |last2=Marullaz |first2=Jeanne |last3=Assous |first3=Adrien |last4=Barre |first4=Chloé |last5=Diab |first5=Khaled |title=Carbon pricing trends in Asia |publisher=Carbon Market Watch |url=https://carbonmarketwatch.org/wp-content/uploads/2026/04/202601_CMW-briefing-on-5-target-countries_13.04-1.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{tamellinindcarbon, author = {Tamellini, Lidia and Marullaz, Jeanne and Assous, Adrien and Barre, Chloé and Diab, Khaled}, title = {{Carbon pricing trends in Asia}}, institution = {Carbon Market Watch}, url = {https://carbonmarketwatch.org/wp-content/uploads/2026/04/202601_CMW-briefing-on-5-target-countries_13.04-1.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }