Carbon Market Insights: Volume 1, Issue 1

The inaugural issue of Carbon Market Insights explores the continued mainstreaming of carbon pricing worldwide, now covering over 23% of global greenhouse gas emissions through 43 carbon taxes and 38 emissions trading systems (ETSs) in force. While established markets like the European Union and the United Kingdom saw significant price momentum in late 2025, Asian markets in China and South Korea continue to navigate challenges related to allowance oversupply and low price signals. The issue contextualizes these trends for Southeast Asia with implementation-relevant insights and country-focused updates. 

A central focus of this issue is the "definitive phase" of the European Union’s CBAM, which launched in January 2026. The brief provides a detailed sectoral analysis for Indonesia, the Philippines, and Viet Nam, noting that while their economy-wide exposure remains below 1%, specific industries—particularly iron, steel, and aluminum—face potentially significant liabilities unless domestic decarbonization and robust measurement systems are prioritized. 

The publication further examines national milestones, including Indonesia's strengthened legal framework under Regulation 110/2025, which formally enables international carbon trading under Article 6. It also tracks the progress of Article 6.2 bilateral agreements, where over 100 arrangements have been announced or formalized, signalling growing interest in cross-border carbon transactions led by purchasing countries like Singapore and Japan. Furthermore, while Indonesia remains the only Southeast Asian country with an operational ETS, the implementation of its legislated carbon tax under Law 7/2021 remains postponed.

Articles

International and Regional Developments in Carbon Pricing

Carbon pricing has become mainstream globally, with 43 carbon taxes and 38 ETSs in force covering over 23% of global emissions. This section draws on Canada's experience with carbon pricing reform, offering lessons relevant to Southeast Asia.

Read the article here. 

Border Carbon Adjustments (BCAs) and Article 6 Update

The EU CBAM entered its definitive phase in January 2026. This section analyzes the sectoral trade exposure of Indonesia, the Philippines, and Viet Nam, and tracks progress on Article 6 bilateral carbon trading agreements, where Japan and Singapore have emerged as the most active purchasing countries.

Read the article here.

Indonesia Update

Indonesia is the only Southeast Asian country with an operational ETS. This section examines the significance of Regulation 110/2025 in formally enabling international carbon trading under Article 6 and the current state of market activity on IDXCarbon.

Read the article here.

The Philippines Update

Carbon pricing in the Philippines is shifting from policy debate to formal legislation, with multiple bills now before the 20th Congress. The section also examines the Department of Energy's new framework for generating and trading carbon credits in the energy sector.  

Read the article here.

Viet Nam Update

Trading on Viet Nam's carbon market has been postponed to end of 2026, but regulatory progress continues. New rules on the domestic trading exchange and national registry system are in place, and the country has taken its first steps toward international carbon trading under Article 6 of the Paris Agreement.

Read the article here.