Global Carbon Market 2025: Revenues Surpass US$100 Billion

The World Bank’s State and Trends of Carbon Pricing 2025 report, published in June 2025, reveals that the global carbon market is experiencing robust growth, with revenues exceeding US$100 billion in 2024. This milestone underscores the pivotal role of carbon pricing in climate action and advancing sustainable development.

Overview of Carbon Pricing in 2025: Impressive Figures

Carbon pricing is a vital financial tool that assigns a cost to GHG emissions to incentivize their reduction. The World Bank report emphasizes its importance in mobilizing finance, encouraging innovation, attracting investment, and supporting climate and development goals.

Key advances in 2024 include:

• Record revenue: For the first time, global carbon pricing raised over US$100 billion, a threefold increase in real terms compared to a decade ago, despite a slight dip from 2023.
• Broader coverage: Carbon pricing now covers about 28% of global GHG emissions, up from 24%, largely due to China’s expansion of its ETS into industrial sectors.
• Revenue allocation favors sustainability: Over half of the revenues were directed to environmental initiatives, infrastructure, and development—signaling a positive trend in using carbon revenues for green growth. The power sector had over half of its emissions priced.

Carbon Pricing Mechanisms and Their Multi‑Purpose Role

By early 2025, 80 direct carbon pricing instruments were in operation globally: 37 ETSs, 43 carbon taxes, plus various crediting mechanisms. These tools not only reduce GHG emissions, but also:

• Increase domestic budget revenues;

• Create fiscal space for development priorities;

• Stimulate green growth and job opportunities;

• Mobilize private capital for carbon reduction and climate resilience projects.

A global map illustrates where ETSs and carbon taxes are implemented, under development, or under consideration.

The global map of ETS and carbon tax systems that have been implemented, are under development, or are currently under consideration.

Global Impact & Emerging Trends in Developing Economies

The 2025 report highlights growing carbon pricing adoption in middle-income countries. Economies like Brazil, India, Colombia, and Türkiye are achieving significant progress in deploying these mechanisms:

• Brazil approved its domestic GHG emissions trading law in December 2024, expected to be operational within five years.

• India released detailed ETS regulations targeting emissions intensity reductions in industry.

Vietnam and ASEAN: Strong Development Potential

The report also offers critical insights for Vietnam and the Southeast Asia region:

• Vietnam – Regional Leader:

Vietnam is positioning itself to participate deeply in international carbon markets. The report notes Vietnam is accelerating its ETS implementation in sectors covered by the EU’s CBAM—meaning these industries will be among the first to receive government emission quotas in 2025 and 2026.

Decree 119/2025/NĐ‑CP establishes a robust legal foundation for Vietnam’s domestic carbon credit trading system and carbon market. The World Bank is supporting Vietnam to create a solid market infrastructure, enabling a transition toward balancing economic growth with climate risk.

• ASEAN developments:

  • Thailand: Cabinet approved a new carbon tax; a draft climate law includes provisions for a CBAM similar to the EU’s.

  • Malaysia: Plans to introduce carbon taxes for the energy and steel sectors by 2026.

  • Philippines: The House has proposed legislation to establish an ETS.

  • Singapore: Allows companies to offset up to 5% of their carbon tax obligations with high-quality international credits

Challenges and Opportunities in 2025

While global carbon pricing adoption slowed in some regions last year, significant expansion potential remains, especially among middle-income countries. These positive trends, coupled with rising private-sector interest and growth of political-risk insurance products for carbon markets, are reducing perceived risks and encouraging investment.

>>>>You can access the full report here.