Asia's Carbon Markets Strategic Imperatives for Corporations 2025

Executive summary Carbon markets across Asia have entered a pivotal stage of evolution and structural transformation. Corporations should act now and harness the power of carbon markets to advance their decarbonization journeys. The Asian carbon market is crucial in achieving global net-zero goals. The region accounts for more than 50% of global emissions1 and 55% of global GDP ,2 yet its carbon markets currently cover only 28% of regional emissions.3 As critical enablers, carbon markets play a key role in mobilizing resources and reducing costs. Unlike the European Union’s mature, unified carbon market, Asian carbon markets are characterized by rapid scaling-up, diverse development stages and strong potential for regional synergy. Asia hosts quite advanced carbon markets (e.g. Japan, South Korea, Singapore) and is developing nascent systems (e.g. India, South East Asia). China, which hosts the world’s largest carbon market and the biggest mandatory national emissions trading system (ETS), has relaunched its voluntary carbon market, Chinese Certified Emissions Reduction (CCER). This report’s projections suggest that China’s ETS could reach RMB 400-600 billion ($56-84 billion) in market size by 2030, driven by 2 billion tonnes of carbon traded at RMB 200-300 ($28-42) per tonne.4 Such developments serve as models for other emerging economies in the region. Asia’s carbon markets are becoming increasingly integrated, offering businesses the opportunity to revamp decarbonization plans and secure a competitive edge in the low-carbon transition. Asia’s Carbon Markets: Strategic Imperatives for Corporations 4