The ICAP Status Report 2026, released on 22 April 2026 (Earth Day), is the most comprehensive annual survey of emissions trading systems (ETS) globally. It covers 36 operational ETS at national and subnational levels, plus 15 under development. The new entries for 2026 are Japan’s J ETS, India’s CCTS, and Vietnam’s preparatory framework.

Japan’s J ETS in detail: The system covers CO₂ emissions from large sources in manufacturing (iron and steel, chemicals, cement and paper), power generation above 50 MW, and commercial buildings above 5,000 m². The cap is set at 350 million allowances in 2026, declining to 250 million by 2030. Allowances are allocated partly via free allocation (80% initially, falling to 50% by 2028) and partly auctioned. Auction revenues are earmarked for a “Green Innovation Fund” supporting hydrogen and carbon recycling projects.

India’s CCTS: Unlike traditional cap and trade, India’s scheme uses intensity based targets. Each covered entity receives a specific target of kg CO₂ per tonne of product – for example, 0.45 tCO₂/t of cement clinker. Those that outperform earn carbon credits; underperformers must buy credits from the exchange or from approved offset projects (forestry, solar thermal for industrial heat). The scheme covers about 500 million tCO₂e annually, roughly 18% of India’s total emissions. Critics argue that intensity targets do not guarantee absolute emission reductions if production expands rapidly. The Indian government counters that the scheme will evolve into an absolute cap from 2030 onward.

Vietnam’s roadmap: The voluntary market launched in April 2026 focuses on two sectors: forestry (REDD+ credits) and rice cultivation (alternate wetting and drying practices). The goal is to generate 20 million credits by 2027, with the government acting as the quality assuring intermediary for international buyers. A formal ETS for industry and power is scheduled for 2027 28, initially covering 150 large emitters.

The ICAP report also notes that ETS linkage discussions are intensifying. Japan and South Korea have begun technical talks to link their ETS by 2029. The EU and Switzerland have already linked their systems, and the EU is exploring “cooperation agreements” with Japan and South Korea on mutual recognition of allowances for international aviation. The report concludes that “carbon markets are no longer a niche European experiment – they are a mainstream policy tool across Asia, North America and Europe.”