Market Snapshot
| Instrument | Price | MoM Change |
|---|---|---|
| EUA Dec-26 | EUR 71.40 | +1.5% |
| VCU Nature-based (2022 vintage) | USD 5.00-5.50 | +3.0% |
| VCU Cookstove (CCP-labeled) | USD 8.50-10.00 | +4.1% |
| ARR High Quality (BBB+) | USD 25 | — |
| I-REC Turkey (solar, 2025) | USD 0.12-0.15/MWh | Flat |
| YEK-G | TRY 2.5-3.5/MWh | Flat |
| GS VER (cookstove) | USD 9.00-11.00 | +2.5% |
Top Story: CBAM Definitive Phase Begins — Certificate Sales Postponed to 2027
The EU Carbon Border Adjustment Mechanism (CBAM) entered its definitive phase on January 1, 2026: financial obligations now apply. However, under the EU simplification package, the start of CBAM certificate sales has been postponed from January 2026 to February 2027. The first surrender deadline is set for September 30, 2027 (for 2026 imports).
Certificate pricing will be based on quarterly averages of 2026 EU ETS auction prices in the first year, then weekly averages thereafter. Importers must hold certificates covering 50% of embedded emissions from year-to-date imports by year-end. The mechanism covers 303 goods across electricity, hydrogen, cement, fertilisers, aluminum, and iron & steel — 3% of EU imports, approximately USD 132 billion in trade value (Source: OECD 2025).
Turkey note: With the Climate Law adopted in July 2025 and the TR-ETS pilot phase (2026-2027) now underway, Turkey is positioned to deduct its domestic carbon price from CBAM certificate costs once TR-ETS becomes operational. The OECD assessment finds that Turkey stands to achieve modest value-added gains in CBAM sectors thanks to its low emission intensity and upcoming carbon pricing system.
Market Moves
EUA: Record MSR intake continues to underpin prices. EUA Dec-26 closed February at EUR 71.40 — up 1.5% from January. The Market Stability Reserve's September 2025-August 2026 intake of 275.5 million allowances (the largest since 2021) has cemented structural tightness on the supply side. End-2024 TNAC stands at 1.148 billion allowances — well above the 833 million threshold. The approaching April 30, 2026 surrender deadline for 2025 verified emissions is building compliance buying pressure. 2026 auction volumes are approximately 8% lower than 2025; the maritime sector's transition to full coverage delivered a -52 million EUA adjustment versus the original 2026 calendar.
VCM: Record retirement volumes and CCP quality stratification deepens. H1 2025 saw 95 million voluntary carbon credits retired — the highest half-year figure on record. Through Q3 2025, retirements reached 128.15 million with 33.5 million in Q3 alone and 70.4 million in issuances. The ICVCM has approved 40 of 147 methodologies assessed (~38 CCP-labeled); over 40 million CCP-labeled credits were issued as of January 2025. CCP-labeled retirements through Q3 2025 totaled 16.63 million credits. The quality premium is sharpening: high-rated credits (A-AAA) average USD 14.80/ton while low-quality (CCC-B) trade at USD 3.50/ton. ARR (BBB+) at USD 25/tCO2e (ECM Terminal). The removal-versus-reduction premium reached 381% in 2024 (up from 245% in 2023), and the vintage premium for last-five-year credits hit 217% (up from 53% in 2023).
EAC: Turkish I-REC and YEK-G stable. Turkey I-REC prices at USD 0.12-0.15/MWh (ECM Terminal). YEK-G at TRY 2.5-3.5/MWh (ECM Terminal). Corporate Scope 2 reporting and CSRD's expanding requirements are expected to boost demand for energy attribute certificates, indirectly supporting Turkish EAC markets.
Compliance: Global carbon pricing expands. There are now 80 carbon taxes and ETSs operating worldwide (net +5 over 12 months). Approximately 28% of global GHG emissions are covered by carbon pricing — up from 24%, driven primarily by China ETS expansion into industrial sectors (+3 GtCO2e). 2024 carbon pricing revenue exceeded USD 100 billion for the second consecutive year. Brazil approved an ETS framework law in December 2024; Denmark will become the first country to implement an agricultural carbon tax starting 2030.
Regulatory Signals
Turkey Climate Law and TR-ETS. The Climate Law adopted by the Grand National Assembly on July 2, 2025 was published in the Official Gazette on July 9, 2025. The draft implementing regulation was published on July 22, 2025, with the TR-ETS pilot phase covering 2026-2027. The first compliance period begins in 2028. The system design is based on intensity-based cap with benchmark-based free allocation. Installations above 50,000 tCO2e/year in power and industry are covered. The Carbon Market Board is chaired by the Environment Minister with 7 deputy ministers.
Article 6: Approximately 100 bilateral agreements. As of 2025, roughly 100 bilateral carbon transfer agreements are in force under Paris Agreement Article 6.2 (20 new agreements added in 2024). Switzerland has concluded agreements at an average price of 29 CHF/tCO2e (>USD 30) for 2022-2030 delivery; Singapore's February 2025 tender saw prices of USD 18 to >USD 40/tCO2e.
CORSIA: Phase 1 demand estimate. The international aviation carbon offsetting program CORSIA is expected to generate demand for 102-148 million tonnes in Phase 1 (2024-2026). IATA's fixed-price offering from early 2025 was set at USD 21.70/tCO2e. 33.3% of Q3 2025 issuances were CORSIA-eligible.
Positioning Note
EU ETS: The EUA forward curve reflects the supply tightening narrative. The MSR's 275.5 million intake — the largest since 2021 — combined with the 4.3% annual linear reduction factor leaves progressively fewer allowances reaching the market. Maritime full coverage from 2026 adds structural demand. Support is well-defined at EUR 68-70, with resistance at EUR 72-74. The April 30 compliance deadline for 2025 verified emissions should support seasonal upside. The January 2025 invalidation of 271 million allowances from the MSR permanently removes supply from the system.
VCM: CCP-labeled credits remain thinly offered relative to demand. With only 16.63 million CCP credits retired through Q3 2025 against 40+ million issued, a stock overhang exists but liquidity at desired vintages and project types is tight. ARR (BBB+) at USD 25/tCO2e (ECM Terminal). Buyers seeking CCP cookstove or ARR credits should secure inventory early. The removal premium at 381% signals a structurally diverging market where high-quality removal credits are becoming a distinct asset class.
EAC: Turkey I-REC at USD 0.12-0.15/MWh represents significant value versus European GOs (ECM Terminal). YEK-G at TRY 2.5-3.5/MWh. The TR-ETS pilot phase creates additional corporate incentive to document renewable energy procurement. Forward purchasing for 2026 delivery is recommended for buyers with RE100 or Scope 2 commitments.
Week Ahead / Dates to Watch
- Mar 5: EEX EUA primary auction
- Mar 10: ICVCM methodology assessment webinar
- Mar 15: Verra quarterly issuance data release
- Apr 30: EUA surrender deadline for 2025 verified emissions
Sources: ICE Endex, EEX Auction Results, ECM Terminal, EC MSR Publication, ICVCM, OECD 2025, World Bank State and Trends 2025, Sylvera Q3 2025, Ecosystem Marketplace