• The EU, China and Brazil have launched the Open Coalition on Compliance Carbon Markets to strengthen cooperation on domestic carbon pricing systems.
• The coalition will focus on MRV systems, carbon accounting methods and high-integrity offsets to improve market transparency and environmental integrity.
• New Zealand and Germany are the first countries to join as members, with Brazil chairing the coalition for two years and China and the European Commission serving as co-chairs.

Florence Launch Puts Carbon Pricing Back On The Multilateral Table

Florence became the latest staging ground for global climate diplomacy this week as the European Union, China and Brazil formally launched the Open Coalition on Compliance Carbon Markets.

The initiative is designed to strengthen cooperation on domestic carbon markets and carbon pricing policies. It also aims to improve the effectiveness, transparency and integrity of compliance carbon markets worldwide.

The coalition builds on a declaration endorsed by European Commission President Ursula von der Leyen and other leaders at COP30 in Belém, Brazil, in November 2025. Its formal launch in Italy brings together three major climate and economic actors at a time when carbon pricing is gaining renewed policy attention.

China, Brazil and the EU signed the coalition’s Terms of Reference during the meeting. The document sets out the coalition’s objectives, scope of work, governance structure and decision-making framework.

With the adoption of those terms, the coalition is now open to countries with nationwide compliance carbon markets. These include emissions trading systems and carbon taxes. Subnational authorities with carbon pricing schemes may participate as observers.

Coalition Targets MRV, Accounting And Offset Integrity

The coalition’s work will focus on the technical systems that determine whether carbon markets can deliver real emissions cuts.

Priority areas include robust monitoring, reporting and verification systems, known as MRV. Members will also work on sound carbon accounting methodologies and the potential use of high-integrity offsets.

These areas matter for companies and investors because weak accounting can distort carbon costs, undermine compliance and expose firms to reputational risk. Stronger market design can improve pricing certainty and support capital allocation toward lower-carbon assets.

Participants at the Florence meeting said emissions trading systems remain an important market-based instrument for advancing the green and low-carbon transition. They also agreed that the coalition should follow principles of openness, inclusiveness and voluntariness.

The European Commission said the initiative will help foster mutual understanding, promote best practices and raise global standards. It pointed to around 80 carbon pricing schemes now in place across 50 countries.

For the EU, the coalition is also a chance to promote carbon pricing as a cost-effective tool for reducing emissions. Brussels brings more than 20 years of experience through the EU Emissions Trading System.

China Seeks Larger Role In Global Carbon Market Governance

China used the meeting to frame the coalition as a platform for practical international cooperation.

Li Gao, vice minister of China’s Ministry of Ecology and Environment, said China is ready to work with all parties to develop the Open Coalition on Compliance Carbon Market into “an open, inclusive, pragmatic and efficient platform for international cooperation on carbon markets.” He added that China wants the coalition to “contribute to global climate governance.”

Li said China is accelerating the construction of “a more effective, dynamic, and internationally influential carbon market.” He also said China is willing to share its practices in green and low-carbon development and carbon market construction with the international community.

China has invited participants to the China Carbon Market Conference in Wuhan, Hubei Province, this September. The coalition is expected to develop a work plan for adoption at the 15 September 2026 conference.

That next step will be important. A coalition built around cooperation will need a credible technical agenda to avoid becoming another diplomatic forum with limited market impact.

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Brazil To Chair As Members Begin To Join

Brazil will chair the coalition for its first two years. China and the European Commission will serve as co-chairs.

New Zealand and Germany are the first countries to join as members. Several others are expected to follow. Representatives from Canada, Britain, Türkiye, France and other countries and regions also attended the high-level meeting.

Cristina Reis, deputy secretary for sustainable economic development at Brazil’s Ministry of Finance, said the establishment of the OCCCM is “an innovative initiative reflecting the shared willingness of both developing and developed countries to strengthen cooperation on carbon markets.”

She added that Brazil is ready to deepen exchanges and cooperation with China and other partners. The goal, she said, is to enable carbon pricing mechanisms to play a greater role in emissions reduction and green transition.

Kurt Vandenberghe, director-general for climate action at the European Commission, said the joint launch by China, Brazil and the EU “sends a clear signal of continued progress in global climate action and international cooperation.”

He said the EU looks forward to further strengthening cooperation with China in areas such as carbon market development, particularly MRV systems.

What Executives And Investors Should Watch

For C-suite leaders, the coalition points to a more connected carbon pricing landscape. That could affect compliance planning, cross-border investment decisions and climate risk management.

For investors, better alignment on MRV and accounting could improve confidence in carbon market data. It may also help compare corporate compliance costs across jurisdictions.

The European Commission has already identified priorities for the coalition’s work plan. These include enhancing domestic carbon pricing effectiveness, improving carbon credit quality and comparing carbon accounting methods across systems.

The work will also draw on Article 6.4 of the Paris Agreement Crediting Mechanism and the Climate Club’s efforts on industrial decarbonisation.

The launch does not create a global carbon market. Nor does it harmonise prices overnight. But it does create a new policy venue where major economies can shape rules, expectations and technical standards.

That matters because carbon pricing is no longer only a climate instrument. It is becoming part of trade policy, industrial strategy and competitiveness planning. For companies operating across multiple jurisdictions, the quality of market rules will shape both risk and opportunity.

The coalition’s test will be whether it can turn political alignment into practical market integrity. If it succeeds, Florence may be remembered as a step toward stronger global carbon pricing governance.

ESG News Editorial Team

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