All eyes are on the rollout of the EU’s new carbon tax and clean energy technology in 2026 in a critical test of the world’s willingness to tackle climate change as US President Donald Trump continues his push for a global retreat.
With 2025 expected to rank as among the hottest years on record, companies and countries outside the US face the challenge of moving from creating targets and regulations to putting them into practice.
Jules Kortenhorst, co-chair of the Energy Transitions Commission, said: “The energy transition is at a tipping point — not of possibility, but of policy and implementation.”
Here are some of the key moments for climate action in 2026.
CBAM hits
The EU’s carbon border tax (CBAM), which came into force on January 1 for certain high-emission sectors such as cement and steel, will challenge its trading relations.
While some developing countries say it will drive up costs, restrict trade and hinder their ability to grow their economies, supporters of the tax say it is already spurring major exporting countries to consider their own carbon pricing.
The EU says it will create a level playing field for European companies by making sure any imported goods are produced to the same green standards or face an additional cost. Turkey is among those making plans to put in place an exchange traded system for carbon allowances.
Brussels also plans to roll out a host of other green regulations and strategies over the course of 2026, including for heating and cooling, as well as a revision of its linchpin emissions trading scheme in June.
Solar and storage boom
Across many parts of the world, the rollout of large-scale battery and solar projects looks set to continue at pace.
Some projects to watch in 2026 include Africa’s largest, the 1.1GW Obelisk development in Egypt, with both the first and second phases due to be commissioned in the year ahead.
Solar panels on a mall rooftop in Manila. The world’s largest single-location solar farm is expected to begin operations from its first phase in the Philippines this year. © AFP/Getty Images
The first phase of the Terra Solar project in the Philippines, which is expected to provide 3,500MW solar power and 4,500MWh battery storage to make it among the world’s largest, is also due to begin operations in 2026.
Despite lingering pressures, big wind projects are also due to be completed next year. These include Ørsted’s Borkum Riffgrund 913MW offshore wind farm in Germany, which is expected to be fully operational during the first quarter of 2026.
The 1.4GW Sofia offshore wind farm in the UK’s North Sea is also on course to be commercially operational in September 2026 and is said to be the first UK wind farm to feature recyclable blades.
Time to disclose
Despite so-called greenhushing from businesses in recent years and successful lobbying against SEC and EU rules, many will have to begin disclosing more climate and other sustainability data this year.
In the UK, from mid-January companies seeking admission to regulated markets must include climate-related disclosures in prospectuses where climate is material to their prospects.
Many businesses will have to begin disclosing more climate and other sustainability data this year © AFP via Getty Images
In the EU, subject to further lobbying by business, it is expected that the revised European Sustainability Reporting Standards will be officially adopted in the second quarter of 2026.
By the end of April, large-cap companies on the Beijing, Shanghai and Shenzhen stock exchanges must submit mandatory sustainability data, including so-called scope 3, or indirect, greenhouse gas emissions.
In Hong Kong and Singapore, large listed companies also face stricter climate reporting rules, including scope 3 from the 2026 full year.
In Australia, medium-sized businesses will also have to begin providing climate-related disclosures this year, including greenhouse gas emissions, while the UK will begin implementing mandatory climate-related financial disclosures under the UK Sustainability Reporting Standards.
One of California’s high-profile climate disclosure laws, which had an initial reporting deadline of January 1, has been temporarily paused because of a legal challenge. Another, requiring companies to report on their direct and energy-related greenhouse gas emissions, is still proceeding.
Fossil fuels fight
More than 80 countries pushed unsuccessfully for a “road map” to phase out fossil fuels at the UN COP30 climate summit in Brazil in November.
Brazil has promised to present a road map on how to wean economies off fossil fuels at COP31 in Turkey in November © AFP via Getty Images
The next test of their two-year-old commitment to move away from coal, oil and gas comes in April, when Colombia, along with the Netherlands, will co-host the first international conference on transitioning away from fossil fuels in Santa Marta.
Brazil has also promised to present a road map outlining how countries can wean their economies from fossil fuels at COP31 in Turkey in November.
Electric vehicle development
Even as the EU relaxes targets for banning combustion engines and the UK comes under pressure from some lobby groups to fall in line, several big new developments in electric vehicles are expected in 2026.
This includes the first vehicles featuring CATL Naxtra sodium-ion batteries, which are due on the market in early to mid-2026.
CATL says the battery will reduce dependence on lithium resources by swapping to sodium, while reaching 80 per cent charge state within 15 minutes and working well in low temperatures.
A new PowerCo Gigafactory in Germany is expected to be fully operational in early 2026 and will produce electric car batteries for smaller vehicles in the Volkswagen and Škoda electric car model ranges © Ronny Hartmann/Getty Images
Stellantis, the automaker behind Dodge and Fiat, says it will demonstrate solid-state batteries, which replace liquid electrolytes in traditional batteries with solid materials, in 2026.
Chinese automakers such as Chery and Dongfeng are also planning demonstration fleets or limited production for 2026.
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