Climate action will face a series of decisive tests in 2026, as new carbon policies take effect and large-scale clean energy projects transition from planning to implementation. With global temperatures continuing to set records, the challenge for governments and companies will shift from setting targets and rules to implementing them in the real world.
The year ahead will test whether political commitments can translate into structural change at a time when global cooperation on climate policy is under pressure.
A major carbon border tax comes into force
One of the most closely watched developments is the introduction of a new carbon border tax by a major economic bloc, applied to imports from high-emissions sectors such as steel and cement. Designed to prevent carbon leakage and protect domestic industries, the policy requires imported goods to meet domestic climate standards or face additional costs.
The measure is already reshaping trade dynamics. Some developing economies argue it could raise costs and constrain growth, while supporters say it’s encouraging exporting countries to consider their own carbon-pricing systems. Several governments are now exploring emissions trading schemes or equivalent mechanisms in response.
The border tax forms part of a wider wave of climate regulation expected in 2026, including new rules covering heating, cooling and reforms to carbon markets.
Solar, storage and wind scale up
Across many regions, investment in large-scale solar, battery storage and wind projects is set to continue at a pace. Several landmark developments are scheduled to come online in 2026, including some of the largest solar-and-storage facilities and major offshore wind farms ever built.
Together, these projects signal the growing maturity of clean power technologies, even as developers continue to navigate challenges linked to financing, grid access and supply chains.
A turning point for climate disclosure
After years of debate, delays and resistance, 2026 is expected to mark a step change in climate and sustainability reporting.
Companies in multiple jurisdictions will begin complying with stricter disclosure requirements, covering climate risks, emissions and supply-chain impacts. New rules are coming into force across Europe, Asia-Pacific and other major markets, with many frameworks requiring reporting not only on direct emissions but also on indirect emissions across value chains.
While some regulations have been delayed or challenged, the overall direction is clear: climate data is becoming a standard feature of corporate reporting and market transparency.
The unresolved battle over fossil fuels
Despite the acceleration of clean energy deployment, an international agreement on phasing out fossil fuels remains elusive. Efforts to secure a formal global roadmap have so far fallen short, even as more countries commit to moving away from coal, oil and gas.
Several international meetings in 2026 will test whether these commitments can be turned into coordinated action, particularly around how fossil-fuel-dependent economies manage the transition while safeguarding energy security and development.
Electric vehicles and battery innovation
The electric vehicle sector will also reach a defining moment in 2026, even as some governments soften or delay targets for ending sales of combustion-engine vehicles.
New battery technologies are expected to reach the market, including alternatives that reduce reliance on scarce minerals and perform better in extreme temperatures. At the same time, new manufacturing facilities are due to reach full production, supporting the rollout of smaller and more affordable electric vehicles.
Taken together, these developments make 2026 a decisive year for climate action. The technologies needed to cut emissions at scale are increasingly available, and the policy frameworks are largely in place. What remains uncertain is execution. Success will depend on whether governments and markets can move beyond announcements to delivery, building infrastructure, mobilising capital, strengthening resilience and maintaining public support. The outcome will shape not only the pace of emissions reductions but also the direction of economic growth and competitiveness for decades to come.