Carbon market in China
Zero Point in exchange market
On August 25, the General Office of the CPC Central Committee and the General Office of the State Council officially released the Opinions on Promoting Green and Low-Carbon Transformation and Strengthening the Construction of the National Carbon Market.
As a key policy instrument for addressing climate change and advancing the green transition, this document is of great significance.
The Opinions draw a clear roadmap for China’s national carbon market: by 2027, it will basically cover industrial emissions; by 2030, a unified market with total cap control at its core will be established. Carbon pricing will become an important signal for resource allocation, and enterprises will face a critical window for carbon management and low-carbon investment.
Main Content of the Opinions
1. Clear Targets
By 2027: The national carbon emissions trading market will basically cover major industrial emission sectors; the national voluntary GHG emissions reduction trading market will achieve full coverage of key areas.
By 2030: Establish a unified national emissions trading system based on total quota control, combining free and paid allocation, with a transparent, standardized, widely participated voluntary reduction market aligned with international rules. A sound pricing mechanism will emerge with clear reduction effects, robust rules, and reasonable price levels.
2. Accelerated Construction of the National Carbon Market
(1) Expand coverage: Gradually extend to more industries and GHG types based on industry status, carbon reduction potential, and data quality.
(2) Improve quota management: Transition from intensity control to total cap control, increase paid allocation, and establish reserve and adjustment mechanisms.
(3) Strengthen pilot management: Standardize pilot carbon markets, allow experimentation, set evaluation and exit mechanisms, and stop creating new local markets.
3. Active Development of the Voluntary GHG Market
(1) Speed up market development: Improve methodologies, especially in key sectors; strengthen full-chain management (development, validation, verification).
(2) Promote CCER (Certified Emission Reduction) use: Encourage adoption in green supply chains, carbon neutrality for events, and CSR activities; enhance international recognition.
4. Enhancing Market Vitality
(1) Diversify trading products: Develop carbon financial products such as pledges and repos, improve asset management channels, and enhance price discovery.
(2) Broaden market participants: Support banks in carbon pledge financing, allow qualified financial institutions to participate, and gradually permit individuals in voluntary trading.
(3) Strengthen regulation: Improve information disclosure, prevent manipulation and compliance risks, strengthen oversight of carbon finance, and ensure stability.
5. Comprehensive Capacity Building
Build a unified digital management system covering registration, trading, and services.
Improve MRV (monitoring, reporting, verification) systems; explore automatic monitoring; enhance data quality management.
Encourage high-quality companies to benefit from simplified verification.
Standardize third-party services and establish exit/self-regulation mechanisms.
Improve disclosure and credit regulation to enhance transparency and credibility.
6. Strengthened Organization & Legal Safeguards
Clarify central-local responsibilities and coordination.
Promote carbon market legislation and voluntary reduction legislation.
Crack down on fraud and violations.
Improve settlement systems and reduce transaction costs.
Enhance linkage with green power and green certificate mechanisms.
Actively participate in international rule-making and promote global recognition of technologies, methods, standards, and data.
Conclusion
The Opinions establish a shift from “intensity-based constraints” to “total cap control”, signaling that carbon prices will play a more direct role in resource allocation.
In coming years, higher quota allocation ratios, wider CCER application, and innovations in carbon finance will jointly strengthen market price signals.
For enterprises, this means not only stricter compliance requirements but also a fundamental restructuring of business logic. Carbon data quality, asset management capabilities, and risk management will become new variables determining competitiveness. Early establishment of carbon asset management and low-carbon investment systems will greatly influence future market positioning and capital access.
Recommendations for enterprises and parks:
Strengthen foundations: Audit baseline emissions data and integrate ESG climate goals with development goals.
Forward-looking planning: Incorporate low-carbon projects and CCER development into investment strategies.
Strategic upgrade: Treat the carbon market as a long-term strategy embedded in energy management, capital operations, and brand value.