Xinhua News Agency, Beijing, August 25 – Topic: Building a More Effective, Dynamic, and Internationally Influential National Carbon Market – Interpretation of the Opinions of the General Office of the Communist Party of China (CPC) Central Committee and the General Office of the State Council on Promoting Green and Low-Carbon Transition and Strengthening the Construction of the National Carbon Market

By Gao Jing, Xinhua News Agency Reporter

The carbon market is an important policy tool for actively addressing climate change and accelerating the comprehensive green transition of economic and social development through market mechanisms. On the 25th, the Opinions of the General Office of the CPC Central Committee and the General Office of the State Council on Promoting Green and Low-Carbon Transition and Strengthening the Construction of the National Carbon Market was released to the public.

A responsible person from the Ministry of Ecology and Environment stated that this document fully demonstrates China’s firm determination and strong actions to steadily advance the goals of peaking carbon emissions and achieving carbon neutrality. It is necessary to accurately grasp the overall requirements, main objectives, and key tasks for strengthening the construction of the national carbon market, and accelerate the development of a more effective, dynamic, and internationally influential carbon market to provide strong support for realizing the modernization featuring harmonious coexistence between humans and nature.

The National Carbon Market Has Achieved Stable Inception and Operation

A responsible person from the Ministry of Ecology and Environment introduced that currently, China has established two interconnected markets that jointly form the national carbon market system: the national carbon emission rights trading market (for key emitters to fulfill mandatory emission reduction obligations) and the national voluntary greenhouse gas emission reduction trading market (to encourage voluntary emission reductions by the society). The construction of the national carbon market has achieved stable inception and operation, with its institutional system gradually improved, market vitality steadily enhanced, data quality comprehensively improved, and the market’s function of promoting low-cost emission reductions across the society gradually emerging.

In terms of the national carbon emission rights trading market: as of the end of July 2025, the cumulative trading volume of allowances reached 681 million tons, with a total transaction value of 46.784 billion yuan, and the "baton" role of pricing is gradually taking effect. In 2024, a total of 2,096 key emitters were included in the national carbon emission rights trading market, with a compliance rate of nearly 100% in allowance surrender.

Regarding the national voluntary greenhouse gas emission reduction trading market: since 2023, the Ministry of Ecology and Environment, together with relevant departments, has successively issued 6 methodologies covering afforestation carbon sinks, offshore wind power, etc., and completed the registration of the first batch of 9.48 million tons of certified voluntary emission reductions (CCER). As of the end of July 2025, the cumulative trading volume of CCER reached 2.4603 million tons, with a total transaction value of 208 million yuan.

The responsible person emphasized that through continuous exploration and practice, the construction of the national carbon market has maintained a balanced pace and intensity. While considering the affordability of enterprises, it has fully stimulated the internal driving force for carbon reduction, effectively promoting the formation of a low-carbon development awareness across the society that "emitting carbon incurs costs and reducing carbon brings benefits". Industries are increasingly demonstrating the characteristics of high technology, high efficiency, and high quality.

Clarifying the Roadmap for the Medium- and Long-Term Development of the National Carbon Market

This document defines the timeline, roadmap, and task list for the medium- and long-term development of the national carbon market, and puts forward the main objectives to be achieved by 2027 and 2030.

A responsible person from the Ministry of Ecology and Environment pointed out that it is necessary to give full play to the market’s role and further advance the construction of the national carbon emission rights trading market. Based on factors such as industrial development status, contributions to carbon and pollution reduction, data quality foundation, and carbon emission characteristics, the scope of covered industries and types of greenhouse gases should be expanded in an orderly manner. A transparent carbon emission allowance management system with clear expectations should be established, and medium- and long-term carbon emission allowance control targets should be defined. The transition from intensity-based control to total-based control should be gradually realized, and a combination of free allocation and paid allocation of carbon allowances should be steadily implemented, along with the establishment of an allowance reserve and market adjustment mechanism.

The Opinions require active development of the national voluntary greenhouse gas emission reduction trading market. Zhang Xin, Chief Economist of the National Center for Climate Change Strategy and International Cooperation, believes that it is necessary to focus on key areas for peaking carbon emissions and achieving carbon neutrality, as well as key technologies for green, low-carbon, zero-carbon, and negative-carbon development. Efforts should be made to accelerate the establishment of a methodology system for voluntary greenhouse gas emission reduction projects, laying a foundation for the supply of projects and emission reductions to create huge green market opportunities. At the same time, it is essential to speed up the improvement of market trading systems, enrich market trading products and participants, and strengthen effective connection with the mechanisms of other resource and environmental factor markets. Market supervision should be strengthened to prevent systemic risks in the market, and international cooperation should be actively carried out.

In addition, industry insiders pointed out that in accordance with the requirements of the Opinions, efforts should be made to gradually enrich market elements and enhance the vitality of the national carbon market. Comprehensive capacity building should be strengthened to improve the management level of the national carbon market.

Making Overall Plans to Advance the Construction of the Carbon Market

The construction of the national carbon market is a complex systematic project. It is necessary to adhere to a problem-oriented and goal-oriented approach, strengthen a systematic perspective, and coordinate relationships such as those between the market and the government, long-term and short-term goals, the whole and the parts, and domestic and international dimensions. This will promote the national carbon market to have a more improved institutional mechanism, higher data reliability, and greater industrial inclusiveness.

For example, in terms of coordinating the relationship between an effective market and a capable government, Yan Gang, Director of the South China Institute of Environmental Sciences under the Ministry of Ecology and Environment, believes that the government should focus on building an institutional framework and a risk prevention and control system, and play a role in setting carbon allowance control targets, improving market adjustment, balancing market supply and demand, and strengthening market supervision. The market, on the other hand, should focus on releasing the efficiency of resource allocation, enhancing vitality by enriching trading products and expanding market participants, stimulating internal driving forces, and forming authentic carbon price signals. It is necessary to balance the relationship between "maintaining vitality" and "ensuring regulation" – while fully stimulating market vitality, it is also important to strengthen supervision, maintain market order, and ensure the healthy and orderly development of the carbon market.

Regarding the coordination of the connection between the national carbon market and local pilot carbon markets, Yan Gang noted that as the national carbon market accelerates the expansion of covered industries, the number of industries and enterprises covered by local pilot carbon markets will gradually decrease. However, this does not mean that the role of local pilot carbon markets will weaken. Local pilot carbon markets will continue to play the role of a "policy test field", taking the lead in exploring experiences for the construction and development of the national carbon market in areas such as expanding coverage, improving market regulation mechanisms, innovating supervision methods, and developing carbon finance in a healthy and orderly manner.

Wang Haiqin, Deputy Director of the Institute of Resources and Environment Policies under the Development Research Center of the State Council, stated that while improving the role of the carbon market in leading domestic green and low-carbon transition, the carbon market should also serve as an institutional guarantee for China’s international cooperation on green and low-carbon development. The design of the national carbon market system should adhere to international standards and reserve interfaces for international cooperation. Through open cooperation and in-depth exchanges, China’s international influence should be enhanced, and the carbon market should play a bridging role in promoting transnational cooperation on green development, facilitating the global outreach of China’s green and low-carbon technologies and industries.

Article Source: Xinhua News Agency