On August 25, 2025, the Communist Party of China Central Committee’s General Office and the State Council General Office jointly issued the Opinions on Promoting Green and Low-carbon Transition and Strengthening the Development of the National Carbon Market (hereinafter referred to as “the Opinions”). This document provides a comprehensive strategic plan for the development of China’s national carbon markets, both mandatory and voluntary ones. 

Up to now, China’s carbon market is considered by the government to have operated in a smooth and orderly manner, which is consisting of two parts, namely mandatory emission reduction and voluntary emission reduction, and is operating stably as a whole. Market regulations are becoming increasingly complete, trading activity is continuously increasing, data quality has significantly improved, and the effect of low-cost emission reduction is gradually emerging. As of July 2025, the cumulative transaction volume of the carbon emission rights market has reached nearly 46.8 billion yuan, and the transaction volume of the voluntary emission reduction market has exceeded 200 million yuan. However, a further developed and optimized carbon market is still believed to be necessary in order to support China’s caron peaking and carbon neutrality goals.

The Opinions clearly position the carbon market as a policy tool for the greenhouse gas (GHG) emission control. The core objectives planned in this national document are:

-   By 2027, the national carbon market will essentially cover all major emitting industries in the industrial sector, and the voluntary carbon market will achieve full coverage across key sectors.

-   By 2030, the national carbon market is expected to mature into a fully developed market based on total quota control with a mix of free and paid allowances, alongside a credible voluntary market with unified methodologies and international recognition. A carbon pricing mechanism with significant emission reductions, a robust regulatory framework, and rational price levels will be established. 

Key measures to achieve these objectives are laid out in 4 chapters: i) accelerate the construction of national carbon emission trading market; ii) actively develop voluntary national carbon emission trading market; iii) develop a more active carbon market; iv) improve current supportive/management system and supervision system. Specific measures that the Opinions elaborate include:

-   Expanding the national carbon market coverage to include more industries and greenhouse gases based on sectoral development and decarbonization contributions.

-   Improving carbon emissions quota management by shifting from intensity-based to total quota control, prioritizing sectors with stable emissions by 2027, and steadily raising the share of paid allocation.

-   Accelerating the development of the voluntary carbon market by establishing a scientifically sound methodology system, prioritizing sectors with significant social and ecological benefits, and strengthening full-chain project management to ensure integrity and transparency.

-   Promoting the application of China Certified Emission Reductions (CCER, which is actually the national voluntary carbon market of the country) and encouraging government agencies, state-owned enterprises, companies, and social organizations to use CCERs for carbon offsetting in activities such as carbon neutrality efforts and green low-carbon practices.

-   Diversifying financial products by introducing carbon-linked services like pledge and repurchase agreements to help firms manage carbon assets and improve pricing mechanisms.

-   Broadening participation by allowing financial institutions and, in time, non-compliance entities and individuals to trade.

-   Strengthening oversight through standardized policy communication, price monitoring, and strict enforcement against market abuse, while enhancing supervision of carbon finance to prevent systemic risks.

-   Modernizing management and digital infrastructure to enhance operational efficiency and data security.

-   Reinforcing emissions measurement, reporting, and verification (MRV) through standardized protocols and automated monitoring.

-   Implementing end-to-end data supervision using advanced technologies like big data, blockchain, and IoT to curb fraud.

-   Strengthening oversight of technical service providers via certification and compliance mechanisms.

-   Improving transparency through expanded information disclosure and credit-based supervision.

Further supporting measures for the implementation of the measures stated in the Opinions are also put forward:

-   Strengthening organizational structures with national coordination to clarify local responsibilities and enhance inter-ministerial collaboration.

-   Improving the legal and policy framework by advancing carbon market legislation, combating violations, facilitating linkages with green power and certificate mechanisms, and optimizing trading and settlement systems.

-   Deepening international cooperation through active participation in global carbon market governance, promoting mutual standard recognition, and sharing operational experience.

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