Toward a Beautiful China: New Policies Accelerate Green and Low-Carbon Transition and Propel National Carbon Market Development

On August 25, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Opinions on Advancing Green and Low-Carbon Transition and Strengthening the Construction of the National Carbon Market.” This directive outlines plans to establish a more effective, dynamic, and internationally influential national carbon market.
China has already put in place two complementary trading platforms: a mandatory emissions trading market for key polluters and a voluntary greenhouse-gas trading market open to broader participation. The newly released Opinions reaffirm the carbon market’s role as a principal policy instrument for controlling greenhouse gas emissions and call for the rapid creation of a unified, nationwide carbon trading system.

Tao Ye, Deputy Director of the Renewable Energy Center at the Energy Research Institute of the Academy of Macroeconomic Research, emphasized that speeding up the formation of a single national carbon market leverages market forces to tackle climate change and underpins a full economic and social transition toward sustainability. He highlighted that a phased expansion of market scope and participants, together with a transparent and equitable operating environment, will optimize carbon-resource allocation, maximize environmental and economic benefits, and drive traditional industries to transform deeply while nurturing new green productive forces.

Under the Opinions’ timetable, by 2027 the emissions trading market will cover the principal industrial sectors, and the voluntary reduction market will encompass all key fields. By 2030, China aims to complete a nationwide carbon market grounded in total-quota control with a balanced combination of free and paid allocations, alongside a voluntary market that is transparent, methodologically consistent, broadly inclusive, and aligned with international standards. This framework is designed to produce clear emissions reductions, a robust regulatory regime, and a reasonable, market-based carbon-pricing mechanism.

To extend the carbon market’s reach, the Opinions mandate a systematic, criteria-based enlargement of covered industries and greenhouse gases, drawing on sectoral development, pollution-reduction impact, and data quality. The document also calls for a well-defined, transparent quota management regime that preserves policy stability and continuity, sets medium- and long-term emission targets, and balances economic growth with the cost of decarbonization.

Tao Ye further noted that, in line with national targets and dual-control requirements, quota totals must be scientifically determined to align with energy security, supply-chain resilience, and public welfare. The strategy envisions a gradual shift from intensity-based controls to absolute volume caps.

Finally, the Opinions stipulate that industries with relatively stable emission levels will be the first to adopt total-quota controls. The allocation mechanism will blend free and paid quotas with a growing proportion of paid distribution, supported by quota reserves and market-adjustment tools to stabilize supply and demand. A mechanism for offsetting quotas with certified voluntary reductions will also be established at a reasonable ratio to enhance market liquidity and ensure orderly development.