A company in Ningxia has been fined RMB 424 million (about USD 59 million) for failing to hand over carbon allowances to cover its 2023 emissions, according to People’s Daily.
This is the largest penalty to date imposed by China’s mandatory carbon market, and the first exceeding RMB 100 million since a new national carbon trading regulation came into effect in May 2024.
The sanction reflects stricter enforcement under the new regulation. If a large emitter fails to surrender allowances on time, it must pay five to ten times the average market price of allowances in the month prior to the compliance deadline, multiplied by the volume not surrendered.
Under the former rules, the maximum fine for non-compliance was just RMB 30,000 (approximately USD 4,200).
Wang Ke, a professor at Beijing Institute of Technology, told People’s Daily that some companies still treat carbon management as a box-ticking exercise. He said weaknesses remain across monitoring, accounting, surrender and trading. These include inaccurate data calculation, unclear accounting boundaries, weak compliance planning.
The unprecedented fine comes with China’s mandatory carbon market in a new phase of expansion and tighter oversight. Last March, the market grew from covering only the power sector to covering the steel, cement and aluminium smelting sectors.
In August, the government issued a policy opinion on strengthening the market. That states that by 2027 the system should cover all major industrial sectors, and by 2030 it will have shifted from controls based on carbon intensity (emissions per unit of output) to controls based on absolute emissions.
Analysts have projected that China’s carbon prices could double by 2030 under new policies. In 2025, they briefly exceeded RMB 100 (USD 14) per tonne, before falling back to around RMB 70. By comparison, prices in the European Union carbon market are currently around EUR 70 (USD 76) per tonne.
Read Dialogue Earth’s previous report on China’s personal carbon accounts.