{"id":60096249,"date":"2025-08-28T16:41:13","date_gmt":"2025-08-28T15:41:13","guid":{"rendered":"https:\/\/dialogue.earth\/?post_type=news_digest&p=60096249"},"modified":"2025-09-04T17:04:56","modified_gmt":"2025-09-04T16:04:56","slug":"chinas-carbon-market-set-to-introduce-absolute-emissions-cap","status":"publish","type":"news_digest","link":"https:\/\/dialogue.earth\/en\/digest\/chinas-carbon-market-set-to-introduce-absolute-emissions-cap\/","title":{"rendered":"China\u2019s carbon market set to introduce absolute emissions caps by 2027"},"content":{"rendered":"\n

China plans to introduce absolute emissions caps to cover major industrial sectors by 2027, according to a policy document<\/a> released on 25 August by the State Council and Central Committee of the Communist Party. It will then establish a nationwide emissions trading scheme (ETS) by 2030. <\/p>\n\n\n\n

While the new document does not specify the sectors that will be added by 2027, industry figures like Tang Renhu, the chair of Sino Carbon Investment, expect<\/a> they will include the chemical, petrochemical, papermaking and aviation industries.\u00a0<\/p>\n\n\n\n

The new system will combine free and paid carbon emissions allowances (CEAs) and operate alongside a transparent, standardised voluntary carbon market aligned with international standards, the document states.\u00a0<\/p>\n\n\n\n

China currently runs both a compulsory ETS for several industries and a voluntary carbon market, known as the China Certified Emission Reduction (CCER) scheme.\u00a0<\/p>\n\n\n\n

The ETS, launched in July 2021 for the power sector, was officially expanded<\/a> in 2025 to include steel, cement and aluminium, and covers 60%<\/a> of the country\u2019s greenhouse gas emissions. <\/p>\n\n\n\n

The CCER programme, originally launched in 2012 but suspended in 2017 due to low transaction volumes and data quality issues, was relaunched in January 2024<\/a> to complement the ETS. <\/p>\n\n\n\n

Currently, China\u2019s ETS is intensity-based, allocating allowances according to a company\u2019s output and emissions efficiency. Companies exceeding their quotas must buy additional CEAs, while those emitting less can sell their surplus.\u00a0While this approach avoids hurting economic growth from restricting output, it has also resulted in overgenerous quota allocations and weakened the effectiveness of the carbon market, said<\/a> Zhu Keli, founding director of the China Institute of New Economy.\u00a0<\/p>\n\n\n\n

Rising carbon prices due to the emissions caps will put greater compliance pressure on companies, Shi Yichen, deputy director of the International Institute of Green Finance at the Central University of Finance and Economics, told<\/a> the 21st Century Business Herald. However, it will also increase the value of carbon assets, incentivising investment in emissions-reduction measures.<\/p>\n\n\n\n

The introduction of the new industries will \u201cdefinitely help to spur demand\u201d for CEAs, said<\/a> Camille Wee, an analyst at BloombergNEF. \u201cHopefully, this means a slightly more aggressive emissions pathway for China.\u201d<\/p>\n\n\n\n

The reforms are also closely tied with international trade pressures, particularly the EU\u2019s Carbon Border Adjustment Mechanism<\/a> (CBAM), which is set to impose tariffs on carbon-intensive imports from 2026, reports Bloomberg<\/a>. Accurate emissions reporting and active participation in China\u2019s carbon market will become increasingly crucial for Chinese exporters.\u00a0<\/p>\n\n\n\n

Read Dialogue Earth\u2019s previous <\/em>analysis<\/em><\/a> on China\u2019s national carbon market.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

China plans to introduce absolute emissions caps to cover major industrial sectors by 2027, and establish a nationwide emissions trading scheme by 2030<\/p>\n","protected":false},"featured_media":60006649,"template":"","categories":[758],"tags":[513,50040310,580],"country":[20000110],"digest-collection":[50039911],"class_list":["post-60096249","news_digest","type-news_digest","status-publish","has-post-thumbnail","hentry","category-business","tag-carbon-emissions","tag-carbon-markets","tag-policy","country-china"],"acf":[],"yoast_head":"\nChina\u2019s carbon market set to introduce absolute emissions caps by 2027 | Dialogue Earth<\/title>\n<meta name=\"description\" content=\"China plans to introduce absolute emissions caps to cover major industrial sectors by 2027, and establish a nationwide emissions trading scheme by 2030\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" 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