China recently released a policy aimed at accelerating the green, low-carbon transformation of its economy, emphasizing the importance of building a unified and highly efficient national carbon market.

The policy stresses China's commitment to confronting climate change head on, while driving sustainable economic development with a focus on upgrading the role of carbon markets to control greenhouse gas emissions.

The policy's core objective is to establish a comprehensive carbon market that integrates mandatory carbon emissions trading and voluntary greenhouse gas reduction trading. By 2027, the mandatory carbon emissions market is expected to expand to include key industrial sectors, while the voluntary market should cover all critical areas.

By 2030, China aims to build a robust, transparent, and internationally aligned carbon trading system, setting up a pricing mechanism that is genuinely reflective of environmental costs.

The policy sets out clear priorities to accelerate the carbon market's development. The national carbon emissions trading market is to be expanded gradually across all industries, with a focus on sectors that offer substantial emissions reduction potential.

The government initially plans to implement a quota system for carbon emissions, combining both free and paid allocation methods, and progressively shift towards a total cap on emissions. A market adjustment mechanism will also be created to ensure stability, enhance liquidity, and balance supply and demand.

The development of the voluntary carbon market is another key initiative. The government plans to establish a comprehensive strategy for voluntary emissions reduction projects, focusing on sectors with significant ecological and social benefits. The use of certified voluntary reductions in carbon trading will be encouraged, with government and state-owned enterprises leading by example in integrating these reductions into their operations.

In addition, the policy focuses on improving the market's competitiveness by diversifying trading products, promoting green financial instruments, and expanding the range of market participants, including financial institutions and individual traders. Regulatory measures will be strengthened to ensure market transparency and prevent any form of manipulation.

To ensure the carbon market's success, China will also improve its management systems, including implementation of a nationwide digital platform for trading and emissions reporting. High-quality carbon data and rigorous oversight to maintain the integrity of the market is another area of importance.

In the international arena, China aims to contribute to global efforts to combat climate change by aligning its carbon market practices with international standards, and engaging in collaborative efforts to develop a fair and equitable global low-carbon transition.