China's national carbon market to expand to 3,700 firms, quota hits 8 bln tonnes: report
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A research report titled 'China Carbon Market Study 2026' from the Ministry of Ecology and Environment indicates that the national carbon market policy system and operational rules are continuously improving. The report states that after expanding coverage to include the steel, cement, and aluminum smelting industries, the number of participating enterprises will increase from approximately 2,300 to over 3,700. The quota scale is projected to rise from 5.2 billion tonnes to about 8 billion tonnes, and the proportion of covered carbon dioxide emissions will increase from 40% to 65%. The report identifies key subsequent issues including the integration of the carbon market with dual control of carbon emissions, paid allocation, data quality, carbon futures, market liquidity, CCER methodologies, and international carbon credits. It also outlines the expected improvement path for the 15th and 16th Five-Year Plan periods.
Source report
Source: Ministry of Ecology and Environment – Environmental Protection Industry Report: China Carbon Market Study 2026 (September 26, 2026)
The China Carbon Market Study 2026 report indicates that the national carbon market's policy framework and operational rules continue to improve. Following the expansion of sector coverage to include steel, cement, and aluminum smelting:
- The number of included enterprises increased from over 2,300 to more than 3,700.
- The quota scale expanded from 5.2 billion tonnes to approximately 8 billion tonnes.
- The share of covered carbon dioxide emissions rose from 40% to 65%.
The report identifies the following as key issues for the next phase:
- Alignment between the carbon market and dual control of carbon emissions
- Paid allocation of allowances
- Data quality assurance
- Carbon futures
- Market liquidity
- CCER methodologies
- International carbon credits
It also outlines the expected pathway for mechanism improvement during the 15th and 16th Five-Year Plan periods.
Source
research_reportEastern
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