China's national carbon trading market gathers momentum

China's national carbon trading market has maintained stable operations while gaining momentum, with cumulative trading of carbon emission allowances reaching 961 million metric tons by the end of August, according to the National Carbon Market Development Report (2026) released Tuesday.

The total transaction value in the market has reached almost 65.7 billion yuan ($9.8 billion), said the report, which was unveiled at the 2026 China Carbon Market Conference in Wuhan, the capital of Hubei province.

In 2025, annual trading of carbon emission allowances reached 235 million tons, up 24.36 percent year-on-year and marking a record high since the market began operation in July 2021. The annual trading value stood at about 14.6 billion yuan ($2.03 billion).

Carbon pricing has increasingly become an important reference for companies in formulating emission-reduction strategies, encouraging them to proactively pursue emissions reduction efforts on their own, the report said.

The report also noted a marked uptick in market trading activity last year.

Compared with the previous compliance cycle, trading volume, the number of transactions, and the number of participating companies increased by about 116.2 percent, almost 89.1 percent and roughly 77.1 percent, respectively, all reaching record highs since the market's launch.

The trading under the China Certified Emission Reduction program, a voluntary mechanism in which participants can earn carbon credits to trade, also expanded rapidly, supported by the introduction of methodologies for key sectors, the report said.

By the end of August, 41 projects had been registered under the program, generating about 24.2 million metric tons of certified emission reductions. Cumulative trading volume reached 21.7068 million metric tons, with a total value of 1.737 billion yuan.

According to the report, in 2026, the country's carbon trading market covered 3,680 key emitting entities in the power, steel, cement and aluminum smelting industries. Together, they account for about 8.3 billion tons of carbon dioxide emissions, or more than 65 percent of China's total.

It said preparatory work has begun to include petrochemicals, chemicals, papermaking and civil aviation sectors in the market.