China’s Bold Leap Toward a Low-Carbon Future
Overview
On August 25, 2025, China released a new guideline aimed at accelerating its green and low-carbon transition. Jointly issued by the General Office of the Communist Party of China Central Committee and the General Office of the State Council, the policy outlines a roadmap to expand and strengthen the national carbon trading market, with ambitious targets set for 2027 and 2030.
Photo by Dominic Kurniawan Suryaputra on Unsplash
Expanding the Carbon Trading Market
China’s carbon trading market is poised for a major transformation. By 2027, the market will cover all major industrial sectors, and the voluntary greenhouse gas emission reduction trading system will extend to key fields beyond energy and manufacturing. This expansion signals a shift from regional pilot programs to a unified national framework.
By 2030, China aims to establish a cap-and-trade system with both free and paid allocations. This system will be credible, transparent, standardized, and internationally aligned, marking a significant step toward global climate leadership.
Strengthening Market Infrastructure
The guideline emphasizes the need to:
Improve carbon emission quota allocation
Enhance accounting and reporting mechanisms
Expand market participants and trading products
Boost supervision and regulatory oversight
These measures are designed to invigorate the market and ensure that carbon pricing reflects environmental costs accurately, encouraging industries to innovate and reduce emissions.
International Alignment & Legal Support
China is also looking outward. The guideline calls for deeper international cooperation and alignment with global standards. Legal and policy frameworks will be reinforced to support the carbon market’s credibility and effectiveness.
Final Thoughts
China’s new guideline is more than a policy, it’s a signal that the world’s largest emitter is stepping up its climate game with systemic reforms and international ambition. As the carbon market matures, expect ripple effects across global ESG landscapes, from regulatory shifts to investor expectations.