China has announced plans to broaden its carbon trading market by incorporating the steel, cement, and aluminum industries, adding around 1,500 firms to the system. This expansion will increase the total carbon dioxide emissions covered by the scheme to 8 billion metric tons, accounting for over 60% of the country's total emissions, according to the environment ministry. The move aims to not only support China's climate objectives but also encourage heavy industries to modernize by phasing out outdated, high-emission facilities and adopting cleaner technologies.
Launched in 2021, China's emissions trading scheme currently applies to over 2,200 power companies, covering about 5 billion metric tons of CO₂ emissions. Participating firms receive emission allowances based on industry benchmarks, with those exceeding their limits required to buy additional credits. For the newly added sectors, only the highest emitters will need to purchase allowances initially, as quotas for 2024 emissions will be set high enough to ease the transition. Over time, these quotas will be gradually reduced, though authorities plan to minimize economic disruptions by keeping adjustments within a controlled range.
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