China Carbon Emissions Market Size Likely to Grow at a CAGR of 13.45% By 2035

Market Size and Growth

The market size of the China carbon emissions market is estimated to be around CNY 125 billion (USD 17.5 billion) in 2025 and is estimated to grow to an average of CNY 520 billion (USD 72.8 billion) between 2026 and 2035 with a CAGR of 13.45%.

China Carbon Emissions Market Revenue and Trends

Carbon emissions trading and carbon emissions trading services market in China includes the national Emissions Trading Scheme (ETS), provincial pilots, carbon credit generation (CCER), carbon futures, carbon offsets, verification and certification services, MRV (monitoring, reporting, verification) systems and carbon asset management platforms through which power utilities, steel, cement, aluminum, petrochemicals and other high-emitting industries can meet the national intensity goals and absolute cap targets and achieve cost-effective decarbonization. The China carbon market is becoming dynamic as the country is expanding its national ETS coverage, increasing compliance pressure on heavy industry, and increasing domestic and international demand for Chinese carbon credits are increasing, the government is committed to carbon peaking by 2030 and neutrality by 2060, and digital MRV platforms, blockchain-based registries and preparations for cross-border linkage in climate finance and compliance ecosystems are being developed.

What are the Factors That Have a Significant Contribution to the Growth of the China carbon emissions market?

The explosion in compliance requirements as a result of the complete inclusion of power, steel, cement, non-ferrous metals, petrochemicals, chemicals, and building materials into the national ETS, coupled with the increase in annual carbon intensity targets and absolute allowances, has contributed to the increase in demand in carbon allowances, CCER credits, and trading services. The demand to comply with increasing surrender requirements and penalties may cause the increase of the number of companies that will be active enough to operate in spot, futures, and over-the-counter markets to cope with the high compliance costs and gain profits with early decarbonization investments.

Innovations such as satellite-based monitoring of emissions, automation of MRVs using AI, registries with blockchain protection to provide transparency, standardized approaches to CCER in forestry, renewable energy, methane capture, and CCS projects, and built-in carbon-finance platforms enhancing market liquidity, lowering transaction friction, and enhancing price discovery have been presented by technological advancements. Other reasons are the rise of state and provincial subsidies on low-carbon technologies, the rise of institutional investors and green funds, the rise of international demand of Chinese offsets under Article 6 of the Paris Agreement, strong support of the policy by the Ministry of Ecology and Environment and the National Development and Reform Commission, and the rapid development of carbon finance products in the Shanghai, Beijing, and Shenzhen exchanges.

Segment Insight

By Product Type

In units, national ETS allowances (CEA) and spot trading occupied by far the largest portion of the China carbon emissions market as of 2025, fueled by the primarily needed mandatory compliance in the power sector, as well as increased coverage of industries under the national cap-and-trade scheme, which led to further technological advances in futures contracts, forward contracts, and allowance borrowing/lending vehicles cited by large numbers of compliance managers and trading desks as more efficient ways to maximize surrender costs and enhance liquidity across the eight major exchanges.

By Distribution Channel

The most significant market share is with direct trading via national ETS and pilot exchange (Shanghai Environment and Energy Exchange, Beijing Green Exchange, Guangzhou Emissions Exchange, etc.) and allowed carbon asset management companies, which are the main channels of allowance auction, secondary market, CCER procurement, and hedging approaches. The channels have become the choice of covered entities and carbon intermediaries since they offer professional expertise in compliance planning, price forecasting, risk management, and regulatory reporting.

Report Scope

Recent Developments

• In November 2025: The national ETS was extended to the cement and aluminum industry by the Ministry of EC and Environment with a binding absolute cap beginning in 2026, and the Shanghai Environment and Energy Exchange introduced standardized CCER futures contracts on methane abatement and afforestation credits that would greatly raise the liquidity in the market and involve more institutional investors and foreign purchasers.

List of the prominent players in the China Carbon Emissions Market:

• Shanghai Environment and Energy Exchange
• Beijing Green Exchange
• China Emissions Exchange (Guangzhou)
• Shenzhen Emission Rights Exchange
• Hubei Emission Exchange
• Tianjin Climate Exchange
• Chongqing Carbon Emission Trading Center
• Fujian Strait Equity Exchange
• National Center for Climate Change Strategy and International Cooperation
• China Emissions Trading Association (CETA)
• Others

The China Carbon Emissions Market is segmented as follows:

By Market Type

• National Emissions Trading System (ETS)
• China Certified Emission Reduction (CCER) Voluntary Market
• Regional Pilot Markets

By Sector Coverage

• Power Generation (Coal & Gas)
• Steel Industry
• Cement Production
• Aluminum Smelting
• Other Industries (Future Expansion)

By Transaction Type

• Spot Trading
• Forward Contracts
• Carbon Offsets (CCER)
• Future Instruments (Planned)

By Participant Type

• Compliance Entities
• Trading Institutions
• Investment Entities
• Financial Institutions

By End User

• Industrial Emitters
• Energy Companies
• Financial Institutions
• Government Entities