Group 1: Current State of Carbon Finance in China - Carbon finance in China is still in its early development stage, with the national carbon market officially launched in 2021 and local markets starting from 2013[7] - As of August 2022, the Shanghai carbon market had conducted 16 carbon quota pledge financing transactions totaling over 41 million yuan, while the Guangdong market had 31 transactions totaling 93 million yuan[8] - The financing scale of carbon finance is insufficient compared to the over 40 trillion yuan in green loans available in China[8] Group 2: Future Directions for Carbon Finance Development - The national carbon market is expected to cover 8 billion tons of carbon emissions by 2025, making it the largest carbon market globally[10] - The development of financing tools should be prioritized to enhance the role of the carbon market in promoting green finance[11] - It is estimated that achieving carbon neutrality in China may require over 100 trillion yuan in cumulative investment[15] Group 3: Policy Recommendations for Carbon Finance - Emphasizing carbon pledge financing as a key area, with a need to clarify the financing model and extend loan periods beyond the current compliance cycle[26] - Developing a comprehensive financing product system that includes carbon repurchase agreements and carbon bonds to provide both short-term and long-term financing[27] - Establishing a quota reserve and market adjustment mechanism to prevent extreme price fluctuations in the carbon market[30]

Report Date - October 10, 2025 [2] Research Team - Energy and Chemical Research Team includes researchers for different sectors such as crude oil, PTA/MEG, industrial silicon, polyolefins, pulp, and glass soda ash [3] Investment Rating - Not provided Core View - The national carbon market price is under pressure and fluctuating [4] Summary by Section 1. National Carbon Market Overview - In September, the national carbon market's highest price was 69.49 yuan/ton, the lowest was 57.72 yuan/ton, and the closing price dropped 16.35% from the last trading day of the previous month. The total trading volume was 32,700,907 tons, and the total turnover was 2,003,662,939.74 yuan. From January 1 to September 30, 2025, the trading volume was 98,098,802 tons, and the turnover was 6,797,362,256.82 yuan [7] - Fudan Carbon Index shows price expectations for October and December 2025 for national carbon emission allowances (CEA) and China Certified Emission Reductions (CCER), with some price indices showing declines [8] - From January to July 2025, thermal power generation decreased 1.30% year-on-year, cement production decreased 4.5% year-on-year, electrolytic aluminum production increased 2.54% year-on-year, pig iron production decreased 1.3% year-on-year, and crude steel production decreased 3.1% year-on-year [9][10] 2. Market News - At the 2025 China Carbon Market Conference, the Deputy Minister of Ecology and Environment introduced the progress and achievements of the national carbon market since 2024 and outlined future plans. The Minister reported on the significant achievements and challenges in climate change response and carbon peaking and neutrality work, highlighting issues like the resurgence of "two high" projects [11] 3. Data Summary - Not provided with specific summary information other than the mention of data sources and some chart references [13][17][22]

Core Points - The national carbon market opened at a price of 59.30 yuan/ton, with a closing price of 58.23 yuan/ton, reflecting a decrease of 0.97% from the previous day [1][2][5] Trading Volume and Revenue - The total trading volume for the day was 981,263 tons, with a total transaction value of 53,848,590.40 yuan [4][5] - The breakdown of trading included 681,263 tons in listed agreement transactions valued at 36,856,590.40 yuan and 300,000 tons in bulk agreement transactions valued at 16,992,000.00 yuan [4] Cumulative Data - From January 1 to October 10, 2025, the total trading volume in the national carbon market reached 99,320,065 tons, with a cumulative transaction value of 6,865,222,847.22 yuan [6] - As of October 10, 2025, the cumulative trading volume in the national carbon market was 729,588,729 tons, with a total transaction value of 49,897,949,950.73 yuan [6]

Core Insights - The national carbon trading market in China is designed to convert emission reduction pressure into internal motivation, encouraging various sectors to participate in the green and low-carbon transition [1][2] - The market has become the largest in the world in terms of greenhouse gas emissions coverage, effectively managing over 60% of the national carbon dioxide emissions by including industries such as steel, cement, and aluminum [1][2] - The carbon market is expected to enhance trading vitality, with a projected transaction volume of 18.114 billion yuan in 2024, marking the highest level since its inception in 2021 [2] Group 1 - The carbon trading market allows companies to sell excess carbon emission allowances and reinvest the proceeds into energy-saving projects, creating a positive feedback loop [1] - The market aims to promote technological advancement and industrial upgrades by limiting carbon emissions in key sectors [2] - The establishment of a voluntary greenhouse gas reduction trading market broadens participation across various industries, complementing the mandatory carbon trading market [2] Group 2 - The construction of the carbon market is a significant institutional innovation that requires effective management mechanisms, comprehensive regulations, and reliable trading systems [3] - The government has issued guidelines to enhance the carbon market's effectiveness and international influence, aiming for a more vibrant and impactful system [3] - There is a focus on expanding the market's coverage and improving the quality of emission data while combating fraudulent activities [3]

Core Viewpoint - The transition to a dual control system for carbon emissions is essential for achieving high-quality development and is a key task in the new round of ecological civilization reform in China [1] Challenges in Carbon Emission Dual Control System - The carbon emission accounting system is not yet fully developed, facing issues such as unclear statistical bases, inadequate methods, and a lack of timely data [2] - The evaluation and assessment mechanisms for carbon emissions are still underdeveloped, with insufficient accountability at local and industry levels [3] Strategies and Countermeasures for Carbon Emission Dual Control System - At the regional level, a dual control system for total carbon emissions and intensity should be implemented, focusing on accurate statistical accounting and dynamic updates of greenhouse gas emission factors [4] - At the industry level, there should be a focus on controlling fossil energy consumption and enhancing carbon emission monitoring in key sectors such as electricity, steel, and cement [5] - At the enterprise level, improving the quality of carbon emission data management and integrating it into a multi-tiered regulatory framework is crucial [6] - At the project level, establishing performance standards for carbon emissions and ensuring new projects meet advanced value levels is necessary [7] - At the product level, developing a carbon footprint labeling system and promoting low-carbon products through policy incentives and consumer education is essential [7]

Core Viewpoint - The issuance of the "Opinions on Promoting Green and Low-Carbon Transition and Strengthening National Carbon Market Construction" marks a significant step towards the comprehensive deepening and acceleration of the national carbon market, providing direction for institutional innovation and operational optimization, which is crucial for achieving carbon neutrality goals and enhancing China's carbon governance system [1] Group 1: Carbon Market Structure - The national carbon market consists of a mandatory carbon trading market and a voluntary emission reduction market, which are interconnected through quota clearing and offset mechanisms, each focusing on different aspects while complementing each other [2] - The carbon pricing mechanism is central to the carbon trading market policy, with quota allocation being a key factor influencing carbon pricing [2] Group 2: Quota Allocation and Management - Current quota allocation primarily uses a free distribution method based on carbon emission intensity and actual production volume, avoiding negative impacts on economic growth [2] - As more emission entities are included in the carbon market, the focus will gradually shift from controlling carbon intensity to controlling total carbon emissions, transitioning from free allocation to a mixed approach of "free + paid" allocation [2] Group 3: Monitoring and Verification - A robust monitoring, reporting, and verification (MRV) system is essential for accurately determining historical carbon emissions and their intensity, which supports the effective functioning of the carbon market [3] - Enhancing data quality through comprehensive regulation and automated monitoring is crucial for achieving national emission reduction targets [3] Group 4: Low-Carbon Transition Strategies - Companies can achieve green and low-carbon transformation through energy-saving renovations and clean energy alternatives, fostering a virtuous cycle of emission reduction, revenue generation, and reinvestment in research and development [4] - The development of low-carbon industry clusters, such as clean energy and carbon consulting, can drive industrial structure upgrades and promote economic transition towards a green high-end model [4]

Core Viewpoint - The issuance of the "Opinions on Promoting Green and Low-Carbon Transition and Strengthening National Carbon Market Construction" marks a significant step towards the comprehensive deepening and acceleration of the national carbon market, providing direction for institutional innovation and operational optimization, which is crucial for achieving carbon peak and carbon neutrality goals [1] Group 1: Carbon Market Structure - The national carbon trading market consists of a mandatory carbon trading market and a voluntary emission reduction market, which are interconnected through quota clearing and offset mechanisms, each with its own focus and independent operation [2] - The carbon pricing mechanism is central to the carbon trading market policy, with quota allocation being a key factor influencing carbon pricing [2] Group 2: Quota Allocation and Control - Currently, carbon quotas are primarily allocated for free, based on carbon emission intensity and actual production, to avoid limiting production and impacting economic growth [2] - As more carbon emitters are included in the market, the focus will gradually shift from controlling carbon intensity to controlling total carbon emissions, transitioning from free allocation to a combination of free and paid allocation methods [2] Group 3: Monitoring and Verification - A robust monitoring, reporting, and verification (MRV) system is essential for accurately determining historical carbon emissions and their changes over time, which supports the effective implementation of the carbon market [3] - Improving the quality of carbon emission data through comprehensive regulation and automated monitoring is a key direction for enhancing carbon accounting and reporting management [3] Group 4: Green Technology and Economic Transition - Companies can promote green technology research and application through low-carbon production methods, creating a virtuous cycle of emission reduction, revenue generation, and reinvestment in research [4] - The transition to low-carbon industries can be facilitated by eliminating outdated production capacity and fostering the development of clean energy, low-carbon equipment manufacturing, and carbon consulting [4] - The establishment of a comprehensive voluntary certification methodology for emission reduction projects will provide stronger momentum for achieving green and low-carbon goals in the future [4]

Core Insights - China has announced a new round of Nationally Determined Contributions (NDCs), aiming for a 7%-10% reduction in greenhouse gas emissions by 2035 compared to peak levels, with non-fossil energy consumption reaching over 30% of total energy consumption [6][7] - The country has established the world's largest carbon market, covering over 60% of carbon dioxide emissions after including steel, cement, and aluminum industries [6][8] Regulatory Voices - The Minister of Ecology and Environment, Huang Runqiu, stated that nearly 20 million high-emission vehicles will be eliminated during the 14th Five-Year Plan [4] - The Deputy Minister of Ecology and Environment, Li Gao, emphasized the acceleration of building a unified national carbon market and expanding its coverage [4] - The Deputy Governor of the People's Bank of China, Lu Lei, highlighted the importance of financial institutions in carbon accounting and sustainable information disclosure [4] Policy Updates - The National Development and Reform Commission (NDRC) has initiated revisions to the pricing methods for electricity transmission and distribution to adapt to the new requirements of a modern power system [6] - The NDRC and the National Energy Administration released implementation opinions to promote the integration of artificial intelligence in the energy sector [6] Industry Insights - The China Alcohol Industry ESG Rating Platform 2.0 has been updated to cover all categories of alcoholic beverages, expanding from three to over ten categories [8] - The Shanghai Cooperation Organization has launched a platform to support renewable energy projects, including a target of adding 10 million kilowatts of photovoltaic and wind power capacity [8] - A recent document from the Central Government emphasizes the urgency for companies to disclose ESG information, with 2,523 A-share listed companies having released their 2024 ESG reports, achieving a disclosure rate of 46.49% [8] Event Highlights - The 2025 China International Service Trade Fair showcased advancements in hydrogen energy applications and zero-carbon park developments, indicating a significant shift towards green transformation in China's economic development [10][11] - The fair also featured discussions on how technology, including AI and remote sensing, can drive the green transformation of industries and support climate governance [10]

Carbon Neutrality Policy - China announced a new round of Nationally Determined Contributions (NDC) at the UN Climate Change Summit on September 24, aiming for a 7%-10% reduction in greenhouse gas emissions by 2035 compared to peak levels, with non-fossil energy consumption exceeding 30% of total energy consumption [1][2] - The NDC outlines commitments to enhance forest carbon storage to over 24 billion cubic meters and to make new energy vehicles the mainstream of new vehicle sales, while establishing a national carbon trading market covering major high-emission industries [1][2] Carbon Market Development - The Ministry of Ecology and Environment emphasized the importance of a unified national carbon market, which has become a key mechanism for carbon pricing and achieving carbon neutrality goals [3] - The national carbon market has been operational for four years and is seen as a core driver for carbon peak and neutrality initiatives, with plans to enhance market vitality and expand coverage [3] Extreme Weather and Climate Adaptation - Extreme weather events, including high temperatures and heavy rainfall, are becoming the new normal, posing challenges for meteorological warnings and disaster prevention [4][5] - The need for a dual approach of "mitigation + adaptation" is highlighted, with recommendations for improving climate resilience, especially in rural areas [4][5] Corporate Practices - Chongqing plans to establish over two municipal-level battery recycling industrial bases by 2027, aiming for a 90% coverage rate of the battery recycling network across districts and counties [6] - The policy aims to optimize the layout of battery recycling projects and promote technological upgrades to address industry pain points [6] Local Developments - Hitachi Energy provided a 200 MVA electric arc furnace transformer to support Baosteel's decarbonization efforts, marking a significant advancement in the steel industry's green transition [7] - The transformer, the largest of its kind in China, utilizes next-generation technology to enhance operational efficiency and support the industry's shift towards low-carbon solutions [7]

Group 1 - Gansu Province is showcasing its achievements in climate change standards through the "National Standards Going to the Grassroots" initiative, highlighting how standards translate into tangible benefits for enterprises, such as reduced carbon emissions and increased revenues [1][15] - The ecological transformation in Gansu is evident, with improved vegetation due to effective implementation of national standards, reflecting a commitment to green development [2][15] - The Gansu Provincial Ecological Environment Science Design Institute emphasizes the importance of data quality in the carbon market, implementing mechanisms for regular data verification and management to ensure accurate carbon emissions reporting [4][15] Group 2 - Gansu's enterprises are adopting carbon emission standards as a driving force for green development, with many power plants facing financial losses due to outdated equipment, prompting a strict adherence to standards to mitigate losses [4][15] - The introduction of national standards, such as the "Carbon Emission Accounting and Reporting Requirements," serves as a foundation for companies like Lanzhou Jingshi Resource Environment Technology Co., which conducts carbon audits for local industries [5][15] - Traditional industries, such as Lanzhou Aluminum, are leveraging national standards to enhance their operations, resulting in significant reductions in carbon emissions and improved environmental conditions [6][7][9] Group 3 - The establishment of a modern industrial system in the non-ferrous metal sector is supported by national standards, with Lanzhou Aluminum investing 597 million yuan to implement carbon reduction and digital transformation projects [9][15] - Lanzhou Lishi Superalloy New Materials Co. has developed a digital energy and carbon management system, achieving a 10% reduction in carbon emissions through precise monitoring and optimization of energy consumption [11][15] Group 4 - Lanzhou Taiji Ion Technology Co. has made significant strides in the field of medical equipment by developing China's first carbon ion therapy system, breaking foreign monopolies and contributing to the localization of high-end medical devices [12][14] - The approval of a national standard for medical ion therapy systems is a strategic move for Gansu, aiming to secure a leading position in the industry and enhance the competitiveness of domestic products [14][15]