Core Viewpoint - The carbon market is a crucial policy tool for addressing climate change and promoting green transformation in China, with significant growth and participation observed in recent years [1][3]. Market Overview - The national carbon market has been operational for four years, covering over 60% of China's carbon dioxide emissions, with a cumulative trading volume of 728 million tons and a transaction value of 49.83 billion yuan as of September 30, 2025 [1]. - The number of key emission units that have opened trading accounts has reached 1,277 as of August 2025, indicating an increase in market participants [3]. Market Changes and Opportunities - The expansion of the carbon market to include steel, aluminum smelting, and building materials has diversified market participants, enhancing trading opportunities and market development [3][5]. - The trading volume in the carbon market has increased by 40% compared to the same period last year, with significant growth in transaction numbers and active participants [5]. Local Market Dynamics - Local carbon markets, such as Shanghai's, are expected to play a supportive role in achieving local "dual carbon" goals while adapting to the national carbon market's expansion [6][7]. - Shanghai's carbon market has over 2,200 registered entities, including around 400 regulated enterprises, contributing to its trading activity [7]. Future Plans and Mechanisms - The Shanghai Environmental Energy Exchange is focusing on expanding industry coverage, researching paid allocation mechanisms, and enhancing market participant diversity [10][11]. - The transition to a "paid allocation + total control" model is anticipated during the "14th Five-Year Plan" period, with an emphasis on policy coordination to achieve national carbon reduction targets [12][13].

Core Viewpoint - The national carbon market in China has become a crucial policy tool for addressing climate change and promoting green transformation, with significant growth in trading volume and market participation since its inception four years ago [1][2]. Market Development - The national carbon market has achieved a cumulative trading volume of 728 million tons and a total transaction value of 49.83 billion yuan as of September 30, 2025 [1]. - The trading volume has increased by 40% compared to the same period last year, indicating a rise in market activity and participant engagement [3]. - The number of trading accounts opened by newly included key emission units reached 1,277 by the end of August 2025, expanding the market's participant base [2]. Industry Inclusion and Impact - The carbon market has expanded to include four major industries: power generation, steel, aluminum smelting, and building materials, enhancing market diversity and trading opportunities [2][3]. - The structural changes in market participants have led to increased trading opportunities due to varying judgments on market transactions among different enterprises [2]. Local Market Role - Local carbon markets, such as Shanghai's, are expected to continue supporting local "dual carbon" goals and green development, even as they face challenges from the national market's expansion [6]. - Shanghai's carbon market has over 2,200 registered entities, including around 400 regulated enterprises and numerous investment and financial institutions, contributing to its trading volume and activity [5]. Future Directions - The carbon market is set to transition towards a model of "paid allocation + total control" during the 14th Five-Year Plan, with a focus on policy coordination and the establishment of a total control mechanism for carbon emissions [11]. - Shanghai plans to further diversify its market participants and explore innovative environmental rights, including water rights and pollution rights trading, to enhance market functionality [7][10].