1. Report Industry Investment Rating No relevant information provided. 2. Core Views of the Report - The carbon market construction has entered an expansion and development period. In March 2025, the steel, cement, and aluminum smelting industries were included in the national carbon market, and in May 2025, four specific measures were proposed to strengthen carbon market construction [3]. - As of October 20, 2025, the cumulative trading volume of the national carbon market was 742 million tons, with a turnover of 50.461 billion yuan. Trading volume increases near the annual compliance period, and bulk trading is the main method. Carbon price declined in 2025, and the 2023 - year quota settlement was completed with a significant drop in emission intensity [3]. - Among the pilot carbon markets, Guangdong has the most regulated enterprises and is the most active in terms of trading volume. Except for Tianjin, carbon prices in other pilot areas have declined [3]. - Pilot carbon markets have innovative mechanisms. Hubei established the first provincial "electricity - carbon - finance" linkage market; Beijing refined quota repurchase principles; Chongqing realized the "carbon market - carbon offset - carbon inclusive" linkage mechanism [3][4]. - The Guangzhou Carbon Exchange promotes low - carbon development in the Guangdong - Hong Kong - Macao Greater Bay Area. It has a policy framework of government guidance, market operation, and public participation, develops 5 carbon financial products, tightens the proportion of free carbon quotas, and promotes the construction of the Greater Bay Area carbon market [4]. - The "Qin Carbon Star" in the Hengqin - Macao Cooperation Zone is an innovative product that encourages individuals to participate in low - carbon activities through carbon credits [4]. 3. Summary According to the Table of Contents 3.1 Carbon Market Construction: Entered the Expansion and Development Period - **National Carbon Market Expansion and Policy Issuance**: Since 2024, a series of carbon footprint management policies have been issued, and the national carbon market has expanded to cover steel, cement, and aluminum smelting industries. The government has set goals for the future expansion of the carbon market, aiming to basically cover major industrial emission industries by 2027 and build a complete carbon market by 2030 [6][7]. - **Revisions of Pilot Carbon Market Management Measures**: Starting from May 2024, relevant regulations required pilot areas to improve carbon market management systems. Each pilot area has successively formulated carbon emission and trading management measures [12][13]. - **Development Stages of the Carbon Market**: From 2011 - 2013, China launched carbon emission trading pilot projects; from 2014 - 2019, it established the overall framework of the national carbon market; since 2020, the national unified carbon market has been officially launched, and in March 2025, the market expanded for the first time [15]. 3.2 National + Pilot Carbon Markets: Guangdong is the Most Active - **Trading Volume and Turnover**: As of October 20, 2025, the cumulative trading volume of the national carbon market was 742 million tons, with a turnover of 50.461 billion yuan. Trading volume increases near the annual compliance period, and bulk trading is the main method [26]. - **Carbon Price**: In 2024, the carbon price rose, with an average of 91.82 yuan/ton. In 2025 (from January 1 to October 20), the carbon price declined, with an average of 76.73 yuan/ton [28][29]. - **Achievements**: The 2023 - year quota settlement was completed, and the carbon emission intensity decreased significantly. The carbon market has achieved good emission reduction results [33]. - **Pilot Areas**: In 2024, Guangdong had the most regulated enterprises. Except for Tianjin, carbon prices in other pilot areas declined, and Guangdong was the most active in terms of trading volume [38][40]. 3.3 Carbon Market Innovation Mechanisms: Stimulate Market Vitality - **Hubei's "Electricity - Carbon - Finance" Linkage Market**: In May 2024, relevant parties in Hubei signed a coordinated agreement. The background was that the carbon emissions of regulated enterprises were calculated without deducting the green electricity part. This mechanism allows regulated enterprises to obtain low - interest loans to buy green electricity, reducing compliance costs [47][50]. - **Beijing's Refined Quota Repurchase Principles**: In 2024, Beijing issued relevant management measures to regulate market supply and demand through measures such as quota repurchase, aiming to address carbon price fluctuations and supply - demand imbalances [52][53]. - **Chongqing's "Carbon Market - Carbon Offset - Carbon Inclusive" Linkage Mechanism**: In 2024, Chongqing established the "Carbon - Friendly" voluntary emission reduction system and platform. By May 2025, it had attracted over 3.7 million participants, with more than 30 low - carbon application scenarios for residents and over 208 registered enterprise users [47][56]. 3.4 Guangzhou Carbon Exchange: Promote Low - Carbon Development in the Greater Bay Area - **Development History**: The Guangzhou Carbon Exchange has a long - standing development history, from the initial establishment to the launch of various platforms and business expansions [59]. - **Policy Framework**: It follows a policy framework of government guidance, market operation, and public participation, and has established a multi - industry quota trading system and innovative carbon financial tools [60]. - **Transaction Volume and Carbon Price**: The trading volume and carbon price in the Guangdong carbon market have been affected by factors such as the postponement of compliance time and the expansion of the national carbon market [67][71]. - **Carbon Financial Products**: The Guangzhou Carbon Exchange has developed 5 carbon financial products, with carbon quota repurchase having the highest trading volume and turnover [72][73]. - **Promotion of the Greater Bay Area Carbon Market**: The Guangzhou Carbon Exchange actively promotes the construction of the Greater Bay Area carbon market, conducts cooperation and exchanges with Hong Kong and Macao, and participates in relevant research projects [76][77]. - **Carbon Inclusive Mechanism**: The "Qin Carbon Star" in the Hengqin - Macao Cooperation Zone encourages individuals to participate in low - carbon activities through carbon credits and has attracted the participation of many low - carbon businesses [81][83].

Core Insights - The article discusses the development and significance of China's carbon market, which has become the largest in the world, covering over 60% of the country's carbon emissions [2][24] - It highlights the transition from pilot programs in select cities to a national market, emphasizing the importance of regulatory frameworks and technological integration [4][7][10] Summary by Sections Development of Carbon Market - China initiated its carbon market with pilot programs in 2011 in cities like Beijing and Shanghai, which later provided valuable insights for the national market [4][5] - The national carbon market officially launched on July 16, 2021, initially including 2,162 power generation companies, covering approximately 4.5 billion tons of carbon emissions [5][7] Market Expansion and Performance - By 2025, the market is expected to expand to include steel, cement, and aluminum industries, adding around 2.5 billion tons of emissions to its coverage [7] - As of August 2025, the carbon market has traded nearly 700 million tons of allowances, with a transaction value exceeding 47.4 billion [8][10] Pricing and Impact on Emissions - The average carbon price in 2024 has increased significantly compared to 2021, with reduced volatility indicating growing confidence in the market [10] - Companies within the carbon market have shown a notable reduction in emission intensity, with their carbon emissions per unit of GDP being lower than non-participating firms [10] Future Goals and Regulatory Framework - The central government has set clear targets for the carbon market, aiming for comprehensive coverage of major industrial sectors by 2027 and a mixed allocation system by 2030 [13][14] - The transition from intensity-based allocation to total emissions control is planned, with a gradual increase in auctioned allowances [16][17] Challenges and Areas for Improvement - Current issues include excessive administrative intervention in allowance distribution, lack of financial instruments like carbon futures, and inconsistent data standards across regions [21][22] - Effective regulation requires collaboration among various departments to ensure funds are directed towards green initiatives and to prevent market manipulation [22] Future Developments - Plans for introducing carbon futures and establishing market makers are in place, with potential for alignment with the EU carbon market [24] - The article emphasizes the importance of understanding and participating in the carbon market for all stakeholders, as it plays a crucial role in achieving carbon neutrality goals [25][27]

Core Viewpoint - The article emphasizes the significant transformation in global climate governance, highlighting the importance of reducing greenhouse gas emissions and promoting green low-carbon transitions as a universal consensus. China's commitment to achieving its "dual carbon" goals showcases its responsibility as a major power, with the carbon market playing a crucial role in ecological civilization construction [1]. Summary by Sections Development of China's Carbon Market - China's carbon market has evolved from local pilot programs to a national unified market, covering 60% of carbon emissions and becoming the largest carbon market globally. The recent issuance of the "Opinions on Promoting Green Low-Carbon Transition and Strengthening National Carbon Market Construction" marks a new phase of comprehensive deepening in carbon market development [1][2]. Market Achievements and Trends - As of August 22, 2025, the cumulative trading volume of carbon emission allowances reached 680 million tons, with a total transaction value exceeding 47.41 billion yuan. The market has shown stability, with a nearly 100% compliance rate for allowance submissions in 2024. The market is set to expand in 2025 to include steel, cement, and aluminum industries, which together account for approximately 2.5 billion tons of CO2 emissions [3][4]. Policy Innovations and Institutional Breakthroughs - The "Opinions" provide a systematic framework for the national carbon market, outlining medium- and long-term development goals. By 2027, the market aims to cover major industrial sectors, and by 2030, it will establish a mixed allocation system combining free and paid distribution of allowances [6][7]. Market Mechanisms and Financial Innovations - The carbon market is transitioning from intensity-based allocation to total control, with a phased approach to implement total control by 2030. The introduction of a "mandatory + voluntary" dual-track market system aims to enhance flexibility and inclusivity, encouraging broader participation in emission reduction efforts [8][9]. Challenges and Opportunities - Despite significant progress, challenges remain, including the predominance of free allocation methods and the need for improved market stability mechanisms. However, the potential for financial innovation, such as carbon pledges and repurchase policies, presents opportunities for enhancing market vitality and developing new carbon financial products [10][13]. Future Directions - The article suggests that future efforts should focus on establishing a comprehensive regulatory framework, enhancing market mechanisms, and fostering international cooperation to strengthen China's position in global carbon governance. This includes developing carbon financial products and improving data governance to support market efficiency [14][15][16].

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 recent issuance of the "Opinions on Promoting Green and Low-Carbon Transition and Strengthening National Carbon Market Construction" marks a significant step in the development of China's carbon market, establishing a clear roadmap and enhancing its strategic position in national climate governance [1] Carbon Market Development - The national carbon market is identified as a crucial mechanism for achieving the "dual carbon" goals, with an emphasis on expanding industry coverage, improving quota allocation, and enhancing market mechanisms [1] - The document outlines a transition from intensity-based quota allocation to total control, prioritizing industries with relatively stable carbon emissions for total quota control by 2027 [2][3] Quota Allocation System - The quota allocation system is central to the carbon trading market, and its effectiveness directly impacts market fairness and efficiency [2] - The current system uses intensity-based allocation, which, while reducing the burden on companies, lacks sufficient constraints for carbon reduction [2] - The shift to total control aims to balance emission reduction targets with economic costs and industry differences [3] Information Disclosure and Transparency - The restructuring of carbon emission accounting and information disclosure is essential for connecting mandatory and voluntary reduction markets, addressing data quality issues, and enhancing carbon price signaling [1][6] - The "Opinions" propose improvements to the information disclosure system, requiring timely public reporting of emissions, compliance, and trading information from key market participants [7] - Current limitations in data disclosure and standardization hinder comparability and transparency, which could affect market efficiency [6][7] Financial Market Opportunities - The introduction of financial institutions and non-compliance entities into the carbon market is expected to enhance liquidity and pricing efficiency through diverse financial products and risk management tools [8][10] - The "Opinions" encourage the development of green financial products related to carbon emissions, aiming to establish a comprehensive carbon pricing mechanism [8][9] - The emphasis on cautious development highlights the importance of risk management in the expansion of financial instruments like futures and options [10]

Group 1 - The Shanghai carbon market has cumulatively traded 265 million tons of carbon emissions since its inception in 2013, with a total transaction value of 5.544 billion yuan, making it the only pilot region in China to achieve 100% compliance for twelve consecutive years [1] - Shanghai has implemented an "electricity-carbon" collaborative mechanism, with green electricity transactions exceeding 8 billion kilowatt-hours from January to September 2025, and has introduced incentives for outstanding companies, offering free quota rewards of 0.3% or 0.5% [1] - The carbon market in Shanghai covers over 400 enterprises across 28 industries, including steel, chemicals, automotive, aviation, and water transport, with a total carbon quota of approximately 100 million tons [1] Group 2 - Shanghai has organized 16 sessions of paid quota auctions by August 2025, with a total of 26.68 million tons of quotas auctioned and a total transaction value of 628 million yuan [2] - The city is promoting carbon financial innovations, forming a "carbon spot + carbon forward" linkage model, and has developed various financial products such as carbon funds, carbon trusts, and carbon insurance [2] - A carbon inclusive management platform has been established, attracting over 200,000 citizens to open accounts and involving nearly 500 distributed photovoltaic projects, resulting in the issuance of over 100,000 tons of emission reductions [2] Group 3 - Future plans for the Shanghai carbon market include enhancing operational capabilities and focusing on three major actions: improving the carbon trading market, incentivizing voluntary greenhouse gas reductions, and enhancing innovation capabilities [3] - The city has outlined 16 key reform tasks, including establishing quota management systems, improving greenhouse gas reporting, and enriching carbon financial products and services [3] - Shanghai aims to stimulate market vitality by expanding market participants, integrating carbon assets into financial institutions' collateral, and developing a carbon account system based on corporate carbon performance [3]

Core Viewpoint - The issuance of the "Opinions on Promoting Green and Low-Carbon Transition and Strengthening National Carbon Market Construction" marks the first central document in China's carbon market sector, aiming to provide a more comprehensive institutional guarantee and stronger capability support for the national carbon market construction [1] Group 1: Carbon Market Development - The national carbon market consists of a mandatory carbon emissions trading market and a voluntary carbon emissions trading market, which operate independently but are interconnected through a quota clearing mechanism [2] - As of August 22, 2023, the mandatory carbon market has seen a cumulative transaction volume exceeding 680 million tons, with a transaction value of 47.41 billion yuan, while the voluntary carbon market has recorded a cumulative transaction of 2.49 million tons, valued at 210 million yuan [2] - The "Opinions" outline a timeline and roadmap for the development of the national carbon market, aiming for full coverage of key emission sectors by 2027 and a transparent voluntary carbon market by 2030 [3] Group 2: Quota Management and Distribution - The establishment of a clear and transparent carbon emissions quota management system is essential for the healthy operation of the national carbon trading market [4] - The quota distribution system will balance emission reduction targets with economic costs and will gradually implement total quota control for stable emission industries by 2027 [5] Group 3: Voluntary Carbon Market and Data Quality - The development of the national voluntary carbon emissions trading market is emphasized, focusing on key areas for carbon peak and neutrality, and establishing a methodology system for voluntary reduction projects [6] - Continuous enhancement of data quality management is crucial, with measures including monthly verification of key emission data and the use of big data and blockchain for risk monitoring [6] Group 4: Market Mechanism and Financial Integration - The construction of the national carbon market is a complex system project that requires a problem-oriented and goal-oriented approach, enhancing the reliability of data and inclusivity of industries [7] - The ecological environment department plans to explore green financial products related to carbon emissions rights and certified voluntary reduction amounts, which will help improve financing channels for key emission units [8] Group 5: Management and Compliance - Strict regulation of carbon emissions verification and enhancement of the responsibility of key emission units for carbon accounting and reporting are necessary [9] - Comprehensive supervision of carbon emissions data quality will be enforced to combat fraudulent activities [9]

Core Viewpoint - China's carbon market is entering a critical upgrade phase, with the release of the first central document outlining the long-term development roadmap and tasks for the national carbon market [2] Group 1: Policy Framework - The document emphasizes the dual-track carbon market system of "mandatory reduction + voluntary reduction" to support green transformation and climate change response [2] - It sets a direction for a "more effective, more vibrant, and more internationally influential" national carbon market, which is crucial for achieving carbon peak and carbon neutrality goals [2] Group 2: Institutional Foundation - The document focuses on enhancing the effectiveness of the carbon market through expanded coverage, improved quota management, regulatory innovation, and strengthened rule coordination [4] - By 2027, the national carbon trading market aims to cover major industrial sectors, while the voluntary reduction market will achieve full coverage in key areas [4] - A transparent quota mechanism will be established, transitioning from intensity control to total volume control for stable carbon emission sectors by 2027 [4] Group 3: Regulatory Innovation - The document proposes a national coordination approach to avoid the disorderly development of local carbon markets, enhancing operational efficiency [5] - It emphasizes policy coordination between the national carbon market and other green mechanisms, facilitating a comprehensive green low-carbon policy system [5] Group 4: Market Vitality - To address the current limitations of trading participants and products, the document aims to stimulate market dynamics by diversifying products, expanding participants, and strengthening regulation [7] - Financial institutions are encouraged to develop green financial products related to carbon emissions, enhancing corporate carbon asset management [7] - The introduction of non-compliance entities and eligible individuals into the carbon market is expected to attract more social capital into the green sector [8] Group 5: International Influence - China's carbon market, launched in 2021, has become the largest in terms of greenhouse gas emissions coverage, playing a significant role in global climate governance [10] - The document outlines tasks to enhance the international recognition of China's voluntary emission reduction credits, aiding domestic enterprises in navigating international green trade barriers [10] - It emphasizes participation in the formulation of international carbon market mechanisms and strengthening international cooperation in carbon market standards and data recognition [10][11]

Overall Requirements - The document emphasizes the importance of establishing a unified national carbon market to effectively address climate change while promoting economic development [2] - The main goals include achieving comprehensive coverage of major industrial sectors by 2027 and establishing a robust carbon pricing mechanism by 2030 [2] National Carbon Emission Trading Market - The plan includes expanding the coverage of the national carbon emission trading market based on industry development, pollution reduction contributions, and carbon emission characteristics [3] - A transparent carbon emission quota management system will be established, transitioning from intensity control to total volume control by 2027 [3] - The document outlines the need for a balance between carbon emission control and energy security, as well as the gradual increase of paid quota distribution [3] Voluntary Greenhouse Gas Reduction Trading Market - The establishment of a comprehensive methodology for voluntary reduction projects is prioritized, focusing on areas with significant sustainable development benefits [5] - The document encourages the use of certified voluntary reduction amounts in various sectors, including government and enterprises, to offset carbon emissions [5] Enhancing Market Vitality - Financial institutions are encouraged to develop green financial products related to carbon emissions, enhancing support for greenhouse gas reduction [6] - The introduction of new trading participants, including individuals and financial institutions, is planned to diversify market engagement [6] - Strengthening market regulation and monitoring to prevent market manipulation and ensure fair trading practices is emphasized [6] Capacity Building for Carbon Market - A management system that aligns with the development stages of the national carbon market will be established to enhance oversight and operational efficiency [7] - The document stresses the importance of accurate carbon emission accounting and reporting, with a focus on developing national standards [7] - It highlights the need for rigorous verification processes for carbon emissions to ensure the credibility of reported data [7] Organizational Implementation Support - Local governments are tasked with leading the implementation of the carbon market initiatives, ensuring compliance and effective management of emission quotas [9] - The document calls for the development of legal frameworks to support carbon market operations and enhance regulatory enforcement [10] - International cooperation and dialogue on carbon market mechanisms are encouraged to align with global climate change efforts [10]

Core Viewpoint - The recently published "Opinions on Promoting Green and Low-Carbon Transition and Strengthening National Carbon Market Construction" marks the first central document in China's carbon market sector, outlining a roadmap for the long-term development of the national carbon market [1] Group 1: National Carbon Market Development - The document provides a clear roadmap for building a more effective, vibrant, and internationally influential carbon market, detailing the requirements for establishing a national voluntary greenhouse gas emission reduction trading market [1] - The establishment of both the national carbon emission trading market (mandatory carbon market) and the national voluntary greenhouse gas emission reduction trading market (voluntary carbon market) has been achieved, creating a comprehensive national carbon market system [1][2] - As of August 22, 2025, the cumulative transaction volume of carbon emission allowances (CEA) in the national carbon market reached 680 million tons, with a total transaction value of 47.41 billion yuan [2] Group 2: Regulatory Framework and Market Expansion - Over 30 regulations and technical standards have been developed, forming a multi-level and relatively complete regulatory framework for the carbon market [2] - The coverage of the mandatory carbon market is set to expand, with the steel, cement, and aluminum smelting industries being included this year, effectively managing over 60% of national carbon emissions [2] - The carbon allowance allocation method will transition from free allocation to a combination of free and paid allocation, gradually increasing the proportion of paid allocation [2] Group 3: Financial Instruments and Market Vitality - The introduction of carbon pledge and carbon repurchase systems aims to enhance financing channels for key emission units, activate carbon assets, and reduce financing costs [3] - Financial institutions will be encouraged to participate in the national carbon market transactions, with the potential inclusion of non-compliance entities and eligible individuals in the voluntary carbon market [3] - The Ministry of Ecology and Environment will continue to strengthen the institutional foundation for carbon market construction, aiming to build a more effective, vibrant, and internationally influential national carbon market [3]