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China · Emissions trading system

China National Emissions Trading System

China's national ETS began trading on 16 July 2021 with the power sector and now regulates more than 3,300 companies in power, steel, cement and aluminium. It operates under State Council Interim Regulations in force since 1 May 2024 and allocates allowances on an output basis rather than under an absolute cap.

In forcesince 16 Jul 2021Verified 4 Oct 2026

The Interim Regulations on the Administration of Carbon Emission Trading were adopted at a State Council executive meeting on 5 January 2024, signed as Order No. 775 on 25 January 2024 and took effect on 1 May 2024, giving the market a State Council-level legal basis that builds on the 2021 trial measures of the Ministry of Ecology and Environment (MEE). Covered companies must surrender allowances against verified emissions; allocation is based on production output.

Trading opened on the Shanghai Environment and Energy Exchange on 16 July 2021 with more than 2,200 power companies. Under a work plan approved by the State Council and released by the MEE on 20 March 2025, cement, steel and aluminium were added, with the first compliance for 2024 emissions due by the end of 2025, bringing in about 1,500 more companies.

Legal journey

From proposal to operation

  1. Rulemaking

    Ministry of Ecology and Environment issues trial ETS measures, effective 1 February 2021

    mee.gov.cnOfficial
  2. In force

    National ETS trading opens on the Shanghai exchange with over 2,200 power companies

    icapcarbonaction.com
  3. Milestone

    State Council Interim Regulations on carbon emission trading take effect (Order No. 775)

    gov.cnOfficial
  4. Milestone

    Work plan adds cement, steel and aluminium to the national ETS

    icapcarbonaction.com
  5. Milestone

    Central guidelines set path to absolute caps from 2027 and auctioning by 2030

    icapcarbonaction.com

Each milestone links to the page it was checked against. Dates are given only to the precision the source supports.

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