China's carbon market to introduce absolute emissions caps from 2027

China will tighten its carbon trading market with absolute emissions caps starting in 2027. This change will first apply to industries with stable carbon emissions. By 2030, a nationwide carbon trading scheme will be established that combines both free and paid carbon emissions allowances.

Currently, allowances are based on carbon intensity benchmarks. Companies that exceed their quota must buy additional allowances. The expanded trading scheme will include major carbon-emitting sectors, though specific industries have not been detailed. Analysts suggest that chemicals, papermaking, and domestic aviation may be included.