Carbon prices in China rose amid the addition of three sectors to the market

Carbon prices in China have risen sharply after the government announced a plan covering the steel, aluminum, and cement sectors, according to Bloomberg.

Beijing recently approved a policy document to expand the national mandatory carbon quota market through a test system by the end of the year.

Against the backdrop of this news, carbon quota prices rose by more than 8% to 66.86 yuan per tonne, according to the exchange. Pressure to secure them by the end of 2025 helped offset a significant drop to a two-year low in October due to an excess of carbon credits.

The Ministry of Ecology and Environment has promised to reduce quotas annually. The agency has also begun preparations to include the chemical, petrochemical, aviation, and paper sectors in the national carbon market in order to cover all major industrial polluters by 2027.

The new allocation rules for 2025 are stricter than previously anticipated, notes consulting firm ClearBlue Markets, which means that more companies will face a shortage of allowances. In addition to 2,500 companies in the energy sector, another 1,300 companies from three industries have been included in the national ETS, which will increase its coverage of emissions from 5 to approximately 8 billion tons.

It should be recalled that on the eve of the COP30 climate summit, the European Union and China agreed to join Brazil in a coalition aimed at improving cooperation in carbon markets. Its creation was announced on November 7 in Belém. The coalition also includes the United Kingdom, Canada, Chile, Armenia, Zambia, France, Germany, Mexico, and Rwanda. The initiative aims to bring countries together to harmonize practices and standards in carbon markets.