China’s carbon market hits record 235Mt trading volume as aluminium joins the fold

China’s national carbon market is scaling up rapidly, with annual trading volume reaching a record 235 million tonnes of carbon dioxide equivalent in 2025, up 24.36 per cent year-on-year, according to a report released at the China Carbon Market Conference 2026 in Wuhan.

By the end of August 2026, cumulative trading volume since the market’s launch had reached 961 million tonnes of CO₂ equivalent, while total turnover stood at RMB 65.7 billion (about USD 9.71 billion).

A key development for the aluminium industry is the expansion of China’s national carbon market to include aluminium smelting, alongside power generation, steel and cement.

As of 2026, 3,680 key emitters across these four sectors had been included in the market, collectively covering around 8.3 billion tonnes of CO₂ emissions, or more than 65 per cent of China’s national emissions, Xinhua reported.

The expansion began in 2025, when China broadened the market’s industry coverage for the first time since its launch.

For aluminium producers, inclusion places the sector within China’s expanding carbon trading framework, making emissions management increasingly relevant to the country's vast smelting industry.

Trading activity continues to accelerate

The national carbon market operated for 243 trading days in 2025, recording transaction value of RMB 14.63 billion alongside its record annual trading volume.

China launched its national carbon emissions trading market in July 2021. Xinhua described it as the world's largest carbon market based on the total volume of greenhouse gas emissions traded.

The government is also preparing to widen participation further, with petrochemicals, chemicals, papermaking and civil aviation among the sectors being considered for inclusion.

Voluntary carbon market gains ground

China’s voluntary greenhouse gas emissions reduction market is expanding alongside the mandatory carbon trading system.

By the end of August 2026, 41 projects had been registered, generating cumulative trading volume of 21.71 million tonnes and transaction value of RMB 1.74 billion.

In March, a mangrove restoration project in Xiapu County, Fujian Province, became the first mangrove restoration project to complete registration under the voluntary emissions reduction market.

China targets broader carbon market coverage by 2027

Speaking at the Wuhan conference, China’s Minister of Ecology and Environment Huang Runqiu said the country would further strengthen the carbon market’s role in emissions reduction, diversify trading products and market participants, and expand international exchanges and cooperation.

China aims to bring all major industrial sectors into its carbon trading market by 2027, while its voluntary emissions reduction market is expected to expand to all key fields.

The broader policy direction is aligned with China’s stated targets of peaking carbon emissions before 2030 and achieving carbon neutrality before 2060.