At a 2026 carbon-market stakeholder workshop, the Ministry of Ecology and
Environment said next-phase work will focus on expanding domestic sector
coverage and tightening data-quality standards, while accelerating
implementation of global carbon-market rules and international linkage. Lu
Shize, deputy director of the ministry's Department of Climate Change, said:
"Next year we will begin preparatory work for a second-round expansion;
high-emitting sectors must be brought under market control." The expansion would
bring about 75–80% of CO2 emissions under market management. Lei Yu, chief
engineer at the ministry's Environmental Planning Institute, said China’s carbon
market has passed the start-up phase and should shift quota management from
intensity-based controls to an absolute cap, starting from fully free allocation
and exploring paid allocation with a gradual increase in the paid share.
