China’s carbon market has seen a significant surge in prices, with carbon permits or credits reaching an all-time high as industries prepare for a looming compliance deadline.
On Monday, emissions permits rose 2.5% to 103.49 yuan ($14.62) per ton. This is the highest since the national market’s launch in mid-2021, as reported by the National Carbon Trading Agency. This increase represents a 35% rise in carbon prices so far this year, fueled by recent government actions aimed at tightening regulations and driving greater activity within the market.

Compliance Countdown: Fueling the Price Surge
China’s carbon market includes a compliance or mandatory Emission Trading System (ETS) and a voluntary greenhouse gas (GHG) emissions reduction market, known as the China Certified Emission Reduction (CCER) scheme, which was revamped earlier this year.
China’s ETS plans to include 8 major emitting sectors—power generation, steel, building materials, non-ferrous metals, petrochemicals, chemicals, paper, and civil aviation—representing 75% of China’s total emissions.
Since its launch, the ETS has become the world’s largest emissions trading platform. It covers about 5.1 billion tons of carbon dioxide equivalent or 40% of China’s total emissions.
The spike in prices comes as China’s power utilities face a year-end deadline to secure enough carbon allowances, also called carbon credits, to offset their 2023 emissions.
The existing ETS system allocates a certain amount of free permits to companies. However, if their emissions exceed these allowances, they must purchase additional credits on the market. The impending deadline has intensified demand for these permits, contributing to the price surge.
This year, the Chinese government introduced stricter regulations to further develop the national carbon market. The goal is to increase the pressure on polluting industries to curb their emissions. These changes could spur a more aggressive transition toward lower-carbon operations among industrial players.
Expanding the Scope of Regulation
The latest regulatory shift broadens the scope of China’s carbon market, which currently covers around 2,200 power utilities that together account for about 4.5 billion tons of carbon dioxide emissions annually. New rules will extend emissions obligations to other high-polluting sectors starting next year, including:
- steel,
- aluminum, and
- cement production.
Moreover, fossil-fuel power generators are facing tighter emissions caps, which further pushes them toward either reducing their carbon output or purchasing more permits to comply with regulatory requirements.
These measures align with China’s broader climate commitments to peak carbon emissions before 2030 and achieve carbon neutrality by 2060. By intensifying regulations, China aims to use its carbon market to steer industries towards cleaner energy and lower emissions.
Strategic Implications for Industries
As the market adapts to the stricter compliance requirements, industries are being prompted to reassess their carbon strategies. Companies that exceed their allotted emissions must factor in the rising cost of permits. This, in turn, could put pressure on profit margins, especially for high-emitting sectors like power generation, steel, and cement.
To mitigate costs, these industries may accelerate their investments in clean energy solutions, such as renewable power sources or efficiency upgrades, to reduce their reliance on carbon credits.
The inclusion of new industrial sectors into the carbon trading scheme is expected to increase market liquidity, as the demand for permits will expand beyond power utilities to other key players. This change could also drive more transparency and efficiency in China’s carbon pricing mechanism as more companies participate.
What’s Next for China’s Carbon Trading?
With China’s national carbon market still in its early stages, the recent surge in prices represents a crucial phase in its development. Analysts believe that tightening regulations will be instrumental in enhancing the market’s effectiveness as a tool for reducing emissions. The Chinese government’s efforts to refine and expand the market are likely to continue, as it aims to strike a balance between economic growth and climate goals.
If China can successfully integrate more industries into its carbon trading system and continue to enforce stringent emissions standards, the national market could become one of the most significant in the world. This would help the world’s largest greenhouse gas emitter move closer to its climate targets. It could also provide valuable lessons for other countries seeking to implement or expand their own carbon markets.
The response from industrial players in the coming months—particularly as they navigate the end-of-year compliance deadline—will serve as an early indicator of the market’s long-term impact on China’s decarbonization efforts.
The post China Carbon Prices Reach All-Time High At $14.62 Per Ton appeared first on Carbon Credits.
Carbon Footprint
The Strategic Case for Nature-Based Carbon Investments
Nature-based carbon investments deserve consideration when they address a specific business dependency and produce outcomes you can measure. Imagine Moonbucks, a global coffee roaster planning next season’s espresso blend. It is considering natural Grade 4 coffee from Jimma, in southwestern Oromia, Ethiopia. Its sourcing decisions affect the roasting schedule and the cash tied up in coffee purchases. Moonbucks needs to understand which measures could protect that supply, what they would cost and how it would judge the results.
1. Define the sourcing problem before choosing a project
Moonbucks needs a dependable component for its espresso blend. Its procurement team wants continuity of volume and an agreed cup profile. Replacing a shipment at short notice could require new sample approval and changes to the blend, and given the schedules for cultivation, processing, and freight delivery, is practically impossible. Moonbucks needs to get this right, and its initial concern is inconsistent deliveries. It commissions an assessment of the supplying farms and post-harvest chain. The questions cover land condition, harvest availability and whether drying or storage problems are affecting saleable lots.
This distinction changes the investment brief. A tree-planting proposal cannot be assumed to fix drying problems. Better storage cannot restore eroded land. The team must establish which problem exists before selecting the response.
CCC’s guide to finding nature-based solutions in your supply chain explains where to look. Here, the next task is to turn a broad concern into a testable proposal.
2. Develop nature-based carbon investments around the actual supply chain
The assessment would trace Moonbucks’ purchases back through the exporter and supplying producer groups. Which farms supply the contracted lots? Who controls land-management decisions? How long does the buyer expect to maintain the purchasing relationship?
Furthermore, Jimma natural Grade 4 cannot be treated as interchangeable with every Ethiopian coffee. Moonbucks would need to test any substitute against its own blend and quality requirements.
Suppose Moonbucks’ assessment identifies an opportunity to maintain shade trees and restore vegetation along exposed streambanks. The IPCC describes agroforestry as a way to store carbon in vegetation and soil, with potential benefits for erosion control and water quality.1 Moonbucks would need local advice on species, growing conditions and maintenance before deciding how these measures fit its sourcing plan.
The proposal now has a defined sourcing connection and a candidate intervention. The next steps are to test its effect on production, assess carbon eligibility and build the financial case.
3. Compare the proposal with other ways to protect supply
WBCSD’s Nature-based Solutions Blueprint recommends comparing nature-based options with other responses across their benefits and costs.2 For Moonbucks, that means evaluating the landscape proposal alongside drying improvements, storage controls and alternative sourcing arrangements.
The product’s natural-process designation matters. Moonbucks should examine the drying and dry-milling chain alongside land conditions. Its team would check storage practices, contamination risks and incoming-lot quality to see whether problems arise before or after the coffee leaves the farms.
The revised proposal might combine land stewardship with separate post-harvest controls. Each component needs its own purpose and budget. A sustainability label should not obscure which activity is expected to solve which problem.
The project develops as the evidence improves. Its scope should follow the diagnosis rather than preserve the first idea unchanged.
4. Establish what the carbon outcome could count toward
Moonbucks’ sustainability team now tests the proposed carbon case separately from the sourcing case. Is the objective a measurable change in Moonbucks’ value-chain emissions, verified credits for separate voluntary use, or distinct outcomes under carefully defined arrangements?
Scope 3 covers value-chain emissions. A purchasing relationship alone does not prove that a farm intervention can be included in Moonbucks’ inventory. The team needs an applicable accounting method, defensible boundaries and evidence supporting attribution.
SBTi’s FLAG Guidance (forest, land and agriculture), version 1.2, says purchased credits used as offsets cannot meet near-term FLAG or energy and industry targets. Eligible land-based removals are subject to accounting requirements.3 Moonbucks needs to test its proposal against those rules before including an outcome in its targets.
For Moonbucks’ Jimma proposal, maintaining existing trees and establishing new vegetation could involve different carbon questions. Specialists must examine the baseline and additionality, meaning what changes because the project proceeds. They must also assess measurement and the risk that stored carbon is lost. CCC’s MRV and additionality article introduces those tests.
Until that work is complete, Moonbucks should not budget an assumed Scope 3 reduction or credit-sale receipt. Direct emissions reductions remain the priority.
5. Build a financial case that survives weaker assumptions
Moonbucks’ finance team would now build a multi-year budget. UNEP’s State of Finance for Nature 2023 compares current finance with the investment needed to meet climate, biodiversity and land-restoration goals.4 The company would cost its proposed activities, farmer participation and ongoing monitoring. Verification, where required, is a separate expense. Maintenance and responsibility for replacing failed plantings must remain visible after the initial establishment budget ends.
Operational benefits need equally careful treatment. If fewer rejected lots reduce emergency purchasing, count that saving once. Do not add “supply resilience” as another financial benefit when it represents the same avoided cost.
Moonbucks should compare a base case with slower benefits, higher implementation costs and no carbon revenue. It should also distinguish production outcomes from quality and shipment outcomes. A single good harvest would not prove that the landscape intervention caused better delivery performance.
A project can remain worth funding even when its carbon case needs more work. That decision must rest on the operational evidence and the company’s objectives, without unsupported environmental claims.
6. Fund a pilot with a clear expansion decision
Moonbucks’ first approval would fund a bounded pilot, rather than commit the entire sourcing program. Before spending, Moonbucks would agree on participating farms, responsibilities and the evidence needed at review.
Its scorecard could track farmer participation, implementation costs and plant survival, alongside accepted coffee volumes and lot-quality results. Carbon measurements would follow the selected method. Farm-level traceability must connect the intervention to the actual sourcing relationship.
Suppose Moonbucks’ review later finds that storage changes explain most quality improvements, while the land measures need longer observation. Those findings would shape the next decision: expand the proven component, adjust the landscape work or pause further spending. They would not justify crediting all improvements to tree planting.
This gives nature-based carbon investments a practical place in a multi-year strategy. Funding increases as the evidence supports it, and the project can change direction before a larger commitment.
Discuss a sourcing opportunity with CCC
Carbon Credit Capital’s nature-based supply-chain investment service uses its Dual-Value Model to examine supply-chain economics alongside potential sustainability outcomes.
Schedule a consultation to discuss your sourcing exposure and the questions to resolve before allocating capital.
Sources
- Intergovernmental Panel on Climate Change (IPCC), Climate Change 2022: Mitigation of Climate Change, Chapter 7, Agriculture, Forestry and Other Land Uses, section 7.4.3.3 (Agroforestry).
- World Business Council for Sustainable Development (WBCSD), Nature-based Solutions Blueprint, 5 June 2024.
- Science Based Targets initiative (SBTi), Forest, Land and Agriculture Science-Based Target-Setting Guidance, version 1.2, March 2026, section 3.1.4, pp. 37–38.
- United Nations Environment Programme (UNEP), State of Finance for Nature 2023, 2023.
Carbon Footprint
How to buy plastic credits, and what to check before you do
A plastic credit funds the collection of plastic waste in places where no formal system exists to collect it. Each credit represents a measured, independently audited quantity of plastic taken out of the environment or returned to use, tracked on a public registry.
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Carbon Footprint
EU carbon credit claims after 27 September 2026
EU carbon credit claims changed on 27 September 2026, the day the Directive (EU) 2024/825 began to apply across the European Union. The change is narrow. It changes how a company can talk about the credits it buys. A product can no longer be called neutral on the strength of compensation alone; however, every specific, evidenced statement about what a company measured, reduced, and funded stays fully available.
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