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The report also set a target to reduce carbon dioxide emissions per unit of gross domestic product (GDP) by around 3.8% in 2026, continuing China’s use of carbon intensity targets to guide decarbonization across the world’s largest emitting economy.
Authorities will continue to implement a system that controls both the total amount and intensity of carbon emissions while strengthening carbon accounting and emissions data systems, the report said.
The government confirmed that the coverage of China’s national emissions trading system will be expanded, signaling further development of the country’s flagship market-based climate policy instrument.
China launched its national carbon market in 2021, initially covering the power generation sector. The plan is the world’s largest emissions trading system by covered emissions.
Sectors such as steel and cement were still among the most carbon-intensive industries in China’s economy, making them a key focus for emissions reduction policies and potential expansion of the carbon market.
Fastmarkets has reported that regulators have already begun preparing additional sectors for possible inclusion in the market. But authorities have not yet confirmed when these sectors will formally enter the plan.
In February, China’s Ministry of Ecology and Environment issued compliance rules requiring emissions reporting and verification for steel, cement and aluminium smelting companies.
Provincial authorities were instructed to publish lists of key emitting companies in those sectors and to begin preparing allowance allocation procedures.
These measures indicated that authorities were laying the regulatory groundwork required before additional industrial sectors can formally enter the carbon market.
Expanding the carbon market to additional sectors would increase the number of regulated emitters participating in the plan and expand the volume of emissions covered by the trading system. Broader sector inclusion could also strengthen allowance demand over time when additional industries enter the compliance market.
Alongside carbon market reforms, the government announced plans to establish a national fund supporting low-carbon transition.
The report said that China will foster new growth drivers, including hydrogen energy and green fuels, while promoting initiatives to upgrade industrial production, reduce costs and cut carbon emissions.
Authorities will also promote the development of zero-carbon industrial parks and factories, part of broader efforts to decarbonize manufacturing and industrial activity. The work report did not specify the size of the proposed transition fund.
The report also emphasized continued investment in clean energy infrastructure as part of the country’s broader energy transition.
Authorities will accelerate construction of a new electricity system, including the development of smart grids, expanded energy storage capacity, and wider use of green electricity.
According to the report, China’s new energy storage capacity exceeded 130 gigawatts in 2025, while non-fossil energy accounted for 21.7% of total energy consumption.
The development of grid flexibility and storage capacity has become increasingly important while renewable power deployment continues to expand.
The work report also highlighted plans to strengthen carbon accounting systems and carbon footprint management frameworks.
Authorities said that they will improve carbon emissions statistics and develop systems to better measure and manage carbon footprints across the economy.
Improved monitoring and accounting systems were expected to play a central role in the future development and expansion of China’s carbon market.
China’s policy framework also includes a target to reduce carbon emissions intensity by 17% over 2026-30. The 3.8% carbon intensity reduction target for 2026 was part of this broader trajectory, reinforcing China’s pathway toward its climate goals.
The country has pledged to peak carbon emissions before 2030 and achieve carbon neutrality by 2060.
Together, the expansion of the national carbon market, plans for a transition fund and continued investment in clean energy infrastructure point to China’s reliance on a combination of market mechanisms, industrial policy and power system reform to drive emissions reductions across its economy.
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