Key Differences Between the Two Core Sectors of the National Carbon Market
In May 2025, the General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the “Opinions on Promoting Green and Low-Carbon Transformation and Strengthening the Construction of the National Carbon Market” (hereinafter referred to as the “Opinions”), which clarifies that China’s carbon market consists of two main sectors: the “National Carbon Emission Trading Market” and the “National Voluntary Greenhouse Gas Emission Reduction Trading Market.” These two markets have different positioning and mechanisms, yet they jointly support the goal of green and low-carbon transformation. Today, we will clarify the core differences between the two using a comparison table.
1. Positioning Attributes: Mandatory Constraints vs. Voluntary Participation
| Dimension | National Carbon Emission Trading Market | National Voluntary Greenhouse Gas Emission Reduction Trading Market |
|---|---|---|
| Core Positioning | Amandatory policy tool for controlling greenhouse gas emissions | Avoluntary platform that incentivizes self-reduction and realizes ecological value |
| System Logic | Top-down administrative regulation + market adjustment | Bottom-up social spontaneity + value realization |
| Related Policies | Directly linked to the “dual control” requirements of total carbon emissions and intensity | Serves voluntary goals such as green supply chains, corporate social responsibility, and product carbon neutrality |
2. Participation Requirements: “Hard Threshold” vs. “Zero Threshold”
1. Participants
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National Carbon Emission Trading Market: Limited tokey emission units (must meet specific conditions such as annual emission volume), categorized as “designated participation,” with regulatory penalties for non-compliance. ▶ Coverage goal: By 2027, it will basically cover the main emission industries in the industrial sector, with gradual expansion to other industries and types of gases.
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National Voluntary Greenhouse Gas Emission Reduction Trading Market: No mandatory restrictions, coveringgovernment agencies, enterprises, social organizations, and in the future, gradually introducing eligible individuals, categorized as “voluntary participation.” ▶ Coverage goal: Achieve full coverage in key areas by 2027, focusing on areas with significant sustainable development benefits (such as ecological restoration and energy-saving renovations).
2. Participation Obligations
- For the former: Key emission units must participate in quota allocation, trading, and settlement, which is alegal obligation.
- For the latter: Participants can independently decide whether to develop projects or purchase emission reductions, with no mandatory obligations, which is avoluntary action.
3. Operational Mechanism: Quota Management vs. Project Emission Reduction
1. Core Trading Targets
| Market Type | Trading Target | Essential Attribute |
|---|---|---|
| Carbon Emission Trading Market | Carbon emission quotas | “Legal emission certificates” allocated by the government |
| Voluntary Emission Reduction Trading Market | Certified voluntary emission reductions | “Emission reduction achievement certificates” generated by projects (1 unit ≈ 1 ton of CO₂ equivalent reduction) |
2. Generation Method of Targets
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Carbon Emission Quotas: The government scientifically sets the total quota based on the “total control target,” using a combination of “free + paid” allocation methods, with a gradual increase in the proportion of paid allocation in the future. By 2027, total control will be prioritized for industries with stable carbon emissions.
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Certified Voluntary Emission Reductions: Must be generated through the full chain of “project development → approval → implementation → verification → certification,” with projects needing to comply with national unified methodologies, and only after third-party verification of emission reduction effects can they enter market trading, with no government-mandated allocation.
3. Offsetting Rules
- In the carbon emission trading market: Key emission units can use certified voluntary emission reductions tooffset part of their quota settlement obligations (offsetting ratio determined by the government), with emission reductions serving as a “supplementary tool” for quotas;
- In the voluntary emission reduction trading market: Emission reductions are mainly used for self-offsetting carbon emissions (e.g., enterprises offsetting operational emissions, large events achieving carbon neutrality), serving as an independent “emission reduction realization tool.”
4. Core Goals: Total Control vs. Activation
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National Carbon Emission Trading Market: Achieves optimal allocation efficiency of carbon emission resources through total quota control, promotes deep transformation of traditional high-emission industries, and directly serves the “hard targets” of carbon peak and carbon neutrality.
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National Voluntary Greenhouse Gas Emission Reduction Trading Market: Stimulates the endogenous motivation for green and low-carbon development across society, supplements the blind spots of mandatory market coverage, and simultaneously realizes the value of ecological products (e.g., monetizing forest carbon sinks), helping to form a diversified emission reduction pattern.
Conclusion: The Two Are Not in a “Substitution Relationship” but in a “Complementary Relationship”
The “Opinions” clearly define: the National Carbon Emission Trading Market is the “main force,” relying on mandatory constraints to control high-emission sources; the National Voluntary Greenhouse Gas Emission Reduction Trading Market is a “supplement,” relying on voluntary participation to activate social enthusiasm for emission reduction. In the future, the two markets will further collaborate, for example, by achieving linkage through “emission reduction offsets for quota settlement,” jointly constructing a national carbon market system that is “unified in rules, complementary in functions, and vibrant,” providing key support for carbon peak and carbon neutrality.
(The original policy text can be found on the “China Government Website” or the “Ministry of Ecology and Environment’s official website” for complete policy details.)