National People's Congress Deputy, Party Secretary and Governor of the People's Bank of China Hubei Branch, Ma Jun: Accelerate the top-level design of the national carbon emission trading market

During the 2026 National Two Sessions, Ma Jun, a National People’s Congress delegate and Party Secretary and President of the Hubei Branch of the People’s Bank of China, proposed suggestions to accelerate the development of a highly market-oriented national carbon emission trading market. Ma Jun pointed out that speeding up the construction of a highly market-oriented national carbon emission trading market is not only an inevitable requirement for deepening the reform of factor market allocation and promoting green and low-carbon development but also a key measure to expand green financial services and enhance the effectiveness of green finance empowerment. Efforts should be made to accelerate the top-level design of the national carbon emission trading market and promote orderly market entry for financial institutions within a unified national trading framework.

“During the 14th Five-Year Plan period, China will implement a dual control system for carbon emissions, primarily controlling intensity and secondarily controlling total volume. After reaching the peak of carbon emissions, the system will shift to primarily controlling total volume and secondarily controlling intensity. With less than five years remaining before reaching the peak, establishing a market-oriented mechanism for the national carbon emission trading market is an important institutional guarantee for effectively controlling total carbon emissions,” Ma Jun said.

On the other hand, improving the carbon emission trading market mainly relies on the “invisible hand” of the market to optimize resource allocation and effectively transmit signals that “resources have value, ecology has value, and environment has value.” This is of great significance for integrating and enhancing the system efficiency of resource and environmental element allocation and continuously improving utilization benefits.

Since the official launch of the national carbon emission trading market in 2021, China has formed a structure where the national market and regional pilot markets operate in parallel. Currently, the power generation, steel, cement, and aluminum smelting industries are all managed under the unified national carbon emission trading market. Over 3,300 key emitters are included, covering about 65% of the country’s carbon emissions.

By the end of 2025, the total transaction volume of allowances in the national carbon emission trading market reached 865 million tons, with a total transaction value of 57.663 billion yuan. In 2025 alone, the allowance transaction volume was 235 million tons, a year-on-year increase of about 24%, with a transaction value of 14.63 billion yuan, and the trading scale continued to expand.

Ma Jun pointed out that there are still some prominent shortcomings in China’s current carbon emission trading market construction, which severely restrict the role of green finance in the dual control and peak carbon processes. These include significant market segmentation and insufficient liquidity of factors; market operation mainly driven by government mandates, with limited price mechanism effects; a single market participant type and low trading activity; and an underdeveloped market regulation system with inadequate enforcement.

“The current shortcomings in the development of the carbon emission trading market further constrain financial empowerment for green development,” Ma Jun said. First, financial institutions cannot adopt unified standards to evaluate the value of environmental and resource elements, making it difficult to accurately assess the environmental benefits and investment risks of green projects. The connection between financial products like green loans and green bonds and resource and environmental element trading is not close enough. Second, financial institutions cannot deeply participate in the carbon emission market, lacking hedging tools to respond to “carbon price” fluctuations, resulting in a mismatch of risks and returns in related resource and environmental element trading activities, which diminishes their enthusiasm.

In Ma Jun’s view, accelerating the construction of a highly market-oriented national carbon emission trading market is not only an inevitable requirement for deepening reform of factor market allocation and promoting green low-carbon development but also a key measure to expand green financial services and improve green finance’s empowerment capacity. It is of great significance for coordinated efforts to reduce carbon, cut pollution, expand green areas, and accelerate comprehensive green transformation of economic and social development.

Ma Jun recommended that the Ministry of Ecology and Environment should accelerate the top-level design of the national carbon emission trading market, establish an integrated policy system from central to local levels, and build a coordinated linkage mechanism between central and pilot regions to enhance policy consistency and coordination.

Based on this, the People’s Bank of China, the China Banking and Insurance Regulatory Commission, the China Securities Regulatory Commission, and other financial regulators should promote orderly market entry for financial institutions within a unified national trading framework. Under the premise of stable and predictable carbon asset values, develop diverse financial market products related to carbon allowances, innovate credit products linked to environmental rights, continuously enrich the supply chain of derivatives for carbon emission rights, explore market demand potential, and leverage the market’s price discovery and recognition functions to enhance market vitality and external motivation.

Meanwhile, efforts should be made to build a nationwide unified trading platform to expand carbon accounting coverage across more sectors, clarify the baseline of national carbon assets, and gradually increase the number of market participants involved in carbon trading. This will fully activate market liquidity, activity, and price sensitivity. On the basis of a unified standard for the carbon market, establish and implement unified standards for carbon accounting in financial institutions and financial services, and improve the management and statistics of carbon emission data in investment and financing activities.

To further regulate market participants’ entry and exit, as well as the compliance and penalty mechanisms, Ma Jun suggested establishing unified regulatory standards for trading institutions, trading entities, and third-party service providers, and strengthening supervision. Additionally, support should be given to the development of intermediary service organizations in the environmental resource sector, improve the quality of intermediary services, and bring service prices back to reasonable levels, providing valuable assistance for financial institutions to assess the fair value of resource and environmental markets.

Ma Jun also recommended that the carbon emission trading market should be positioned as a key component in the reform of resource and environmental factor marketization, clarifying that markets for pollution rights, energy rights, water rights, and other resource and environmental factors should support and complement the carbon market. This will promote effective connection and integration among various resource and environmental factor markets and the national carbon emission trading market.