China is signalling that it wants a role in the Article 6 carbon market, but what that role will be is still an open question. A Carbon Pulse analysis published this week frames the debate directly: recent policy signals point to an evolving position for China in international carbon trading, yet experts remain divided on whether the country will actively participate as a credit trader. For buyers, developers, and investors, the answer matters because China operates the world’s largest carbon market by covered emissions, and even a cautious opening would reshape global supply expectations.
The Signals Coming Out of Beijing
The concrete steps are regulatory. According to the Center on Global Energy Policy’s country framework, the Ministry of Ecology and Environment (MEE) has begun drafting administrative measures for cross-border carbon trading, written “in line with China’s national circumstances.” The stated goals are to facilitate bilateral crediting arrangements and to convert some credits from existing voluntary or Kyoto-era mechanisms into Article 6-compliant units.
The timeline is not abstract. Beijing has signalled plans to adopt international trading rules as early as 2026 and to pilot a bilateral credit program with another country in the medium term. Engagement on institutional design and data quality has already begun with Thailand, Singapore, Malaysia, Vietnam, Turkey, and Brazil.
The diplomatic track points the same direction. Bloomberg reported on Friday that China is considering a bid to host COP33, the 2028 UN climate summit, a move that would underscore its push for greater global climate leadership. Hosting the COP while staying outside the Paris Agreement’s market mechanisms would be an awkward combination, and the bid, if confirmed, adds weight to the reading that Beijing wants in.
The Domestic Machine Behind the Ambition
Any Chinese entry into Article 6 would be built on a domestic architecture that is already operating at scale.
The national ETS, launched in 2021, is the world’s largest carbon market by covered emissions. After the 2024-2025 allocation framework released in November 2025 expanded coverage beyond power to steel, cement, and aluminium, the system now covers around 60 percent of national emissions. It is expected to shift from intensity-based benchmarks toward absolute caps by 2027.
Alongside the ETS sits the CCER offset scheme, relaunched in 2024 after a six-year suspension. The first batch under the new framework, 9.5 million tonnes of CO2 equivalent from nine offshore wind and solar-thermal projects, was issued in March 2025. Seventeen methodologies were approved across 2024 and 2025, and ETS-covered emitters can use CCER credits to offset up to 5 percent of their compliance obligation.
The market itself is behaving like a compliance market, not a pilot. Chinese emission allowances traded in a narrow band of RMB 97-98 ($14.43-14.58) over the past week, with robust volumes driven by emerging compliance demand, according to Carbon Pulse’s weekly market wrap.
Why Experts Are Split
The bullish reading is straightforward: China has the registry, the methodologies, the exchange infrastructure, and now a stated intention to write cross-border rules. Few countries can assemble that stack this quickly.
The cautious reading rests on what the current rules actually allow. Today, only legal entities established in China may participate in CCER trading, cross-border participation is not permitted, and the China Beijing Green Exchange is the sole eligible trading venue, with over-the-counter bilateral trades not clearly allowed. The phrase “in line with China’s national circumstances” suggests Beijing wants Article 6 engagement on managed, bilateral, state-supervised terms, not open market access. A country that tightly controls who can trade at home is unlikely to become a free-wheeling international credit trader overnight.
There is also a strategic ambiguity. China could plausibly engage Article 6 mainly as a host and supplier of authorised units, as a buyer of ITMOs to help meet its own targets, or as a dealmaker building bilateral corridors on its own terms. Each path has very different consequences for price formation and supply availability.
What It Means for Buyers, Developers, and Investors
For buyers, the medium-term implication is supply optionality. If CCER-derived units or converted legacy credits gain Article 6 authorisation, a large new pool of compliance-grade supply could enter bilateral channels, starting with the six countries already in technical dialogue with Beijing.
For project developers, the actionable signal is the bilateral pilot. The first partner country China selects will define the template: eligibility, registry interoperability, and data standards will all be set in that initial arrangement. Developers with projects in Thailand, Vietnam, Malaysia, Singapore, Turkey, or Brazil should treat the pilot selection as a market-opening event.
For investors, the timing question dominates. Rules “as early as 2026” leaves little room for positioning after the fact, but the domestic constraints mean early international exposure will likely come through partnerships and bilateral structures rather than direct market access.
What to Watch
Three checkpoints will clarify which role China chooses. First, the publication of the MEE’s cross-border trading measures, and how much discretion they leave for non-Chinese participants. Second, the identity of the first bilateral pilot partner, which will reveal whether Beijing prioritises regional ASEAN corridors or wider south-south deals. Third, the COP33 bid: a confirmed candidacy for the 2028 summit would be the strongest political signal yet that China intends to sit at the centre of international carbon market governance, not at its edge.
