NAVIGATING THE

PATH TO NET ZERO

Carbon markets regulatory tracker

Chinese mainland LANDSCAPE

China’s carbon market system is not only the largest by trading volume, but it is becoming increasingly sophisticated.

The 2021 introduction of its Compliance Carbon Market and the renewal in late 2023 of its voluntary carbon market are part of a broader set of initiatives to help decarbonise the biggest emitter globally.

China has committed to hit peak emissions by 2030 and carbon neutrality by 2060 – the ’30-60 target’.

This landscape is helping to accelerate innovation among businesses. The scope of China’s voluntary and compliance schemes will expand over time to capture a wider group of emitters and incentivise decarbonisation.

There are also efforts to connect with other schemes, including in Hong Kong, and to open to foreign investors in time.

As carbon regulation and reporting obligations increase, it’s critical to keep up with key dates.

Our tracker will evolve to keep you across the changes. Please reach out to your KWM contact if we can assist.

What’s next?

As regulatory frameworks develop in line with the increasing focus on sustainability and environmental responsibility, more compliance deadlines and business opportunities will arise.

In compliance markets, organisations have no choice - they must actively reduce emissions or invest in carbon offset projects. Yet many businesses, voluntarily opt to take the same path, seeking sustainability and meeting stakeholder demands.

Technology that enables more accurate measurement and reporting of emissions has amplified the need for businesses to demonstrate a commitment to carbon neutrality.

To ensure compliance, foster innovation and enhance reputation in the evolving low-carbon economy, organisations must stay informed about regulatory changes. They can also aspire to proactively adopt technologies and collaborate with government initiatives.

Collaboration between the government and private sector is crucial for the success of carbon market initiatives, fostering innovation and driving economic growth in a sustainable direction.

KWM is helping organisations with ESG strategies. This not only covers advice on suitable regulatory policies and processes to ensure compliance, but also to take advantage of the changes that lie ahead.