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China’s Expanding Carbon Market Could Spur Demand for Overseas Credits

Published: Oct. 20, 2026  11:54 p.m.  GMT+8
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The solar power industry in Fengxin County, Jiangxi province, June 17, 2026. Photo: VCG
The solar power industry in Fengxin County, Jiangxi province, June 17, 2026. Photo: VCG

China is drafting rules for cross-border carbon trading as its expanding domestic market faces a potential credit shortfall, a move that could make the country a major buyer of international carbon offsets.

The expansion of China’s national emissions trading system (ETS) could push demand beyond the supply of domestic credits, prompting authorities and companies to explore lower-cost options overseas.

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