"Shanghai Carbon Market Comprehensive Deepening Reform Action Plan (2026-2030)"

Shanghai Carbon Market Comprehensive Deepening Reform Action Plan (2026-2030)

To improve the green and low-carbon development mechanism, establish and improve a carbon emission trading system that is organically connected with Shanghai's carbon peak and carbon neutrality goals, effectively complements the national carbon market, and matches and adapts to international carbon market rules; to build a well-regulated, honest, transparent, and widely participated voluntary greenhouse gas emission reduction management system; to gradually form a carbon pricing mechanism dominated by the carbon market; and to develop Shanghai's carbon market into a carbon trading, carbon finance, carbon pricing, and carbon innovation center with certain international influence, this action plan is formulated.

1. Implement actions to improve the quality and efficiency of the carbon emission trading market.

(1) Establish and improve the total quota management system. Reasonably determine the total carbon emission quota and establish and improve the reserve quota regulation mechanism. Establish a carbon emission quota allocation system that aligns with the dual control system of total carbon emissions and intensity. Pilot total quota control in industries with relatively stable total carbon emissions, reserving development space for strategic emerging industries and future industries. (Responsible units: Municipal Ecology and Environment Bureau, Municipal Development and Reform Commission, Municipal Economic and Information Technology Commission)

(2) Gradually expand market coverage in phases. Implement market expansion following the approach of "lowering thresholds, expanding categories, and increasing types." From 2026, the inclusion threshold for high energy-consuming industries such as petrochemical and chemical industries and data centers will be lowered to an annual emission of 10,000 tons of CO2 equivalent; the inclusion threshold for the water transport industry will be lowered to an annual emission of 80,000 tons of CO2 equivalent. From 2028, public institutions such as universities and hospitals with annual emissions of 10,000 tons or more of CO2 equivalent will be included in market management and gradually implement carbon emission quota management. Research the inclusion of non-CO2 greenhouse gases such as nitrous oxide and methane into market management. (Responsible units: Municipal Ecology and Environment Bureau, Municipal Development and Reform Commission, Municipal Economic and Information Technology Commission, Municipal Transportation Commission, Municipal Housing and Urban-Rural Construction Management Commission, Municipal Education Commission, Municipal Health Commission, Municipal Commerce Commission, Municipal Statistics Bureau)

(3) Optimize greenhouse gas emission accounting and reporting methodologies. Align with international carbon market accounting rule systems, promote the shift of greenhouse gas emission accounting methods in key industrial sectors from "organizational carbon" to "facility carbon," and gradually refine greenhouse gas emission accounting and reporting methods in the building sector. Encourage and guide quota-managed units (hereinafter referred to as "managed units") to proactively implement "product carbon" accounting. Further strengthen the coordinated control of electricity and carbon, establish carbon emission factor accounting rules, release and update mechanisms applicable to different scenarios in public service sectors such as electricity and heat. Research and formulate carbon emission accounting methods for the use of sustainable aviation fuels, green methanol, bio-natural gas, and carbon capture, utilization, and storage technologies. Strengthen the connection between green power certificates and greenhouse gas emission accounting rules. (Responsible units: Municipal Ecology and Environment Bureau, Municipal Economic and Information Technology Commission, Municipal Transportation Commission, Municipal Development and Reform Commission, Municipal Housing and Urban-Rural Construction Management Commission, Municipal Water Affairs Bureau, Municipal Greening and City Appearance Bureau, Municipal Statistics Bureau)

(4) Steadily and orderly increase the proportion of paid allocation. Leverage the constraint and incentive role of the paid quota allocation mechanism, set differentiated paid allocation ratios by industry according to the pace of Shanghai's carbon peak and carbon neutrality goals, and establish incentive adjustment coefficients based on the annual reduction in total carbon emissions or intensity of managed units, the synergistic effect of pollution reduction and carbon reduction, and the construction of energy or carbon measurement systems. By 2027, control the paid allocation ratio of quotas for managed units within 8%; by 2030, further increase the proportion of paid allocation in the total quota. (Responsible units: Municipal Ecology and Environment Bureau, Municipal Development and Reform Commission, Municipal Economic and Information Technology Commission, Municipal Transportation Commission, Municipal Housing and Urban-Rural Construction Management Commission, Municipal Education Commission, Municipal Health Commission, Municipal Commerce Commission, Municipal Market Supervision Bureau)

(5) Standardize the paid bidding allocation and rollover mechanisms for quotas. Promote the establishment of quota paid allocation and market regulation mechanisms that balance market fairness and efficiency. Research and formulate regulations for the collection and management of revenues from paid bidding allocation of carbon emission quotas. Coordinate fiscal funds to support the construction and development of the carbon market. Research and formulate rollover rules for carbon emission quotas of managed units; for managed units entering the national carbon emission trading market, their surplus carbon emission quotas shall, in principle, be gradually rolled over in the Shanghai carbon emission trading market within three years. (Responsible units: Municipal Ecology and Environment Bureau, Municipal Finance Bureau, Municipal Development and Reform Commission)

(6) Establish and improve the greenhouse gas emission reporting and carbon market information disclosure system. Effectively connect the energy utilization reporting system of key energy-consuming units with the greenhouse gas emission reporting system, gradually lower the annual greenhouse gas emission reporting thresholds by sector, and refine the types of greenhouse gas emissions reported, establishing a greenhouse gas emission reporting system covering major emission sources. Further improve the carbon market information disclosure mechanism; the carbon emission trading regulatory authority shall annually release quota allocation plans, lists of managed units, and annual reports and other government information. Trading institutions shall release real-time carbon emission trading market information. (Responsible units: Municipal Development and Reform Commission, Municipal Statistics Bureau, Municipal Ecology and Environment Bureau)

2. Implement guiding and incentive actions for voluntary greenhouse gas emission reductions.

(7) Promote corporate autonomous carbon reduction. Support and encourage enterprises to accelerate the establishment of product carbon footprint management systems, set greenhouse gas emission control targets, achieve net-zero emissions through technological innovation, management improvement, and the use of high-quality carbon credits, and build green and low-carbon supply chains. Promote the establishment of voluntary corporate greenhouse gas emission information disclosure mechanisms, encouraging the voluntary release of carbon reduction targets, total carbon emissions, control measures, and other information. Support financial institutions in using disclosed corporate information as an important reference for conducting green finance business. (Responsible units: Municipal Economic and Information Technology Commission, Municipal Development and Reform Commission, Municipal Commerce Commission, People's Bank of China Shanghai Headquarters, Shanghai Financial Regulatory Authority, Municipal Financial Office)

(8) Improve the sustainable operation management mechanism of carbon inclusiveness. Establish voluntary greenhouse gas emission reduction management mechanisms such as carbon inclusiveness, optimize and improve the hierarchical and classified management system of methodologies, focus on promoting emission reduction scenarios and projects in areas such as green travel, energy saving and consumption reduction, and resource recycling, and improve the rule system for the normalized closed-loop consumption of carbon inclusive emission reductions. Rely on blockchain technology to achieve comprehensive, digital, and intelligent aggregation of carbon account information, ensuring that emission reductions are measurable, traceable, and verifiable. (Responsible units: Municipal Ecology and Environment Bureau, Municipal Transportation Commission, Municipal Development and Reform Commission, Municipal Housing and Urban-Rural Construction Management Commission, Municipal Greening and City Appearance Bureau, Municipal Data Bureau)

(9) Continuously innovate carbon inclusiveness incentive mechanisms. Guided by promoting the formation of green and low-carbon production and lifestyle, research and establish green and low-carbon behavior scenarios integrated with the carbon inclusive user growth system. Promote the formation of a personal carbon credit evaluation system and explore the application of carbon credit in green finance, green consumption, and other fields. Promote the organic integration of the carbon inclusive mechanism with business operation models, support and encourage various social entities to participate in the construction of carbon points malls, and promote the diversification of carbon inclusive products and services. Encourage various social entities to carry out voluntary public welfare carbon cancellation and practice social responsibility for green and low-carbon development. (Responsible units: Municipal Ecology and Environment Bureau, Municipal Financial Office, Shanghai Headquarters of the People's Bank of China, Shanghai Financial Regulatory Bureau)

(10) Promote the implementation of carbon neutrality for large-scale events. Establish a working mechanism of cross-department collaboration, industry and enterprise demonstration leadership, and broad social participation, guiding large-scale events such as performances, competitions, conferences, and exhibitions to implement carbon neutrality in a planned manner. Following the principle of "pilot a batch, drive a batch," fully leverage the demonstration and leading role of government and state-owned enterprises and institutions to form new replicable and promotable experiences and models for carbon neutrality in large-scale events. (Responsible units: Municipal Ecology and Environment Bureau, Municipal Propaganda Department, Municipal Development and Reform Commission, Municipal Commerce Commission, Municipal Culture and Tourism Bureau, Municipal Sports Bureau, Municipal Airport Authority)

III. Implement the coordinated enhancement action for carbon market innovation capability

(11) Establish and improve the carbon market guarantee and supervision system. Implement the "Shanghai Carbon Emission Management Measures," introduce market rules for carbon emission quota registration, verification, trading, and management measures for carbon inclusion and large-scale event carbon neutrality, and promote the release of a batch of technical guidelines and standards related to carbon emissions. Establish the Shanghai Carbon Emission Comprehensive Management Platform, strengthen dynamic tracking and supervision of carbon emission data quality, reinforce credit management of all participants in the carbon market, and improve the standardization, digitalization, and intelligent management level of the carbon market. Explore conducting carbon emission accounting based on automatic monitoring in qualified industries. Study and formulate guidelines for the allocation, use, and management of carbon emission metering instruments for key industries and key emission sources. For regulated units connected to Shanghai's key energy-consuming units' online energy consumption monitoring system as required, pilot direct acceptance of related metering data in carbon emission verification work. (Responsible units: Municipal Ecology and Environment Bureau, Municipal Market Supervision Bureau, Municipal Economic and Information Technology Commission, Municipal Data Bureau)

(12) Enrich the carbon finance product and service system. Support financial institutions to participate in voluntary greenhouse gas emission reduction activities, spot and derivative trading of carbon emission rights in compliance with laws and regulations under controllable risks. Study the use of cross-border RMB by overseas institutional investors in Shanghai carbon emission rights trading in accordance with regulatory requirements. Explore models and paths for individual participation in carbon trading. Effectively leverage green finance policy support, continuously enrich carbon finance products and market systems, and promote sustained growth of carbon finance scale. Support including carbon assets traded in the Shanghai carbon market within the scope of qualified collateral for financial institutions. (Responsible units: Shanghai Headquarters of the People's Bank of China, Shanghai Financial Regulatory Bureau, Shanghai Securities Regulatory Bureau, Municipal Ecology and Environment Bureau, Municipal Financial Office)

(13) Innovate the coordination mechanism between the carbon market and the green finance market. Benchmarking the green finance management system, promote the establishment of information interconnection and mutual recognition mechanisms between the carbon market and the green finance market, encourage rating agencies to incorporate voluntarily disclosed carbon emission information of relevant units into corporate credit and green product rating methods. Study and establish a carbon account system based on corporate carbon performance, form a linkage mechanism with green investment and financing, and promote the application of carbon pricing in green investment and financing. Gradually improve incentive mechanisms to guide more financial resources into the green and low-carbon field, forming a new driving force for the carbon market to continuously promote the green development of the real economy. (Responsible units: Municipal Ecology and Environment Bureau, Municipal Development and Reform Commission, Municipal Financial Office, Shanghai Headquarters of the People's Bank of China, Shanghai Financial Regulatory Bureau)

(14) Vigorously cultivate technical service institutions. Include technical service institutions in the field of carbon emission management within the scope of support policies for the development of the service industry, support and cultivate a batch of technical service institutions with high professionalism, strong innovation, and great influence. Encourage and guide technical service institutions in related fields to leverage industry advantages to expand new business in carbon emission management technical services. Fully utilize the bridging role of industry alliances, industry associations, and international organizations to further strengthen the industrial ecosystem in the field of carbon emission management. Connect with the selection mechanism for green and low-carbon service institutions and establish and improve institutional capacity assessment, qualification review, and other institutional systems to strengthen standardized management of technical service institutions. (Responsible units: Municipal Ecology and Environment Bureau, Municipal Development and Reform Commission, Municipal Economic and Information Technology Commission, Municipal Housing and Urban-Rural Construction Management Commission, Municipal Transportation Commission, Municipal Market Supervision Bureau)

(15) Enrich the supply of professional talent in the market. Promote the implementation of socialized vocational skill level recognition for carbon emission managers. Encourage enterprises, universities, and technical service institutions to carry out industry-university-research cooperation, strengthen talent team building in carbon management, carbon accounting, carbon verification, carbon trading, carbon consulting, etc., by establishing internship bases, selecting industry mentors, compiling professional teaching materials, holding practical competitions, and conducting employment promotion. Establish and improve the training system, develop training courses, form expert think tanks, and encourage districts to provide training services related to carbon emission management. (Responsible units: Municipal Human Resources and Social Security Bureau, Municipal Education Commission, Municipal Ecology and Environment Bureau)

(16) Strengthen international and regional cooperation and exchanges. Relying on platforms such as the United Nations Climate Change Conference and the China Carbon Market Conference, deepen exchanges and cooperation with relevant countries, international organizations, and the Yangtze River Delta region in the fields of climate change response and green low-carbon development. Actively strive to host the international carbon emission reduction trading platform under the Paris Agreement in Shanghai. Encourage local enterprises and technical service institutions to "go global," promote technical exchanges and project cooperation with countries along the "Belt and Road," strengthen dialogue and exchanges with international carbon markets, strive to promote international mutual recognition of technology, methods, standards, and data, and explore new models of international cooperation. (Responsible units: Municipal Ecology and Environment Bureau, Municipal Development and Reform Commission, Municipal Commerce Commission, Municipal Foreign Affairs Office)

Source: Shanghai Municipal People's Government