Climate Bridge International’s latest report, Unlocking Global Value: Internationalizing China’s Carbon Markets, examines how international cooperation under Article 6.2 of the Paris Agreement could help China access a broader pool of carbon mitigation opportunities, while supporting its long-term decarbonization objectives and deeper participation in global carbon markets.

China’s carbon market is entering a new phase. As the National Emissions Trading System (ETS) broadens its sectoral coverage and demand for high-integrity carbon credits grows, the supply of domestic China Certified Emission Reduction (CCER) units could emerge as an increasingly important market constraint. By 2030, eligible domestic CCER projects are estimated to generate approximately 213 million CCERs annually, compared with a theoretical maximum ETS demand of up to 525 million CCERs per year.

Note: 1 CCER unit = 1 tCO₂e of certified emission reductions or removals.

This potential supply-demand gap creates a case for greater participation in international carbon markets. Using Singapore’s and Switzerland’s Article 6.2 price references and projections as indicative benchmarks, the estimated shortfall could represent approximately US$7.8–13.4 billion per year in potential carbon finance to support and accelerate the deployment of low-carbon technologies overseas.

The report examines how the CCER framework could be internationalized through Article 6.2, allowing carbon projects in partner countries to be developed under recognized CCER methodologies and bilateral cooperation arrangements.

From framework to implementation

The report outlines a phased approach to internationalization, building on China’s existing carbon market foundations while expanding bilateral cooperation and strengthening the infrastructure needed to support cross-border participation.

If implemented effectively, such a framework could create benefits for both China and participating host countries by:

1. expanding access to cost-effective emission reductions and removals;

2. supporting the overseas deployment of Chinese solar photovoltaics, batteries, electric vehicles, and other low- carbon technologies,alongside the export of technical expertise and professional services;

3. mobilizing additionalcarbon finance to support mitigation projects and low-carbon development in host countries;

4. advance RMBinternationalization through carbon markets, by expanding the use of RMB in cross-border carbon transactions, carbon pricing, and green financial instruments;

5. enhancing China’s role in shaping emerging international carbon market standards, while strengthening connections between carbon cooperation, trade, investment, and technology deployment;

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