China Pledges to Cut GHG Emissions by 7%-10% Below Peak Levels in 10 Years
China, the world’s largest emitter of greenhouse gases by total volume, has pledged to cut its emissions by 7% to 10% below peak levels by 2035, a target that market sources describe as “moderate.”
President Xi Jinping announced the commitment on Tuesday through a video link at a United Nations climate summit held in New York, ahead of COP30 in Belém, Brazil in November.
“Green and low-carbon development is the trend of our times,” Xi said, urging developed countries to take the lead in stronger emissions cuts and climate action. His speech comes as the U.S. continues to roll back climate commitments and President Donald Trump disparages global climate efforts.
China’s new pledge is deemed to be moderate by the market as it reflects government efforts to minimize economic disruption.
“The target is a bit moderate, which is understandable as the government intends to avoid a high cost on the economy,” a China-based trader said.
Market participants noted that the 2035 target does not affect the current national emissions trading scheme or ETS, which is shaped by short-term trading behavior and recent allocation plans.
“If next year’s allocation reflects this target, then yes the market would respond to that, but again, it’s a moderate target,” the trader added.
Another Chinese trader echoed the same sentiment, saying that “it should not affect the compliance market much for the following few years.”
China’s latest target comes amid ongoing efforts to expand its ETS, which was recently broadened to cover the steel, cement and aluminum sectors, accounting for roughly 60% of the nation’s emissions. However, the ETS’s real impact on national emissions is still limited by the practice of free allowance allocations and evolving regulatory frameworks.
OPIS assessed China’s Carbon Emission Allowance down 1.32 yuan per metric ton ($0.19/mt) on Wednesday at 58.51 yuan/mt.
–Reporting by Sang Ah Lee, slee@opisnet.com; Editing by Mei-Hwen Wong, mwong@opisnet.com