China’s national Emissions Trading System (ETS), officially established in 2021 as the world’s largest carbon market, plays a crucial role in tackling climate change. It currently covers the power, . Since 2012, Germany has been a key partner in this journey, supporting the design of regional and national schemes, and training over 5,000 Chinese officials and industry experts.
A new phase in Sino-German ETS cooperation
Building on this strong collaboration, the “Sino-German Cooperation on Emissions Trading Systems, Carbon Market Mechanisms, and Non-CO₂ Greenhouse Gas Mitigation” project was launched on 9 April 2025 to deepen China’s ETS efforts and tackle additional greenhouse gases beyond CO₂.
The virtual kick-off meeting brought together around 20 participants, including officials from the German Federal Ministry for Economic Affairs and Energy (BMWE) and the Ministry of Ecology and Environment (MEE), as well as experts from the implementing institutions Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and the National Center for Climate Change Strategy and International Cooperation (NCSC).
Project objectives
The new project targets political decision-makers at the national level and their supporting organisations. It supports them in strengthening China’s national ETS and developing effective measures to reduce non-CO₂ GHG emissions through technical exchange and international best practice.
The project is commissioned by the BMWE and implemented by GIZ, in close cooperation with the Chinese ministry MEE. It will be running until September 2028.
Highlights from the project launch
During the kick-off meeting, Dr. Dirk Weinreich, Head of Division for the Climate Change Act and Emissions Trading at BMWK, emphasized the long-standing and fruitful cooperation between Germany and China on carbon market development over the past 15 years. He expressed his enthusiasm for deepening this collaboration, particularly in the areas of emissions trading systems (ETS), carbon pricing, and non-CO₂ GHG mitigation.
Mr. Chen Yixing, Project Director at GIZ, presented the project’s background, objectives, key outputs, and the 2025 work plan. The project introduction was followed by a discussion on core cooperation topics, including China’s national ETS, carbon pricing mechanisms, and the mitigation of methane (CH₄), sulfur hexafluoride (SF₆), and industrial nitrous oxide (N₂O) emissions, which are potent greenhouse gases with high global warming potential.
Both sides acknowledged the successful track record of collaboration—from the development of regional ETS pilots in 2012 to the current national ETS.
Next steps: workplan for 2025
In 2025, the project will focus on:
- enhancing the MRV (monitoring, reporting, and verification) system,
- improving emissions data quality,
- advancing research on carbon pricing under the Paris Agreement,
- intensifying joint efforts to reduce non-CO₂ GHG emissions, with a focus on industry-related N₂O.
These activities are intended to strengthen China’s emissions trading system and non-CO₂ mitigation efforts, supporting the country’s broader climate goals with measurable, lasting impact.
