China to Add Steel, Aluminum and Cement to Carbon Market in 2024

(Bloomberg) -- China will expand its national carbon trading market to include the steel, aluminum, and cement industries at the end of the year, to push the polluting sectors to reduce emissions.

The move was broadly expected by the market, and Minister of Ecology and Environment Huang Runqiu announced the timeline at an industry conference at the weekend, according to a report in the China Securities Journal.

While producers of steel, aluminum, and cement will soon face extra costs at home for emitting carbon, Chinese authorities hope lower emissions will help soften the blow from a new carbon tariff, known as CBAM, to be imposed by the European Union from 2026.

The mandatory market currently covers about 2,200 power utilities but has been slow to compel polluters to change their behavior because of low carbon prices and taxes.

Expanding the three-year-old carbon market paves the way for seven additional sectors to be included as Beijing aims to cover 70% of its total emissions by 2030.

--With assistance from Kathy Chen and Luz Ding.