Resources
What Is a Carbon Market?
2025-06-09
GHG Inventory Knowledge
carbon market
Introduction

A carbon market is a system where companies trade carbon emission allowances, turning the right to emit into a financial asset. It’s a key policy tool that uses market forces to reduce greenhouse gas emissions efficiently by channeling investment toward low-cost reduction opportunities.

Two main types of carbon markets:

Compliance markets
Regulated by governments, where companies must hold enough allowances to cover their emissions. Non-compliance leads to penalties.
Used by organizations to offset emissions on a voluntary basis, often as part of carbon neutrality or ESG goals.

How a successful carbon market behaves

The primary product traded is the carbon allowance, but many systems allow partial use of carbon offsets from approved projects. In some schemes, up to 10% of compliance obligations can be met using these verified reductions.
A successful carbon market requires strong monitoring, reporting, and verification (MRV) systems, transparent pricing, and broad participation. As more countries adopt carbon pricing, carbon markets are expected to become a core part of global climate strategy, supporting the path to net-zero emissions.

More Resources

The core of EUDR compliance is establishing a low-cost and confidential evidence system, following the data minimization principle. It requires providing necessary data around three core issues, clarifying data boundaries and transmission norms, and avoiding compliance and confidentiality misunderstandings.

CBAM

The core of EUDR compliance is establishing a low-cost and confidential evidence system, following the data minimization principle. It requires providing necessary data around three core issues, clarifying data boundaries and transmission norms, and avoiding compliance and confidentiality misunderstandings.

EUDR

Product carbon footprint is a full-life-cycle carbon emission record of products, following international standards like ISO 14067. It has two accounting boundaries, helping enterprises meet global low-carbon requirements, optimize design and green marketing, and enhance global competitiveness.

Carbon Footprint

Organizational carbon inventory is a basic carbon health check for enterprises low-carbon transformation. Following standards like GHG Protocol and ISO 14064-1, it covers three emission scopes and completes accounting via a four-step process, meeting carbon market compliance needs.

GHG Inventory

EUDR covers 7 product categories like timber and coffee. The EU proposed extending its implementation in Nov 2025 (not in force yet). Exporters don’t file DDS directly but need to send compliance info like GPS coordinates; they can solve upstream coordinate issues and prepare by country risk level (China is low-risk) to avoid clearance delays.

EUDR