25 Brokerage Firms Obtain License to Enter Market, Carbon Finance Business Accelerates

This article is reprinted from China Securities Journal

● Staff Reporter Zheng Cuiying

Under the combined influence of policy guidance, market expansion, and industry transformation, since March, securities firms have accelerated their involvement in carbon finance. Seven firms, including Changjiang Securities, Guojin Securities, Shanxi Securities, and Guoxin Securities, have been approved to participate in carbon emission rights trading, bringing the total number of approved securities firms involved in carbon emission rights trading in the industry to 25.

Currently, China’s carbon market has become the largest in the world in terms of covered emissions, but liquidity remains a key challenge. The entry of securities firms is expected to improve pricing efficiency and market vitality. Shanxi Securities and Guoxin Securities stated they will deepen financial services and develop comprehensive financial strategies aligned with the carbon market.

Accelerated Entry of Securities Firms

In recent years, 18 securities firms in China have obtained qualifications for carbon emission rights trading. Recently, licenses for securities firms to trade carbon emission rights have been concentrated and expanded. In early March, seven firms announced they had been approved to participate in carbon trading, increasing the total licensed firms to 25. Respondents from these firms said this trend results from policy guidance, market demand, and industry transformation.

On the policy front, the “dual carbon” strategy continues to deepen, and the development of the carbon market has entered an accelerated phase. A relevant person from Guotai Haitong said that financial regulatory policies explicitly regard carbon emission rights trading as an important tool for green finance. Regulatory authorities like the China Securities Regulatory Commission (CSRC) have shifted their attitude from “cautious pilot” to “orderly expansion” regarding securities firms’ participation.

For example, the CSRC’s 2025 implementation guidelines for “Five Major Articles” in the capital market list carbon emission rights trading as one of the core scenarios of green finance, opening policy channels for securities firms to enter the market compliantly. The same year, the Central Office and the State Council issued opinions on promoting green and low-carbon transformation and strengthening the national carbon market. These documents proposed expanding the trading entities in the carbon market and cautiously advancing financial institutions’ participation. The promulgation of the Interim Regulations on Carbon Emission Rights Trading in 2024 also laid a solid institutional foundation for securities firms’ involvement.

From a market perspective, a relevant person from Guoxin Securities noted that although China’s carbon market is the largest globally in terms of coverage, liquidity remains a pressing issue. Data shows that by the end of 2025, total trading volume of allowances reached 865 million tons, with a total transaction value of 57.663 billion yuan. While trading volume and value saw significant growth compared to the previous year, the market is still mainly driven by regulated emitters, with high concentration and uneven liquidity. Turnover rates are far below those of mature markets, highlighting the urgent need for securities firms to leverage their professional intermediary roles to enhance market activity and improve price discovery mechanisms.

Industry-wise, traditional securities business growth faces pressure, and green finance has become a key sector for differentiation. “As a policy-supported area, carbon finance opens new investment channels for securities firms’ proprietary trading, enriches asset allocation options, and is an important lever for optimizing business structure and creating new growth curves,” said a relevant person from Guoxin Securities. The expansion of licenses not only signifies market maturity but also demonstrates the capital market’s commitment to supporting green and low-carbon transformation.

Regarding trading content and products, many licensed securities firms stated that they currently mainly conduct trading using proprietary funds in local pilot markets and the national voluntary emission reduction market, primarily through spot and financing transactions. Spot trading forms the basic trading mode, involving carbon allowances and Certified Emission Reductions (CCER). Financing transactions mainly involve carbon repurchase agreements to provide liquidity support for regulated emitters. Due to the pace of market development and opening, securities firms cannot yet directly access the core spot trading system of the national carbon market. Additionally, regulators have set specific requirements for securities firms’ compliance, risk control, and information disclosure in participating in the carbon market.

Leveraging Professional Advantages

Industry insiders told reporters that opening up participation in carbon emission rights trading to securities firms is significant for achieving the “dual carbon” goals, as it can enhance market liquidity and pricing efficiency. As professional institutional investors, securities firms can inject capital and trading strategies, balance supply and demand, promote reasonable pricing of carbon allowances, and prevent excessive price fluctuations. Moreover, securities firms can design carbon financial instruments to guide funds into low-carbon projects, reduce corporate emission reduction costs, and accelerate the deployment of green technologies.

A relevant person from Guoxin Securities explained that by providing carbon repurchase services to regulated emitters, securities firms can convert idle carbon assets into funds needed for operations, broadening financing channels for low-carbon transformation. This upgrades the carbon market from a “emission reduction constraint tool” to a “dual tool of emission reduction incentives and financing support,” helping companies accelerate green and low-carbon transformation. Additionally, securities firms’ comprehensive internal controls, risk management, and information disclosure systems can promote standardized trading behaviors among market participants, improving overall market efficiency and credibility.

Currently, approved securities firms are actively advancing their carbon market trading operations. A representative from Shanxi Securities, which recently received approval, said the firm is in the active preparation stage for its carbon emission rights trading business. As an energy-rich province, Shanxi has abundant emission reduction scenarios and corporate demand. The firm plans to initially focus on steady proprietary trading, familiarizing itself with market rules, while actively engaging with local regulated emitters to understand their hedging and asset revitalization needs, laying a solid foundation for future in-depth services.

A relevant person from Guoxin Securities stated that the firm will follow the principles of “compliance, stability, serving the real economy, and phased development” to orderly implement its carbon trading business. Initially, it plans to participate cautiously in four local pilot markets—Beijing, Hubei, Guangzhou, and Shanghai—and expand participation in line with national policies. The firm will base its operations on spot trading of allowances and CCER, gradually develop financing services such as carbon repurchase, and strengthen professional capacity building.

Guotai Haitong, which has already been approved to participate in carbon emission rights trading, said a relevant person that the company has been deeply involved in the carbon market since 2014. By the end of 2025, it had traded nearly 100 million tons and ranked among the top in multiple pilot markets. The company will continue leveraging its pricing and trading experience to prepare for participation in the national carbon market.

Activating the Green Finance Ecosystem

As a vital part of green finance, carbon financial products are continuously innovating. Domestic institutions have undertaken various experiments, including four main categories: first, securitization of carbon assets, issuing ABS backed by carbon emission rights; second, carbon derivatives, exploring futures and options for risk management; third, carbon-neutral bonds to incentivize corporate emission reductions; and fourth, inclusive carbon products, developing tools to support small and micro enterprises’ emission reductions and expanding coverage.

In conjunction with the carbon market, securities firms are actively exploring innovations and launching carbon financial products and services.

In March 2025, Guotai Haitong provided full-process support for CCER registration and trading for Dunhuang Shouhang New Energy Co., Ltd.’s solar thermal power project, helping the client generate over 30 million yuan in revenue. In the field of carbon finance, Guotai Haitong has established trading models such as emission reduction purchase, allowance and reduction transfer, outright buybacks, and carbon borrowing, completing several representative projects. A relevant person from the firm said they will further enrich their carbon financial product offerings and, within regulatory limits, explore tools like carbon repurchase and forward contracts.

Guoxin Securities stated that it will take the approval of its carbon emission rights trading business as an opportunity to serve state-owned and central enterprises’ needs for green transformation, steadily implement carbon trading and financial product innovation, and deeply integrate ESG concepts with carbon finance services to create an integrated “carbon trading + ESG consulting + green financing” service system.

Shanxi Securities said it will utilize its carbon trading qualification to develop comprehensive “carbon assets + finance” solutions, converting corporate emission reduction actions into tangible financing advantages. The firm also plans to explore digital finance applications such as big data and blockchain to track carbon footprints, improve the efficiency of carbon asset rights confirmation, and enhance transaction transparency, providing new underlying assets and application scenarios for inclusive finance and pension finance, such as supporting energy-saving upgrades for small and micro enterprises and developing green low-carbon themed asset management products.

Industry experts recommend further increasing liquidity in the carbon market, activating market vitality, and orderly opening of spot trading in the national carbon market, while enriching trading varieties and tools.

Guotai Haitong said that based on years of experience in pilot markets, it has developed a mature carbon financial service model and hopes the national carbon market can be opened to financial institutions in an orderly manner to better serve real economy needs. Shanxi Securities suggested that standard derivatives like carbon futures and options should be introduced as soon as possible, enabling securities firms to use more tools for risk management and product innovation to attract more investors.

A relevant person from Guoxin Securities stated that securities firms can also provide services such as allowance trading, carbon asset valuation, financing support, risk management, ESG consulting, and emission reduction plan design to regulated emitters, helping them optimize carbon asset management strategies. They can also support green projects with carbon asset development and CCER project registration, promoting more emission reduction projects and enriching supply in the carbon market.