China’s Carbon Labeling: Time to Integrate and Align for Hard to Abate Sectors

China’s State Administration for Market Regulation (SAMR) released its List of Pilot Projects for Product Carbon Footprint Labeling Certification. Following SAMR’s announcement, China’s National Certification and Accreditation Administration (CNCA) issued the General Implementation Rules for Product Carbon Footprint Labeling Certification (Trial) and officially launched the pilot on March 17th, 2025.

Why This Matters

• Ten high-impact product categories: The initiative targets ten high-impact product categories across twenty-five provinces and province-level regions. The selected product categories include lithium-ion batteries, solar panels, steel, aluminum, textiles, electronics, tires, cement, phosphates, and wood products.

• Mandatory regulatory framework: This marks a significant milestone in China’s carbon reduction efforts. It signals a shift from treating carbon labeling solely as a policy tool to making it part of a mandatory regulatory framework. It also represents a transition from a fragmented system to a unified one.

Details

China’s earliest major carbon footprint labeling initiative dates back to 2018, when the government launched a pilot program in the electrical and electronics industry. Its effort aimed to support manufacturers in meeting international carbon disclosure and certification standards. In contrast, the current pilot focuses on establishing effective mechanisms with clear objectives, improving data quality to enhance carbon measurement practices, enabling enterprises to benchmark against global standards, and documenting pilot experiences to inform future policy development.

The pilot will run for three years. It is intended to lay the groundwork for future legislation by aligning domestic standards with international ones and strengthening collaboration among key stakeholders. It represents a critical step toward building a unified, transparent, and science-based carbon labeling system in China that will influence both domestic and international supply chains and contribute to the country’s ambitious climate goals.

Action Items: Financial Institutions

• Integrate: Integrate carbon label certification into green finance product evaluation systems and corporate climate risk assessments.

• Develop: Develop financial products linked to carbon footprints and certified carbon labels.

  
  

Action Items: Businesses

• Audit: Conduct supply chain audits to identify exposure to Chinese products affected by carbon labeling requirements.

• Align: Align internal procurement standards with China’s emerging carbon labeling system and other environmental requirements to ensure regulatory compliance and reputational risk management.