BEIJING — China's national carbon market started online trading on July 16, a significant step to help the country reduce its carbon footprint and meet emission targets, according to the Ministry of Ecology and Environment (MEE).

Trading began at 9:30 am at the Shanghai Environment and Energy Exchange, with the opening price for carbon quotas at 48 yuan ($7.4) per metric ton. The first transaction was priced at 52.78 yuan per ton, with a total value of 7.9 million yuan.

Carbon emissions by more than 2,000 power companies involved in the first trading group are estimated to exceed 4 billion tons per year, making the market the world's largest in terms of the amount of greenhouse gas emissions covered.

Carbon trading is the process of buying and selling permits to emit carbon dioxide or other greenhouse gases.

Companies are assigned quotas for carbon emissions and can sell surplus emission allowances to those that expect to exceed their pollution quotas.

To maintain the healthy and stable development of the national carbon market, trading institutions have established a series of systems including price fluctuation limits, maximum position limits, large account reports, risk warnings and reserves, and abnormal trading monitoring.

It is necessary to further strengthen the top-level design, refine the roadmap, arrange for more industries and trading entities to be brought into the market, and enrich trading varieties to help the carbon market play a better role in controlling greenhouse gas emissions, said Liu Jie, general manager of the Shanghai Environment and Energy Exchange.

China's national carbon trading market was launched in 2017 after pilot operations in seven provincial-level regions in 2011. Behind its launch was the aim of exploring market-based mechanisms to control greenhouse gas emissions.

The MEE will roll out trading regulations and improve relevant standards and management schemes while expanding the varieties and methods of trading.

As data authenticity and accuracy are the bases of trading, the MEE will work to ensure the quality and transparency of emission data.

The carbon market is also expected to be an important scheme for China in realizing its goals of peaking carbon dioxide emissions by 2030 and achieving carbon neutrality by 2060.

Pursuing a green growth path, China has been working on all fronts to transform its coal-centered energy structure and build a clean and diversified energy supply system.

By the end of 2020, more than 40 percent of China's installed power generation capacity came from renewable resources, supporting nearly one-third of the country's electricity consumption, according to data from the National Energy Administration.

As a result, 15.9 percent of China's primary energy consumption came from non-fossil energy, surpassing the target of 15 percent set for 2020.