More than 917 million metric tons of carbon emission allowances had been traded on China's national carbon market as of last month, with a total transaction value of over 61.7 billion yuan ($9.1 billion), according to the Ministry of Ecology and Environment.

In the first half of this year, 52.96 million tons of the allowances changed hands, up by 37 percent year-on-year, the ministry announced in a media release on Thursday, which coincided with the market's fifth anniversary.

When it was launched in July 2021 to cover 2,162 coal-fired power generation companies, China's carbon trading market was already the world's largest.

The market was extended to 3,378 companies in the steel, cement and electrolytic aluminum sectors last year. With the expansion, the market now covers more than 65 percent of the country's total carbon dioxide emissions, according to the ministry.

ALSO READ: China's carbon market development draws global attention at COP30

Carbon trading allows designated emitters to buy and sell allowances to emit greenhouse gases. In the coal-fired power generation sector, for example, emission limits are set for each unit of electricity produced. After meeting the benchmark, operators can sell surplus carbon allowances. Those exceeding their limits must buy additional allowances.

Thanks to the market, the coal-fired power sector alone achieved a tangible carbon reduction of 530 million metric tons during the 14th Five-Year Plan period (2021-25), Lu Shize, deputy director of the ministry's department of climate change, told China Central Television.

He added that 80 percent of enterprises have managed to lower their carbon emissions per unit of electricity generated.