Baotou in the Inner Mongolia autonomous region is making strides in carbon trading with a homegrown environmental initiative at its core: the city's "digital carbon ticket", a local carbon exchange reshaping how industries, businesses and residents approach carbon offsetting.

The model is simple: companies or individuals buy carbon credits to compensate for their emissions. The funds then support ecological development, creating a sustainable cycle that balances environmental and economic needs.

Every morning, Zhang Rui, a staff member at Baotou's forestry and grassland bureau, starts her day by checking Baotou's forestry carbon credit certification and trading platform. Launched in 2021, it has become the cornerstone of the city's carbon trading efforts, tracking and managing the region's growing pool of carbon credits. The digital carbon tickets, issued as certificates for verified carbon sequestration by local forests and grasslands, mark a shift in how carbon markets operate.

"The digital carbon ticket combines blockchain technology with traditional forestry carbon credits to create a transparent, efficient and secure trading platform," Zhang said. Digitizing these credits, she added, allows for a more flexible, accessible and market-driven approach to sustainability.

In June 2023, the city logged its first major success with 150,000 metric tons of digital carbon credits developed from a nearly 1,500-hectare State-run forest in Guyang county.

"Not only does this forest improve the environment, but it's also generating income for the region," said Qin Ling, deputy director of the forestry bureau in Guyang county. The sale of the carbon credits, valued at more than 2 million yuan ($281,754), has already shown the economic potential of carbon trading, helping offset the carbon footprints of multiple businesses.

Baotou's digital carbon tickets stand out, said Feng Xiaodong, director of the reform development and science technology department of the Baotou forestry and grassland bureau. Unlike traditional paper-based credits, the digital tokens "can be tracked and verified in real time, making the transaction process more secure and transparent".

"Baotou has established a city-level carbon neutrality mechanism. It uploads core operational data and critical information from the process of carbon ticket development, trading and application to the blockchain for certification," Feng said.

The system is open not only to companies but also to the public. Through a mobile app, residents can earn carbon credits by walking, cycling and other eco-friendly activities, and redeem the credits for rewards, linking individual actions to broader sustainability goals.

Qin Dan, a local resident, said her community has embraced the platform. "Over the past two years, my neighbors and I have learned about the system. We registered on the app, where we can apply to set up personal carbon accounts. The app allows us to participate in forest adoption, voluntary tree planting, forest and grassland protection, and wildlife conservation."

"Through these low-carbon actions, we earn forest and grassland carbon sink points, which can be exchanged for rewards and digital carbon tickets. These digital carbon tickets are stored in our personal carbon accounts, where they can be traded or used to enjoy discounts at designated merchants," Qin said.

What began in Baotou is now becoming a model for other provinces and regions. Enterprises from Zhejiang, Shandong and Fujian provinces have purchased the credits to offset their emissions. Baotou's carbon credits were also used to offset emissions at the 14th National Winter Games in 2024 in Inner Mongolia, marking a milestone in applying regional carbon products to national events.