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(Bloomberg) -- China has set softer emissions rules for the three industries it plans to add to its carbon market in 2025.

The regulator has confirmed that steel, aluminum and cement companies will participate in emissions trading this year, but their free allowances won’t be capped until 2027, according to a notice from the environment ministry posted on March 21.

The expansion will add about 1,500 firms to China’s carbon market, which currently only includes power generators, capturing a total of 8 billion tons of annual emissions. The plan would extend market coverage from 40% to 60% of China’s total emissions, according to Bloomberg Intelligence.

The delay until 2027 will ease the financial burden on the new entrants. China’s economy continues to face headwinds from deflationary pressures and an escalating trade war with the US. The steel and cement industries in particularly have been wounded by the yearslong downturn in the Chinese property market.

The news may weigh on prices of carbon allowances in the short term, said Mai Duong, an Oslo-based analyst at Veyt AS. Still, they’re likely to remain above 80 yuan a ton, as the market remains optimistic given the government’s assurances it will prevent a large surplus building in the new sectors in the first few years.

--With assistance from Heesu Lee.