China, the world's biggest polluter, unveiled plans on Tuesday for a national carbon market likely to become the world's largest exchange for emissions credits.

China burns more coal than any other country and bears the ignominious title of top greenhouse gas emitter.

The dirty fuel generates most of the nation's power but the country has moved rapidly this winter to limit its use in northern China.

The launch of the long-delayed carbon exchange scheme is a sign that China is taking its war on pollution to new levels.

The country is the largest investor in renewable energy but has faced an uphill battle transitioning from coal, which is used to generate roughly three-quarters of its power according to the International Energy Agency.

"The launch of the Chinese carbon market shows that there is increased commitment around the world to price pollution and direct investments into clean technologies," said Femke de Jong, policy director at Carbon Market Watch.

China is seen as a potential leader in the fight against climate change after the US retreated from the Paris accord struck in 2015.

The emission exchange outlined by officials from China's National Development and Reform Commission may slowly change the calculus for utilities and other coal-burners.

"The purpose of this programme is to reduce greenhouse gas emissions," said commission vice chairman Zhang Yong.

"We aim to reduce emissions through market-based mechanisms."

The immediate focus for establishing the carbon credits exchange is on the power generation industry, Zhang said.

"Some 1,700 electric companies emitted more than three billion tons of carbon," Zhang said.

"This is where we will get to it."

The project expands on the lessons learned from seven provincial and city carbon exchanges.

"With just emissions trading in the power generation industry, the scale will exceed that of every country in the world," said Li Gao, an official in the National Development and Reform Commission's climate change department.