The　augmentation　of　transactional　volume　within　carbon　emissions　trading　systems　(ETS)　is　widely　acknowledged　as　an　efficacious　mechanism　for　ensuring　the　efficient　distribution　of　resources　and　financial　support　to　corporations,　significantly　influencing　their　financing　limitations.　Despite　its　relevance,　this　subject　has　garnered　scant　attention　in　scholarly　discourse.　This　research　utilizes　a　panel　dataset　comprising　Chinese　listed　firms　from　2009　to　2019,　applying　the　difference-in-differences　approach　to　examine　the　correlation　between　the　magnitude　of　carbon　emissions　trading　in　regional　ETS　pilots　and　the　evolution　of　financial　constraints.　Our　analysis　reveals　that　a　1%　escalation　in　carbon　transaction　volume　correlates　with　a　0.1885%　reduction　in　the　financial　constraints　encountered　by　companies.　This　phenomenon　is　particularly　salient　among　smaller　enterprises　in　the　eastern　provinces　and　second-tier　urban　centers,　and　those　engaged　in　the　primary　and　secondary　sectors.　Moreover,　our　principal　results　demonstrate　resilience　across　various　sensitivity　analyses,　encompassing　common　trend　scrutiny　and　alternative　methodologies　like　propensity　score　matching　estimation.　The　research　further　delves　into　the　underlying　mechanisms　by　which　carbon　trading　can　mitigate　a　firm’s　fiscal　pressures.　Our　examination　identifies　investment　in　intangible　assets,　improved　carbon　performance,　and　liquidity　enhancement　as　key　conduits.　These　findings　carry　substantial　policy　implications,　advocating　for　governmental　initiatives　to　bolster　corporate　engagement　in　ETS,　thereby　easing　financial　burdens　while　concurrently　advancing　environmental　regulation　and　low-carbon　transformation　objectives.　©　The　Author(s),　under　exclusive　licence　to　Springer-Verlag　GmbH　Germany,　part　of　Springer　Nature　2024.