Under the double constraints of resources and environment, improving green total factor productivity is crucial to realizing high-quality development. The Emissions Trading System has entered a deepening stage of development after decades of piloting in China, and it is of great significance to research the impact of the implementation of the Emissions Trading System on green total factor productivity. Taking the Emissions Trading System implemented in 2007 as a natural experiment, based on the panel data of 30 provinces(due to the lack of data, the statistical data mentioned here do not include the Tibet Autonomous Region, the Hong Kong Special Administrative Region, the Macao Special Administrative Region and Taiwan Province) in China from 2004 to 2020, difference-in-difference method (DID) was employed to explore the impact and mechanism of the Emissions Trading System on GTFP. The results highlight that the Emissions Trading System significantly enhances regional GTFP. The impact mechanism test shows that the Emissions Trading System further enhances GTFP by promoting green innovation and industrial structure upgrading. Relevant government departments can use the research findings as policy insights to further maximize the role of the Emissions Trading System in promoting economy and green development.