With a sample of listed companies that have not yet been included in the carbon trading system, this paper analyses the impact of carbon market establishment on the green decisions of nonemissioncontrol enterprises based on the spillover effect framework. It is found that the inclusion of customers in carbon market transactions promotes green innovation in nonemissioncontrol supplier enterprises. The mechanism is that the green innovation behavior of emissioncontrol enterprises under carbon trading has a pressure effect and a motivation effect based on the production network, which can stimulate the green innovation willingness of associated nonemissioncontrol enterprises and promote the improvement of their green innovation capacity. This spillover effect helps to achieve an increase in the quantity and quality of green innovation in nonemissioncontrol enterprises. The process is directional, and there are no “topdown” governance spillovers from the carbon market establishment based on production networks. The relevant effects are more pronounced in nonemissioncontrol enterprises with higher customer concentration, a better foundation for green innovation and higher environmental uncertainty. In addition, the green innovation spillover effect of the carbon market establishment has a positive effect on promoting the sustainable development of nonemissioncontrol enterprises. These conclusions provide management insights for efficiently playing the role of carbon market in the green governance and deepening environmental protection reforms to promote highquality economic development.