Manufacturing companies are increasingly recognizing the importance of sustainable supply chain management (SSCM) and the need to address the issue of reworking defective items in their operations, both for their business goals and for the environment. To achieve sustainability goals, it is essential to design supply chain networks while taking ecological and environmental factors into account. This article's focus is on developing an environmentally friendly supply chain system within the framework of the emission trading mechanism. The problem at hand is formulated mathematically as a non-linear programming model with the objective of minimizing the total cost and carbon emissions. The approach is applied to analyse two distinct regulations: the cap and tax scheme under a finite planning horizon (FPH). Additionally, the study includes a sensitivity analysis, along with graphical or tabular representations, to enhance its effectiveness. The numerical results indicate the optimal solution for the decision variables, and a decrease in carbon emissions is observed. To solve the problem, a programming model in the Mathematica software version -12.0 is employed.