China unveils nationwide carbon trading market
World’s largest emitter of greenhouse gases China has flipped the switch on a nationwide carbon trading market on 1 February 2021. The Emission Trading System, which will include all greenhouse gas emissions measured by CO2e, will initially apply mainly to power plants this year.
MEE has published guidelines on how emission quotas will be distributed to a total of 2,225 coal- and gas-fired power plants, including manufacturing facilities that have captive power plants. As per media reports about 10 steelmakers are included in the list, including Baotou Steel, Anshan Steel and Pangang.
They will receive free carbon emissions quotas covering 70% the electricity and heat produced in 2018, with actual quotas to be allocated by provincial governments after final adjustments based on actual production levels in 2019-20.
China’s Ministry of Ecology and Environment Vice Minister Mr Zhao Yingmin last month also announced that it will push for a Climate Change Law, which may fill this higher level role. Taken together with the ambitious climate targets announced by President Xi in September, the timing of the publication of this regulation suggests that 2021 will be the year that China’s carbon market finally comes of age.
As the Chinese government works to curb its environmental impact, policies like a carbon trading system could spur the adoption of new technologies, increasing demand for goods and services from domestic start-ups and tech companies around the world.