A framework of regulations for standardising China’s emissions trading systems has been approved by the State Council.
The “Interim Regulations on the Management of Carbon Emissions Trading” is yet to be published but is likely to have provisions on: defining the scale of the national carbon market, identifying “key emission companies”, determining allocation of emissions allowances, data quality supervision, and trading operations, according to the Ministry of Ecology and Environment, as reported by Securities Daily.
The national carbon market, officially launched in 2021, covers about 4.5 billion tonnes of CO2 emissions annually – all from the power sector – making it the world’s largest such market, according to The Beijing News.
However, China’s regional carbon markets lack unified laws, regulations and policy systems, and need standardising and greater transparency, states China Energy Network.
The Interim Regulations public consultation draft states that no more regional markets should be established once the regulations have implemented, and that regional markets should be gradually integrated into the national market; though it is not clear if this element is retained in the officially approved version.
Zhou Di, an expert on technology and standards, told Dazhong.com that China’s carbon markets have fewer participants, insufficient laws, and insufficient flexibility in trading mechanisms, than the world’s mature carbon markets.
The Interim Regulations, he said, “clarifies the basic principles and management requirements of carbon emissions trading”, “strengthens market supervision” and “emphasises information openness and transparency.“
Read China Dialogue’s analysis of the first two years of the national carbon market.