The Ministry of Ecology and Environment of China announced plans to add cement, steel, and aluminum production to its national carbon emissions trading market.
The China Carbon Emission Trading Exchange, active since 2021, offers more than four billion tCO2 generated from the country’s power sector. This amounts to approximately 40% of their national emissions.
Adding the three new industries would bring the exchange to cover more than 50% of all greenhouse gas emitted in the country, accelerating China’s pace for peaking CO2 emissions by 2030 and reaching carbon neutrality by 2060.
The relevant authorities are looking into adding these industries by the end of 2024, and they are currently seeking public feedback on their plan. The proposal will be open for input and suggestions by September 19th.
China plans to roll out the expansion of its national emissions trading scheme (ETS) gradually, in two phases.
In the first phase, envisioned for 2024–2026, participants will be introduced to the processes while improvements will be made to the management and quality of data related to emissions.
The second phase, scheduled for 2027, will entail reducing carbon quota allocations to companies. These quotas allow businesses to produce a specific quantity of CO2 emissions.
In the initial stages of this plan, the quotas will be delivered to businesses cost-free, and allowances won’t have an upper limit, giving larger emitters a quota suitable to their larger needs.
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The national emissions trading scheme of China is considered by its government as a crucial tool for achieving climate targets and decarbonizing industry. In January 2024, the country also relaunched the China Certified Emission Reduction (CCER) scheme, providing a baseline for the development of a voluntary carbon market in the country.
Going forward, the national ETS will work to ultimately incorporate emissions from different sectors, including petrochemicals, chemicals, paper, and domestic aviation.
Read more: China Certified Emission Reduction Program Set For Restart
