China Daily

Nation to expand carbon market soon

- By HOU LIQIANG houliqiang@chinadaily.com.cn

China will strive to expand its carbon trading market as soon as possible, as both trade volume and prices in the program are increasing, Zhao Yingmin, vice-minister of ecology and environmen­t, said on Monday.

The Ministry of Ecology and Environmen­t has been forging ahead with preparator­y work to include another seven major carbon emitting industries in the market, which currently only involves the power generation sector, he told a news conference organized by the State Council Informatio­n Office.

By the end of last year, the program had seen over 440 million metric tons of carbon emission allowances change hands for roughly 24.9 billion yuan ($3.5 billion), Zhao said.

He said the trade volume in the second compliance period jumped by 19 percent, and the turnover went up by 89 percent.

“Overall, the price of carbon emission allowances shows a stable upward trend,” Zhao said, adding that the price had climbed to about 80 yuan per ton, compared with 48 yuan when the market was launched.

Carbon trading is the process of buying and selling permits to emit greenhouse gases among designated emitters.

Currently, 2,257 power-generating enterprise­s are involved in the carbon trading market, Zhao said. It covers roughly 5.1 billion tons of emissions, representi­ng over 40 percent of the country’s total.

The program imposes carbon emission limits for every unit of electricit­y a power plant generates. After each cycle of trading, operators can sell any carbon allowances they have left after complying with the benchmark. If they exceed their limits, they will have to buy allowances.

On an annual basis, the ministry has carried out verificati­on of carbon emissions accounting, not only in the power generation sector, but also in seven other major carbon emitting industries, including steel, building materials and nonmake ferrous metals, he said.

Altogether, Zhao said, the eight industries account for 75 percent of the country’s emissions.

The ministry has essentiall­y completed drafts of a series of documents to include the seven industries in the market, including how to allocate carbon emission allowances and compile reports on carbon accounting verificati­on, he said.

“We are proactivel­y promoting relevant work, and will endeavor to the first expansion of the market as early as possible,” Zhao said.

Zhang Yaobo, an official with the Ministry of Justice, said a regulation introduced last month by the State Council, China’s Cabinet, on the market’s governance will help ensure smooth operation of the market with strengthen­ed penalties.

“In operation of the market, the falsificat­ion of carbon emissions data has emerged,” he said, adding that the new regulation includes measures to crack down on such violations.

Companies that breach the rules will have their illicit gains confiscate­d, and will be penalized five to 10 times the gains. The penalties should be a minimum of 200,000 yuan, but should not exceed 1 million yuan, he said.

Executives responsibl­e for the violations and the individual­s directly involved will be fined 20,000 to 200,000 yuan, he said, and they will be banned from involvemen­t in related businesses for five years.

We are proactivel­y promoting relevant work, and will endeavor to make the first expansion of the market as early as possible.”

Zhao Yingmin, vice-minister of ecology and environmen­t

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