China’s top government authority has flagged the imminent launch of what is set to be the world’s largest market for carbon emissions trading.
On 7 July China’s State Council announced that it would launch trading on National Carbon Emissions Trading Market at some point in July, following the staging of initial regional trials over the past decade.
The State Council also said that it would “drive green, low-carbon development and establish monetary policy tools to support carbon emissions reductions.”
The following day on 8 July the Ministry of Ecology and Environment (MEE) said that preparatory work had seen the inclusion of over 2,200 enterprises in China’s national carbon trading system, all of whom were power companies.
MEE said that it would “further expand the scope of industries covered, and employ market mechanisms to control and reduce greenhouse gas emissions.”
The announcements arrive just following the official release of the “National Carbon Emissions Trading Market Transaction Regulations” (全国碳排放权交易市场的交易细则) on 22 June.
Since 2011 the Chinese government has conducted trials for the trading of carbon emissions credits at multiple locations around China, including Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong and Shenzhen.
As of November 2020 the trials encompassed nearly 3000 “key emissions entities” in over 20 sectors including power, steel and cement, trading credits for approximately 430 million tonnes in CO2 emissions worth nearly 10 billion yuan.
The nationwide launch of China’s carbon trading market is expected to cover more than 4 billion tonnes in emissions, making it the world’s largest carbon market.
In 2020 the Chinese central government set the emissions mitigation targets of achieving peak carbon before 2030 and carbon neutrality by 2060. Since the start of 2021 Chinese regulators led by the People’s Bank of China (PBOC) have also pushed aggressively for growth in domestic green financing.