UNDATED, Nov 27: China’s most populous province, Guangdong, will launch a CO2 emissions trading scheme in mid-December, hot on the heels of Shanghai and Beijing this week. A market in Shenzhen was launched in June.
China, the world’s biggest source of climate-changing carbon emissions, will initially distribute credits to member firms mostly free of charge, meaning participants will face additional costs only if they exceed their quotas and have to buy.
Carbon markets force companies that exceed their emissions quotas to buy permits from others that reduce their emissions.
Below is how the first four Chinese markets will work. Three more will follow next year.
GUANGDONG
Some 202 companies from the power generation, cement, iron and steel, and manufacturing sectors will be given an absolute cap on their CO2 emissions for 2013 of 350 million tonnes, while the provincial Development and Reform Commission (DRC) has set aside a further 38 million permits for new entrants and unspecified “adjustment” purposes.
The scheme will in later years be expanded to cover ceramics, textiles, non-ferrous metals, plastic and paper firms.
Companies will initially be given 97 per cent of their permits for free, while the rest will be auctioned. The first auction will be in mid-December. In 2015 the share of permits to be auctioned will rise to 10 per cent.
The market has no official price floor, but the government has proposed that bids in the first auction start at 85 yesterday,
Companies will be allowed to use carbon credits from offset projects, known as Chinese Certified Emissions Reductions (CCERs), to meet 10 per cent of their overall compliance requirements. These are issued by the National DRC.
Trading will take place at the China Emissions Exchange in Guangzhou. Only spot trading is allowed. —
(AGENCIES)
Follow our WhatsApp channel