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China’s carbon neutral goals: turnover under emissions trading scheme expected to reach US$15 billion in 2030

  • The expectations of an increase in volume came after China’s new carbon market met its first compliance deadline with a high compliance rate of 99.5 per cent
  • About 8 billion yuan worth of carbon trading has been recorded since the national carbon exchange was launched in Shanghai mid July

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The national ETS is going to expand to cover 7 billion tonnes of carbon emissions by 2025, 60 per cent of China’s current total emissions, after gradually including all eight of China’s heavy industry sectors by then. Photo: AP
Yujie Xue
China’s carbon trading scheme, the world’s largest, could see transaction volumes reaching 100 billion yuan (US$15.7 billion) in 2030, climate experts and officials said.
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The increase in volume will come as the country’s national Emissions Trading Scheme (ETS) takes shape. The scheme is expected to undergo several upgrades this year to meet China’s carbon peaking and carbon neutrality goals.

“The basic framework of the national ETS has taken shape, and the price determination mechanism has taken effect,” said Liu Youbin, the spokesman for China’s ministry of ecology and environment (MEE). In the next step, the MEE will focus on improving relevant laws and technical specifications, he said.

The expectations of an increase in volume came after China’s new carbon market met its first compliance deadline with a high compliance rate of 99.5 per cent. The national ETS, which covers 2,162 firms from the power sector with total annual carbon dioxide emissions of 4.5 billion tonnes, completed its first compliance period on December 31, after its official launch in July last year.

Almost all trading companies have surrendered at least an equivalent number of carbon emission allowances (CEA) – which they can buy or trade under the scheme – for actual emissions in 2019 and 2020.

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Transaction volumes are expected to hit the 100 billion yuan mark by 2030, the same year China is targeting to peak its total carbon emissions, according to a report published last month by the Center for Energy and Environment Policy Research at Beijing Institute of Technology. About 8 billion yuan worth of carbon trading has been recorded since the national carbon exchange was launched in Shanghai mid July.

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