Advertisement
China’s carbon neutral goal
BusinessBanking & Finance

China kicks off national carbon-trading exchange, using market prices to put nation on track to reach 2060 neutrality goal

  • The first trade on permits for 160,000 tonnes of emission changed hands at 52.78 yuan a tonne, according to state media CCTV
  • Trading is initially limited to the power-generation sector, which contributes about 40 per cent to carbon dioxide pollution

Reading Time:3 minutes
Why you can trust SCMP
0
Smoke billowed from a large steel plant in Inner Mongolia on November 4, 2016. Photo: Getty Images
Eric NgandYujie Xue
China kicked off its national carbon emission exchange, the world’s largest carbon market, with the first deal sealed at 7.9 million yuan (US$1.2 million), as the nation adopts a market-based mechanism to drive decarbonisation efforts in the world’s second-largest economy.

The first permit for 160,000 tonnes of emissions was transacted at 52.78 yuan a tonne on Friday morning, with the total trading volume reaching 7.9 million yuan, according to China Central Television, without divulging the identities of the buyers and sellers.

About 2,200 key emission units in the power generation industry are included in the national emission trading market, with more than 4 billion tonnes in combined carbon dioxide emissions, Xinhua News Agency reported at the debut trading officiating ceremony.

Trading is limited to the power-generation sector, the only industry included in the national emissions trading system for now. The sector contributes to about 40 per cent to the nation’s carbon dioxide emission. The exchange operates on two sessions, from 9.30am to 11.30am local time on week days, with the afternoon session going from 1pm to 3pm.

03:27

World leaders pledge to cut greenhouse emissions at virtual Earth Day summit

World leaders pledge to cut greenhouse emissions at virtual Earth Day summit
Carbon trading represents a key plank of Beijing’s policies to reach its carbon-neutrality goals by 2060, as it identifies companies that are more efficient in cutting pollution and pools market resources to support their projects, while penalising heavy emitters.

Less efficient companies, whose emissions exceed their quotas, will have to square the difference by buying additional permits from more efficient companies whose emissions are less than their allocations.

Advertisement