China to expand carbon market to major industries by 2027
Measures aim to help deliver President Xi Jinping’s pledge to peak China’s emissions by the end of the decade
China will accelerate the expansion of its carbon market to incorporate major industries by 2027, according to guidelines issued by top policymakers.
The plan also calls for setting absolute limits on emissions, a tougher standard than the current system, which imposes caps based on carbon intensity and allows emissions to rise over time.
China has become the world’s biggest carbon polluter after rapid economic expansion pushed up its emissions. The plan to add more industries by 2027 is three years ahead of schedule and highlights the government’s determination to meet its climate targets. It should also help breathe life into an often sluggish carbon market.
The new industries will “definitely help to spur demand, which is what the government hopes to see”, said Camille Wee, an analyst at BloombergNEF. “Hopefully, this means a slightly more aggressive emissions pathway for China.”
China’s carbon market was launched four years ago, covering only power generators, the country’s main source of emissions. Three other heavily polluting industries – steel, aluminium and cement – will be added this year, although they will be subject to less stringent rules in their first two years of inclusion.