Carbon trading programme shows worth at anniversary
THE ARTICLES ON THESE PAGES ARE PRODUCED BY CHINA DAILY, WHICH TAKES SOLE RESPONSIBILITY FOR THE CONTENTS
More than 194 million tonnes of carbon emission allowances have changed hands in China for almost 8.5 billion yuan (£1.05 billion) since the launch of the carbon trading market a year ago, authorities say.
The programme has played a significant role in enhancing low-carbon development awareness among major emitters as the country forges ahead with its ambitious climate targets, experts said. Although it covers only the power generation sector now, the initiative of putting a price on carbon emissions has boosted the development of carbon-related services in industries beyond, paving the way for the market’s expansion, they said.
Carbon trading is the process of buying and selling permits to emit greenhouse gases among designated emitters. It began on July 16, 2021, and now includes 2,162 power-generating companies, covering about 4.5 billion tonnes of carbon dioxide emissions. That is the world’s largest amount of greenhouse gas emissions covered.
The programme imposes carbon emissions limits for every unit of electricity a power plant generates. After each cycle of trading, operators can sell any carbon allowances they have left over after complying with the benchmark. If they fall short they will have to buy allowances.
Over the past year, the carbon market has generally run smoothly, with a slight increase in trading prices, Zhao Yingmin, vice-minister of ecology and environment, said at the China International Carbon Trading Conference in Shanghai on July 16, 2022.
The carbon price opened at 48 yuan (£5.90) a tonne on the first day of trading and was recently about 60 yuan (£7.40) a tonne.
Zhao, stressing the importance of the market in helping China honour its pledge of reaching peak carbon dioxide emissions before 2030 and realising carbon neutrality before 2060, said China will promote the expansion of the market step by step, adhering to the general principle of pursuing progress while ensuring stability.
By 2025, the national carbon market will cover another seven industries with high energy consumption – iron and steel, construction materials, non-ferrous metals, petrochemicals, chemicals, paper manufacturing and aviation – the ministry said.
“The biggest impact of the national carbon market lies in improving the awareness of carbon neutrality among companies with high emissions and their managers,” said Meng Bingzhan, deputy general manager of SinoCarbon Innovation & Investment.
By putting a price on carbon emissions, the market encourages more action from companies to cut their emissions and even consider profiting from reducing emissions by selling leftover allowances, he said.
Wu Wenzhang, general manager of Steelhome, an online business information platform for the steel industry, said China’s carbon goals will cause a reshuffling of the industry. “In future, steel companies that achieve ultra-low emissions and environmentally friendly production will have broader space for development.”
However, Li Gao, director for climate change at the Ministry of Ecology and Environment, said China still has a long way to go to improve its national carbon trading programme.
The programme has preliminarily proven its value in motivating companies to cut emissions at lower cost, but China needs to try to improve the support systems for the programme, get the market to better play its role in its operation and enhance the quality of carbon emission data, he said.
Xinhua contributed to this story
Subscribe to Independent Premium to bookmark this article
Want to bookmark your favourite articles and stories to read or reference later? Start your Independent Premium subscription today.