Today is Tuesday, 13 August 2024.
China's national carbon trading market is already one of the world's largest on terms of emissions traded.
After commencing operations back in July 2021, new regulations of China's carbon emissions trading market became effective on 1 May 2024.
According to a 30 July article from China Daily, in this period the market reported a trading volume of 465 million tons of carbon emissions, a total turnover of 27 billion yuan ($ 3.8 billion) and “a steady upward trend, with the closing price rising from 48 yuan per ton <$7> on the launch day to 91.6 yuan <$12> on July 26 this year”.
The Chinese Compliance Carbon Market (CCM) covers about 2,000 entities from the power generation industry, while the Voluntary Carbon Market (VCM) is centered on the issuance and trade of China Certified Emission Reductions (CCER) by other businesses and individuals.
Partially integrating regulated with voluntary, CCM participants are allowed to offset up to 5% of emissions using credits from the VCM.
See below some examples (in Chinese) of the methodologies being used.
Projects entitled for carbon credits have to meet the following criteria:
Authenticity in terms of transparency, third-party validation and verification, integrity and penalties;
Uniqueness, no double counting;
Additionally, compared with the baseline scenario.
There is also the interesting, and very sensible, “principle of conservatism”.
See this link for more details, including references to King & Wood Mallesons, the largest law firm in Asia.
Also important to mention that in recent meetings at the United Nations, China voiced concerns related to the legal nature of the carbon credits, in particular in a World that oscilates between civil and common law. Recall.
Click at the image below for China Daily’s article mentioned above.
As you will read, carbon budgets will be created by China's provinces and municipalities and tested before the end of 2025. Besides, provincial goals for renewable energy consumption and a multi-year plan to strengthen the electricity grid will be established.
Last but not least, by expanding its cap-and-trade system to other sectors, China continues enhancing its carbon market as a key tool to curb emissions.
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