On June 18th, 2024, the European Commission and the Ministry of Ecology and Environment (MEE) of the People’s Republic of China signed the Memorandum of Understanding to Enhance cooperation on Emissions Trading (hereinafter referred to as “the MOU”) in Brussels to replace the previous one which was signed on July 18th, 2018. Building on the EU-China Climate Change Partnership and bilateral projects, the cooperation will continue for a period of five years.
Having acknowledged the urgency of addressing climate change and the importance of giving full effect to the Paris Agreement, both the EU and China consider the Emissions Trading System (ETS) as a cost-effective instrument to reduce greenhouse gas (GHG) emissions, drive the transformation to a carbon-neutral economy and stimulate the necessary innovation and deployment of low carbon technologies. With the launch of China’s national ETS in 2021 and the latest revision of the EU ETS in 2023, both sides concurred the need for an enhanced cooperation between the two largest carbon markets in the world. They agreed to reinforce dialogue in areas relating to:
- A cost-efficient implementation of emissions trading in China and the EU;
- The promotion of ETS as an effective policy to anticipate and guarantee post-peaking emission reduction in absolute terms in the power sector;
- The role of Chinese Certified Emissions Reductions (CCER) and
- Comprehensive cooperation with respect to (1) common challenges arising from emissions trading and (2) broadening of carbon markets in China and the EU including the inclusion of new sectors.
The cooperation will take place in form of:
- An annual policy dialogue,
- The joint organization of seminars and workshops; and,
- Joint research activities and ad-hoc working groups.
The European Commission hopes that the cooperation will ‘result in mutual benefits for both sides, as well as in contributing to the promotion of carbon markets in general and world wide’.
Read More:
MEE: The MOU (Chinese Version), P020240801583349109495.pdf (mee.gov.cn)
European Commission: The MOU (English Version), https://climate.ec.europa.eu/document/download/9d1329c1-45e5-460a-8013-ad73c75c96f5_en?filename=policy_carbon_international_mou_en.pdf
