After July 2021 reports had shown that the technical service company China Carbon Energy Investment and S&T (中碳能投科技有限公司) falsified emission data and supported key enterprises in their effort to manipulate their data of the first compliance cycle, the Ministry of Ecology and Environment (MEE) announced to increase its attention on the quality of emission data.
As of March 2022, the MEE had completed its verification of 2021 emission data reported by companies under the national ETS and published a list of companies that had been accused of data manipulation or inaccurate verification. The announcement featured a set of actions to be implemented by the authorities and the next steps to prevent future manipulation.
The list built upon the efforts of 31 working groups that had been established between October and December 2021 and were tasked to assist in the verification of enterprise carbon emission reports. The working groups focused on technical service companies and relevant power generation enterprises by supervising essential industrial processes such as coal sampling and monitoring production data.
As a result of investigations, the MEE released a list of four technical service companies on 14 March that assisted enterprises in manipulating their emission data or violated their due diligence. Alongside these publications, the MEE elucidated three key problems enterprises had in their data reports:
- Many of the responsible consulting firms showed limited knowledge of laws and regulations on reporting emission data.
- Key technical service companies showed poorly organized management structures which caused the lack of data accuracy.
- Some of the verification companies did not fulfil their responsibilities and failed to check the data thoroughly.
As a next step, the ministry will first roll out the “Trial Ordinance of ETS Management” with a further affirmation of the responsibilities of the technical service organizations covering their supervision and management duties in further detail. Furthermore, the MEE announced to transfer the investigation’s findings to local authorities and instruct them to prosecute the alleged enterprises. Finally, supervision of information sharing mechanisms will be enhanced.
The MEE’s investigations were accompanied by the implementation of sanctions by several provinces against companies who had reported false data for the first compliance cycle of the national ETS. Whereas Shanxi Province announced that four companies out of a total of 63 had been penalized, Anhui Province fined just one company out of a total of 69 in the first cycle. The Anhui-based company must pay a fine of 20,000 CNY according to the “Trial National ETS Administrative Measure”. Against this backdrop, Hainan Province published a list of seven companies that were included in the first cycle of the national ETS: All of them met their requirements on time. More information (CHN, CHN, CHN, CHN, CHN; CHN, CHN, CHN, CHN)