Climate Cooperation China
On behalf of the International Climate Initiative (IKI)

MEE released the Notice on the Allowance Allocation Tasks and issued the allocation plan for the year 2021 and 2022

On 15 March 2023, the Ministry of Ecology and Environment (MEE) released the Notice on the Allowance Allocation Tasks and issued the “Implementation Plan on National ETS Allowance Allocation for the year 2021 and 2022”. It requested the authorities of provincial level jurisdictions to report and finish the pre-allocation by 30 April 2023, allowance distribution and advance allocation by 15 July 2023, surrender and compliance by 15 November 2023 for 95% and by 31 December for 100%, the penalty for violations by 15 March 2023, through the national ETS online management platform.

Compared to the last compliance cycle, the plan improved mainly on:

  1. The optimised benchmarks are set according to the previous year’s actual emissions. Replaced the last version of the same benchmarks for both year of 2019 and 2020. Allowances’ distribution and surrender are also separated by year of 2021 and 2022.
  2. First time introduced the balance value, which is key reference for benchmarks setting of the power supply and heat supply units. The balance value is a carbon intensity value when the electricity and heat supply units’ allocated allowances and the verified emissions get balanced.
  3. The 70% pre-allocation’s calculation method is simplified for sum of each power generation unit’s pre-allocation to get the enterprise’s total pre-allocation.
  4. Added allowances borrowing mechanism, the enterprise can borrow from 2023 for 50 % of the gap allowances and the gap reaches more than 10% of the total allowances. It is keeping the exemption mechanism for the enterprise’ allowances gap more than 20% but only requests for surrendering 20% maximally.
  5. The correction factor of the load factor’s application, except to the coal-fired power generation units but also to the co-generation of heat and power units

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