Ministry of Ecology and Environment (MEE) Released Administrative Measure for National ETS (Trial)

On January 05, 2021, the MEE released the interim administrative measure for the national ETS of China, which came into force on February 01, 2021.

According to the trial measure, the MEE is responsible for constructing the national ETS including defining the coverage of greenhouse gases (GHG) and scopes, building registration and trading systems, formalizing technical guidelines, and supervising the trading actives jointly with other authorities. It clarifies that enterprises covered by the national ETS will not participate in any regional pilot ETS anymore. At the beginning allowances  will mainly be allocated for free, with auctioning being gradually introduced in the future. Allowances are initially the only trading product but other products might be introduced later. Enterprises shall submit a GHG emission report each year before March 31. The CCER used for annual payment shall not exceed 5% of the actual annual emissions, and must be derived from renewable energy, methane utilization and carbon sink voluntary emission reduction projects within China. Finally, the supervision responsibilities within the Ecology and Environment authority system and penalties for non-compliance are also defined.

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Sino-German Project on Capacity Building for the Establishment of ETS in China

Project country
China
Political Partners
German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU); Ministry of Ecology and Environment of the People's Republic of China (MEE)
Implementation Partners
National Center for Climate Change Strategy and International Cooperation of the People's Republic of China (NCSC)
Duration
07/2012 - 03/2020

The Chinese government has set itself the goal of reaching the peak of CO2 emissions by around 2030 and reducing CO2 emissions per unit of GDP by 60 to 65% compared to 2005 levels. To achieve these targets, China is gradually establishing a national Emission Trading System (ETS) as one of the key building blocks of its mitigation strategy. Since the start of the project in 2012, the Sino-German project “Capacity Building for the Establishment of Emissions Trading Schemes (ETS) in China” has been supporting the Chinese government in this endeavour through knowledge transfer and strengthening of the political leverage of key institutions and stakeholders required to develop and operate an ETS. Initially, the project supported the development of the regional pilots ETS. Since 2016, the focus lies on support for the roll out of the national ETS. The project is jointly implemented by GIZ and the Ministry of Ecology and Environment (MEE) of the People’s Republic of China. It is executed on behalf of the Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU) within the framework of the International Climate Initiative (IKI) that is financing climate and biodiversity projects in developing and newly industrialising countries, as well as in countries in transition.