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 Cooperation on Emissions Trading Systems, Carbon Market Mechanisms, and Industry-related N2O Mitigation

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 - 09/2022

The project has been supporting the development of ETS in China since 2012. Since the launch of the Chinese national ETS, the project provides support to further refine the ETS and strengthen the political and technical dialogue between China and Germany on carbon market topics. Since 2020, the project also supports the abatement of industry related N2O emissions through capacity building, studies, workshops, and various exchange formats.