July 16, 2018 – Shanghai announced that it will offer 2 million carbon allowances in an additional auction on July 31. The goal of this auction is to help emitters comply with the ETS after shortages of certificate supply. The auctioning will be limited to ETS participants and the allowances bought must be used for compliance. Originally, this year’s compliance deadline had been set for June 30. It was postponed by a month due to some emitters facing compliance problems because they were unable to purchase permits. This situation was caused by the tendency of many potential sellers to hoard their allowances due to uncertainties related to the transition to the national ETS.
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
China has set itself the goal of peaking of CO2 emissions before 2030 and achieving carbon neutrality by 2060. The national emissions trading system (ETS) is expected to play a central role in achieving this goal and is part of China’s Nationally Determined Contribution (NDC) to the Paris Agreement. Since 2013, China has operated ETS pilots at a regional level in five cities and three provinces. The development of the national ETS was officially launched in 2017. Has entered first compliance phase, will regulate CO2 emissions from around 2,200 companies in the power generation sector. To effectively contribute to China's climate goals, the national ETS is to be further developed and expanded to other industrial sectors in the coming years. As laid out in the 14th Five-Year Plan and the 2035 long-term outline, China is committed to strengthen the control of non-CO2 greenhouse gases (GHG). Non-CO2 GHG mitigation has considerable reduction potential and can be realized at low cost. Industry-related N2O mitigation is playing an important role. N2O or nitrous oxide is a particularly potent greenhouse gas and the Chinese government develop suitable measures for a sustainable reduction GIZ on behalf of Federal Ministry for the Environment, Nature Conservation and Nuclear Safety of the Federal Republic of Germany (BMU) has been supporting the development of ETS in China since 2012, the Sino-German project “Capacity Building for the Establishment of Emissions Trading Schemes (ETS) in China” supported the Chinese government through the deepening of the knowledge and strengthening of the political leverage of key institutions and stakeholders required to develop and operate an emission trading scheme during the pilot phase at the local level and during the initial phase at the national level. Since 2020, project name is “Sino-German Cooperation on Emissions Trading Systems, Carbon Market Mechanisms, and Industry related N2O Mitigation”. The Project supports the establishment and further refinement of the Chinese national ETS as well as other carbon market instruments to reduce GHG emissions through technical exchange, advisory and capacity building activities. A particular focus is on the support for enhancing the verification system. The Project shall further strengthen the political and technical dialogue between China and Germany on carbon market topics. It further supports the abatement of industry related N2O emissions through support capacities, studies, workshops and various exchange formats for knowledge and technology. By analyzing good practices of German industry in terms of N2O reduction policies and technical solutions, the Project aims to provide policy recommendations for N2O mitigation in China.
