First Year of China’s Carbon Market Yields Total Transactions Near $1.26B
At a press conference held on July 22, Liu Youbin, a spokesperson for China’s Ministry of Ecology and Environment, said that as of July 15 this year, the cumulative transaction volume of carbon emission allowances in China’s carbon market was 194 million tons, with a cumulative transaction value of 8.492 billion yuan ($1.26 billion).
China’s national carbon market officially started trading on July 16, 2021. During the first compliance cycle, 2,162 key emission enterprises in the power generation industry were included, covering about 4.5 billion tons of carbon dioxide emissions annually, making it the largest carbon market in the world.
Liu Zhiquan, an official at the Ministry of Ecology and Environment, pointed out that the national carbon market is an important policy tool for implementing the government’s goals of carbon peaking and carbon neutrality. The Ministry of Ecology and Environment has actively and steadily promoted various tasks such as institutional systems, technical specifications, infrastructure construction and capacity building. A national carbon market institutional system has been initially established together with a management framework of integrating quota allocation, data management, transaction supervision, law enforcement and inspection, and support.
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Liu also said that the incentive and restraint role of the carbon market has initially taken effect, and the responsibility for carbon emission reduction has been implemented to enterprises nationwide for the first time through the market mechanism. It has enhanced the low-carbon development awareness of enterprises that “carbon emission has costs and carbon reduction brings benefits” and effectively played the role of carbon pricing.
Next, the regulatory authorities will continue to strengthen the national carbon market laws, regulations and policy system, actively promoting the promulgation of the “Provisional Regulations on the Administration of Carbon Emission Trading,” and improving the supporting trade system and related technical specifications. On the other hand, China will strengthen data quality supervision and operation management, improve information disclosure and credit disciplinary management, and increase punishment for violations of laws and regulations. At the same time, the country will continue to strengthen the construction of the market, gradually expand its industry coverage, and enrich trading subjects, varieties and methods.