China’s long-delayed national emissions trading scheme (ETS) that launches in February will include 10 steelmakers with energy or mining assets.
The ecology and environment ministry published the final version of regulations governing the scheme yesterday. It will take effect by 1 February, enabling eligible entities to start trading by that date and kicking off what may become the world’s largest ETS.
China’s ETS was originally designed to cover all its heavy industries but was scaled back to initially focus on power plants. The environment ministry published guidelines on the distribution of emission quotas to a total of 2,225 coal- and gas-fired power plants, as well as manufacturing facilities with captive power plants. Ten steelmakers fall under the latter category.
Steel companies with steel businesses covered under the scheme are Tisco Stainless Steel, Jiangyin Xingcheng Special Steel, Weifang Special Steel, Linzhou Xinlong Steel and Pangang. Steel companies’ energy or mining subsidiaries covered under the scheme are Tisco Lanxian Mining, Baotou Steel’s Baoshan Mining, Anshan Steel Mining’s Qidashan branch, Wisco Power, Pangang and Chongqing Ti Industry.
All entities that emitted more than 26,000t of CO2 equivalent in any single year from 2013-19 will be covered by the ETS, according to the regulations, in line with the consultation draft released in November.
China’s 1bn t/yr steel industry will be required to reduce its emissions to meet a goal of peak carbon by 2030. The ministry of industry and information technology is expected to roll out low-carbon plans for the steel and cement sectors this year.
Under the ETS launching next month, listed entities will receive free carbon emission quotas that cover a portion of emissions. Actual quotas will be allocated by provincial governments after final adjustments.
China identified an emissions-trading market as one of the top priorities for the coming year at its annual central economic work conference in December. This was the first time that emission reductions had been included in the key conference, following president Xi Jinping’s pledge last year to achieve carbon neutrality by 2060.
The environment ministry is also speeding up efforts to draft an action plan for emissions to peak by 2030 and will “start to build” a national emissions trading market in 2021, environment minister Huang Runqiu said this week.
The national ETS centre will be located in Shanghai and the registration system will be in Wuhan in Hubei province, Huang said.
China already operates emissions-trading programmes on a pilot basis in seven cities and provinces. But moves towards a nationwide scheme had stalled since 2011.
Total trading volumes in the pilot programmes were 430mn t of CO2e as of 2020, state media said. Most of the transactions were in Guangzhou and Shenzhen, accounting for around 2.21mn t of CO2e or 51pc of the total.
China is also seeking chance to launch a carbon futures market as part of efforts to meet its emissions-reduction targets, a top executive at the China securities regulatory commission (CSRC) said last year.
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