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On January 5th, 2021, China’s Ministry of Ecology and Environment (MEE) issued the Measures on the Management of Carbon Emission Trade (Trial) [1] (hereinafter refers to “the Measures”), aiming to standardize national carbon emissions trading and related activities. The Measures is scheduled to enter into effect on February 1st, 2021.
Consisting of 7 Chapters, the Measures apply to the above objectives as well as related activities such as:
Carbon emission allowance allocation and payment;
Carbon emission permits registration, trading, and settlement;
Greenhouse gas emission reporting and verification, activities, etc.
The supervision and management of all the above activities.
To guarantee the implementation of the Measures, MEE will establish the National Carbon Emission Registration Institution and the National Carbon Emission Trading Institution, and develop corresponding IT systems to support the operation of the two institutions.
The National Carbon Emission Registration institution will record the carbon emission allowance information, such as holding, modification, payment, and cancellation, etc. through the registration system, and provide settlement services. The National Carbon Emissions Trading institution will be responsible for organizing and conducting centralized and unified trading of carbon emission permits through the country.
A list of key greenhouse gas emission units will be established according to the Measures. In the Measure, greenhouse gas refers to natural and man-made gaseous components in the atmosphere that absorb and re-emit infrared radiation, including CO2, CH4, N2O, HFCs, PCFs, SF6, and NF3. Greenhouse gas emission units that meet the following conditions shall be included in the List of Key Greenhouse Gas Emission Units:
(1) Belong to the industries that the national carbon emission trading market covers, and;
(2) Annual greenhouse gas emission reached 26,000 tons of carbon dioxide equivalent.
Key emission units will be required to control greenhouse gas emissions, report carbon emission data, clear carbon emission allowances, open trading and related activity information, and accept the supervision and management of the competent department of ecological environment.
A unit will be removed from the list of key emission units when its annual greenhouse gas emission is below 26,000 tons of carbon dioxide equivalent for 2 consecutive years.
Legal penalties for the key emission units that violate the Measures are specified as well. The key emission units that fail to fulfill the obligations may be levied a fine up to 30,000 yuan. In addition, if they fail to make a rectification as the administration demands, their carbon emission allowances for the next year shall be equally reduced.
