Shanghai Emissions Contracts to Start Trading in July
SCMP reported that China will begin trading carbon emissions contracts later this month after eight years of trials, as the world’s largest emitter of greenhouse gases kicks off the crucial market-based mechanism to put the nation on track to meet its 2060 carbon neutral goal. Leading the charge on the Shanghai Environment and Energy Exchange will be power plants and electricity generators, estimated to be responsible for 40 per cent of China’s carbon dioxide emissions, before seven other carbon-intensive industries join in the mandatory trading. State Council, citing a directive by Premier Li Keqiang, said “Trading will be expanded to cover more industries subsequently so that greenhouse gases emission can be reduced by market forces,” according to the statement, which did not provide a schedule. The remaining industries are in construction materials, steel, petrochemical, chemical, non-ferrous metal, paper and aviation.”
State Council said “Monetary tools will be available to channel funding towards clean energy infrastructure and energy-efficient projects in an orderly and targeted fashion.”
To be sure, trading in Shanghai had been delayed from the June 30 commencement date announced in March by Minister of Ecology and the Environment Huang Runqiu during his visit to central China’s Hubei province, which will host the registration system and the data of the exchange.
The impending commencement is a crucial part of the plan by the nation responsible for 30 per cent of the world’s annual greenhouse gases to reverse the trend, through a mechanism that puts a price on emissions, prompting companies that exceed their caps to buy quotas from energy-efficient companies.
President Xi Jinping surprised the world last September with his unexpected pledge at the United Nations for China to reach carbon neutrality, becoming the second major economic entity after the European Union to put a date on that promise.