China's delayed carbon trading system will start operating in February, as the world's biggest polluter takes steps towards decarbonising its economy by 2060. Under the new rules, more than 2,200 firms that emit over 26,000 tonnes of greenhouse gases per year can start trading their emission quotas from February 1. The ETS will initially apply mainly to power plants numbering about a total of 2,225. Several refineries are also covered by the ETS. Once fully operational, the Emissions Trading Scheme will cover about a third of China's national emissions. The national ETS centre will be located in Shanghai and the registration system will be in Wuhan in Hubei province. China's nationwide system is expected to eclipse that of the European Union to become the world's largest emissions trading scheme
China’s Environment Ministry issued rules allowing provincial governments to set pollution caps for big power businesses for the first time. Firms can buy the right to pollute from others who have a lower carbon footprint, but the programme is expected to drive down overall emissions by making it more costly to do so.
Under the trial rules, the ministry will act as the national regulator and supervisor of the country's carbon trade, while provincial environmental authorities will manage quota allocations, emissions inspections and other administrative work.
China has pledged to peak emissions before 2030 and become carbon neutral 30 years later. But it pared back initial plans to curb emissions from seven other industries including aviation, steel and petrochemical manufacturing. China's greenhouse gas emissions in 2019 were estimated at 13.92 billion tonnes, about 29% of the world's total linked to global warming.