On April 22, 2021, President Xi Jinping pointed out to the international community in his speech "Building a Community of Life with Nature" at the Leaders' Climate Summit that China would launch the national carbon market online.
On June 22, 2021, in accordance with the Measures for the Administration of Carbon Emission Trading (for Trial Implementation) and the Rules for the Administration of Carbon Emission Trading (for Trial Implementation), as well as the relevant provisions of relevant national laws, regulations, rules and normative documents, Shanghai Environmental Energy Exchange Co., Ltd. issued the Announcement on Matters Related to National Carbon Emission Trading (Shanghai Environmental Exchange [2021] No. 34), which sets out the rules for national carbon emission trading in order to regulate national carbon emission trading and related activities, protect the legitimate rights and interests of all trading subjects, and maintain the order of the trading market.
Carbon trading is the trading of carbon dioxide emission rights as a commodity, and the buyer pays a certain amount to the seller so as to obtain a certain amount of carbon dioxide emission rights, thus forming a trade of carbon dioxide emission rights.
The 1997 Kyoto Protocol specifies the emission reduction targets of the signatories to the agreement and provides for three international carbon trading mechanisms: international emissions trading, joint implementation and the Clean Development Mechanism, which form the prototype of the carbon trading system. Each contracting party allocates emission reduction targets to domestic enterprises, thus forming a carbon-emissions trading system with enterprises as the mainstay.
According to the relevant regulations of the Ministry of Ecology and Environment, before the establishment of the national carbon emission trading institution, Shanghai Environmental Energy Exchange Co., Ltd. will undertake the specific work such as account opening and operation and maintenance of the national carbon emission trading system.
On June 22, 2021, Shanghai Environmental Energy Exchange Co., Ltd. specifically issued the Announcement on Matters Related to National Carbon Emissions Trading, which made clear provisions on trading methods, trading hours, trading accounts, trading responsibilities, etc.
In terms of trading methods, the trading of carbon emission allowances (CEA) can take the form of agreement transfer, one-way bidding or other methods in accordance with the regulations, and the agreement transfer includes listed agreement trading and bulk agreement trading.
The trading hours are 9:30-11:30 a.m. and 13:00-15:00 p.m. from Monday to Friday for listed agreements and 13:00-15:00 p.m. from Monday to Friday for block agreements, except for legal holidays and closed days announced by the trading institution, which will announce the trading hours for one-way bidding.
In terms of trading accounts, each trading entity can only open a trading account, and can apply for multiple operators and the corresponding account operation rights according to business needs. The trading entity shall ensure that the trading account opening information is true, complete, accurate and valid.
In terms of trading responsibility, all activities occurring under each trading account shall be regarded as the trading subject's own behavior, and the trading subject shall bear the corresponding legal responsibility.
The national carbon trading market is about to start, thanks to the active exploration and practice in recent years. As early as October 2011, the General Office of the National Development and Reform Commission issued the Notice on the Pilot Work of Carbon Emissions Trading, officially approving the pilot work of carbon trading in seven provinces and cities, including Beijing, Shanghai, Tianjin, Chongqing, Hubei, Guangdong and Shenzhen.
During the "13th Five-Year Plan" period, the construction of the domestic carbon market has developed faster.The "13th Five-Year Plan" work plan for controlling greenhouse gas emissions issued by the State Council in 2016 clearly specifies the construction and operation of a national carbon emissions trading market, with three main measures, firstly, the establishment of a The first is to establish a national carbon emission trading system; the second is to start the operation of the national carbon emission trading market; and the third is to strengthen the national carbon emission trading infrastructure support capacity.
Under the active cultivation of the state, the construction of China's carbon market has been developing in exploration and has accumulated valuable experience for the development from a regional carbon market to a national carbon market.
In December 2020, the Ministry of Ecology and Environment issued supporting documents such as the Implementation Plan for Setting and Allocating the Total Amount of National Carbon Emission Trading Quotas for 2019-2020 (Power Generation Industry) and the List of Key Emission Units Included in the Management of National Carbon Emission Trading Quotas for 2019-2020.
According to the standard of 26,000 tons of carbon dioxide equivalent and above in any one year from 2013 to 2019, 2,225 key emission units in the power generation industry have been selected to be included in the national carbon market from 2019 to 2020. This also means that the power generation industry will be the first to enter the first compliance cycle of the national carbon market as a breakthrough.
Since 2021, under the vision of carbon peaking and carbon neutral, the construction of China's carbon trading market has been speeding up under the promotion of various policy documents.
In January 2021, the Ministry of Ecology and Environment (MOE) considered and adopted the Measures for the Administration of Carbon Emissions Trading (Trial Implementation), which clarified the responsibilities, rights and obligations of all parties, including the participating parties and regulatory authorities in the carbon market.
In May 2021, three documents related to the management rules of carbon emission rights registration, trading and settlement, which were organized by the Ministry of Ecology and Environment, were formally introduced. The introduction of these documents is of positive significance to further regulate the trading activities of the national carbon market.
According to the regulations and normative documents issued by the Ministry of Ecology and Environment related to carbon trading, China's carbon market covers key emission units, i.e. enterprises with annual greenhouse gas emissions of 26,000 tons of carbon dioxide equivalent (comprehensive energy consumption of about 10,000 tons of standard coal) and above.
Currently, China implements the free distribution of allowances to key units. The total amount of carbon emission quotas and the allocation plan are formulated by the Ministry of Ecology and Environment according to the national greenhouse gas emission requirements, taking into account all factors. Provincial ecological and environmental authorities then allocate carbon emission quotas to key emission units in the region for a specified year according to the total amount of quotas and the allocation plan.
According to the provisions of the "Measures for the Administration of Carbon Emission Trading (Trial Implementation)", China's carbon market can be divided into a mandatory allowance trading market and a China Certified Voluntary Emission Reduction (CCER) market, where trading in the carbon market is dominated by allowance trading and voluntary trading in CCERs is an important supplement.
For emitters, the gap and surplus between allowances and actual emissions can be traded. The quota market (mandatory trading market) and the CCER market (voluntary trading market) can generate linkages through an offset mechanism.
Specifically, key emission units can use national certified voluntary emission reductions (CCERs) or other emission reduction targets separately announced by the Ministry of Ecology and Environment to offset up to 5% of their verified emissions. 1 unit of CCERs can offset 1 ton of CO2-equivalent emissions.
As of June 3, 2021, the historical cumulative total transaction volume of the seven pilot cities, including Beijing, Shanghai, Tianjin, Chongqing, Hubei, Guangdong and Shenzhen, was close to 340 million tons, with a turnover of more than 7.7 billion yuan.
Among them, Guangdong and Shenzhen were relatively active in carbon market trading activities, with the Guangdong Carbon Exchange having a turnover of over 126,000 tons on June 3 and a turnover of over 5.07 million yuan, and the historical cumulative turnover and turnover amount were the highest among the pilot cities.
From the perspective of historical transactions, there is a more significant difference between the transaction prices of each pilot city, with the historical average transaction price of about 30 yuan/ton and the recent price fluctuation range of 15-45 yuan/ton, while the European carbon market emission permit (EUA) futures transaction price has exceeded 50 euros/ton during the same period.
The establishment of the carbon trading market helps to enhance the economic value of green low-carbon projects and technologies from a market-oriented perspective, promote the transformation of enterprises' green low-carbon production methods, and has a significant role in promoting the achievement of carbon peaking and carbon neutral goals.
Anhui Yuanchen Environmental Technology Co., Ltd (hereinafter referred to as "Yuanchen Technology") is a high-tech enterprise integrating R&D, production and sales of dust removal bags and denitrification catalysts. Over the past sixteen years, Yuanchen Technology has been focusing on the environmental protection field, and now has 4 international PCT, 33 authorized invention patents and 77 invention patents in process, among which many products such as "dust removal and denitrification integrated technology products" have been awarded the Scientific Progress Award of Anhui Province. Our dust removal bags (mainly PPS, PTFE, P84 and composite series filter needle felt) and SCR denitrification catalysts have been widely used in cement, steel, glass kilns, waste incineration power generation, biomass power generation, non-ferrous metal smelting and other industries. In the future, Yuanchen Technology will be guided by "becoming the guardian of global ecological environment", always rooted in environmental protection, and insist on the great cause of guarding the blue sky and white clouds. Leveraging on the national ecological civilization construction pattern, we will continue to deepen technology, optimize management, strengthen brand, refine industry and solidify advantages, and create synergistic value for industry through comprehensive and integrated governance and services.
Source: Eco-environmental Standards
Statement: This article is reproduced for the purpose of conveying more information. If there is a source labeling error or infringement of your legitimate rights and interests, please author with proof of ownership and our Division Yuanchen Technology contact, we will promptly correct, delete, thank you.
Contact number: 17333203296
