In one of its latest efforts to forge ahead with carbon neutrality, China is expected to see trading of carbon emission allowances launched online in no more than three months, according to the Ministry of Ecology and Environment.
"The country has reached the final key stage in the construction of its national carbon trading market," Minister of Ecology and Environment Huang Runqiu was quoted as saying in a news release on Sunday.
The work for the online system's construction should be arranged in accordance with the set deadline, he stressed.
With all-out efforts being made for comprehensive integration and tests, "the system should be put into operation as soon as possible to ensure trading is launched before the end of June", Huang said.
He made the remarks during an inspection tour in late February to Hubei province and Shanghai, the two areas that are leading the construction of the institutions for emissions allowance registration and emissions trading, according to the release.
Carbon trading is the process of buying and selling permits to emit carbon dioxide or other greenhouse gases. If a company curbs its emissions significantly, it can sell surplus permits in the market. If it fails to limit its emissions, it has to buy unused allowances in the market.
The national program will only initially involve the power generation sector. The ministry published a document at the end of last year setting out the 2019-20 allocation of carbon emission allowances for the sector and a list of 2,225 companies that would be given the permits.
Zhang Jianyu, founder and chief representative of the Environmental Defense Fund's China program, said these power generation companies will have to buy permits in the market if they saw their carbon emissions exceed their total free emission allocation limit between Jan 1, 2019, and the end of last year.
While addressing the general debate of the 75th session of the United Nations General Assembly via video in September, President Xi Jinping announced that China aims to see its carbon dioxide emissions peak before 2030 and to achieve carbon neutrality before 2060.
Huang said the carbon trading program is "a major institutional innovation" that could help realize these goals.
"With a strong sense of mission and responsibility, we should not only build the market well, but also make it operate smoothly, which could help translate the country's goal of reaching its peak carbon emissions and its vision of realizing carbon neutrality into concrete actions in different regions, departments and industries," he stressed.
Huang also urged Shanghai and Hubei to enhance communication and coordination with other areas that are tasked to contribute, as well as to roll out pilot programs before the bodies are officially established.
The municipal and provincial governments are expected to explore supervision and risk management mechanisms. Their experiences will be summarized and promoted, Huang added.
