Draft Plan Targets Major Carbon Emitters
China has introduced a draft proposal to significantly broaden its national carbon trading market by incorporating three major carbon-emitting industries: cement, electrolytic aluminum, and steel. This initiative, currently open for public feedback, aims to enhance the world’s largest carbon trading program, which has been limited to the coal-fired power generation sector until now.
Enhanced Market Coverage
According to the Ministry of Ecology and Environment, integrating these sectors would increase the carbon market’s coverage to approximately 60 percent of China’s total carbon emissions. This expansion is part of a strategic effort to include industries with substantial emissions profiles, thereby intensifying China’s carbon management capabilities.
Rigorous Industry Evaluation
The proposal follows detailed evaluations of seven sectors, including petrochemicals, chemicals, papermaking, and aviation, assessing their suitability for carbon market participation. The ministry’s criteria for evaluation included greenhouse gas emission control, industry development, contributions to pollution and carbon reduction, emission data quality, and compliance with international carbon requirements. The cement, steel, and electrolytic aluminum industries were identified as ready for integration into the carbon trading system this year.
Market Performance and Future Projections
Since its inception in July 2021, China’s carbon trading market has seen the exchange of roughly 465 million metric tons of carbon emission allowances, with transactions amounting to nearly 27 billion yuan ($3.8 billion). The existing system allows coal-fired power plants to trade unused carbon allowances or purchase additional ones to comply with set emission limits.
This expansion is expected to streamline emissions management across more sectors, reflecting China’s proactive approach to meeting global climate commitments through market-driven mechanisms.
Source: chinadaily.com.cn
