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China Plans to Include Eight Industries in Carbon Trading Market

China's National Carbon Trading Program to Encompass Eight Industries

China's forthcoming national carbon-trading program will encompass eight industries when it commences in 2017, as announced by the National Development and Reform Commission (NDRC), the country's top economic planning agency. The industries to be included in the program are petrochemicals, power, chemicals, construction materials, nonferrous metals, steel, papermaking, and aviation.

The establishment of a national pollution-trading system is part of China's broader efforts to reduce emissions from its most polluting industries and fulfil its commitment to reaching peak emissions around 2030. Alongside this initiative, China has been aggressively promoting the development of solar and wind power. The nationwide carbon market will be developed using a cap-and-trade system, allowing major corporate polluters to purchase credits from entities with lower emissions. The system aims to incentivize companies to reduce their emissions, enabling them to sell any unused allowances. China is already running seven pilot programs across the country.

The carbon market will encompass companies in the eight industries that have collectively consumed at least 10,000 metric tons of standard coal annually between 2013 and 2015. The NDRC has requested China's Civil Aviation Administration, industry associations, and local authorities to identify companies eligible for inclusion in the trading system by the end of February. Furthermore, the agency intends to issue plans outlining emission quotas later in the year, providing further clarity for market participants.


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