First transactions carried out in the Chinese national ETS

China today announced that the first exchanges in its National Emissions Trading System (ETS) have been completed, marking the start of formal exploitation of the world’s largest carbon market. During the first compliance period, regulated entities will have to use allowances to cover their 2019-2020 emissions. The system initially covers 2,162 electrical industry entities and 4.5 billion tonnes of C02 emissions, and will gradually expand to include more industries.

“With the first transactions taking place in its National Emissions Trading System (ETS), China has taken an important step in its progress on climate action, putting together the final piece of the puzzle for the largest carbon market in the world.

“China’s national carbon market will be one of the main policy instruments to achieve its goals of peaking carbon emissions by 2030 and achieving carbon neutrality by 2060. A functioning carbon market well will contribute to a lower peak and a faster reduction in emissions. after. The market is also a sign of China’s full commitment to participate in global climate governance as the world’s largest emitter.

“The Chinese Ministry of Ecology and Environment (MEE) has been leading the preparatory work for China’s national ETS for years, issuing basic regulations and organizing much-needed training and simulations, with the support of ‘EDF and our partners. EDF is proud to have helped to lay the foundations for the functioning of the carbon market.

“EDF is delighted to work with MEE to strengthen the Chinese national market, in particular by paving the way for increased ambition in key emissions sectors. We are confident that we will see a greener China as it tackles climate change head-on. “

• Fred Krupp, President, Environmental Defense Fund