China announced today that the first trades in its national Emissions Trading Scheme (ETS) have been conducted, marking the start of the formal operation of the world’s largest carbon market. In the first compliance period, regulated entities will have to use allowances to cover their 2019-2020 emissions. The system initially covers 2,162 entities in the power industry and 4.5 billion tons 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 reached an important milestone in its progress on climate action, putting the last puzzle piece in place for the largest carbon market in the world.
“China’s national carbon market will be one of the central policy instruments to achieve its goals of peaking its carbon emissions by 2030 and reaching carbon neutrality by 2060. A well-functioning carbon market will contribute to a lower peak and a more rapid reduction in emissions afterward. The market is also a sign of China’s full commitment to participating in global climate governance as the world’s largest emitter.
“China’s Ministry of Ecology and Environment (MEE) has been leading the preparation work of China’s national ETS for years, through issuing fundamental regulations and organizing indispensable trainings and simulations, with the support of EDF and our partners. EDF is proud to have helped lay the groundwork for the carbon market’s operation.
“EDF looks forward to working with MEE to strengthen China’s national market, including by charting a pathway to increased ambition in the key emission sectors. We are optimistic that we will see a greener China as it tackles climate change head-on.”
- Fred Krupp, President, Environmental Defense Fund
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