Posted on 20 Jul 2022
China is expected to take up new carbon legislation this year, which will better define the nation's high-level decarbonization targets and long-term plans for the national carbon market, as well as impose stricter punishments for malpractices like data falsification, according to policy documents and researchers.
China's national compliance emission trading scheme has been operating for one year. In its initial phase, the key focus was largely on smoothing the roll out of emission measurements and trading activities, and the mechanism is yet to evolve fully into a carbon policy tool.
On July 14, State Council of China, the highest executive body of the country, announced its legislative work agenda of 2022, which included enacting the legislation that governs China's compliance emission trading scheme.
The legislation framework, once completed, will provide better clarity to market participants on how different government bodies will collaborate and supervise the market, how emission allowances will be allocated in the long term, and how the total emissions cap will be set, carbon think tank SinoCarbon said on July 15 in its status report on one year of China's carbon market.
It said the State Council legislation will enable stricter punishments for malpractices, beyond what can be done by the environment ministry, which currently oversees the national carbon market.
In the first compliance period of the carbon market (July 16-Dec 31, 2021), slightly more than 100 companies did not surrender for carbon allowances on time to cover their excess emissions, with an overall compliance rate of 94.5%, the report said. Ningxia in northern China, Heilongjiang and Liaoning in northeast China had the lowest compliance rates, SinoCarbon data showed.
Source:Platts
