Photo taken on July 16, 2021 shows a screen displaying real-time information of national carbon emission trading in Wuhan, central China’s Hubei Province. (Photo: Xinhua)
China’s national carbon market celebrated its one year anniversary on Saturday, as data showed that the trading volume of the carbon market has now become the largest carbon spot market in the world.
As of Friday, the cumulative trading volume of the carbon market reached 194 million tons, with a cumulative turnover of 8.49 billion yuan ($ 1.26 billion), showed data released by the market.
One year on, the carbon market has made great progress in reducing carbon emissions based on market-based mechanisms, and helped to form the function of carbon pricing, Ma Jun, direc-tor of the Beijing-based Institute of Public and Environmental Affairs, told the Global Times on Saturday.
As one of the core policy tools to achieve carbon peak and carbon neutrality, the national carbon market started online trading on July 16, 2021 at the Shanghai Environment and Energy Exchange with the opening price for the carbon quota at 48 yuan per tonne.
Carbon emissions by 2,162 power companies were covered in the first batch of trading, with a total emission of about 4.5 billion tons in one year.
By trading in the carbon market, companies can calculate their carbon emissions more effec- tively and precisely, following by disclosure progresses which is of great significance to fur-ther promote the reduction of carbon emission, Ma said.
In the meantime, there are problems that need to be addressed. For instance, the trading ac-tivities were not active enough and there were some problems involving data quality, Ma not-ed.
Currently there is only one thermal power industry involved in the trading system, it is ex-pected that more industries could be concluded in the system so as to boost the trading activi-ties, he added.
According to the plan of China’s Ministry of Ecology and Environment, during the 14th Five-Year Plan period (2021-25), the national carbon market will gradually cover eight energy-intensive industries including power generation, iron and steel, building materials , non-ferrous metals, petrochemical, chemical, paper and aviation.
About 8,500 large carbon-emitting enterprises will be included in the trading system, and managing about 70 percent of the country’s total energy-related carbon emissions.
Ma also noted that the improvement of related laws and regulations is a key aspect that needs to be enhanced. Interim regulations on the administration of carbon market trading have been put on the legislative plan list of the State Council, China’s cabinet.
Carbon trading is the process of buying and selling permits to emit carbon dioxide or other greenhouse gases.