China national ETS officially starts trading – overview and outlook

After a decade in the making, China’s national Emissions Trading System (ETS) officially started trading on 16 July 2021. It initially involves only the power sector, covering around 4.5 Gt of CO2 emissions and 2,162 enterprises. The 31 December 2021 will be the compliance deadline for the first period (2019-2020), all allowances are currently handed out for free. The Ministry of Ecology and Environment (MEE) has handed out preliminary allocation to cover enterprises by end of June, and will finalize the allocation plan by 30 September, based on actual power generation data of 2019 and 2020. The national carbon trading platform is hosted by Shanghai Environment and Energy Exchange.