2021.07.16 ZHU, He (George)、NI, Tianling (Carey Nee)、Wang Zhengming
The long-awaited National Carbon Emission Trade Scheme (ETS) was officially launched today. Currently, the number of companies that can directly participate in the national carbon trading market is capped at 2225.
Along with the further development of the national carbon trading system, the remaining seven key energy-consuming industries (i.e., petrochemicals, chemicals, building materials, iron and steel, non-ferrous metals, papermaking and civil aviation) are expected to be gradually incorporated into the national market in the coming phases.
In order to achieve China’s committed dual carbon goals (i.e., carbon peak by 2030 and carbon neutrality by 2060), the Ministry of Ecology and Environment (MEE) issued and implemented a number of important administrative measures and rules this year, which lay the foundation for the national carbon trading system (see below for reference):
On February 1, 2021, the MEE implemented the Administrative Measures for the Trading of Carbon Emission Rights (for Trial Implementation), which stipulated rules for the allocation and settlement of carbon emission allowances, the registration, trading and settlement of carbon emission rights, the reporting and verification of greenhouse gas emissions and other activities. The MEE further promoted the construction of a national carbon trading system.
On March 26, 2021, the MEE issued the Guidelines for Verification of Enterprise Greenhouse Gas Emission Reports (for Trial Implementation), which stipulated the verification principles and basis, verification procedures and focus, verification reviews and the information disclosure of the greenhouse gas emission reports of key emission entities.
On May 17, 2021, the MEE implemented the Administrative Rules for the registration of Carbon Emission Rights (for Trial Implementation), Administrative Rules for the Trading of Carbon Emission Rights (for Trial Implementation) and the Administrative Rules for the settlement of Carbon Emission Rights (for Trial Implementation), which set the key and principle rules for carbon market trading, and specified that at the early stage, the Hubei Carbon Emission Rights Trading Center will undertake the opening of the registration system accounts, and the registration system operation and maintenance; Shanghai Environment and Energy Exchange will oversee the opening trading accounts, and the operation and maintenance of the trading system.
On June 22, 2021, Shanghai Environment and Energy Exchange, as the institution that undertakes the function of the opening of the trading accounts and the trading system operation and maintenance at the current stage, issued the Announcement about Issues Concerning Trading of National Carbon Emission Rights, which clarified certain issues related to the trading of national carbon emission rights, such as trading venues, trading means, trading periods and trading accounts .
The establishment and improvement of the national carbon trading market brings new challenges and opportunities to emission entities. Meanwhile, there will be more new investment opportunities related to green development and green finance for investment institutions.
We will continue to pay attention to the status of and investment path for the trading of carbon emission allowances, CCER and carbon trading-related financial products (including financial derivatives) in connection with the national carbon trading market, and will continue to share and discuss the relevant topics with you. If you are interested in such topics, please feel free to contact us via email: ecoenvpro@junhe.com.
JunHe’s EHS Team
JunHe, with over 900 professionals, is one of China’s largest full-service law firms with an international reputation for providing high quality legal services. As one of the pioneers in the practice area of environment, health and safety production (“EHS”) in China, JunHe’s EHS team provides multinational enterprises with a full range of EHS legal services. These include industrial project development, the incorporation of joint ventures, M&A transactions, daily commercial operations, EHS related audit and compliance, ESG, carbon reduction, government investigations, administrative punishments and reconsiderations and litigation.
