NDRC outlines national ETS sector coverage
1. Compiling the covered entities list: The Notice lists eight sectors to be included in the ETS from 2017: petrochemicals, chemicals, building materials, iron and steel, non-ferrous metals, paper making, power generation and aviation, that are further divided into 15 subsectors. All entities from these sectors whose energy consumptions exceed 10,000 t of standard coal equivalent in any year between 2013-2015 are considered for inclusion in the ETS from the start. The local Development and Reform Commissions (DRCs) and the Civil Aviation Administration of China (CAAC) are requested to report all entities that fulfil these requirements to the NDRC by 29 February. They may also suggest other potential participants for the ETS. Industry associations and central state-owned enterprises are also asked to do the same for companies in their reach.
2. Collecting verified historic emissions data of covered companies: To support the NDRC drafting of the national allocation plan in 2016, local DRCs shall collect emissions reports for 2013-2015 from entities in their regions in accordance with the MRV guidance documents published previously by the NDRC (2013, 2014 and 2015 [Chinese]). Companies are also required to report production and other industry-specific data that may be used for benchmark allocation. The reports must be verified by a third-party chosen by the local DRCs. Both the emissions and verification reports must then be checked by local DRCs and sent to the NDRC by the end of June 2016.
3. Developing and selecting third-party verification organizations and personnel: The NDRC is currently drafting regulation for third-party verification for the national ETS. Before this is finalized, local DRCs are asked to select suitable institutions and personnel to carry out the verification tasks. Requirements are stipulated in annex 4 and for example exclude all organisations that have been involved in carbon trading or consulting activities.
4. Intensify capacity building measures for government institutions, covered entities, verification bodies and other market participants.
In the Notice, the NDRC is also calling on the CAAC, state-owned enterprises, industry associations and the pilot regions to actively support the process.
Annexes (links to direct document downloads):
Annex 1: Industry codes of covered entities (Chinese)
Annex 2: Summary form for emissions reporting (Chinese)
Annex 3: Reporting template for covered entities (Chinese)
Annex 4: Requirements for third-party verification organisations and personnel (Chinese)
Annex 5: Reference guide for third-party verification (Chinese)