In a press interview on 3 August 2016, Jiang Zhaoli, Deputy Director General of the Department of Climate Change of the National Development Reform Commission (NDRC), announced that China is considering a rolling model for allocation and compliance for its upcoming national emissions trading system (ETS) (Chinese). If adopted, this would mean that participating companies would be divided into groups, for instance, by sector. These groups would then receive their allowances on different dates and be subject to differing compliance deadlines. The initial allowance allocation will roll out across different regions in China starting from October 2016 and would be finished by the end of March 2017. Trading is expected to begin in the first half of 2017.
It was also announced that some more economically advanced areas in China, such as Jing-Jin-Ji (Beijing, Tianjin and Hebei), the Yangtze River Delta, and the Pearl River Delta, will be encouraged to auction a share of allowances. While provincial governments will be in charge of allocation and ensuring ETS compliance, the rules and standards for the national carbon market will be set by the NDRC.
The NDRC also approved two new exchanges in the provinces Fujian and Sichuan to serve as dedicated trading platforms for the national ETS alongside the seven platforms in the existing pilots (Chinese (Fujian news), Chinese (Sichuan news)). The Haixia Equity Exchange in Fujian aims to promote potential cooperation on climate change measures and carbon trading with Taiwan, while the Sichuan Exchange is expected to cover carbon trading and related services for Southwest and Northeast China. Sichuan also became the first province, outside of the seven ETS pilot regions, to publish their ETS regulations in line with the proposed carbon market rules released by the NDRC (Chinese). Sichuan also included plans to establish a market adjustment mechanism to ensure market stability.
The national ETS is expected to cover around 7,000-8,000 companies (click here for more details on the Chinese national ETS).
