context: While the national carbon suffered numerous setbacks, the release of these two sets of rules indicates that the market is finally taking off. The signals sent by the top officialdom offer hopes of the market being developed into a robust scheme in future.
MEE (Ministry of Ecology and Environment) released two sets of draft rules on the national carbon market.
'National carbon market management measures (trial)', state
- the measures are drafted for the purpose of fulfilling the Paris Agreement
- MEE is in charge of building, managing and supervising the carbon market, and drafting relevant policies and standards
- provincial environmental authorities are responsible for managing activities within their respective jurisdictions
- municipal authorities will work with provincial counterparts on implementation
- entities to be covered are those whose annual greenhouse gas emissions are above 26,000 tonnes carbon equivalent (or around 10,000 tonnes of standard coal)
- entities covered by national market will be excluded from local pilots
- carbon allowances will first be freely allocated; auctioning will be later introduced, with the auctioned portion to increase gradually
- MEE may reserve allowances for market adjustment and major projects
- provincial authorities will distribute allowances among entities within their jurisdiction
- China Certified Emission Reduction and other supplementary carbon reduction mechanisms can be used to offset up to 5 percent of emissions
- penalties
'National carbon market registry, trading and settlements measures (trial)' outlines
- registry and settlements; trading to be managed by two separate institutions
- details concerning registry, trading, settlements
- responsibilities of registry, trading, settlements institutions
- information disclosure and risk management
- trading can proceed via open bidding, negotiation transfer and other methods approved by MEE
- a single transaction via open bidding should not exceed 100,000 tonnes
- a single transaction via negotiation should be over 100,000 tonnes
- prices may fluctuate within range of
- 10 percent for trading via open bidding
- 30 percent for trading via negotiation transfer