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World's largest carbon trading market mirrors China's green commitment
CGTN
China launches its national carbon market on July 16, 2021. /CFP

China launches its national carbon market on July 16, 2021. /CFP

The total trading volume on China's national carbon market, the world's largest in terms of the amount of greenhouse gas emissions covered, has reached 194 million tonnes since its launch a year ago, according to Shanghai Environment and Energy Exchange (SEEE) statistics released on Saturday.

Carbon trading is the process of buying and selling permits to emit carbon dioxide or other greenhouse gases, and is restricted to designated emitters who have such rights.

Launched on July 16, 2021, China's national carbon market is an important scheme for the country to reduce its carbon footprint and meet emissions targets, with an aim to peak CO2 emissions before 2030 and achieve carbon neutrality before 2060.

Experts noted that the market is expected to include more enterprises from emission-intensive sectors and see increasingly active trading as companies improve green awareness.

The Shanghai Environment and Energy Exchange (SEEE) in east China's Shanghai Municipality, July 16, 2021. /CFP

The Shanghai Environment and Energy Exchange (SEEE) in east China's Shanghai Municipality, July 16, 2021. /CFP

Growing awareness of carbon neutrality

Over the past year, the carbon market has run smoothly overall with a slight increase in trading prices, noted Vice Minister of Ecology and Environment Zhao Yingmin at the China International Carbon Trading Conference held on Saturday in east China's Shanghai Municipality.

The carbon price opened at 48 yuan (about $7.1) per tonne on the first trading day and has been around 60 yuan per tonne recently, according to Zhao.

Since the launch of China's national carbon market, the cumulative trading volume of carbon quota exceeded 194 million tonnes, and the cumulative trading volume reached nearly 8.5 billion yuan (about $1.26 billion). 

The market in the first year included 2,162 power-generating enterprises, covering about 4.5 billion tonnes of CO2 emissions. The market wrapped up its first compliance period on December 31, 2021, with the compliance rate reaching 99.5 percent.

According to the overall plan of the Ministry of Ecology and Environment, from 2021 to 2025 during China's 14th Five-Year Plan period, the national carbon market will cover eight high-energy-consuming industries – power generation, iron and steel, construction materials, non-ferrous metals, petrochemicals, chemicals, paper manufacturing – and aviation with a total of approximately 8,500 large emission-intensive enterprises.

Lai Xiaoming, chairman of the SEEE, said the market is also expected to become multi-levelled, and the pricing mechanism will become more scientific and reasonable with the market system in place.

Wind power helps reduce carbon emissions in Ji'an City of East China's Jiangxi Province, May 14, 2021. /CFP

Wind power helps reduce carbon emissions in Ji'an City of East China's Jiangxi Province, May 14, 2021. /CFP

Surging carbon-related services

"The biggest impact of the national carbon market lies on improving the awareness of carbon neutrality among high-emission enterprises and their managers," said Meng Bingzhan, deputy general manager of SinoCarbon Innovation & Investment.

The national carbon market has fueled an increase in transactions of China Certified Emissions Reductions (CCER), with companies' voluntary reduction of emissions achieved via means such as afforestation or employing clean energy technologies.

Statistics from the SEEE showed that in 2021, the cumulative trading volume of CCER was about 170 million tonnes, up about 1.7 times from the previous year.

"The price set at the carbon market sends a clear signal that emission costs should be factored in," Meng said, adding that some companies are even considering the reduced emissions as profits.

Wu Wenzhang, general manager of Steelhome, an online business information platform for the steel industry, said China's carbon goals mean a reshuffling for the industry. "In the future, steel enterprises that can achieve ultra-low emission and environmentally-friendly production can have a broader space for development."

China Baowu Steel Group, the world's largest steel conglomerate, in east China's Shanghai Municipality, November 21, 2021. /CFP

China Baowu Steel Group, the world's largest steel conglomerate, in east China's Shanghai Municipality, November 21, 2021. /CFP

China Baowu Steel Group, the world's largest steel conglomerate, is exploring using hydrogen to power its metallurgical process in one of its green, low-carbon projects.

The project has completed the first two experimental phases. The phase-three experiment will mark the beginning of attaining the planned capacity to achieve more than a 30-percent reduction in carbon emissions.

Shen Yizhu, CEO of Xoeytech, a carbon-related service provider in the construction industry, said though the industry has not yet been included in the national carbon market, leading enterprises in the real estate industry and the supply chain of the industry have an increasing demand for low-carbon solutions over the past year.

According to the corporate information provider Tianyancha, more than 9,800 enterprises are providing carbon-related services in China, over 1,800 of which were established in the past year. Over 800 such enterprises have been set up so far this year, up 19.4 percent year on year.

(With input from Xinhua)

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