- China has released new regulations to improve the regulation of carbon trading.
- This regulation is designed to provide a more robust legal framework for an emissions trading scheme (ETS).
China has released new regulations to improve the regulation of carbon trading and crack down on emissions data fraud. This is a vital part of the efforts of the world’s biggest greenhouse gas producer to expand the market into new industrial sectors.
The new rules, passed by China’s cabinet, will be effective from May 1 and are designed to provide a more robust legal framework for an emissions trading scheme (ETS). This ETS covers around 5 billion metric tons of annual carbon dioxide emissions from more than 2,000 power plants.
China’s national ETS allows participants to meet emission targets by buying allowances from other companies. It was formally launched in 2021 following years of delays, partly driven by data accuracy concerns.
The new rules will establish a new supervision system and force market participants to develop data quality control plans. They will also give authorities more power to investigate and punish companies with falsified data – including third-party firms involved in monitoring and verifying emissions.
Last year, a total of 442 million tons of emission allowances had been traded, with a transaction value of nearly 25 billion yuan ($3.5 billion), but the potential for fraud has remained a major concern.