China’s emissions trading system recorded a trading volume of 179 million metric tonnes in 2021, injecting new impetus into the country’s continued efforts to foster green and low-carbon development, experts say.
The trading system, which was launched on July 16 and follows the cap-and-trade principle, is an effective tool for energy conservation, emission reduction and carbon control, experts said. . It will also help the country meet its goals of peaking carbon dioxide emissions by 2030 and achieving carbon neutrality by 2060, they added.
The trading system has made tremendous progress over the past year. Carbon trading revenue was 7.66 billion yuan ($ 1.2 billion) on 114 trading days last year, according to the Shanghai Environment and Energy Exchange.
The price of carbon emission allowances, which companies can buy or trade under the scheme, closed at 54.22 yuan per tonne on December 31, up 12.96% from the opening price. of the first trading day. The allocation’s average daily trading volume exceeded 1.25 million tonnes, 22 times and 53 times that of its counterparts in the European Union and South Korea, respectively.
Experts said the adoption of a market-based mechanism showed the government’s determination to step up decarbonization efforts as well as promote a global response to climate change.
Lin Boqiang, director of the China Institute for Energy Policy Studies at Xiamen University, said China’s carbon trading market is an effective tool for controlling carbon emissions and has made impressive achievements.
However, Lin said the relatively low value of the total trade was largely due to the limited number of emitters included in the trading system and the low price of carbon allowances. The system is currently limited to more than 2,000 companies involved in the electrical industry, but will be extended to other industries in the future.
“To propel business activity into the market, its coverage of industries and business entities needs to be broadened, and adjustments are also needed to optimize the pricing system so that companies’ efforts to control carbon can be effectively rewarded.” Lin said.
“More energy-intensive industries, such as cement and electrolytic aluminum, will likely be included in the trading system in the second half of 2022,” Lin added.
Lai Xiaoming, chairman of the Shanghai Environment and Energy Exchange, said the emissions trading market is in its infancy and has structural shortcomings compared to other markets, such as the EU.
Lai said in a recent interview with Shanghai Securities News that the exchange will add more participants to the trading system and the market will be expanded to include more carbon-emitting industries. Increased efforts will also be made for the deployment of derivative products.
Guo Haifei, deputy director of the Green Innovation Center of the Special Investment Advisory Committee of the China Investment Association, said the development of the system and the growth of the Chinese carbon trading market will help promote ” a green and low-carbon circular economy. system globally.
Shi Jing in Shanghai contributed to this story.