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World’s largest CO2 market starts trading on Friday in China

Posted on 16 July 2021

China’s national carbon market will become the world’s biggest as begins trading on Friday.

The system, will initially cover more than 2,200 companies in China’s power sector, the Shanghai Environment and Energy Exchange said in a statement on its website. The market previously missed a June 30 deadline to launch.

China aims to rapidly expand the market to add more heavy polluting industries, Vice Minister of Ecology and Environment Zhao Yingmin said at a press conference on Wednesday. Zhao added that authorities will quickly work on setting emissions accounting rules and guidance for pollution rights for industries beyond the power sector.

Still, the market is not expected to have any impact on the amount of emissions in its early days. There’s potential that a surplus of permits will mean even power generators who pollute too much will be able to buy them at a cheap price and won’t be incentivized to become greener, according to some analysts.

Europe’s market started in 2005 and covers industries from power generation to cement and steel manufacturers. It will be expanded to include maritime transport.

Source : The Edge