China`s Unified Carbon Emission Right Trading Market Is Expected to Officially Start in the Middle of This Year—Chairman of Shanghai Environment and Energy Exchange

From Reuters

Lai Xiaoming, chairman of the Shanghai Environment and Energy Exchange (SEEE), said a national carbon emission trading market is expected to be launched in the middle of the year, and the plan for a national carbon trading platform is being submitted for approval. As the specific contractor, SEEE carried out the relevant trading mechanism research and system construction.

The Securities Times published an interview with him on Monday, saying that the trading platform for the national carbon market will be run by independent trading institutions. The agency will be built by seven pilot provinces and cities, along with Jiangsu and Fujian provinces. At present, the establishment plan of the institution is still under approval and has not been finalized.

"The competent authorities are also studying the trading mechanism of the national carbon emission trading market, and the SEEE has also participated in the research of relevant topics and policies. It still needs time to process it for the promotion and implementation.” For example, individual investors are mentioned in the Carbon Emissions Trading Regulation (Trial), but the initial launch is expected to be dominated by companies and institutional investors, Lai said.

He said that according to the pilot area about 5% quota shall enter the platform trading, hoping that the trading scale will reach more than 200 million tons as soon as possible after the launch of the national carbon market. If the variety and mechanism can make a breakthrough in the future, then there will be a lot of room to improve the liquidity and the trading scale.

According to the national construction plan, the power industry will be included in this year. During the 14th Five-Year Plan period, it is expected that eight key energy consumption industries will be included in the carbon market. By then, the quota issuance will reach about 5 billion tons, which will be the world's largest carbon emission trading market.

At present, the institutional investors participating in carbon trading in Shanghai are mainly carbon asset management companies and investment companies. It is hoped that more financial institutions will participate in the carbon trading market in the future, which will contribute to the healthy development of the carbon market.

"After the launch of the national carbon market, China will be issued with the world's largest carbon allowances and is likely to become the world's largest spot trading market, which will have a great impact on the international market. "Even though the international and domestic markets are still segmented, China as such a big market will probably affect the global price. " "Lai Xiaoming said.

China's Ministry of Ecology and Environment (MEE) announced last Tuesday that carbon emission quota will be the trading product in the national carbon emission trading market, and the MEE can add other trading products according to relevant national regulations. The Measures will take effect on February 1st.