Second year of China’s emissions t • Table.Briefings

China’s emissions trading system enters its second calendar year. Virtually all participating power companies have met the requirements by the end of 2021. However, the system does not yet provide sufficient incentives for reducing emissions. But the entry into CO2 pricing has been achieved. The next step will be to include other industries – beyond the energy sector.

The first trading cycle of the Chinese national carbon trading scheme has been completed: Time to take stock. And the results are mixed. On the positive side, the system started successfully: Trading of CO2 emission allowances has been underway on the Shanghai Environment and Energy Exchange (SEEE) since mid-July. But even though there have been actual transactions on the market, 2021 should more be considered a test run for a future, more comprehensive ETS. This is because the instrument so far had little impact on emissions due to low coverage:

Second year of China’s emissions trading

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