China today officially launched its national emissions trading scheme. It will initially focus on the power generation sector and will be extended over time to cover seven other sectors, such as cement, iron and steel, and aluminium. The launch follows the roll-out of seven pilot emissions trading schemes in major cities, such as Beijing and Shanghai, as well as the provinces of Guangdong and Hubei since 2013.
Welcoming the announcement, Climate Action and Energy Commissioner Miguel Arias Cañete said: "As the US government turns its back on the fight against climate change, China, the EU and many others are forging ahead with robust climate policies and measures. This announcement sends a very strong signal: the world is changing with new, broad climate leadership. With both the EU and China committed to emissions trading, two major international players are championing carbon markets to meet their commitments under the Paris Agreement and curb emissions cost-effectively."
China's system will help the country – the world's biggest emitter of greenhouse gas emissions – to mitigate emissions cost-effectively. The EU is supporting China to establish and develop its own system.
A new EU-China cooperation project on emissions trading started just a few weeks ago. The €10 million (more than 70 million yuan) project runs over a period of three years. The project will enhance EU-China cooperation on emissions trading and coincides with the launch of China's nationwide carbon market. It will build on the existing cooperation project which started in 2014 and has supported the roll-out of the seven pilot schemes.
The EU Emissions Trading System (ETS) uses a cap-and-trade system to reduce emissions from large power stations, industrial plants and flights within Europe. It covers nearly half of all EU greenhouse gas emissions. Last month, the European Parliament and Council reached a provisional agreement to reform the EU ETS for the post-2020 period.