China’s ETS only covers thermal power plants
China’s emissions trading scheme lacks bite
Overly generous allowance allocations and low prices blunt impact of world’s largest cap-and-trade scheme in its first 18 months
China’s cap-and-trade scheme has so far struggled to make an impact on emissions from domestic thermal power generators—the only sector it covers—because of low prices and overly generous allowance allocations. China’s emissions trading system (ETS) went live in July 2021 after years of delays and six regional pilots in cities including Beijing and Shanghai. It covers 2,162 thermal power plants that each emit at least 26,000t of CO₂/yr. The scheme, overseen by the state-owned Shanghai Environmental and Energy Exchange (SEEE), covers c.4.5bn t/yr of CO₂ emissions, making it the biggest in the world by volume. But transaction value in its first year of operation reached just RMB8.5bn ($1.22bn)
Also in this section
14 January 2025
Bioenergy will be a key part of the energy transition as the world decarbonises, and Brazil is set to be a major player in the sector
14 January 2025
The region has ample resources of both gas and renewable energy and developing both will be vital to the global effort to reduce emissions
13 January 2025
The region’s fast-growing economies stand at a pivotal juncture, with the opportunity to drive a sustainable growth strategy that will keep the world’s net-zero ambitions alive
10 January 2025
Global energy demand keeps rising, and digital technology will play a crucial role in both meeting that demand and doing so in a sustainable way
