Capacity Building to support the establishment of a National Emission Trading Scheme (ETS) in China
As of: January 2020
Objective and activities
The project is supporting the responsible government institutions in China in the preparation and introduction of an emission trading scheme (ETS) by providing specialist advice and training. The support covers various aspects of an ETS, including the legal and procedural framework, market oversight, emission caps, allocation mechanisms, trading platforms and registries. A key element is the sharing of experience with German and European institutions. The project is also working to involve the private sector. Companies regulated and firms involved in carbon exchanges and verification are being trained on the ETS, its application and the special characteristics of the different sectors. The focus is on monitoring and reporting requirements. The project is also fostering the regional exchange of knowledge and the involvement of China in international networks related to carbon markets.
State of implementation/results
The world's largest emissions trading system is being built in China. The system will initially limit itself to the energy sector and regulate about three gigatons of CO2. In the future, further industrial sectors and civil aviation will gradually be included. The BMU has been supporting this development since 2012 via the International Climate Initiative.
- In preparation for the introduction of the national ETS, the project carried out two regional ETS training sessions in Zhengzhou and Wuhan for provincial government staff in Nov 2018 in partnership with the National Center for Climate Change Strategy and International Cooperation (NCSC). The main focus of the training was the use of monitoring plans for the measurement and reporting of emissions from the energy sector, as they are also used in the European Union Emissions Trading System. The two trainings formed the conclusion of a six-part training series in which more than 230 representatives of local governments and authorities as well as subordinate institutions were trained in the national ETS in 2018.
- Building on the successfull trainings in 2018, NCSC and GIZ will conduct further ETS-Trainings with employees of provincial authorities and participating companies in the end of 2019. The trainings are part of the official Capacity Building Plan of the Chinese Ministry of the Ecology and Environment (MEE) and serves the preperation of the coming testwise trade at the national level. The focus of the trainings will be on measurement and reporting of emissions and the allocation of certificates.
- Together with the International Carbon Action Partnership (ICAP), the project hosted an ETS Advanced Training in Haikou from 21 to 26 October 2018, aimed at young ETS experts from China who are directly involved in building the national ETS. The focus was on conceptual issues for the medium to long-term strengthening of the national ETS in China.
- From the 12th to the 14th of March 2019, the project organized a three-day expert workshop with employees of the Shanghai Environment and Energy Exchange (SEEE), the European Energy Exchange (EEX) from Leipzig and the German Emissions Trading Authority (DEHSt) for an exchange of experience for the operation and monitoring of emission trading platforms. Both the legal and regulatory issues of market supervision and technical aspects of the trading platform in market operations were the focus of attention. The SEEE is leading the construction of the national trading platform for the Chinese ETS, which will be based in Shanghai.