Guangdong’s pilot carbon emission trading market plans to further incorporate five new industries, including construction, transportation, data centers, ceramics, and textile, as reported by Caixin on June 17. At present, the local market regulates six industries: steel, petrochemicals, electric power, cement, aviation, and paper, the combined greenhouse gas (GHG) emissions from which account for nearly 70% of Guangdong’s total GHG emissions. Among them, the electricity industry will soon be within the purview of the national carbon market, which is launching in late June this year.
In the face of the national carbon market’s inception, the Ministry of Ecological Environment (MEE) issued a notice this March, which specified the criteria of key emission enterprises (KEEs) and terminated the construction of new regional pilot markets. At the initial stage of the national market, the list of KEEs includes 2,225 electric power companies. After the transfer of the power industry from the 11 pilot markets to the national market this June, it is expected to include the other five industries that the Guangdong market monitors currently. This will open new opportunities for the Guangdong market to regulate the remaining 30% of GHG emissions and explore the market-oriented mechanism for other industries’ emissions, according to Meng Meng, general manager of China Emissions Exchange Guangzhou (CEEX). Compared to the power industry which has relatively complete emission data and accounting system, other industries will require more refined calculation and management for their emission accounting process.
Guangdong launched carbon emission trading as the country’s biggest pilot market in December 2013. By the end of 2020, the Guangdong market’s cumulative volume of traded emissions reached 172m tons with a cumulative turnover of RMB3.56bn, accounting for 38% of the national total. Both the trading volume and the turnover ranked first among all pilots in the country. Furthermore, over 80% of the KEEs in the Guangdong market have implemented energy-saving and carbon reduction measures, and over 60% of KEEs have achieved lower carbon intensity per unit of production. With the successful experience and the launch of the national market, Guangdong could further promote the implementation of peaking its local carbon emissions and reaching carbon neutrality by gradually adding new industries to its provincial market.