Shenzhen Judicial Bureau on June 10 issued the draft of the Interim Regulations on the Administration of Shenzhen Carbon Emission Right Trading for consultation, as reported by Caixin on June 15. The draft stated that the city would set up a fund to manage the income from paid carbon emission quotas allocated to companies. The fund will support the development of Shenzhen’s carbon emission trading market and key projects of greenhouse gas (GHG) reduction.
The recently issued draft is also a revised version of the previous regulations the city promulgated in March 2014. In addition to the carbon emission trading fund, the new version also introduced an annual quota management implementation plan and a carbon inclusive system that recognizes certified emissions reductions (CERs) as offset credits to support sustainable production and lifestyle of individuals, families, and small businesses. These revisions resonated with the draft rules for the national carbon emission trading scheme (ETS) published by the Ministry of Ecological Environment (MEE) this March, which proposed setting up a carbon emission trading fund at the national level to manage incomes from carbon-related transactions. These new regulations pave the way for the launch of the national carbon market in late June this year, which will include 2,225 power enterprises at the initial stage.
Shenzhen is one of the 11 pilot carbon emission trading markets assigned in 2011, along with Beijing, Shanghai, Guangdong, and other cities and provinces. Shenzhen took the lead in launching carbon emission trading in the country on June 18, 2013. Since its inception, Shenzhen’s carbon market liquidity rate ranked first in the country for seven consecutive years, with the volume of trading being the third and the fourth in turnover. To be more specific, with a quota of only 2.5% of the pilot markets, Shenzhen’s carbon market achieved 16% of the total trading volumes and 17% of its turnover.