March 25, 2014 / 6:56 AM / in 4 years

China's Hubei province to launch carbon market on Apr 2

BEIJING, March 25 (Reuters) - China’s central Hubei province will launch its carbon trading market on April 2, its emissions exchange said Tuesday, a move that could cap carbon dioxide emissions from nearly 140 of its biggest companies.

The Hubei market will be China’s sixth of seven planned regional emissions trading schemes as the world’s biggest-emitting nation steps up its efforts to limit its impact on climate change. The seventh exchange will be in the southwestern Chinese city of Chongqing, which is also scheduled to go into operation this year.

The launch date will mark the opening of secondary trading for companies covered by the scheme, but the government plans to auction an unknown number of permits ahead of that date although details are yet to be sorted out, Wang Hai, vice general manager at the China Hubei Emissions Exchange, told Reuters.

Hubei had originally planned to launch the market this month, but said two weeks ago it had delayed it.

The province will issue around 300 million permits for the year 2014, making it China’s biggest emissions market after Guangdong. Nine million permits will be auctioned, a further 21 million will be withheld in a government adjustment reserve, while the rest will be handed out to scheme participants for free.

Companies that emit more CO2 than they have permits to cover for must buy allowances in the market or in the government auctions.

Among the companies participating in the scheme will be Wuhan Iron and Steel, China’s fourth-biggest steel producer. (Reporting by Kathy Chen and Stian Reklev; Editing by Muralikumar Anantharaman)

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