BEIJING, March 19 (Reuters) - A draft plan for a carbon market in Chongqing proposed that around 250 of its biggest companies be required to cut their carbon dioxide emissions by more than 4 percent per year starting in 2014.
China, the world’s biggest carbon emitter, aims to cut greenhouse gas emissions 40-45 percent from 2005 levels by 2020. Chongqing is one of seven cities and provinces picked to set up pilot carbon markets ahead of the launch of the nationwide scheme later in the decade.
The draft plan, drawn up by Chongqing International Consulting Company and set to be approved by the city government next week, outlined detailed rules for its carbon market, expected to launch next month.
Under the scheme, emission caps will be backdated to Jan. 1, 2013, but for 2013 companies would receive up to 134 million permits, roughly equal to their current emissions, according to Li Qiang, an official at the consultancy.
Then from 2014, “the number of permits issued will drop by 4.13 percent per year”, Li told Reuters.
In mid-2015 companies must surrender permits to the government to cover their 2013 and 2014 emissions.
If the plan is approved, this would make Chongqing the first of the seven pilots to publish an emissions trajectory that requires actual emission cuts from this year.
Chongqing had originally intended to launch the market last year, but it was derailed in the aftermath of the fall of former municipal party secretary Bo Xilai.
In addition to the local permits, companies will be allowed to use offsets issued by the central government, known as Chinese Certified Emissions Reductions (CCERs), to cover 8 percent of their emissions.
All CCERs must be from renewable energy projects based in Chongqing, however. Hydropower, one of the biggest supply sources of carbon offset, will be ineligible, the draft said. (Reporting by Kathy Chen and Stian Reklev; editing by Jane Baird)