China says carbon trading scheme will cover 2,267 power plants in phase one

SHANGHAI, Nov 21 (Reuters) - China’s long-awaited nationwide emissions trading scheme (ETS) will cover a total of 2,267 power plants in its first phase, according to government consultation papers.

Coal- and gas-fired power plants with annual carbon dioxide emissions of at least 26,000 tonnes are included in the first phase of the scheme, according to documents for public feedback by the Ministry of Ecology and Environment (MEE) released on Friday.

Under the scheme, firms are given allowances free of charge based on historical emissions, and have to buy additional permits if they exceed their quota. The total amount they need to buy will account for no more than 20% of their allocation.

The quota allocations have been determined based on emissions levels from 2013-2019, but the ministry said the collection of relevant data for last year had been disrupted by the COVID-19 pandemic and by funding issues.

China launched seven pilot regional carbon markets in 2013-2014, trading more than 400 million tonnes of CO2 by August this year, but the national ETS has been repeatedly delayed.

Li Gao, head of MEE’s climate department, said in January that he expected a “breakthrough” to be made by the end of the year. However, at a briefing last month he declined to give an exact date for the launch of trade.

Experts say President Xi Jinping’s September announcement that China would become “carbon neutral” by 2060 has injected more urgency into the market construction process.

“The Ministry of Ecology and Environment will try to rush through these new measures so as to get all things up and running as quickly as possible,” said Shawn He, a Beijing-based lawyer who advises firms on carbon compliance.

“There is a sense of urgency that hasn’t been seen for quite a long time,” he said.

Reporting by David Stanway; Editing by Jacqueline Wong