China’s carbon neutral goal: Shanghai’s new national carbon emissions trading platform unveils trading rules, sets stage for launch
- Shanghai Environment and Energy Exchange will handle account openings for traders and operations of the new trading platform until a formal national carbon emissions operator is set up
- The exchange will eventually take over all transactions in regional pilot exchanges
The new trading platform’s trading prices during a day will remain within a band of 10 per cent higher or lower compared with the previous day’s closing price, just like the country’s stock markets. Large transactions – those involving more than 100,000 tonnes of carbon emissions – will, however, have a wider band of 30 per cent higher or lower, according to Tuesday’s announcement. These transactions will only be conducted in the afternoon sessions, the exchange said.
Shanghai Environment and Energy Exchange will eventually take over all transactions in eight regional pilot exchanges, which have been up and running since early 2013. Carbon emissions trading and its related futures products are new to China. The new national carbon emissions trading platform will helping the country, the world’s largest emitter of carbon dioxide and other greenhouse gases, catch up with similar financial instruments in the United States and the European Union.
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The platform will allow mainland Chinese companies to trade carbon credits, a process where companies that release less carbon dioxide can sell their excess credits to companies that are still exceeding their limits.