China must set a clear timetable to expand carbon market to achieve climate goal as progress has been disappointing, expert says
- The progress of China’s carbon trading market has been disappointing, with volume and turnover lagging Europe’s market, Zhang Jinbai of Towngas Smart Energy says
- Beijing should provide clarity on allocation of carbon-reduction quotas, auction plans, toughen penalties and allow financial institutions to trade to lift liquidity, he says
China should set a clear timetable to expand the scope and robustness of its national mandatory carbon emission rights trading scheme, according to experts at a decarbonisation conference.
Progress of the cap-and-trade market’s growth has been disappointing, according to Zhang Jinbai, executive vice-president of Towngas Smart Energy, the mainland-focused natural gas and renewable energy unit of gas distributor Hong Kong and China Gas.
Launched in July 2021, China’s national emissions trading scheme (ETS) is the world’s largest, covering 4.5 billion tonnes of emissions. It was designed using the European Union’s ETS as reference.
However, its trading volume of around 220 million tonnes last year was the equivalent of only two weeks of the EU ETS’ volume, while the turnover of around €1.4 billion (US$1.5 billion) amounted to less than 0.2 per cent of the EU market, Zhang noted.
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“Some may say it is just the beginning of China’s ETS, but considering we had eight regional pilots in operation for more than 10 years and the EU ETS was thoroughly studied ahead of the China ETS launch, it is a bit disappointing,” he told a conference hosted by Hong Kong’s Business Environment Council on Thursday.