Fight against climate change: China launches world's largest emissions trading system

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Chinese street

scene

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coal-fired power plants blow a lot of CO2 into the air

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After the EU presented its new plans for stronger climate protection on Wednesday, something remarkable is now also going in this direction in China: According to insiders, the People's Republic will give the go-ahead for its long-awaited system for trading CO2 emission rights (ETS) next Friday .

The system should start this month, said Chinese Deputy Environment Minister

Zhao Yingmin

on Wednesday.

The preparatory work was "essentially completed".

"We will choose a time for the introduction of the national ETS and start trading in July."

The politician did not give an exact date.

Both the "Wall Street Journal" and the Reuters news agency, however, quote insiders who expect the launch next Friday.

The project is another sign that the major nations are now increasingly taking the fight against climate change seriously.

China is the world's largest producer of CO2, ahead of the USA.

According to the media, the Chinese ETS will be the largest in the world.

It should help to achieve the climate goals of the People's Republic, the tightening of which President

Xi Jinping

(68) announced to the UN General Assembly last year: "Our goal is to reach the peak of CO2 emissions before 2030 and to be CO2 neutral before 2060. "said Xi.

It was the first time that China agreed to reduce its greenhouse gas emissions to zero.

Countries tighten climate targets

For comparison: the EU has recently also tightened its climate targets. Instead of the previous 40 percent, by 2030 at least 55 percent of CO2 emissions should be saved compared to 1990. The measures that are intended to contribute to this were presented by EU Vice-Commission President

Frans Timmermans

(60) on Wednesday under the project name "Fit for 55" in Brussels.

After ex-US President and climate change denier

Donald Trump

(75) had drilled alone for four years, under US President

Joe Biden

(78) the US has also returned to the ranks of countries that are trying to protect the climate . As a strong signal, Biden held a much-noticed climate conference in April of this year, in which China and Russia also took part. And he formulated ambitious goals for his country: by 2030, according to the US President, the United States wants to halve its greenhouse gas emissions compared to 2005.

The Chinese emissions trading system, however, was originally supposed to be introduced in 2017, but was then repeatedly delayed.

This was partly due to concerns about the transparency of the emissions data.

Most recently, a case was uncovered in which an energy company had falsified data.

Background: Trading in CO2 certificates is an important instrument for climate protection.

Such an emissions trading system for power plants and industrial companies was started in Europe as early as 2005.

With the "Fit for 55" climate plan, which the EU Commission presented on Wednesday, the framework conditions for this system are being tightened again.

Chinese ETS starts with 2,225 companies

The basic principle of an emissions trading system is simple: Industry and power plants, as the largest CO2 producers, are assigned a certain amount of rights that decrease over the years.

Those who produce in an environmentally friendly way can sell excess certificates on the stock exchange to companies that need additional rights.

According to the "Wall Street Journal", the Chinese ETS will include 2,225 companies from the energy sector at the start.

These companies are responsible for one-seventh of global CO "emissions, according to the newspaper, with reference to the International Energy Agency. According to the report, seven more industries are to be added within the next three to five years: petrochemicals, chemicals, building materials, iron and steel , Non-ferrous metals, paper and domestic aviation.

However, the price that Chinese companies have to pay for the right to emit one tonne of C02 at the start of the ETS initially appears to be quite cheap.

According to the Chinese Vice Environment Minister, it is expected to be between $ 6.18 and $ 7.73, according to the WSJ.

For comparison: In the European trading system, the CO2 price has recently risen sharply and is now around 55 euros per ton (around 65 dollars).

In Great Britain, too, the price level is currently significantly higher at 55 to 69 dollars per ton.

Only comparable trading systems in the USA currently have a price level similar to China, according to the "WSJ".

cr with material from Reuters