A bill on China’s planned national emissions trading scheme has been passed to the State Council for approval by the country’s top economic planning agency, with no changes from an earlier draft, a leaked document showed on Tuesday.
The National Development and Reform Commissions (NDRC) has yet to publish the latest version of the ETS bill, but a copy was distributed via an anonymous account on social media platform WeChat. It is available in Chinese here.
Sources who have seen the original NDRC document confirmed to Carbon Pulse that it is the same text that was leaked online.
The undated document is thought to have been sent to the State Council, China’s Cabinet, ahead of the annual National People’s Congress, which was held in early March.
It is unclear exactly where in the legal process the draft law is. Some laws go through several rounds of consultation that can take years before final approval, while others pass more quickly.
The document showed that no changes were made to the cap-and-trade programme after the previous consultation round last year.
However, it did include a section summarising comments from other agencies, showing that the NDRC had refused a call by financial regulator China Securities Regulatory Commission (CSRC) to remove references to futures trading.
The NDRC wants to allow for futures trading in a bid to improve market liquidity and insert a more efficient carbon price into the economy. However, the CSRC only allows futures trading for a handful of commodities amid concerns of price volatility and market manipulation.
The document also showed that Guangdong province argued that provincial governments should set up rules for monitoring, reporting and emissions verification, but this too was overruled by the NDRC.
The bill for China’s national ETS:
- Puts the NDRC in charge of design, but provincial and regional governments implement.
- Regional authorities ensure compliance, applying strict penalties.
- Mostly free allocation initially, and the auctioned share increases annually.
- ETS expected to launch in H2 2017, with emission caps likely backdated to Jan. 1.
By Stian Reklev – firstname.lastname@example.org