CARBON FORWARD: China’s massive carbon market to weed out industrial overcapacity

Published 09:30 on September 23, 2016  /  Last updated at 09:31 on September 23, 2016  / Stian Reklev /  Asia Pacific, Bavardage, China, Japan, Other Content, South Korea  /  No Comments

China is due to launch next year the world's biggest emissions trading scheme that is being crafted to have a profound impact on key sectors of the country's economy, such as cement, steel and petrochemicals.

China is due to launch next year the world’s biggest emissions trading scheme that is being crafted to have a profound impact on key sectors of the country’s economy, such as cement, steel and petrochemicals.

The programme initially will cap emissions from some 8,000 companies nationwide in an early bid to use market approaches to clean up China’s traditionally energy-intensive manufacturing-based economy.

The Carbon Forward 2016 conference in London on Oct. 12-14 will feature insights from analysts and market participants on what are the main price and regulatory risks involved, how Chinese and foreign-based firms are adapting to the challenges and the opportunities for carbon service providers.

Among the panellists will be Chai Qimin, director of the International Co-operation Department of China’s National Center for Climate Change Strategy and International Co-operation (NCSC), a think-tank under the National Development and Reform Commission.

Chai is involved in designing the rules for China’s national emissions trading system.

“The national ETS is expected to play a big role in cutting overcapacity, most of which is in energy and carbon intensive industries,” Chai said.

From the outset the Chinese ETS will regulate around 3-4 billion tonnes of CO2 annually, up to double the size of the EU ETS.

Initially most permits will be handed out for free, which will limit the impact on the eight included sectors, Chai said, but the effect of the scheme is set to grow over time as more sectors are covered and emissions caps are tightened.

The aim is to use the ETS to boost levels of renewable energy generation in the coal-dependent nation, and shut down unwanted overcapacity in heavily polluting industries such as iron, steel and cement that has raised concerns worldwide over its potential to flood global markets.

In time Chinese policy-makers expect the scheme to establish ties with other emissions markets. Initially links are expected to emerge with East Asian trading partners Japan and South Korea, before eventually a full-blown Asian carbon market emerges.

At that stage it would be time to look at links with other regional markets, such as the EU ETS and a potential North American market.

“Such interaction is not on the formal agenda yet, but I expect that to accelerate after 2020,” said Chai.


  • Objective: To impart on attendees a comprehensive knowledge of the likely path of development of global carbon prices, markets, politics and insight into how to manage the cost of compliance in an increasingly diverse regulatory environment.
  • Who should attend: Environmental managers, financial controllers and procurement managers of airlines, multi-nationals and other companies with an increasingly global carbon exposure, emissions traders, legislators, academics, analysts and others that are looking for an insight into the future evolution of the global carbon markets.
  • Redshaw Advisors has partnered with Carbon Pulse to organise the pre-conference EU ETS training session on Oct. 12.
  • MEP Ian Duncan, the lead lawmaker on post-2020 EU ETS reforms, will deliver a keynote address and hold a townhall-style forum on the opening day on Oct. 13.
  • The second day of the conference will be dedicated to global markets, with special focus on providing insights into the latest developments in the Asia-Pacific and North America.

The event will take place at Greenwich’s Old Royal Naval College in south-east London.

For more information on Carbon Forward 2016 or to book your place, click here

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