Beijing’s municipal government is in discussions with Hebei, Inner Mongolia and Jiangsu to include some of their cities in the Chinese capital’s carbon market, a government-led climate think-tank said Monday.

If officials reach an agreement, cities such as Zhangjiakou and Zhenjiang could join the market, Xu Huaqing with NDRC-led think-tank National Center for Climate Change Strategy and International Cooperation (NCSC) told a conference in Beijing, according to sources.

Xu is involved in designing China’s future national emissions trading market, which will launch in late 2016 or early 2017. He did not say when Beijing might establish market links to other regions.

Beijing last year agreed with Hebei to include six cement plants from the city of Chengde in its market, but issues concerning allocation plans have delayed their entry into the market.

Today’s news came as Beijing CO2 prices fell to 41.07 yuan ($6.61), a fourth consecutive day of record lows as the local government’s battle against coal-fired power and a slower economy translates to lower emissions and shrinking allowance demand.

Hong Jiyuan, vice director with the Beijing DRC, told the conference that key emitters in the ETS had reduced their CO2 emissions 3.7 million tonnes – or nearly 6% – in 2014 from the previous year.

By Stian Reklev – stian@carbon-pulse.com