Major cement plants and power companies in Inner Mongolia’s two biggest cities will join the Beijing emissions trading scheme, in a rare move to boost cross-provincial trading ahead of next year’s national China market launch.
A total of 26 companies emitting at least 60,000 tonnes of CO2 annually will be brought into the Beijing market, said a statement released Thursday and signed by the Development and Reform Commissions of Beijing and Inner Mongolia.
The inclusion covers companies in Hohhot, the provincial capital, and Ordos, one of China’s richest cities due to its wealth of natural resources.
A list attached to the statement showed units of Datang and Guodian, two of China’s biggest state-owned power generators, and Shenhua, a major state-owned mining and energy company, are among the entities to be regulated.
The statement did not say how much the newcomers emit, though one source estimated that the three Datang facilities that will be brought in have collective annual output of around 25 million tonnes.
The announcement said the firms must surrender permits to cover their 2015 CO2 emissions by June 15, meaning their CO2 caps will be backdated to Jan. 1, 2015.
The caps will be based on the companies’ emission levels over 2011-2014, the statement said.
Like Beijing emitters, they will be allowed to use offsets, known as CCERs, to meet up to 5% of their compliance needs – potentially boosting demand in China’s offset market.
Beijing has previously brought a handful of cement producers from Chengde in neighbouring Hebei province into the scheme, which until now was the only example of inter-provincial cooperation in the Chinese pilot carbon markets.
Beijing officials have since last summer been in talks with Hebei, Inner Mongolia and Jiangsu provinces about incorporating some of their cities in the capital’s cap-and-trade programme, but Thursday’s announcement is the first result to come from the process.
Last week, the Beijing DRC published a list of 430 companies within the city limits that will also be brought into the scheme.
By Stian Reklev – stian@carbon-pulse.com
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