China’s Hunan province aims to participate in China’s national emissions trading scheme from the start, a senior official said according to local media reports.

Zhou Zhenhong, deputy director of the Hunan Development and Reform Commission (DRC) told a conference in Changsha that the province is making preparations to join the national carbon market.

“Hunan has made steady progress in building the foundations of a trading system, and will try to be ready for market trading next year,” Zhou said, according to Red Net, a local newswire.

He said China’s carbon market at the moment is not strong enough to spark investments in low-carbon technology, and that the central government should build a unified market based on the pilot schemes, such as the ones in Beijing and Shanghai, as soon as possible.

When the national scheme starts in the second half of 2016, the seven pilot regions will be included. Preliminary rules suggest other provinces initially can choose whether to join the ETS or meet their CO2 targets through other policies, although it is uncertain exactly how this will be implemented.

The National Development and Reform Commission (NDRC) has said it expects the national ETS to be fully operational, covering the whole country, by 2019 or 2020.

Earlier this month, Gansu province announced it would set up an ETS in its two biggest cities this year in preparation for the national market.

Hunan, located between Hubei and Guangdong provinces which already have carbon markets, operates a pilot scheme for greenhouse gas reporting, but last year 30% of the participants failed to report their emissions, Zhou said.

The province, home to 72 million people, is a major agricultural producer, but in recent years it has also become a hub for manufacturing of steel, machinery and electronics.

Hunan’s GDP grew around 9.5% in 2014 to 2.7 trillion yuan ($435 billion), making it slightly bigger than Austria’s economy.

By Stian Reklev – stian@carbon-pulse.com