China delays auto carbon trading scheme

Source:IPCC

China has delayed a mandatory carbon trading scheme for its auto industry aimed at boosting the production of battery cars after pressure from automakers who said they needed more time to comply.

The widely expected set of new regulations were issued on Thursday by China’s Ministry of Industry and Information Technology, following circulation of a draft earlier this year. 

The scheme would see China charge carmakers carbon credits for every combustion engine car they produce in the country, and allow them to earn credits by producing new energy vehicles (NEVs). 

Carmakers will have to fulfil a steadily growing quota of credits, starting at 10 per cent in 2019 and 12 per cent in 2020, that roughly corresponds to the ratio of NEVs to combustion engine cars they produce. 

They will gain credits according to the number and specifications of NEVs they produce. Large, long-range NEVs will receive up to five credits, while short-range NEVs and hybrids will gain two. 

Many carmakers, such as GM, Volkswagen and Ford, have laid plans to set up joint ventures to produce NEVs locally in China primarily as a way to earn credits. 

China faced concerted lobbying from these companies, and particularly the German government, over the timing of the scheme. A first draft seen in the spring said the rules would be implemented in 2018, but the later start date indicates that foreign pressure may have been successful in delaying them. 

However, Dong Yang, secretary-general of the China Association of Automobile Manufacturers, denied foreign lobbying played a role in the decision to put back the start date.

“The policy’s delay has nothing to do with the lobbying of the Chinese government from German carmakers. The main reason is that domestic carmakers have difficulties meeting the new energy credit requirements,” he told a car conference this week.

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