BEIJING (Reuters) – China will launch its nationwide carbon emissions trading system by November at the “very earliest”, a government researcher said on Tuesday.
As part of pledges made to help secure a global climate change pact in Paris in 2015, China said it would complete the launch of the nationwide emissions trading platform this year.
The country has already launched seven pilot regional carbon exchanges that force firms to buy permits to cover their emissions. It is planning to create an integrated national trading system covering as many as 10,000 enterprises in sectors like steel, power generation and papermaking this year.
The market was originally expected to launch in the first half of 2017, but regulators have struggled to deal with a variety of problems, including the valuation of permits trading on existing pilot exchanges, as well as data accuracy and transparency problems in some industrial sectors.
The researcher with an official think-tank, who advises the government on carbon market issues, said the launch was being held back by gaps in legislation as well as incomplete data in sectors like papermaking.
The researcher, who did not want to disclose his name, also said there was not yet a strong consensus on how carbon emission quotas should be allocated.
Authorities are worried that unreliable data in some industrial sectors would undermine the integrity of the market and allow firms to game the system.
Officials with the climate change department at the National Development and Reform Commission (NDRC), which regulates China’s carbon market, told a meeting on Tuesday that progress on the national exchange was still going smoothly and was on schedule to launch this year.
Xie Ji, director general of the department, said the launch was likely to include only the sectors that currently have strong statistical foundations.
“China never promised the market will launch in the first half of 2017,” said Zhang Xiliang, director at the Institute of Energy, Environment and Economy at Tsinghua University.
“We are still actively preparing for the launch and are confident that it will be launched in the next few months,” he added.
Market regulators have also been trying to figure out what to do with large amounts of carbon credits, known as CCERs, generated by an NDRC scheme aimed at funding projects that cut emissions. Amid concerns about oversupply, sources say the credits are likely to be excluded from the nationwide trading scheme in the initial phase.
Meanwhile, California on Tuesday said it would cooperate with China on clean technology, emissions trading and other “climate-positive” opportunities as it bids to fill the gap left after President Donald Trump pulled the United States out of the Paris climate accord last week.
(Reporting by Muyu Xu and David Stanway; Editing by Joseph Radford)