Shanghai, China’s financial center, said it will start trials of emissions trading before the end of June in an effort to reduce the intensity of its energy use and carbon discharges.
Shanghai aims to cut its energy consumption and carbon releases per unit of gross domestic product by 3.5 percent this year, according to a document posted on the website of the Shanghai Municipal Development & Reform Commission.
China, the world’s biggest emitter, has approved pilot programs to cap and trade emissions in seven manufacturing centers as part of its plan to reduce greenhouse gases per economic unit by as much as 45 percent before the end of the decade. The nation will regulate 800 million to 1 billion metric tons of emissions by 2015 in the world’s biggest cap-and-trade program outside of Europe, Bloomberg New Energy Finance forecasts.
Trading will take place on the Shanghai Environment & Energy Exchange, and total emissions covered by the city’s pilot program is 120 million to 130 million tons, according to estimates from New Energy Finance.
Shanghai’s trial program will cover producers of steel, petrochemicals and electricity with annual carbon emissions of at least 20,000 tons, as well as some smaller emitters, the municipal government said in August. The program will involve 200 companies in 16 industries that discharged about 110 million tons of carbon dioxide a year. That’s about half of the city’s total emissions, Jiefang Daily reported last year.
PetroChina and Sinopec, China’s state-owned oil companies, as well as international companies such as BASF SE and ThyssenKrupp AG are among those bound by Shanghai’s emissions cap, the government said.
Shanghai may allow participants to trade credits for emission-reduction projects in other parts of the country.