Beijing May Double Companies Included in Carbon-Trading Market

  • Key emitters may increase to over 1,000 this year from 543
  • Beijing traded 3.1 million tons of emission quotas in 2015

Beijing is expected to more than double the number of companies included in the city’s carbon-trading market as it seeks to become a model for a planned national program.

The number of key emitters may increase to over 1,000 this year from 543 in 2015 after the city lowered the inclusion requirement for annual carbon emissions to 5,000 metric tons from 10,000 metric tons, Zhou Cheng, vice president at the China Beijing Environment Exchange said in an interview on Tuesday.

The exchange traded 3.1 million metric tons of emission quotas in 2015, up almost 50 percent from a year earlier, for 130 million yuan ($20 million), he said.

The capital’s exchange is looking to expand before the start of a national pollution-trading system in 2017 as part of China’s efforts to cut global-warming emissions. Beijing’s trading volume and experience may help it compete with six other pilot regions, Zhou said.

“China is seeking the rights and wrongs from the seven pilot regions to gather experience for the national market,” he said. The other regions include Shanghai, Shenzhen, Guangzhou, Tianjin, Chongqing and Hubei.

Cap and Trade

China last month announced the national carbon-trading program will cover eight industries including papermaking and aviation. The market will be developed using a cap-and-trade system, which provides a mechanism for the biggest corporate polluters to buy credits from those that don’t pollute as much. The idea is that the emissions-trading system prompts companies to cut their emissions so they can sell their unused allocations.

The Beijing exchange called for the government to issue policies such as allowing quicker trading after a purchase to make the carbon market more liquid, Zhou said. Investors are currently required to sell allowances at least five trading days after buying them.

Beijing Municipal Commission of Development and Reform, the city’s top economic planning agency, last month said it’s studying plans on linking its allocated emission quotas with the national market’s allowances.

— With assistance by Feifei Shen

Before it's here, it's on the Bloomberg Terminal. LEARN MORE