Measures for the Administration of Carbon Emissions Trading (for Trial Implementation)

Chapter I General Provisions

  Article 1 These Measures are developed in accordance with the requirements of the state for greenhouse gas ("GHG") emissions control for the purposes of implementing the decisions and arrangements of the CPC Central Committee and the State Council for building a national carbon emissions trading market, maximizing the role of market mechanisms in addressing climate change and promoting green and low-carbon development, encouraging more GHG emissions reductions, and regulating carbon emissions trading and related activities across the country.

  Article 2 These Measures shall apply to carbon emissions trading and related activities across the country—including, among others, the allocation and surrender of emissions allowances, the registration, trading, and settlement of carbon emissions, and the GHG emissions reporting and verification—and the supervision and management of the aforementioned activities.

  Article 3 Carbon emissions trading and related activities across the country shall be conducted under the principles of market orientation, gradual and orderly progress, fairness and openness, and good faith.

  Article 4 The Ministry of Ecology and Environment shall establish a national carbon emissions trading market in accordance with the relevant provisions of the state.

  The GHG types and industry scope covered by the national carbon emissions trading market shall be formulated by the Ministry of Ecology and Environment and implemented after being approved in accordance with procedures. And it shall also be disclosed to the public.

  Article 5 The Ministry of Ecology and Environment will, in accordance with the relevant provisions of the state, organize the establishment of a national carbon emissions registration agency and a national carbon emissions trading agency, and the building of a national carbon emissions registration system and a national carbon emissions trading system.

  The national carbon emissions registration agency, through the national carbon emissions registration system, records the holding, change, surrender, and cancellation of emissions allowances, and provides settlement services. The information recorded in the national carbon emissions registration system is the final basis for determining the ownership of emissions allowances.

  The national carbon emissions trading agency is responsible for organizing centralized and unified trading of carbon emissions nationwide.

  The national carbon emissions registration agency and the national carbon emissions trading agency shall regularly report to the Ministry of Ecology and Environment on such activities as the registration, trading, and settlement of carbon emissions nationwide and their operation and other major matters that should be reported, and ensure that both the national carbon emissions registration system and the national carbon emissions trading system are operated in a safe, stable, and reliable manner.

  Article 6 The Ministry of Ecology and Environment shall be responsible for the development of technical specifications for carbon emissions trading and related activities across the country so as to strengthen supervision and management of the allocation of local carbon emissions allowances and the reporting and verification of GHG emissions, and supervise, administer and guide carbon emissions trading and related activities throughout the country in conjunction with other relevant departments under the State Council.

  The provincial ecology and environment departments shall be responsible for organizing within their respective administrative areas such activities as the allocation and surrender of emissions allowances and the reporting and verification of GHG emissions, and supervise and administer them.

  The ecological and environmental department at the districted city level shall be responsible for cooperating with the provincial ecological and environmental department in implementing the relevant specific work, and carry out supervision and administration in accordance with the relevant provisions of these Measures.

  Article 7 The national carbon emissions registration agency and the national carbon emissions trading agency and their staff shall abide by the technical specifications for carbon emissions trading and related activities across the country, and the provisions of other competent departments of the state on transaction supervision.

  Chapter II Key GHG Emitters

  Article 8 Any GHG emitter that meets the following conditions shall be included in the list of key GHG emitters (hereinafter referred to as key emitters):

  1. It belongs to the industries covered by the national carbon emissions trading market;

  2. The amount of annual GHG emissions reaches 26,000 tons of carbon dioxide equivalent.

  Article 9 The provincial ecological and environmental department shall, in accordance with the relevant provisions of the Ministry of Ecology and Environment, determine a list of key emitters within their respective administrative areas, and report it to the Ministry of Ecology and Environment before disclosing it to the public.

  Article 10 Key emitters shall control GHG emissions, report carbon emissions data, surrender carbon emissions allowances, make public information on trading and related activities, and accept the supervision and administration of the ecological and environmental department.

  Article 11 Under any of the following circumstances, the provincial ecological and environmental department responsible for determining the list shall remove the relevant GHG emitter from the list of key emitters:

  1. The amount of annual GHG emissions fails to reach 26,000 tons of carbon dioxide equivalent for two consecutive years; or

  2. The GHGs are no longer emitted because production or business activities are discontinued due to suspension, closure, or for other reasons.

  Article 12 Where a GHG emitter applies for inclusion in the list of key emitters, the provincial ecological and environmental department responsible for determining the list shall review the application. Those that have been verified to meet the conditions prescribed in Article 8 of these Measures shall be included in the list of key emitters.

  Article 13 Key emitters that have been included in the national carbon emissions trading market shall no longer participate in the local pilot market for carbon emissions trading.

  Chapter III Allocation and Registration

  Article 14 The Ministry of Ecology and Environment shall, in accordance with the requirements of the state for controlling GHG emissions and in light of such factors as economic growth, industrial restructuring, energy mix optimization, and coordinated control of air pollutant emissions, develop a scheme for determining and allocating the total volume of emissions allowances.

  The provincial ecology and environment departments shall, in accordance with the scheme for determining and allocating the total volume of emissions allowances formulated by the Ministry of Ecology and Environment, allocate the prescribed annual carbon emission allowances to key emitters within their respective administrative areas.

  Article 15 The allocation of carbon emission allowances is mainly free, and paid allocation may be introduced in due time according to relevant state requirements.

  Article 16 After determining the carbon emissions allowances, the provincial ecological and environmental departments shall notify the key emitters in writing.

  Any objections to the allocated carbon emission allowances shall be applied to the provincial ecological and environmental department for review within seven working days from the date of receiving the notification. The provincial ecological and environmental department should make a decision on the review within ten working days from the date of receiving the application.

  Article 17 The key emitters shall open accounts in the national carbon emissions registration system to conduct the relevant business operations.

  Article 18 If a key emitter undergoes merger, division, etc. and needs to change its name, carbon emission allowances, etc., it shall report to the local provincial ecological and environmental department for review and then apply to the national carbon emissions registration agency for change registration. The national carbon emissions registration agency shall register the change through the national carbon emissions registration system and make it public.

  Article 19 The state encourages key emitters, institutions and individuals to voluntarily cancel their carbon emission allowances for the purpose of reducing GHG emissions and other public welfare purposes.

  Voluntary cancellation of carbon emission allowances shall be reduced by the same amount in the total amount of national carbon emission allowances and shall not be allocated, registered or traded. The relevant cancellation conditions shall be made public.

  Chapter IV Emission Trading

  Article 22 The trading products in the national carbon emissions trading market are carbon emission allowances, and the Ministry of Ecology and Environment may add other trading products in time according to relevant state regulations.

  Article 22 Key emitters and institutions and individuals that comply with relevant national trading rules are trading subjects in the national carbon emissions trading market.

  Article 22 The carbon emissions shall be traded through the national carbon emissions trading system in the form of contractual transfer, one-way bidding or other methods that comply with regulations.

  The national carbon emissions trading agency shall, in accordance with the relevant regulations of the Ministry of Ecology and Environment, adopt effective measures and give full play to the role of national carbon emissions trading market in guiding GHG emission reduction, to prevent excessive speculative trading and maintain the healthy development of the market.

  Article 23 The national carbon emissions registration agency shall, through the national carbon emissions registration system, update the relevant information for the trading entities according to the transaction results provided by the national carbon emissions trading agency.

  Article 24 The national carbon emissions registration agency and national carbon emissions trading agency shall, in accordance with the relevant provisions of the State, realize the timely, accurate and safe exchange of data.

  Chapter V Emission Verification and Allowance Surrender

  Article 25 Key emitters shall, in accordance with the technical specifications for accounting and reporting of GHG emissions formulated by the Ministry of Ecology and Environment, prepare their GHG emission reports for the previous year, specifying the emission amount, and report them to the provincial ecological and environmental department where the production and business operation site is located before March 31 of each year. The original records and management ledger of the data involved in the emission report shall be maintained for at least five years.

  Key emitters shall be responsible for the authenticity, completeness and accuracy of GHG emission reports.

  The annual GHG emission reports prepared by key emitters shall be made public on a regular basis and subject to public supervision, except for those involving state secrets and business secrets.

  Article 26 The provincial ecological and environmental departments shall organize the verification of GHG emission reports of key emitters and inform the key emitters of the verification results. The verification results shall serve as the basis for the surrender of carbon emissions allowances.

  Provincial ecological and environmental departments may entrust technical service organizations to provide verification services through government procurement of services. Technical service organizations shall be responsible for the authenticity, completeness and accuracy of the verification results.

  Article 27 Any objections to the verification results shall be applied to the provincial ecological and environmental department for review within seven working days from the date of receiving the verification results. The provincial ecological and environmental department should make a decision on the review within ten working days from the date of receiving the application.

  Article 28 Key emitters shall, within the time limit prescribed by the Ministry of Ecology and Environment, surrender their annual carbon emission allowances to the provincial ecological and environmental department that allocate the allowances. The surrender amount shall be equal to or greater than the actual GHG emission amount of previous year of the enterprise confirmed by the verification results of provincial ecological and environmental department.

  Article 29 Key emitters may use China certified emission reduction to offset the surrender of their carbon emission allowances each year, and the proportion of the offset shall not exceed 5% of the carbon emission allowances to be surrendered. Relevant regulations shall be separately formulated by the Ministry of Ecology and Environment.

  The China certified emission reduction used for the offsets may not come from emission reduction projects that are subject to the allowance management of the national carbon emission trading market.

  Chapter VI Supervision Management

  Article 30 Competent ecological and environmental departments at higher levels shall strengthen the supervision, inspection and guidance of the list of key emitters determined by, the national carbon emissions trading and related activities of the competent ecological and environmental departments at lower levels.

  Article 31 Local ecological and environment departments at (above) the level of the cities with districts shall, on the basis of the verification results of GHG emission reports of key emitters, determine the focus and frequency of supervision and inspection.

  Local ecological and environment departments at (above) the level of the cities with districts shall adopt the method of "oversight through inspections by randomly selected inspectors of randomly selected entities and the public release of inspection results" to supervise and inspect the surrender of GHG emission and carbon emission allowances of key emitters, and report relevant information to the Ministry of Ecology and Environment in accordance with the procedures.

  Article 32 The Ministry of Ecology and Environment and provincial ecological and environmental department shall, in accordance with the division of duties, regularly disclose information such as the annual carbon emission allowance surrender of key emitters.

  Article 33 The national carbon emissions registration agency and national carbon emissions trading agency shall abide by the relevant provisions of the national trading supervision, establish a risk management mechanism and information disclosure system, formulate risk management plans, and timely publish the information of carbon emission registration, trading and settlement.

  The personnel of the national carbon emissions registration agency and national carbon emissions trading agency shall not take advantage of their positions to seek illegitimate interests and shall not divulge business secrets.

  Article 34 Where a trading entity violates the relevant provisions of these Measures on the registration, settlement or trading of carbon emissions, the national carbon emissions registration agency and national carbon emissions trading agency may, in accordance with the relevant provisions of the State, take measures to restrict its trading.

  Article 35 The public and news media, etc. are encouraged to supervise the carbon emissions trading and related activities of key emitters and other trading entities.

  Key emitters and other trading entities shall, in accordance with the relevant provisions of the Ministry of Ecology and Environment, timely disclose information about national carbon emission trading and related activities, and consciously accept public supervision.

  Article 36 Citizens, legal persons and other organizations shall have the right to report violations of these Measures by key emitters and other trading entities to local ecological and environmental departments at (above) the level of the cities with districts.

  The competent ecological and environmental department receiving the report shall deal with the case according to law, report the results of the case according to relevant provisions, and keep the confidentiality of the informant.

  Chapter VII Penalty Provisions

  Article 37 The relevant personnel of the Ministry of Ecology and Environment, the provincial ecological and environmental departments or the ecological and environment departments at (above) the level of the cities with districts who abuse their power, neglect their duties, engage in malpractices for personal gain in the supervision and management of the national carbon emission trading and related activities shall be ordered by the administrative organs or supervisory organs at higher levels to make corrections and be punished according to law.

  Article 38 The personnel of the national carbon emissions registration agency and the national carbon emissions trading agency who violate the provisions of these Measures by committing any of the following acts shall be punished by the Ministry of Ecology and Environment according to law, and the punishment results shall be made public:

  1. Taking advantage of his/her position to seek illegitimate interests;

  2. Engaging in other abuses of power, negligence of duty, favoritism and malpractices.

  The personnel of the national carbon emissions registration agency and the national carbon emissions trading agency who violate the provisions of these Measures by disclosing relevant trade secrets or committing other acts in violation of the state trading regulations shall be dealt with in accordance with other relevant provisions.

  Article 39 Where a key emitter falsely reports or conceals its GHG emission reports, or refuses to fulfill its obligation of GHG emission report, the local ecological and environmental department at (above) the level of the cities with districts where its production and business site is located shall order the emitter to make corrections within a time limit and impose a penalty of above RMB10,000 and below RMB30,000. If it fails to make corrections within the time limit, the provincial ecological and environment department where the production and business operation site of the key emitter is located shall calculate its actual GHG emissions and take the emissions as the basis for the surrender of carbon emission allowances. For the part of false report and concealment, the carbon emission allowances of the next year shall be reduced by the same amount.

  Article 40 Where key emitters fail to surrender their carbon emission allowances in full and on time, the local ecological and environment department at (above) the level of the cities with districts where their production and business operations are located shall order them to make corrections within a time limit and impose a fine of not less than RMB20,000 but not more than RMB30,000; for those who fail to make corrections within the time limit, their carbon emission allowances for the next year shall be reduced by the same amount by the provincial ecological and environmental department where the production and business operation site of the key emitter is located.

  Article 41 If an emitter violates the provisions of these Measures and is suspected of constituting a crime, relevant ecological and environmental departments shall transfer the case to judicial organs according to law.

  Chapter VIII Supplementary Provisions

  Article 42 The meanings of the following terms in this Measures are as follows:

  1. Greenhouse gas (GHG): Refer to the natural and man-made gaseous components in the atmosphere that absorb and re-emit infrared radiation, including carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6) and nitrogen trifluoride (NF3).

  2. Carbon emission: Refer to the GHG emissions from the burning of fossil fuels such as coal, oil and natural gas and industrial production processes, as well as from land use change and forestry activities. It also includes GHG emissions from the use of outsourced electricity and heat.

  3. Carbon emission: Refer to the carbon emission allowances allocated to key emitters within a specified period.

  4. China certified emission reduction: Refer to the GHG emission reductions passed quantitative verification of the GHG emission reduction effects of renewable energy, forestry carbon sinks, methane utilization and other projects in China, and registered in the China GHG Voluntary Emission Reduction Trading Registration System.

  Article 43 These measures shall come into effect on February 1, 2021.

(This article is from the Chinese government website)