The regulations aim to provide a legal framework for China’s carbon allowance trading market by strengthening requirements and designating responsibilities.
By Hui Xu, Paul A. Davies, Jean-Philippe Brisson, and Qingyi Pan
On January 25, 2024, Chinese Premier Li Qiang signed a decree of the State Council, introducing the Regulations on the Administration of Carbon Allowance Trading (the Regulations). Effective from May 1, 2024, the Regulations provide a legal framework for the operation of China’s emissions trading scheme (ETS), which initially commenced operations in July 2021 under ministry-level management rules without a higher-level legal foundation. The Regulations fill in the regulatory vacuum that has existed since 2021.
Together with the Chinese Certified Emission Reduction (CCER) Scheme, which was restarted on October 19, 2023, the development and strengthening of the China ETS reaffirms China’s objectives to limit the growth of carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060.