The scheme’s expansion to include the steel, cement, and aluminum smelting industries increases the program’s coverage to 60% of China’s total greenhouse gas emissions.
By Paul A. Davies, JP Brisson, Michael Green, and Qingyi Pan
On March 26, 2025, China’s Ministry of Ecology and Environment (the MEE) published the “Work Plan for the National Carbon Emissions Trading Market Covering the Steel, Cement, and Aluminum Smelting Industries” (the Work Plan).1 The Work Plan expands the scope of
The Standards provide a framework for all Chinese companies’ sustainability disclosures and the applicability extends beyond listed companies.
By Paul A. Davies, Farhana Sharmeen, Michael D. Green, James Bee, and Qingyi Pan
On May 27, 2024, China’s Ministry of Finance published the new Corporate Sustainability Disclosure Standards (Draft for Comment) (the Standards). The Standards set out the general provisions, disclosure objectives, and information quality requirements, which aim to lay the ground for China’s unified national sustainability disclosure standard system, expected to launch by 2030. The goal of the Standards is to promote transparent disclosure throughout the value chain and to enhance the competitiveness of Chinese companies globally.
The guidelines aim to transform China’s approach to ESG by introducing sustainability disclosure rules for large listed companies.
By Hui Xu, Paul A. Davies, Jean-Philippe Brisson, and Qingyi Pan
On February 8, 2024, under the auspices of the China Securities Regulatory Commission (CSRC), each of China’s three major stock markets — Shanghai Stock Exchange, Shenzhen Stock Exchange, and Beijing Stock Exchange— unveiled draft guidelines on sustainable development reports (SDRs) (collectively referred to as the Guidelines). The Guidelines require the largest Chinese public companies to publish high-quality and standardized SDRs, and are open for public comment until February 29, 2024.
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
The draft New Measure aims to enhance the environmental integrity of China’s carbon market by introducing new requirements for project registration and credit issuance.
By Paul A. Davies, Jean-Philippe Brisson, Michael Dreibelbis, and Qingyi Pan
China is preparing to relaunch its carbon credits program, the Chinese Certified Emission Reduction (CCER) Scheme, after suspending the program for over six years. On July 7, 2023, the Ministry of Ecology and Environment (MEE) and the State Administration for Market Regulation (SAMR) of the People’s Republic of China jointly released the draft Measure for the Administration of Voluntary Emission Reduction Trading (the New Measure).
The public consultation for the draft New Measure ended on August 6, 2023, and on September 15, 2023, the MEE ministry conference reviewed and passed the New Measure in principle. The formal release is expected to happen in October 2023, upon which the New Measure would replace the previous set of rules and become the governing law of the CCER Scheme.
Together with the national emission trading scheme (the China ETS) launched two years ago, the CCER Scheme represents China’s continuous efforts towards adopting market-based mechanisms for achieving its climate pledges (peaking emissions before 2030 and reaching carbon neutrality before 2060).[i]
Forced Labor Enforcement Task Force issues required enforcement strategy, including guidance to importers.
By Erin Brown Jones, Paul A. Davies, Sarah E. Fortt, Betty M. Huber, Nathan H. Seltzer, Michael D. Green, James Bee, and Angela Walker
On June 21, 2022, the key operative provision of the Uyghur Forced Labor Prevention Act (UFLPA) entered into force, introducing a “rebuttable presumption” that any goods mined, produced, or manufactured wholly or in part in the Xinjiang region of China are in violation of Section 307 of the Tariff Act of 1930. Under the rebuttable presumption, any such goods are — unless proven otherwise by importers who comply with specific due diligence guidance and submit “clear and convincing evidence” that the goods were legitimately manufactured — presumed to be produced using forced labor, and therefore cannot be imported into the US and will be detained at the border. For more information on the UFLPA, see this Latham blog post.
The bill seeks to extend certain provisions of the Foreign Corrupt Practices Act.
By Erin Brown Jones, Paul A. Davies, Nathan H. Seltzer, and James Bee
The U.S. Congress continues to take interest in implementing legislation to curb alleged human rights abuses in the supply chain in China and elsewhere, as evidenced by two new pieces of legislation introduced in the Senate this month. These bills follow the implementation of the Uyghur Forced Labor Prevention Act, or UFLPA, in December 2021. For more information on the UFLPA, see this Latham blog post.
The start of trading represents a significant opportunity for businesses able to achieve meaningful reductions.
By Paul A. Davies and R. Andrew Westgate
Nearly four years after China’s national emissions trading scheme (ETS) was announced in late 2017, trading of emissions quotas officially commenced on July 16. The start of trading represents a significant step in China’s adoption of market-based mechanisms for addressing climate change, while also signifying a major opportunity for businesses able to achieve meaningful reductions.
More than 4.1 million tonnes of Chinese Carbon Emission Allowances (CEAs) traded on the first day at a price of RMB52.78 (or US$7.42) per tonne — an amount that was in line with analysts’ expectations for launch. Although this price is significantly below the prices of allowances in the EU ETS (€52.89 per tonne on July 16) or California (US$18.80 per tonne at the May 2021 auction), it is close to the allowance price in the Regional Greenhouse Gas Initiative (RGGI) — a cap-and-trade program covering 11 states on the east coast of the United States (US$7.97 per tonne at the auction held on June 2, 2021). Like China’s ETS in its initial phase, the RGGI covers only power plants. Since the launch, prices have largely held steady, although volume fell significantly after the initial flurry of activity.
New trade arrangement incentivizes power operators to be more energy-efficient.
By Paul A. Davies, R. Andrew Westgate, Qingyi Pan, and Jacqueline J. Yap
On January 1, 2021, the long-awaited China Emissions Trading Scheme (ETS) commenced operation, with 2,225 coal-fired power plants participating. Under this new ETS, China’s power operators will have to buy emissions permits if their coal plant exceeds carbon intensity benchmarks, giving power operators an incentive to improve efficiency. Since 2011, China has developed pilot emissions trading platforms in nine cities and provinces, paving the way for a national trading scheme that was first announced in 2017, along with an emissions trading market development plan for the power generation sector. After almost four years of development, the first annual compliance cycle officially began on January 1. China’s Ministry of Ecology and Environment (MEE) has published several policy documents on the national ETS that establish regulatory authority and specify general rules for key areas of market operation and design, including the Carbon Emissions Rights Trading Regulations (Trial), which was published in November 2020.
The proposal signals continued convergence of international standards as the green bond market further matures.
By Paul Davies, Michael Green, and Aaron Franklin
On 29 May 2020, Chinese regulators published a draft of their 2020 revision to the Green Bond-supported Project Catalogue (Green Project Catalogue) for comments. The Green Project Catalogue comprises a list of projects that are eligible to be included as green projects in a green bond framework approved by Chinese regulators — with the 2020 version marking the first revision to the list since 2015. Perhaps the most eye-catching development in the new Green Project Catalogue is the exclusion of “clean fossil fuels”, a previously included project category that had led to a notable divergence between the projects that are eligible for green financing in China, and those that meet generally accepted market standards in other parts of the world.