The State Council Information Office held a regular briefing on the policies of the State Council on the "Interim Regulations on the Administration of Carbon Emission Trading".

At 10 a.m. on Monday, February 26, 2024, the Information Office of the State Council invited Zhao Yingmin, Vice Minister of the Ministry of Ecology and Environment, and Zhang Yaobo, Director of the Fourth Legislative Bureau of the Ministry of Justice, to introduce the Interim Regulations on the Administration of Carbon Emission Trading and answer questions from reporters.

Xie Yingjun, Deputy Director of the Information Bureau and Spokesperson of the Information Office of the State Council (Photo by Luan Haijun)

Xie Yingjun, Deputy Director of the Information Bureau and Spokesperson of the Information Office of the State Council:

Good morning, ladies and gentlemen, and welcome to the regular briefing on the State Council's policies. Recently, the "Interim Regulations on the Administration of Carbon Emission Trading" has been publicly released, in order to help you better understand the relevant situation, today we invited Mr. Zhao Yingmin, Vice Minister of the Ministry of Ecology and Environment, and Mr. Zhang Yaobo, Director of the Fourth Bureau of Legislation of the Ministry of Justice, to introduce the "Interim Regulations on the Administration of Carbon Emission Trading" and answer your questions.

Next, we would like to give the floor to Vice Minister Zhao Yingmin for a briefing.

Zhao Yingmin, Vice Minister of the Ministry of Ecology and Environment (photo by Xu Xiang)

Zhao Yingmin, Vice Minister of the Ministry of Ecology and Environment:

Thank you, moderator. Ladies and gentlemen, friends from the press, good morning, I am very pleased to have the opportunity to introduce to you the Interim Regulations on the Administration of Carbon Emission Trading just promulgated by the State Council and the construction of the national carbon market. First of all, I would like to thank you for your long-term concern and support for the ecological and environmental protection work and the construction of the national carbon market.

The CPC Central Committee and the State Council attach great importance to addressing climate change. General Secretary Xi Jinping stressed that responding to climate change is not what others want us to do, but what we need to do, which is an inherent requirement for China's sustainable development. It is necessary to actively and steadily promote carbon peak and carbon neutrality, and build a more effective, dynamic and internationally influential carbon market.

The construction of a unified national carbon market is a major institutional innovation to promote the green and low-carbon development of China's economy and society. The report of the 20th National Congress of the Communist Party of China, the Opinions of the Central Committee of the Communist Party of China and the State Council on Completely, Accurately and Comprehensively Implementing the New Development Concept and Doing a Good Job in Carbon Peak and Carbon Neutrality, and the Opinions of the CPC Central Committee and the State Council on Comprehensively Promoting the Construction of a Beautiful China have all put forward clear requirements for the construction of the national carbon market. The national carbon market can not only play a decisive role in the allocation of carbon emission resources, but also realize the organic combination of an effective market and a promising government, and is a low-cost policy tool for the whole society, which is highly valued by the international community.

China's carbon market is composed of the national carbon emission trading market, that is, the mandatory carbon market, and the national greenhouse gas voluntary emission reduction trading market, that is, the voluntary carbon market.

A few days ago, Premier Li Qiang of the State Council signed an order of the State Council to promulgate the "Interim Regulations on the Administration of Carbon Emission Trading", which will come into force on May 1 this year. The Regulations are the first special regulations in the field of climate change in China, and for the first time in the form of administrative regulations, the carbon emission market trading system is of milestone significance. The "Regulations" focus on clarifying the institutional mechanism, regulating trading activities, ensuring data quality, punishing illegal acts and many other aspects of the clear provisions, providing a strong legal guarantee for the healthy development of China's carbon market, and opening a new situation of rule of law in China's carbon market. The promulgation of the "Regulations" is of great significance to the realization of China's dual carbon goals and the promotion of green and low-carbon transformation of the whole society.

Since the launch of the national mandatory carbon market for two and a half years, the overall operation has been stable, the system and norms have been improved, the market activity has gradually increased, the quality of carbon emission data has been comprehensively improved, the carbon emission management capacity has been significantly improved, and the role of the price discovery mechanism has become increasingly apparent. Since the beginning of this year, the national voluntary carbon market has been running smoothly. While promoting the emission reduction of greenhouse gases by enterprises and the high-quality development of the green and low-carbon transformation of the industry, the national carbon market also anchors the benchmark price for the whole society to carry out carbon pricing activities such as climate investment and financing, carbon asset management, etc., and promotes all sectors of society to pay attention to climate change, actively participate in carbon reduction, pollution reduction, green expansion and growth, and promote low-carbon and green production and lifestyle, so as to promote the green and low-carbon development of the whole society.

In the next step, we will take the promulgation of the "Regulations" as an opportunity to fully implement the relevant requirements of the "Regulations", further improve the relevant policy supporting systems, ensure the healthy, stable and orderly operation of the market, strictly manage and standardize the operation in accordance with the law, actively promote the construction of the carbon market, and make our contribution to the realization of the goal of carbon peak and carbon neutrality and the construction of a beautiful China.

Now, I would like to answer questions from journalists. Thank you!

Xie Yingjun:

Thank you, Vice Minister Zhao Yingmin. You are welcome to ask questions, so please let us know about your news organization before you ask questions.

People's Daily reporter asked a question (photo by Liu Jian)

People's Daily: In July 2021, the national carbon emission trading was officially launched.

Zhao Yingmin:

Thank you for your question. In accordance with the decision-making and deployment of the CPC Central Committee and the State Council, the national carbon emission trading market, which is what we call the mandatory carbon market, chose the power generation industry as a breakthrough, officially opened in July 2021, and has successfully completed two compliance cycles, the first compliance cycle is 2019-2020, and the second compliance cycle is 2021 and 2022. At present, the expected construction goals have been achieved. At present, the national carbon emission trading market covers about 5.1 billion tons of annual carbon dioxide emissions, and 2,257 key emitting enterprises are included, making it the world's largest carbon market covering greenhouse gas emissions. In the two and a half years since the construction of the national carbon emission trading market, with the strong support and efforts of all parties, four main achievements have been achieved:

First, a relatively complete set of institutional framework system has been established. The State Council issued and implemented the "Interim Regulations on the Administration of Carbon Emission Trading", and the Ministry of Ecology and Environment issued management measures and three management rules for carbon emission rights registration, trading and settlement, as well as technical specifications and supervision and management requirements for the verification of carbon emission accounting reports in the power generation industry. The legal system and working mechanism of the national carbon emission trading market composed of standards and specifications, as well as the business rules of registration institutions and trading institutions.

Second, an infrastructure support system of "one network, two institutions, and three platforms" has been built. The "National Carbon Market Information Network" has been established to publish authoritative information on the national carbon market. Establish a national carbon emission allowance registration agency and trading institution to refine the management of quota registration, issuance, clearance, trading and other related activities. The three major infrastructures of the national carbon emission allowance registration system, trading system and management platform have been built and stably operated, and the online management of the whole business link, the centralization of data in the whole process and the scientific decision-making of the whole process have been realized, and the infrastructure support system of the national carbon emission trading market has been basically formed.

Third, the ability of carbon emission accounting and management has been significantly improved. Establish a normalized and long-term supervision mechanism for the quality of carbon emission data, implement a three-level joint review of "national-provincial-municipal", and use big data, blockchain and other information technologies for intelligent early warning to eliminate data problems in the "embryonic" stage. Innovate and establish a dynamic supervision mechanism for performance risks, and urge enterprises to complete the settlement on time and in full. Enterprises participating in the carbon market have established an internal control system for carbon emission management, incorporated carbon asset management into their daily production and operation activities, and significantly improved the management and accounting capabilities of relevant enterprises.

Fourth, the market performance is stable and improving. It is manifested in several aspects: First, the market activity has significantly improved compared with the first performance cycle, and the second performance cycle. By the end of last year, the cumulative trading volume of the national carbon emission trading market reached 440 million tons, with a turnover of about 24.9 billion yuan. The second compliance cycle saw a 19% increase in volume and an 89% increase in turnover over the first one. Second, carbon prices as a whole have shown a steady upward trend. From 48 yuan per ton at the start to about 80 yuan per ton, an increase of about 66%. In the second compliance cycle, the enthusiasm of enterprises to participate in transactions has increased significantly, accounting for 82% of the total number of enterprises participating in transactions, an increase of nearly 50% compared with the first compliance cycle.

The healthy operation of the national carbon emission trading market has played an important role in achieving the dual carbon goals and promoting the green and low-carbon development of the whole society. The main aspects are as follows:

First, it has implemented the responsibility of enterprises to reduce carbon emissions. Using the allocation of carbon emission quotas in the carbon market, the carbon emission reduction target requirements are directly decomposed to enterprises, so that enterprises become the main body of carbon reduction, consolidate corporate responsibility, establish a low-carbon awareness of "carbon emission has costs, carbon reduction has benefits", and realize the effective control of carbon emissions in the first major carbon emission key industry (power industry).

Second, it reduces the cost of carbon reduction for the industry and the whole society. Through carbon emission allowance trading, the carbon market provides a more flexible choice for enterprises to fulfill their carbon reduction responsibilities, helping the industry to achieve low-cost carbon reduction. It is estimated that the overall emission reduction cost of the national power industry has been reduced by about 35 billion yuan in these two compliance cycles. With the continuous expansion of the scope of industries covered by the carbon emission trading market, the optimal allocation of carbon emission resources among different industries across the country will ultimately minimize the total cost of emission reduction in the country.

Third, the carbon price formed by the carbon market anchors the benchmark price reference for carbon pricing activities such as climate investment and financing, carbon asset management, promotes the innovation of climate investment and financing tools, and provides basic and financial support for the investment and financing of low-carbon, zero-carbon and carbon-negative technologies. China's carbon pricing mechanism, with the carbon market at its core, is gradually taking shape, promoting the low-carbon production and lifestyle of the whole society, thereby promoting green, low-carbon and high-quality development.

Fourth, we have explored and established a statistical accounting system for carbon emissions in key industries in line with China's actual situation, and cultivated a large number of professionals and related institutions in carbon emission reduction and carbon management, laying a solid foundation for promoting the realization of the dual carbon goals. Thank you!

Phoenix Satellite TV reporter asked a question (photo by Liu Jian)

Phoenix TV: We understand that the Regulations are the first time that China has clarified the carbon emission trading management system in the form of administrative regulations. Can you tell us about the general idea of the legislation of the "Regulations"?

Zhang Yaobo (photo by Xu Xiang)

Zhang Yaobo, Director of the Fourth Bureau of Legislation of the Ministry of Justice:

Thank you for your question. The general idea of a piece of legislation must revolve around and serve its legislative purpose. In other words, what kind of legislative purpose we hope to achieve, we should determine the appropriate legislative ideas accordingly. The most direct purpose of the Regulations is to provide a legal basis for the operation and management of the national carbon market. Focusing on the purpose of this legislation, we mainly emphasize three points:

First, adhere to the whole process management. The "Regulations" have achieved full coverage of the elements and main links that constitute carbon emission trading, including registration institutions, trading institutions, greenhouse gas types and industry scopes, trading entities, trading methods, determination of key emitting entities, allocation of carbon emission allowances, as well as the preparation and verification of greenhouse gas emission reports, the settlement of carbon emission allowances and market transactions, etc., and strive to leave no blanks and blind spots.

The second is to maintain the necessary flexibility. As we all know, China's carbon market as a whole is still a new thing, the national carbon market was listed and traded in July 2021, and it has been less than 3 years now, and there are still many places to explore and innovate in the entire construction and operation. On the one hand, it is necessary to provide basic compliance for the operation of the carbon market, ensure that it is standardized and orderly, and at the same time maintain the necessary flexibility in the design of the relevant system, leaving enough space for future exploration and development. It has been noted that the name of the "Regulations" is "Interim Regulations", which in fact embodies such a general idea.

The third is to adhere to the problem-oriented. Because the authenticity of carbon emission data is the key and premise of whether the policy function of the carbon market can be played and whether the market can operate healthily. It has been noted that in practice, there is already an emerging problem of falsification of emission data, so legislation must highlight the problem-oriented approach and respond effectively in a timely manner. The "Regulations" take the effective prevention and punishment of carbon emission data fraud as an important content, and strive to improve the system and mechanism to ensure the play of the policy function of the carbon emission market from four aspects: strengthening the main responsibility of key emitting enterprises, strengthening the supervision of technical service institutions, strengthening supervision and inspection, and increasing penalties. Thank you!

Questions from a reporter from Zhonghong.com (photo by Liu Jian)

Zhonghong: We have noticed that the Regulations clearly stipulate various types of illegal acts and the amount of penalties. How do the "Regulations" strengthen the legal liability for illegal acts?

Zhang Yaobo:

Thank you. Legal responsibility is an important guarantee for the effective implementation of a piece of legislation, and only when legal responsibility is perfected can the system grow "teeth". Therefore, in order to ensure the effective implementation of the "Regulations", the "Regulations" have made great efforts to improve the relevant content of legal liability, and strive to enhance the pertinence and effectiveness, so as to effectively deter illegal acts. To sum up, there are three main characteristics:

First, the main body is comprehensive. That is to say, the subject of legal liability is comprehensive, and all kinds of entities involved in carbon emission trading related activities, including key emitting enterprises, technical service institutions and their staff, relevant government departments, registration agencies, trading institutions, etc., have stipulated clear violations and strict legal liability, and any unit or individual must be held accountable as long as it violates the Regulations.

Second, the means are abundant. That is, the means of sanctions are rich and varied. A variety of legal sanctions are provided for different illegal acts in carbon emission trading and related activities, including warnings, verification and reduction of carbon emission allowances, confiscation of illegal gains, fines, cancellation of inspection and testing qualifications, prohibition of engaging in related businesses, and orders to suspend production for rectification. Among them, there are both admonition and property penalties, qualification penalties and behavioral penalties, and both civil liability, administrative liability, and criminal liability.

Third, the punishment is forceful. The "Regulations" insist on re-emphasizing the punishment of illegal acts of a serious nature, increasing the degree of punishment, and effectively preventing and curbing them. For example, the carbon emission fraud and other issues just mentioned, one of the very important aspects is to involve technical service institutions, because carbon emissions-related inspection and testing work is very professional, inseparable from technical institutions, technical institutions data fraud is a very serious illegal act, "Regulations" for the commissioned preparation of annual emissions report and technical audit of the report of technical service institutions, there are tampering, Strict legal liability is stipulated for falsification of data and other fraudulent acts, starting with confiscation of illegal gains and a fine of not less than 5 times but not more than 10 times the amount of illegal gains; where there are no illegal gains or the illegal gains are less than 200,000 yuan, a fine of between 200,000 and 1,000,000 yuan shall be imposed, and if the circumstances are serious, it is prohibited from engaging in relevant business. For the directly responsible managers and directly responsible personnel, a fine of between 20,000 and 200,000 yuan shall be imposed, and they shall be prohibited from engaging in relevant business for 5 years. It is to adhere to the "double punishment system", which not only punishes the institution, but also punishes the relevant responsible personnel. For example, for those who manipulate the national carbon emission trading market, the illegal income will be confiscated and a fine of not less than 1 time but not more than 10 times the illegal income will be imposed, and if there is no illegal income or the illegal income is less than 500,000 yuan, a fine of not less than 500,000 yuan but not more than 5 million yuan will be imposed. The directly responsible managers and other directly responsible personnel shall be given warnings and fined between 100,000 and 1,000,000 RMB. This is one example of this, and as you can see, the punishment is very strong. Thank you!

Red Star News reporter asked a question (photo by Liu Jian)

Red Star News: My question is, what are the specific industries covered by carbon emission trading, and what are the considerations for the next step of carbon market expansion? Thank you.

Zhao Yingmin:

Thank you for your question. China's carbon emissions are mainly concentrated in power generation, steel, building materials, nonferrous metals, petrochemicals, chemicals, papermaking, aviation and other key industries, these eight industries account for about 75% of our country's carbon dioxide emissions, these key industries have a high degree of industrialization, have a certain talent, technology, management foundation, it is easier to achieve quantitative control of carbon emissions management and affect the price of carbon-containing products and services. At present, the national carbon emission trading market includes the power generation industry. As I mentioned earlier, emissions are about 5.1 billion tons, accounting for more than 40% of the country's total carbon dioxide emissions. Integrating high-emission industries into the national carbon emission trading market as soon as possible, that is to say, seizing 75% of the country's emissions and giving full play to the decisive role of the market in the allocation of carbon emission resources, can make the carbon reduction cost of our whole society optimize and minimize, so as to help achieve China's dual carbon goals, and promote green and low-carbon transformation and the construction of a beautiful China.

In the future, we will adhere to the principle of seeking progress while maintaining stability, first easy and then difficult, combined with the stage and situation of China's economic and social development, the overall requirements of the state to control greenhouse gas emissions, and comprehensively consider the industry's carbon emissions, data quality basis, pollution and carbon reduction synergy, high-quality development of the industry and other factors, and give priority to the inclusion of key industries with large carbon emissions, serious overcapacity, good synergistic effect of pollution and carbon reduction, and good data quality foundation. The expansion work will grasp the rhythm and strength, scientifically and reasonably determine the inclusion time of different industries, and actively promote the carbon emission trading market to cover key carbon emission industries in stages and steps, so as to build a more effective, dynamic and internationally influential carbon market.

Regarding the expansion work, we have carried out two tasks so far, and I would like to introduce them to you:

First, the Ministry of Ecology and Environment organizes the annual verification of carbon emission accounting reports for the above-mentioned key industries nationwide every year, that is, in addition to the power industry, although the other seven industries are not included in the quota control, we have carried out the verification of carbon emission accounting reports.

The second is to carry out special research on the expansion of the area. The quota allocation methods of key industries, accounting reporting methods, accounting requirements guidelines, and expansion implementation paths have carried out special research and evaluation demonstrations, and the drafting of relevant technical documents has been basically completed, and we are actively promoting and striving to achieve the first expansion of China's carbon emission trading market as soon as possible.

Carbon emission control and management is a new thing for government departments, industries and even key emitting enterprises. We will adhere to the principle of mature one and include one, fully learn from and use the existing carbon emission management system and experience, and strengthen the system construction, data management, publicity and training of carbon emission management to be included in the industry, so that the key emitting units in these industries can meet the management requirements of the carbon market after being included in the carbon market, ensure the healthy development of the carbon market, and at the same time promote the green and low-carbon transformation and high-quality development of relevant industries and key emitting units, and enhance the market competitiveness of enterprises. Thank you!

Nanfang Daily Nanfang + reporter asked questions (photo by Liu Jian)

Nanfang Daily: At present, China has built the world's largest carbon market, but compared with the mature carbon market in the world, there are still some problems in China's carbon trading mechanism, such as the lack of activity of the carbon market. What kind of development conditions will the promulgation of the Interim Regulations provide for the construction of China's carbon market?

Zhao Yingmin:

Thank you for your question. Since the launch of the national carbon emission trading market two and a half years ago, the overall operation has been stable, and we have also organized experts to conduct an assessment, and the general conclusion is that the overall performance of China's carbon market is better than that of the developed countries. However, as a new thing that is still in its infancy, compared with the mature carbon markets of developed countries, China's carbon emission trading market still needs to be further built and improved. The market activity, industry coverage, market participants, and inactive trading that you just mentioned are all issues that we need to overcome one by one in the next step of carbon market construction.

Based on the current situation of China's economic and social development, the "Regulations" have made corresponding provisions on the current difficult problems in the carbon market, which should be said to provide strong legal support and guarantee for us to overcome and solve these problems one by one. In addition to the efforts to expand the coverage of the industry, there are several aspects of work to further promote the construction of the carbon market, which are clearly defined in the Regulations.

The first is to gradually implement the carbon allowance allocation method that combines free allocation and paid allocation. At present, China's carbon emission trading market quota allocation method is free of charge, and most mature carbon markets in the world have carried out a combination of free and paid allocation. The "Regulations" make it clear that the quota allocation shall gradually implement a combination of free allocation and paid allocation in accordance with the relevant requirements of the state. The timely introduction of paid allocation and the gradual increase of the proportion of paid distribution are conducive to controlling the total amount of carbon emissions, making the carbon price more truly reflect the cost of carbon emission reduction, and better playing the role of the market, so as to promote the realization of the dual carbon goal and enhance the voice of China's carbon market in international carbon pricing.

The second is to establish a market stability mechanism. At present, the effective market regulation and control means of the national carbon emission trading market are insufficient, and the market stability mechanism is not perfect. The "Regulations" take the need for market regulation as an important consideration in formulating the total amount and allocation plan of carbon emission allowances, carry out market regulation, balance market supply and demand, prevent market risks such as carbon prices from getting out of control, and provide legal guarantees for the healthy, stable and orderly operation of the carbon market.

The third is to make provisions for enriching trading entities and products. At present, the national carbon emission trading market only includes carbon dioxide as a greenhouse gas, and the scope of the industry is only the power generation industry, although this industry emits a lot of emissions. Trading products are only spot carbon emission allowances. The Regulations stipulate that the types of greenhouse gases and the scope of industries covered by carbon emission trading shall be proposed by the competent department of ecology and environment of the State Council in conjunction with relevant departments in accordance with the national greenhouse gas emission control target study, and shall be implemented after approval by the State Council. Carbon emission trading products include carbon emission allowances and other spot trading products approved by the State Council.

In the next step, we will follow the basic positioning of the carbon market as a policy tool to control greenhouse gas emissions, optimize the allocation of allowances in accordance with the relevant provisions of the Regulations on the premise of effective risk prevention, gradually expand the coverage of the industry, continuously enrich the trading varieties, trading entities and trading methods, stimulate market vitality, and give full play to the decisive role of the market mechanism in the allocation of carbon emission reduction resources, so as to promote the green and low-carbon transformation of the economy and society. Thank you!

CCTV reporter from China Central Radio and Television asked questions (photo by Liu Jian)

CCTV: Just talking about data fraud, we know that data quality is the lifeblood of the carbon market. What are the provisions of the newly promulgated "Regulations" in terms of data quality? What are the current management results in this regard? In the future, the Ministry of Ecology and Environment will strengthen management to ensure data quality? Thank you.

Zhao Yingmin:

Thank you for your question. Data quality is the basis for ensuring a healthy, stable and orderly carbon market, and it can be said to be the lifeblood of the carbon market. The CPC Central Committee is very concerned, and the Ministry of Ecology and Environment attaches great importance to it, and we regard it as a political task to ensure and improve the quality of emission data in the carbon market, and have taken measures in five aspects to ensure the quality of data.

The first is to improve the system. There are legal provisions, technical specifications, and judicial interpretations. Promote the Supreme People's Court and the Supreme People's Procuratorate to revise the "Interpretation on Several Issues Concerning the Application of Law in the Handling of Criminal Cases of Environmental Pollution" to include the falsification of greenhouse gas emission data in the scope of criminal sanctions. The technical guidelines for the accounting and reporting of relevant carbon emission data have been revised, and the carbon accounting formulas have been streamlined from 27 in the past to 12, which simply improves the effectiveness, standardization and operability of these accounting formulas, and greatly reduces the accounting uncertainty.

The second is to establish a long-term working mechanism of "national-provincial-municipal" three-level joint review. Creatively carry out monthly storage of key carbon emission parameters, improve the accuracy and traceability of basic data, and discover signs of problems in a timely manner.

The third is to make full use of big data informatization means to achieve penetrating supervision. Through the national carbon market management platform, more than 3 million parameter data were automatically identified and verified in the second compliance cycle, and more than 72,000 data anomalies were discovered and solved in a timely manner.

Fourth, it is necessary to severely crack down on illegal activities such as fraud. Through two rounds of special supervision and assistance for carbon emission reporting, the problems found are linked one by one, classified and processed, and the sales number is rectified. Severe penalties will be imposed on illegal enterprises and their carbon emission quotas will be reduced, and technical service institutions with serious problems will be publicly exposed, so as to form a strong deterrent to fraud.

Fifth, we should comprehensively strengthen publicity and training. As I mentioned earlier, the carbon market is a new thing, and the carbon emission accounting and management capabilities of key emitting enterprises and technical service institutions have been significantly improved through extensive training. Last year, we organized a total of 134 training sessions for about 11,000 participants, achieving full coverage of market participants.

Through the above five measures, the quality of carbon emission data has been greatly improved, the standardization, accuracy and timeliness of carbon emission reporting have been greatly improved, and the management efficiency of enterprises has also been significantly enhanced.

In order to effectively guard the lifeline of data quality, the "Regulations" have really grown "teeth" in cracking down on carbon emission data fraud and curbing false reporting and concealment of carbon emission data, which can be summarized in six words, namely: strict control, strict investigation, and strict punishment.

Strict control is mainly reflected in: clarifying the prohibitions and penalties for relevant institutions and personnel, continuously reducing the space for data fraud through supporting systems and norms, and ensuring that data cannot be tampered with by building and improving the national carbon market management platform and using blockchain and digital technology. Through the working mode of annual verification and daily supervision, we will continue to strengthen data quality audits.

Serious supervision is mainly reflected in: screening abnormal data through the big data of the national carbon market management platform, finding problem clues through complaints and reports, and conducting on-site inspection and verification on this basis.

Severe penalties are mainly reflected in: clarifying the regulatory responsibilities of relevant departments, "zero tolerance" for carbon emission data fraud, severe penalties, and public exposure of violations of laws and regulations. The regulations stipulate specific requirements for preventing and punishing the falsification of carbon emission data from four aspects: first, strengthen the main responsibility of key emitting enterprises, second, strengthen the management of technical service institutions, third, strengthen supervision and inspection, and fourth, increase penalties. In these respects, the "Regulations" have made specific and detailed provisions. I believe that in the next step, with the implementation of the Regulations, the quality of carbon market data will be further improved on the basis of the second compliance cycle.

Thank you!

Questions from a reporter from China News Service (photo by Liu Jian)

China News Service: On January 22 this year, the National Greenhouse Gas Voluntary Emission Reduction Trading Market was launched. What is the relationship between the national carbon emission trading rights market and the national greenhouse gas voluntary emission reduction trading market? Are there any relevant provisions in the Regulations? Thank you!

Zhao Yingmin:

Thank you for your question. The National Greenhouse Gas Voluntary Emission Reduction Trading Market is another important policy tool launched by our country to help achieve the dual carbon goals after the national carbon emission trading market. Both tools are used to control and reduce greenhouse gas emissions through market mechanisms, and they are distinctive, independent, linked, and complementary to each other, and together constitute our country's carbon market system. In layman's terms, the carbon emission trading market is mandatory, and the voluntary emission reduction trading market is voluntary. At present, the participants in the carbon emission trading market are mainly emitting enterprises with legal obligations to control greenhouse gas emissions, that is, the key emitting enterprises mentioned in the "Regulations", and the government allocates carbon emission allowances to these enterprises, and stipulates that the enterprises pay the same amount of allowances to the government as they actually emit, and after the payment, the enterprises with surplus allowances can benefit from trading and selling in the market. Enterprises with insufficient quotas need to buy from the market, so as to achieve the policy orientation of encouraging the advanced and restraining the backward, and reduce the cost of carbon reduction for the entire industry and even the whole society.

The purpose of the voluntary emission reduction trading market is to encourage all kinds of entities to voluntarily take additional greenhouse gas emission reduction actions, and the emission reduction effects generated are quantitatively verified by scientific methods and then sold through the market, so as to obtain the corresponding emission reduction contribution benefits. It should be noted that voluntary emission reduction projects need to meet three conditions, one is additionality, the second is authenticity, and the third is uniqueness. I think the authenticity is easy for everyone to understand, this project is real, and this emission reduction is accurate. The uniqueness is also easy to understand, this project can only be counted once, not "one daughter and two marriages", it can be counted twice or three times, and it cannot be counted repeatedly. I'd like to focus on additionality. This additionality is a feature of the voluntary emission reduction trading market, which is reflected in the fact that the tradable emission reductions must be generated by human activities and that additional efforts have been made to reduce emissions. For example, primeval forests and oceans themselves are meant to absorb carbon dioxide and have carbon sinks, but such carbon sinks are not created by additional human effort, so they cannot be developed into products of voluntary emission reduction projects. In addition, projects that have already reached the average profitability of the market are not additional. For example, some of the renewable energy in our country are already commercially profitable, and the emission reductions generated for the purpose of profit-seeking by market capital are non-additional. Therefore, it must not be commercially viable, and it needs to generate revenue through the voluntary emission reduction market in order for the project to operate effectively and achieve the emission reduction target, which is the only way to reflect its additionality. So, from this point, you may have noticed that the first four methodologies we released have to go through additionality arguments first. The voluntary emission reduction trading market is based on the principle of first easy and then difficult, and the first four methodologies are all relatively additional, such as offshore wind power, to be precise, deep-sea grid-connected power generation. Because we all know that onshore wind power is definitely less expensive than offshore wind power, in order to encourage offshore wind power, we have made it clear that offshore grid-connected power generation is the first batch of methodologies. Everyone is familiar with photovoltaic power generation, but the first four methodologies released this time are CSP grid-connected power generation, because of the current technology, CSP grid-connected power generation is still somewhat difficult in terms of commercial cost recovery, so this is what the state wants to encourage, including forest carbon sinks, mangrove construction, are this logic. Therefore, additionality is very important.

Another feature, which is also a feature of the voluntary emission reduction trading market, is that when calculating, it must conform to the principle of conservatism. Sometimes, it is uncertain how much greenhouse gases are reduced or how much greenhouse gases are absorbed, or the parameters are selected as a range, so our regulations should be in line with the principle of conservatism to ensure that the carbon emission reductions accounted for are not overestimated. If there is a scope, it is to conform to this principle of conservatism. I think these are the characteristics of the voluntary emission reduction trading market.

The generation of high-quality carbon credits is the basis for the healthy development of the voluntary emission reduction trading market, which requires the joint efforts of all participants in the market. Both the project owner and the third-party verification and verification agency need to make a commitment to the authenticity of the project, and the Ministry of Ecology and Environment and the State Administration for Market Regulation will also jointly carry out in-process and ex-post supervision. In general, the voluntary emission reduction trading market will mobilize a wider range of industry enterprises to carry out greenhouse gas emission reduction actions independently and voluntarily, which will create huge green market opportunities and drive the whole society to participate in green and low-carbon development.

The two markets are interconnected through a quota settlement and offset mechanism. The Regulations stipulate that enterprises included in the national carbon emission trading market can purchase certified greenhouse gas emission reductions to pay their carbon emission allowances in accordance with relevant national regulations. The convergence of the mandatory carbon market and the voluntary carbon market will better form a policy synergy, further stimulate the momentum of green and low-carbon innovation, and guide all parties in society to participate in carbon reduction, so as to promote the implementation of the national dual carbon goals. Thank you!

New Yellow River client reporter asked questions (photo by Liu Jian)

New Yellow River Client Reporter: Since 2011, many places across the country have launched the pilot work of local carbon emission trading markets, what is the impact of the promulgation of the "Regulations" on the local carbon emission trading market?

Zhao Yingmin:

Thank you for your question. The construction of our national carbon market started from local pilots. In 2011, seven provinces and cities, including Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong, and Shenzhen, carried out carbon emission trading pilots, and successively launched trading, covering nearly 3,000 enterprises in more than 20 industries such as electric power, steel, and cement, effectively promoting the reduction of greenhouse gas emissions by enterprises, strengthening the low-carbon awareness of all sectors of society, and accumulating valuable experience for the exploration of the construction of a unified national carbon market.

In accordance with the requirements of the "Opinions of the Central Committee of the Communist Party of China and the State Council on Accelerating the Construction of a National Unified Market", we are building a unified national carbon market, implementing unified industry accounting standards, unified regulatory rules, unified transaction settlement, and unified quota allocation scheme. I think there are three main aspects of the relationship between the national carbon market and the current local pilot carbon market: First, it is clear that no new local carbon markets will be established after the promulgation of the Regulations. Second, industries and enterprises included in the national carbon emission trading market will no longer participate in local pilot carbon markets, that is, they will not duplicate control. Third, local pilot carbon markets should refer to the "Regulations" issued this time, improve the relevant management system, and strengthen supervision and management.

The Ministry of Ecology and Environment will guide the local pilot carbon markets to take the lead in expanding industry coverage, implementing total control, paid allocation, and market stability mechanisms, so as to continue to play a good role in local carbon market pilots and provide practical experience for the construction and operation of the national carbon market. Thank you!

Xie Yingjun:

One last question.

Guangming Daily reporter asked a question (photo by Liu Jian)

Guangming Daily: The Regulations propose to strengthen international cooperation and exchanges in the field of carbon emission trading. What are your considerations for conducting cross-border carbon trading and dialogue with the EU on the CBAM?

Zhao Yingmin:

Thank you for your question. China attaches great importance to international exchanges and cooperation in the field of carbon market, and has established good carbon market exchanges and cooperation with many countries and regions and international organizations. In fact, the construction of the national carbon emission trading market and the national voluntary emission reduction trading market has fully learned from and absorbed the experience and lessons of other carbon market constructions in the international community.

Article 6 of the Paris Agreement under the United Nations Framework Convention on Climate Change (UNFCCC) provides important guidance for the international community to carry out global cross-border carbon trading. At present, the details of the implementation of Article 6 of the Paris Agreement are still being discussed, and the international community has not yet reached a consensus. However, this is the right way for the international community to jointly address climate change, and we believe that we should strengthen communication under the multilateral mechanism and strive to reach an early agreement on the international carbon market, so as to promote global carbon emission reduction.

The EU Carbon Border Adjustment Mechanism (CBAM) is a unilateral measure, which has attracted great attention from countries around the world, especially developing countries. We believe that global climate governance should adhere to the principles of fairness, common but differentiated responsibilities and respective capabilities, which have long been agreed upon by the international community, fully understand the different historical responsibilities and different stages of development of developing and developed countries, fully respect the "bottom-up" institutional arrangements of nationally determined contributions, and fully respect the national conditions and capacity bases of different countries, and adopt the Paris Agreement Article 6 negotiations should reach a broad consensus on global carbon market cooperation, and it is also necessary to avoid unilateral actions and reduce unnecessary negative spillover effects on countries outside the region.

Thank you!

Xie Yingjun:

Thank you for your introduction, thank you for your participation, and that's all for today's briefing.

The scene of the regular briefing on the policy of the State Council (photo by Liu Jian)