The Interim Regulations on the Administration of Carbon Emission Trading were recently promulgated to provide legal protection for the healthy development of the carbon market

The "Interim Regulations on the Administration of Carbon Emission Trading" (hereinafter referred to as the "Regulations") was recently promulgated and will come into force on May 1 this year. On February 26, the Information Office of the State Council held a regular briefing on the policies of the State Council, inviting responsible comrades of relevant departments to introduce relevant situations.

In July 2021, the national carbon emission trading market was officially launched with the power generation industry as a breakthrough. "At present, there are 2,257 key emitting enterprises included in the market, covering about 5.1 billion tons of annual carbon dioxide emissions, accounting for more than 40% of the country's total carbon dioxide emissions. As of the end of last year, the cumulative trading volume of the market reached 440 million tons, with a turnover of about 24.9 billion yuan. Zhao Yingmin, Vice Minister of the Ministry of Ecology and Environment, said that the healthy operation of the national carbon emission trading market has played an important role in helping to achieve the "double carbon" goal and promoting the green and low-carbon development of the whole society.

According to reports, the use of carbon emission quota allocation in the carbon market, the carbon emission reduction target requirements directly decomposed to the enterprise, so that the enterprise becomes the main body of carbon reduction, compacts the corporate responsibility, and realizes the effective control of carbon emissions in the first major carbon emission key industry (power industry);

"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. Zhao Yingmin said that around the carbon market, China's carbon pricing mechanism is gradually taking shape.

"The most direct purpose of the Regulations is to provide a legal basis for the operation and management of the national carbon market. Zhang Yaobo, director of the Fourth Bureau of Legislation of the Ministry of Justice, said that the "Regulations" adhere to the whole process management, the elements and main links that constitute carbon emission trading to achieve full coverage, and strive to leave no blanks, no blind spots;

As a new thing that is still in its infancy, China's carbon emission trading market still has many places that need to be further built and improved. 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:

The first is to gradually implement the carbon allowance allocation method that combines free allocation and paid allocation. "At present, China's carbon emission allowance allocation method is free of charge. 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 and making the carbon price more truly reflect the cost of carbon emission reduction. Zhao Yingmin said.

The second is to establish a market stability mechanism. 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. 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;

The Regulations clarify the working procedures related to the determination of industry coverage and key emitting enterprises. "China's carbon emissions are mainly concentrated in key industries such as power generation, steel, building materials, nonferrous metals, petrochemicals, chemicals, papermaking, aviation, etc., accounting for about 75% of the country's carbon dioxide emissions. Bringing high-emitting industries into the market as early as possible can optimize and minimize the cost of carbon reduction for the whole society. Zhao Yingmin said.

Data quality is the basis for ensuring the health, stability and orderliness of the carbon market, and is the lifeline of the carbon market. According to reports, in order to protect and improve the quality of emission data in the carbon market, the quality of carbon emission data will be greatly improved, the standardization, accuracy and timeliness of carbon emission reports will be greatly improved by improving the system, establishing a long-term working mechanism of "national-provincial-municipal" three-level joint review, making full use of big data information means to achieve penetrating supervision, and severely cracking down on fraud and other illegal behaviors, so as to achieve a significant improvement in the quality of carbon emission data, the standardization, accuracy and timeliness of carbon emission reports have been greatly improved, and the efficiency of enterprise management has been significantly enhanced.

The Regulations have "zero tolerance" for the falsification of carbon emission data. Zhang Yaobo introduced that 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 agency staff, etc., have stipulated clear violations and strict legal liability, "any unit, as long as the violation of the "Regulations", must be investigated. ”

The Regulations stipulate a variety of legal sanctions 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. For illegal acts of a serious nature, persist in reinforcing the law and increasing the degree of punishment.

"We will take the promulgation of the Regulations as an opportunity to further improve the relevant policies and supporting systems, ensure the healthy, stable and orderly operation of the market, strictly manage and standardize operations in accordance with the law, and actively promote the construction of the carbon market. Zhao Yingmin said.