The allocation of quotas will be differentiated in the second compliance period of the national carbon market

In order to do a good job in the settlement of carbon emission quotas in the national carbon market in 2021 and 2022 and ensure the healthy and stable operation of the national carbon market, on July 17, the General Office of the Ministry of Ecology and Environment issued the Notice on the Settlement of Carbon Emission Allowances in the National Carbon Emission Trading Market in 2021 and 2022. According to the Circular, the allocation of quotas will be differentiated in the second compliance period of the national carbon market.

The Notice states that pre-allocated quotas will not be issued to key emitting enterprises that still exist after all emitting facilities are shut down or eliminated, and will be issued uniformly at the approval stage; Adjust the methods of quota issuance and compliance for key emitting enterprises that have compliance risks due to circumstances such as law-related, litigation-related, debt-related or judicial freezing.

For the above key emitting enterprises, during the approval stage, the quotas will be issued to the account of the provincial ecological and environmental authorities, and the provincial ecological and environmental authorities will issue the compliance notice to the key emitting enterprises; In the stage of liquidation, the provincial-level competent department of ecology and environment entrusts the national carbon emission allowance registration agency (hereinafter referred to as the registration agency) to carry out mandatory compliance with the quotas of key emitting enterprises (priority is given to the use of the quota of the current year, and the remaining part is given priority to the mandatory performance of another year), and after the completion of the compliance, the remaining part of the quota will be issued to the account of the key emitting enterprise, and the key emitting enterprises shall be urged to make up the difference and complete the compliance in a timely manner. For key emitting enterprises that no longer exist after all emitting facilities are shut down or eliminated (subject to the cancellation of business licenses), quotas will not be issued and they will not participate in the implementation of the national carbon market.

"For key emitting enterprises that meet the above circumstances, the 2023 quota cannot be prepaid." The Notice said.

The Notice also clarifies that the 2019-2020 quotas, 2021 quotas and 2022 quotas held by key emitting enterprises can be used for 2021 and 2022 clearance and compliance, and can also be used for trading.

With regard to the clearance of national certified voluntary emission reduction (CCER) offset quotas, the Notice indicates that CCER that has been cancelled for compliance purposes in the first compliance cycle but has not actually been used for offsetting and clearing can be used by key emitting enterprises to offset the clearance of quotas in 2021 and 2022.

The Notice requires that the provincial-level competent departments of ecology and environment should organize key emitting enterprises that meet the requirements of the Notice on Quota Allocation to declare and advance quotas for 2023, study and determine the list of enterprises that have advanced quotas for 2023, review and determine their pre-disbursed amounts, and fill in the summary table of the actual issuance of approved quotas by key emitting enterprises. The declaration materials of key emitting enterprises must be uploaded to the national carbon market management platform and submitted to the registration agency through official documents before August 4, 2023.

"For key emitting enterprises that undertake major livelihood protection tasks and cannot complete compliance, the provincial-level competent departments of ecology and environment should organize relevant units to submit applications, and study and formulate corresponding relief plans based on the actual situation." The Notice said.

The Notice requires that all provincial-level ecological and environmental authorities should coordinate the work related to quota trading and compliance and payment, establish a work scheduling mechanism, strengthen training, comprehensively use a number of measures to urge key emitting enterprises to actively carry out quota clearance, carry out special assistance to key emitting enterprises with quota gaps, and promote relevant key emitting enterprises to formulate trading plans as soon as possible to ensure timely and full compliance; The movement of quotas across groups and regions must not be restricted.

The annotation institution, in conjunction with the provincial-level competent departments of ecology and the environment, shall study and establish a dynamic supervision mechanism for compliance risks, establish a compliance risk index for key emitting enterprises, periodically assess the compliance risks of key emitting enterprises, and promptly send the risk warning information to the provincial-level competent departments of ecology and environment and trading institutions. Trading institutions shall establish a daily coordination mechanism with the provincial-level ecological and environmental authorities, cooperate in tracking the relevant trading activities of key emitting enterprises, and notify the provincial-level ecological and environmental authorities of the net purchase of quotas of key emitting enterprises every week one month before the deadline for compliance.

"For key emitting enterprises that have not fully paid their quotas after the compliance deadline, they may continue to submit an application for compliance with the provincial-level competent department of ecology and environment, and after confirmation by the provincial-level competent department of ecology and environment, the registration agency will assist the key emitting enterprises to continue to complete the quota clearance." The Notice said.