The national carbon market has been upgraded and expanded

In 2024, the national carbon market will enter the third compliance period, which will be released one after another, and the pace of upgrading and expansion will be accelerated. The reporter learned that the power industry is studying and deepening the relevant supporting mechanisms and formulating a quota allocation plan that meets the requirements of the new power system under the dual carbon goal. At the same time, the cement and electrolytic aluminum industries are also stepping up preparations and are expected to become the first batch of expansion industries.

The use of market mechanisms to control and reduce greenhouse gas emissions is not only an important force and institutional arrangement to promote the green transformation of the whole society, but also one of the core policy tools to accelerate the realization of the goal of carbon peak and carbon neutrality. China's carbon market was officially launched on July 16, 2021, with a total of 2,162 key emitting enterprises in the power generation industry in the first compliance cycle, covering about 4.5 billion tons of carbon dioxide emissions annually, and 2,257 key emitting enterprises in the power generation industry in the second compliance cycle, covering more than 5 billion tons of carbon dioxide emissions annually, making it the world's largest carbon market in terms of tradable carbon dioxide emissions.

According to the data, as of December 29, 2023, the cumulative trading volume of carbon emission allowances in the national carbon market reached 442 million tons, with a cumulative turnover of more than 24.919 billion yuan, and the average comprehensive transaction price was 56.43 yuan/ton, an increase of about 32% compared with the average comprehensive transaction price of the first compliance cycle.

"Overall, the basic framework of the national carbon market has been initially established, and the role of promoting enterprises to reduce greenhouse gas emissions and accelerate the green and low-carbon transformation has initially emerged, and the carbon pricing function has been effectively played. Zhang Jingjie, deputy director of the Planning and Development Department of the China Electricity Council (hereinafter referred to as "CEC"), said.

Entering 2024, the good news of accelerating the upgrading and expansion of China's carbon market has come one after another: on January 22, the national greenhouse gas voluntary emission reduction trading market (CCER) was officially restarted after nearly 7 years, which will help enrich trading products and provide more channels for reducing emission reduction costs;

The reporter learned from the China Electricity Council that in accordance with the overall deployment of the country, the power industry is deepening the research on relevant supporting mechanisms, strengthening the research on the coordination mechanism between the carbon market and the electricity market, and providing support for the construction of a unified national market;

Zhang Jingjie suggested that the role of coal-fired power enterprises in the power system and the actual operational difficulties should be fully considered, the baseline should be tightened within a reasonable range, the role of coal-fired power in ensuring supply should be strengthened, energy supply should be stabilized, and the carbon emission quota allocation mechanism should be improved. At the same time, it is necessary to clarify as soon as possible the policies related to quota allocation, such as the time scale for the tightening and updating of the baseline, and the principle of carrying forward the stock quota.

While improving the institutional mechanism, the expansion of the national carbon market is also advancing. Due to the relatively simple process flow, easy availability of data and high accuracy, the cement and electrolytic aluminum industries are expected to be included.

According to reports, electrolytic aluminum is the industry with the largest carbon emissions in the field of non-ferrous metals, accounting for about 85% and 65% of the total carbon emissions of the entire aluminum industry chain and the non-ferrous metal industry, and accounting for about 4.5% of China's overall carbon emissions.

"About 85% of carbon emissions from electrolytic aluminum production come from indirect emissions from electricity consumption. Xiong Hui, chief expert of Beijing Antaike Information Co., Ltd., said that in 2020, the annual electricity consumption of the electrolytic aluminum industry exceeded 500 billion kilowatt hours, accounting for about 6.7% of the total electricity consumption of the whole society, and carbon emissions were about 450 million tons.

According to Chen Xuesen, vice president of the China Nonferrous Metals Industry Association, the association and relevant departments have completed the implementation plan for the total amount of national carbon emission trading quotas (electrolytic aluminum industry) and the first draft of the accounting verification report and submitted it to the Ministry of Ecology and Environment. According to the carbon emission verification data of electrolytic aluminum enterprises, a total of more than 80 electrolytic aluminum enterprises in the country will be included in the national carbon market.

In his view, there are two key issues in the electrolytic aluminum quota allocation scheme: one is the recognition and quota allocation of non-fossil energy electricity, and the other is how to select electricity emission factors. At present, the Ministry of Ecology and Environment has organized relevant units to study the key issues of the inclusion of the electrolytic aluminum industry in the national carbon market, and will be included in the national carbon market in a timely manner after the study is completed.

The integration of the cement industry into the national carbon market is also accelerating. According to industry insiders involved in this work, the technical guidelines for carbon emission accounting and verification in the cement industry are constantly being revised and improved, and are expected to be released in the first half of this year. After the accounting verification is completed in accordance with the new document requirements, the carbon emission allowance allocation plan will also be released. Judging from the current situation, all clinker production enterprises in the cement industry will be included. According to the statistics of Zhongchuang Carbon Investment, the carbon emissions of clinker production in China's cement industry are about 1.3 billion tons, accounting for about 13% of the country's total carbon emissions.

According to the "Effectiveness and Prospects of China's Carbon Market Construction (2024)" released by the Beijing Institute of Technology, the national carbon market has established a full-process institutional management system, and the time is basically ripe for the inclusion of new trading entities. It is expected that during the 14th Five-Year Plan period, the national carbon market will take the lead in including the three industries of cement, electrolytic aluminum and civil aviation, the number of enterprises covered by the carbon market will increase from the current more than 2,200 to more than 3,500, the annual carbon dioxide emissions will increase from 5 billion tons to about 6.4 billion tons, and the proportion of covered emissions in the country's carbon dioxide emissions will increase from 42% to 53%. During the "15th Five-Year Plan" period, the echelon will be included in the steel, glass, paper, petrochemical and chemical industries. As the coverage of the national carbon market will be further expanded, the influence of the carbon market will be significantly enhanced.