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National carbon trading market activity enhancement issues need to be addressed

2023/6/15

    In recent years, China has focused on the goal of "double carbon" and actively and steadily promoted green and low-carbon high-quality development. The first Shanghai International Carbon Neutral Technology, Products and Achievements Expo (hereinafter referred to as "Carbon Expo") was successfully concluded on June 14. During the Carbon Expo, Liu Guohua, Partner-in-Charge of Financial Accounting Advisory Services of Ernst & Young Greater China, was interviewed by reporters to discuss the initiatives to promote green and low-carbon economic and social transformation, as well as the prospect of the development of the national carbon emission trading market (hereinafter referred to as "national carbon market").

    "China is actively involved in the global governance of climate change, and has established the '1+N' policy system to achieve the goal of 'double carbon'. At the same time, the National Standardization Administration Committee and other eleven departments jointly issued the "Carbon Peak Carbon Neutral Standard System Construction Guide", clearly proposing that by 2025, no less than 1,000 national standards and industry standards will be made and revised, providing the necessary support for the effective implementation of the 'double carbon' policy." Liu Guohua said.

    Liu Guohua believes that the goal of "double carbon" must be achieved over time, and green low-carbon policies must be gradually improved. In the process of building the "double carbon" standard system, attention should be paid to the effective convergence of policies and standards to ensure the consistency of standards, and actively pay attention to the changing trend of international standards, strengthen international exchanges, and transform international standards into standards suitable for China's national conditions.

    As an important policy tool to promote the achievement of China's "double carbon" goal, the national carbon market was officially launched in 2021, including 2,162 key emission units in the power industry. 2021, the first compliance cycle of the national carbon market closed successfully, achieving a compliance rate of 99.5%. How to do a good job of managing the second compliance cycle and further stimulate the vitality of the national carbon market? Liu believes that more industries should be included as soon as possible to further expand the market capacity and enhance the activity of market transactions, so as to help enterprises follow the path of clean, low-carbon and green development more steadfastly. At the same time, it is recommended to restart the declaration of CCER (National Certified Voluntary Emission Reduction) projects as soon as possible to enhance the market space for environmental rights and interests. In addition, it is expected that the green power and green certificate system can be better integrated with the national carbon market to avoid double counting of environmental rights and interests, and provide more emission reduction paths for all kinds of emission control enterprises.

    "As the first batch of carbon trading pilot cities, Shanghai, after several years of carbon trading trial operation, the city's high-energy-consuming industries have seen a significant reduction in carbon emissions, the energy structure has been continuously optimized, and enterprises' awareness of independent emission reduction has been strengthened. These achievements are attributed to a perfect system and a wide range of trading subjects. In addition, Shanghai's carbon financial innovation products have been pushing out new products, and financial institutions have actively participated in the construction of carbon financial market, carrying out carbon financial business such as carbon emission right pledge, carbon repurchase, carbon fund and carbon trust, which enhance the vitality of carbon financial market." Liu Guohua said.

    The national carbon market has helped carbon emission reduction with low cost and high efficiency, giving full play to the role of price discovery, promoting the green transformation of many enterprises, and proving the effectiveness of carbon finance in promoting low-carbon transformation. "The innovation of financial products needs to be based on a stable and active trading market, but the current trading activity of the national carbon market is relatively low. Therefore, enhancing the activity of the carbon trading market is an urgent issue to be addressed at present." Liu Guohua said.


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