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[BEIJING] China's oil refining, petrochemical and chemical companies will propose a plan to benchmark their carbon dioxide (CO2) emissions as the first step toward setting up an emissions market for the sector, the group's industry association said on Tuesday.
The China Petroleum and Chemical Industry Federation (CPCIF), China's oil industry lobbying group, plans to make a proposal by September on how to set benchmarks for the CO2 produced while manufacturing products ranging from diesel fuel to benzene, it said in its China Chemical Industry News newsletter.
The benchmarks will be used to set CO2 emissions caps for nearly 2,400 companies in the sector under the national carbon market that will start next year, the CPCIF said.
China, the world's second-largest oil consumer, will need to benchmarks to help create reduction targets for its large petrochemical and chemical factories that are responsible for up to 70 per cent of the sector's CO2 emissions, the CPCIF said.
The number of the petrochemical and chemical companies participating in China's domestic carbon market will account for one-third of the total number of companies participating nationally, said Li Yongliang, a CPCIF official, as cited by China Chemical Industry News.
China plans to bring in up to about 8000 companies in eight industries into its national carbon trading programme, including from the power, steel, cement and transportation sectors.
The CPCIF will propose benchmarks for 23 products including refined oil products, ethylene and aromatic hydrocarbons such as benzene. The final cap will be set based on the benchmarks at the best-performing facilities.
Sinopec Group, China's biggest oil refiner, said earlier this month that it would cut its carbon intensity 51 per cent below 2005 levels by 2020 as a part of the company's five-year plan.
China's oil companies have been trading carbon in the seven local carbon exchanges since the start of the pilot trading phase in 2013.
Sinopec had traded 3.89 million permits, worth 140 million yuan, by 2015, it said then.