[BEIJING] China plans to initially cap emissions from six industrial sectors, such as power generators and chemical plants, in a national carbon market likely to be launched by the middle of next year, a government official said on Wednesday.
The national carbon market in the world's top emitter of greenhouse gases is likely to regulate 3-4 billion tonnes of carbon dioxide a year by 2020 and be worth up to 400 billion yuan (S$87.3 billion), which would make it twice as large as the EU market, currently the world's biggest.
Companies in power generation, metallurgical, nonferrous metal, building materials, chemicals and aviation will be targeted first under the national scheme, Jiang Zhaoli, a senior official with National Development and Reform Commission's (NDRC's) climate change department, told a seminar in Beijing.
Each producer in these sectors emits more than 26,000 tonnes of carbon dioxide a year, Mr Jiang said.
"We hope to kick off the national market in summer of 2016, starting with a three-year trading phase before the market becomes fully functional in 2019," Mr Jiang added.
Such a plan, still pending final approval by the state authorities, will integrate the existing seven regional markets into a unified trading scheme, Mr Jiang said.
China rolled out seven pilot regional markets in 2013, but liquidity stays low as participants are tempted to trade only for compliance a few months before the deadline. "We are confident that China will successfully build an efficient nationwide emission trading system by 2020," said Mary Veronica Tovsak Pleterski, director DG Clima in the European Commission.