[BEIJING] China will launch a pilot program to trade in energy consumption quotas in four provinces next year, its top economic planner said on Wednesday, in a bid to curb industrial pollution by capping energy use.
The world's biggest energy consumer said in March that it planned to keep the country's total energy consumption within five billion tonnes of standard coal equivalent by 2020, the first time the world's second-largest economy has set such a target.
The National Development and Reform Commission(NDRC) will launch the pilot program in Zhejiang, Fujian, Henan and Sichuan, until 2020, after which it could be rolled out in other provinces.
The pilot provinces will set the cap on energy consumption, but the NDRC did not specify the quota for each province.
One quota, or the unit to measure energy consumption, stands for one tonne of standard coal equivalent. "The amount of the renewable power generation used for the liable company's own operation will not be counted into the total energy cap," NDRC said, without identifying the industries to be covered.
The energy consumption quotas will mostly be handed out for free, it said, adding companies can sell the surplus quota of the same year for profits, without carrying it forward.
The settlement will be carried out once a year.
One of the pilot provinces, Zhejiang, aims to cap its energy usage by 220 million tonnes by 2020, at an yearly increase of 2.3 per cent, according to a provincial government plan released early this month.