China is seeking public feedback on a proposal to incorporate cement, steel, and aluminium production into its carbon emissions trading scheme (ETS) by the end of 2024. This initiative, announced by the Ministry of Ecology and Environment, aims to cover approximately 60% of the country’s total greenhouse gas emissions, surpassing the emissions of the United States.
The plan will be open for public scrutiny until September 19. The expansion of the ETS will occur in two stages: from 2024 to 2026, the focus will be on familiarizing participants with the processes, while from 2027 onward, the management will improve, and quota allocations to businesses will be reduced.
Initially, carbon allowance quotas will be allocated to companies free of charge, with no upper limit on allowances in the first stage. Firms that emit more will receive larger quotas.
Established in July 2021, the China Carbon Emission Trading Exchange has only covered the power sector to date. The move to include heavy industries comes as the European Union plans to impose carbon tariffs starting in 2026, which aim to combat “carbon leakage” by taxing imports based on their carbon footprint.