China's Carbon Emission Trading Market to Open in July 2021

On the morning of July 14, 2021, Yingmin Zhao, Vice Minister of the Ministry of Ecological Environment of the Chinese State Council, announced that national carbon emission trading markets will be launched in July this year. The opening ceremony of the national carbon market will be held in Beijing, Shanghai and Wuhan at the same time, followed by the first batch of trading.

According to people familiar with the matter, the operating mechanism of the carbon market is: the government determines the overall emission reduction targets and adopts a quota system. First, the initial carbon emission permits are allocated to the enterprises included in the trading system in the primary market, and then, these enterprises can trade these carbon emission permits freely in the secondary market. Companies with higher emission reduction costs can achieve the goal of reducing the cost of carbon emission standards by purchasing carbon emission permits.

During the General Assembly of the United Nations in September 2020, China's President Xi Jinping announced China's efforts to achieve carbon neutralization by 2060. On the one hand, the opening of the carbon emission trading market shows China's determination to achieve this goal. On the other hand, it also shows China's responsibility in the international community.