Country Information

Important Dates

MRP first draft submission: 
October 2012
Allocation of Implementation Funding: 
March 2013

Key Documents & Presentations

Most Recent
Document Language Date
PDF icon MRV Practice In China English June 2015
PDF icon China: Upstream Analytical Work to Support Mid- and Long-term Mitigation Objectives English June 2015
PDF icon China: Update on National ETS Developments English March 2015
Market Readiness Proposal
Document Language Date
PDF icon China: Final Market Readiness Proposal (MRP) Presentation English March 2013
PDF icon China: Final Market Readiness Proposal (MRP) English February 2013

Market-based Approach


Source:    In April 2015, China's pilot ETS program reached a value of $122 million.

The PMR will provide support to China to develop a nation-wide emissions trading (ETS) system. The target launch date is between 2018 and 2020. Specifically, PMR suport wil be used to develop the following core ETS components:

  • Determine scope of the system;
  • Set a cap on emissions;
  • Establish a system for allocating allowances;
  • Develop an MRV system and a transaction registry; 
  • Establish compliance rules; 
  • Develop a price containment mechanism;
  • Establish an offset mechanism and rules for linking; 
  • Develop a legal framework;
  • Identify participants and trading products; and
  • Define a system for market oversight.

To support the development of the national ETS, two studies are planned:
1. Role of State-owned Enterprises (SOE) in the National ETS: Recognizing the influence of China's SOEs on economic growth and their significant contribution to carbon emissions (reining in emissions from SOEs is critical to achieving the national mitigation target), China aims to include SOEs in the national ETS. This study will explore the unique characteristics of SOEs relative to other modern enterprises, identify challenges to inclusion of SOEs in the 7 pilot ETS, and propose steps for inclusion of SOEs in the national ETS. Specifically, the study will report on the following: 

  • Characteristics of and incentives for SOEs;
  • Coverage and scope for SOEs;
  • Allowance allocation for SOEs; and
  • MRV System for Effective Involvement of SOEs in China ETS.

2. Participation of the Power Sector in the National ETS: Like China's SOEs, the power sector is also an important contributor to carbon emissions. This study will identify a pathway toward inclusion of the sector in the national ETS, including determining the following:

  • Coverage; 
  • Cap setting;
  • Allocation;
  • MRV; and
  • Coordination of pricing and dispatching mechanism.

National Context

Mitigation Target

China’s climate change strategy is integrated into its social and economic development planning, a point underscored in the June 2015 publication of its Intended Nationally Determined Contribution (INDC) to the UNFCC.

"Looking into the future, China has defined as its strategic goals to complete the construction of a moderately prosperous society in an all-round way by 2020 and to create a prosperous, strong, democratic, culturally developed and harmonious modern socialist country by the middle of this century. It has identified transforming the economic development pattern, constructing ecological civilization and holding to a green, low-carbon and recycled development path as its policy orientation." (INDC of China, pg. 2. Unofficial English translation)

Action on climate change mitigation will be an important catalyst for the restructuring of key aspects of the Chinese economy, including the power sector. China’s annual GHG emissions in 2008 were estimated as 7,031 million tonnes, while per capita CO2 emissions from fossil fuel combustion in China were 5.13 tons in 2009, equivalent to 52% of the average level in OECD countries. China has pledged to reduce its CO2 emissions per unit of GDP by 40–45% by 2020, compared with 2005 levels and has also pledged to increase non-fossil-based primary energy consumption to 15% by 2020.

The National Development and Reform Commission (NDRC) is responsible for climate change policy design and implementation, with division of responsibilities among relevant ministries based on sectors and provincial bodies. Policies have been designed based on China’s National Climate Change Program and the 12th Five Year Plan. The 2009 Resolution of the Standing Committee of the National People’s Congress to develop responses to climate change requires the alignment of climate change related laws with the government’s working plan.

Emissions Trading

China has adopted emissions trading as one tool to achieve its mitigation target. The Chinese government is piloting emissions trading in five provinces and two cities, accounting for 18% of China’s population and 28% of its national GDP. All seven pilots were launched between 2013 and 2014. They include: Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong, and Shenzhen.

China's ETS Pilots: Basic Facts
Pilot Launch Date Coverage Threshold # Entities Covered Reporting Threshold
Beijing November 2013 10,000 tCO2 ~490 2,000 tce
Tianjin December 2013 20,000 tCO2 114 --
Shanghai November 2013

Industrial: 20,000 tCO2
Non-Industrial:10,000 tCO2

197 10,000 tCO2
Chongqing June 2014 20,000 tCO2 242 --
Hubei April 2014 60,000 tce
(~150,000 tCO2)
138 --
Guangdon December 2013 20,000t CO2 202 10,000 tCO2 o
5,000 tce
Shenzhen June 2013 5,000t CO2 635 3,000 tCO2

A nation-wide ETS is expected to be launched in a phased-approach between 2018 and 2020. Offset credits will be allowed within China's ETS.

Offset Crediting Programs

Since 2005 China has developed a large number of CDM projects, and the country ranks the highest in terms of the number of registered projects and estimated average annual reductions.

  • 2,708 CDM projects (52.1% of the world’s total) registered after CDM Executive Board’s approval (as of end of November, 2012)
  • 460million tons of CO2 equivalent (65% of the world’s total) estimated as average annual reductions of Chinese CDM projects.

In 2012, the NDRC issued the Interim Measures for the Management of Voluntary GHG Emission Reduction Transactions. These measures include guidelines for the issuance of domestically-produced offsets known as China Certified Emission Reduction (CCER). CCERs are accepted by all seven ETS pilots in China as offset credits, and are the only type of offset credits accepted by the ETS pilots. The NDRC is the national authority governing offsets and handles all applications for offsets submitted by enterprises supervised by the central government. Other enterprises submit applications to the provincial DRC. 

Percentage of CCERs Allowed for Offseting in the PIlot ETS
Beijing Tianjin Shanghai Chongqing Hubei Guangdong Shenzhen
5% 10% 10% 10% 8% 10% 5%

Voluntary Carbon Market

A voluntary emission trading market has been active since 2008. In 2009, “Panda Standard” (a voluntary carbon standard) was issued. China’ s voluntary emission reduction scheme is largely based on the CDM framework. Key differences, designed to reduce transaction costs, include the following:

  • No standing support structure;
  • No request for review procedures;
  • Requirements for validators/verifiers; and
  • Free of charge to project owners.

Focal Point

  • The Ministry of Finance is the national focal point to the World Bank and for the financial management of resources from the PMR.
  • The National Development and Reform Commission (NDRC) is the implementing agency of the project responsible for the project oversight, preparation of the work plans and report, coordination with relevant organizations and filing of project documents. News from the NDRC is available here.

All Documents & Presentations

Country Work
Document Language Date
PDF icon China's Carbon Emissions Trading Pilots - An Initial Review English March 2015
PDF icon Carbon Finance Innovation in China's Emissions Trading Pilots English March 2015
PDF icon China: Update on ETS English November 2014
PDF icon China: Update on ETS pilots English May 2014
PDF icon China: Status of MRP Implementation English March 2014
PDF icon China: Recent Development of Chinese ETS English March 2014
PDF icon China: International Review of Trading Schemes for Energy Savings and Carbon Emission Reductions English November 2013
PDF icon White Certificate Trading, Green Certificate Trading, Emissions Trading: Which One to Choose? English September 2013
PDF icon International Review of Trading Schemes for Energy Saving, Carbon Reduction and Renewable Energy English July 2013
PDF icon China: Shanghai Emissions Trading Scheme English June 2013
PDF icon China: Design of Domestic Emissions Trading Scheme English March 2013
PDF icon China: Update Carbon Market Developments English May 2012
PDF icon China: Organizing Framework English May 2011
PDF icon China: Expression of Interest Letter English January 2011
PDF icon China: Expression of Interest (EoI) English January 2011
Policy Work
Document Language Date
PDF icon Policy Mapping Workshop: China's ETS - Policies and Challenges English March 2013
Technical Work
Document Language Date
PDF icon China: Status and Challenges Monitoring Facility-Level Emissions English September 2014
PDF icon China: Interaction Between GHG Transaction Registries in Market Mechanisms English September 2014
PDF icon China: QA/QC Operations at the Facility-Level English September 2014
PDF icon China: Status and Challenges to Monitoring National GHG Emissions English September 2014
PDF icon PMR Technical Note 8: A Survey of the MRV Systems for China’s ETS Pilots English July 2014
PDF icon Energy Efficientcy Measurement and Verification Issues and Options English July 2013
PDF icon Modeling & Reporting Workshop: Installation Level Emissions Data Collection in China English October 2012
PDF icon ETS Workshop: Low Carbon Development in Shenzhen, China English March 2012
PDF icon ETS Workshop: Allocation in Emissions Trading - China English March 2012
PDF icon ETS Workshop: Why Emissions Trading - China English March 2012
PDF icon China: Data Management System and Lessons Learned English
Document Language Date
PDF icon Resolution PA5/2013-3: Allocation of the Implementation Phase Funding to China English March 2013
Other Materials
Document Language Date
PDF icon China Carbon Market Monitor May 2015 English May 2015
PDF icon China: Domestic Offset Scheme English March 2014
Document Language Date
PDF icon China Carbon Market Monitor 2 - October 2015 English October 2015
PDF icon China Carbon Market Monitor 2 - October 2015 (Chinese Version) Chinese October 2015

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