- Is Brussels’ and Beijing’s CO2 trade compatible?
- Supplier Weichai benefits from Europe acquisitions
- More Chinese students in the UK
- Kuaishou closes Zynn in the USA
- Controversy over Mao Pins remains without consequence
- Opinion: Stephen Roach on China’s private initiative deficit
The world’s largest emissions trading scheme has been launched. And it’s happening in China. And just like the EU, the Chinese leadership intends to wield it as an instrument in the fight against climate change to significantly curb the amount of CO2 emissions. Although both the EU and China speak of “emissions trading,” both systems differ considerably. Chinese emissions trading is much less ambitious; a cap on thermal power generation, for example, is completely absent. Even before the official introduction of emissions trading in China, it was clear that their system would have little impact on the amount of CO2 emitted in the People’s Republic in the first few years. Amelie Richter and Nico Becker analyze how both systems could become compatible in the near future.
The Chinese automotive supplier Weichai Power shows much higher ambitions. Through acquisitions, not least in Germany, the company from the province of Shandong has catapulted itself into the global top 10. Frank Sieren describes how this poses new challenges for the Swabian competition,
I hope you enjoy our latest issue
Emissions trading: Brussels and Beijing face new frictions
After almost ten years of preparation, China has launched its own emissions trading scheme. For the first time in just over three weeks, companies have been able to buy and sell CO2 allowances for almost 2,200 coal and gas-fired power plants. Measured in terms of included CO2 emissions, the Chinese ETS is the largest in the world. But experts doubt its effect on climate protection. Beijing is even facing climate levies in the future because Chinese emissions trading is not ambitious enough and does not meet the requirements of the European carbon border adjustment.
When trading officially began in China, EU Commission Vice-President and Commissioner for Climate Action Frans Timmermans were still congratulating the People’s Republic. But these pretty words could soon be a thing of the past. Because just two days prior to the trading launch, the EU Commission had presented twelve legislative proposals as part of its climate package for the European Union, including a possible extension of the ETS to shipping, a separate ETS for buildings and road transport – and a CO2 border adjustment (as reported by China.Table). This would require other countries to pay taxes on products produced outside the EU with higher CO2 emissions. Third countries with an ETS based on the European model, have a chance of being exempted – if their system can be incorporated into EU emissions trading
However, it is extremely unlikely that the People’s Republic will end up on the list of exempted states in the near future. A look at the details: At the end of the first trading day, the price for a ton of CO2 in the People’s Republic was the equivalent of around 6.90 euros. This data already shows a big difference to European emissions trading – because in the EU, a ton of CO2 now regularly costs over 50 euros. In addition, EU emissions trading covers around 10,000 plants in the energy sector, as well as energy-intensive industries and intra-European flights. China is currently still far behind in this respect.
- Raw materials
Continue reading now
… and get free access to this Professional Briefing for a month.
Are you already a guest at the China.Table? Log in now