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China Proposes Voluntary Emissions Trading Rules

China’s Ministry of Ecology and Environment (MEE) and State Administration for Market Regulation has issued a regulatory framework to facilitate voluntary greenhouse gas (GHG) emissions trading in the country. According to local reports, the new rules – which are open for comments until 6 August – will help to tackle emissions data quality in the power sector, and pave the way for the relaunch of a national voluntary carbon market. In 2009, the country launched a voluntary market for trading China Certified Emission Reductions (CCER), but due to low transaction volumes and irregular markets, approvals for CCER projects were suspended in 2017. The proposed framework places a significant emphasis on market mechanisms, including the effective execution of supervisory responsibilities by market entities. Under the measures, project owners and third-party review and certification organisations will assume heightened roles, while government departments will strengthen their in-process and ex-post supervision measures. To optimise management efficiency, the draft introduces a revised approach for five record-filing items: methodology, projects, emission reductions, review and certification organisations, and trading institutions. The MEE proposes the establishment of a unified national trading institution to centralise and standardise transactions, replacing the existing practice of dispersing transactions across multiple institutions through record filing. The ministry also said that the framework for voluntary GHG emissions trading in China aligns with international practices. 

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