China still needs to do a lot of work before it can fully launch its long-awaited nationwide carbon emissions trading scheme and will gradually phase in the system that is already running behind schedule, a senior government official said on Monday.
China began launching pilot regional trading platforms in 2013 in line with its efforts to curb surging greenhouse gas emissions, compelling firms in industries like power, steel and cement to cut emissions or buy carbon permits to cover their annual allocations.
The country had aimed to replace the regional pilots with a nationwide emissions trading scheme (ETS) by 2017, but it still needs to ensure it has the required legal and technological infrastructure in place, Li Gao, head of the climate change office at Ministry of Ecology and Environment, said.
"As far as work arrangements are concerned, we must promote the construction of the carbon market in a phased and step-by-step manner," Li said, noting that China would also do its utmost to limit risks by preventing "speculation" and the "excessive financialisation" of carbon trading.
Accumulated trade volume from China's seven pilot regional carbon trading schemes reached 6 billion yuan ($863.9 million) by the end of October, up from 4.7 billion yuan at the end of last year, the ministry said.
A total of 250 million tonnes of carbon dioxide had changed hands by the end of October, versus 200 million at the end of 2017. The schemes cover Beijing, Tianjin, Shanghai, Chongqing and Shenzhen, as well as the provinces of Guangdong and Hubei.
President Xi Jinping pledged in 2015 to replace the regional schemes with the nationwide ETS by 2017, but despite a soft launch late last year, trading has yet to get off the ground amid concerns about data accuracy in some industrial sectors.
Li said China has already carried out a lot of "preliminary work" but the government still needed to draft new laws and regulations. The scheme will start with the electric power sector but China will aim to achieve full nationwide trading in the "shortest possible time".
China is the world's biggest source of greenhouse gases, and has pledged to bring emissions to a peak by "around 2030" as part of its commitments to the 2015 Paris accord. ($1 = 6.9450 yuan.
(With inputs from agencies.)