Emissions Trading Worldwide

Tianjin (Pilot) Emissions Trading System
in force
emissions coverage (Mtco 2 e, 2015)
Liable entities
160.0 112
Gas coverage
allocation
Offsets & Credits
co2 only
free allocation
domestic
On 26 December 2013, Tianjin was the fifth Chinese region, after
Shenzhen, Shanghai, Beijing and Guangdong, to start its pilot ETS.
The system covers enterprises from five sectors: heat and electricity
production, iron and steel, petrochemicals, chemicals, as well
as oil and gas exploration. These industries account for around
60% of the city’s total emissions. The second compliance period
ended in July 2015.
background information
Overall Ghg Emissions (excl. LULUCF) 215 MtCO 2 e (2012)
GHG Reduction Targets By 2015 (12 th Five Year Plan): 19% reduction in carbon
intensity compared to 2010 levels.
Flexibility
Banking and borrowing Banking is allowed during the pilot phase.
Borrowing is not allowed.
Offsets and Credits Quantitative Limit: Domestic project-based carbon
offset credits — China Certified Emission Reduction (CCER)— are allowed. The
use of CCER credits is limited to 10% of the annual compliance obligation.
Qualitative Limit: Credits have to stem from CO 2 reduction projects, excluding
hydro and have to be realized after 2013.
PRICE MANAGEMENT PROVISIONS In case of market fluctuations, the Tianjin
Development and Reform Commission (DRC) can buy or sell allowances in
order to stabilize the market.
compliance
ets size
Cap 160 MtCO 2
emissions coverage
MRV Reporting Frequency: Annual reporting of CO 2 emissions. Verification:
Third-party verification is required.
Enforcement In case of non-compliance, companies are disqualified for preferential
financial support and policies for three years. There are no financial
penalties for non-compliance.
covered
60%
not covered
40 %
other information
GHG Covered CO 2
Sectors & THRESHOLDS Heat and electricity production, iron and steel, petrochemicals,
chemicals, exploration of oil and gas. Inclusion threshold:
20,000t CO 2/year considering both direct and indirect emissions.
Point of regulation Mixed: Both direct emissions from the power sector
and indirect emissions from electricity (and heat) consumption are included in
the scheme. Electricity prices are regulated in China, and therefore a scheme
based on direct emissions alone would not induce a pass-through of carbon
costs via the electricity price, and would not incentivize demand-side management
of electricity. The system therefore covers emissions from the power sector
upstream and other sectors downstream.
Number of liable entities 112 (2014)
Institutions involved Tianjin DRC (Competent authority), Tianjin Climate
Exchange (Trading platform)
Phases and Allocation
Trading periods Three years (2013–2015) 1
allocation Mainly free allocation through grandfathering based on
2009– 2012 emissions or emissions intensity. Benchmarking for new entrants
and expanded capacity.
COMPLIANCE PERIOD One year (31 May)
1 Initially, the seven Chinese pilot ETS were scheduled to end after three compliance years and be
replaced by the national ETS in 2016. However, as the national ETS will not start before 2017, the pilots
will likely be extended until then.
international carbon action partnership
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