China to include automakers and paper mills in national carbon market

China is considering proposals that would force automakers and paper mills to cut greenhouse gas emissions as part of a nationwide carbon trading scheme due to be launched in early 2017.

China was originally aiming to include six industrial sectors in the scheme – power generation, ferrous metals, nonferrous metals, building materials, chemicals and aviation.

But according to a National Business Daily report, a trial carbon trading involving the “six plus two” sectors will begin in 2017 and its scope will be further extended at a later date.

“From 2019 we aim to lower the coverage threshold to include more of companies, and also more industries,” Jiang Zhaoli, the vice-director of the climate change department of the National Development and Reform Commission, was quoted as saying by the National Business Daily newspaper.

China has promised to make full use of market mechanisms to bring its surging greenhouse gas emissions to a peak by around 2030. It has already launched seven regional pilot carbon trading schemes, with firms paying prices ranging between 13-50 yuan to cover each tonne of CO2 they emit.

But the slowing economy has made it harder to set an accurate emissions trajectory for participating companies. Weaker demand for energy-intensive industrial products has cut their CO2 levels and left them with a surplus of free permits, causing a supply glut and undermining the need to trade.

Cement production fell 5 per cent in the January-July period, while crude steel fell 1.8 per cent, raw coal 5.3 per cent, and power generation from coal-fired plants 3 per cent, according to the National Bureau of Statistics.