China’s Ministry of Ecology and Environment has confirmed that steel, cement and aluminium will be incorporated into its national carbon Emissions Trading Scheme (ETS). According to the ministry, these three industries cover roughly 1,500 sites around the country, and will increase the covered emissions from 5 billion tonnes to 8 billion tonnes, expanding the proportion from 40% to 60% of total national carbon dioxide equivalent (CO2e) emissions. Climate think tank Transition Asia said that, since the price of carbon is far cheaper in China than in Europe, there are “important questions” about what carbon price heavy industry in China would consider meaningful as the ETS expands. According to figures quoted by Transition Asia, China’s carbon price was US$14 per tonne of CO2 in 2023, compared to more than €100 (US$108) per tonne in the EU. To make the expanded ETS a success, Transition Asia recommended regularly reviewing high carbon benchmarks as heavy industry accelerates investment, increasing the stringency of intensity benchmarks and introducing auctions for allowances rather than free allocation.
