China releases carbon emission allowance allocation plan for consultation

China's Ministry of Ecology and Environment has called for public consultation during Nov. 20-29 on a draft of carbon emission allowance allocation plan for power generation sector, according to a document on the ministry's website.

Power plants, especially those coal-fired, are the key entities to control carbon emission to meet the country's 2060 carbon neutrality target. The sector is looked as the pilot for China's upcoming national emission trade scheme.

The plan showed that 2,267 power plants across the country, annual emission of which reached 26,000 mt of CO2 equivalent, are in the list to gain emission allowance for 2019 and 2020 while required to meet compliance obligations.

These power plants are not restricted in the power generation sector, but also include those that produce power for self-consumption in other sectors, such as petrochemical sector and mining sector.

However, those that generate power from pure bio-material and self-produced feedstocks are not included for the compliance obligations.

The draft adopts benchmarks for four types of power generators and coefficient of corrections to calculate CO2 allowance for power generation.

The benchmark is 0.877 mt of CO2/mWH for standard coal plants over 300 MW, and 0.979 mt of CO2/mWH for standard coal plants below 300 MW.

For other unusual coal plants, such as those burning coal gangue or coal water slurry, the benchmark is 1.146 mt of CO2/mWH.

Further, the benchmark for gas plants is 0.392 mt of CO2/mWH.

The ministry is also in public consultation on the country's first national emission trade scheme draft rules during Nov. 2-Dec. 1.

As the year-end is coming with short time frame, market observers said the first carbon permit transaction is more likely to happen early in the first half of 2021 instead of 2020 as previously expected.