The "Administrative Measures for Carbon Emission Trading (Trial Implementation)" was discussed and approved by the Ministry of Ecology and Environment Ministerial Meeting on December 25, 2020. It is hereby promulgated and will come into force on February 1, 2021。Minister of Ecology and Environment HUANG Runqiu

December 31, 2020

　Administrative measures for carbon emissions trading

(Trial implementation)

Chapter 1 General Provisions

Article 1 In order to implement the decision and deployment of the Party Central Committee and the State Council on building a national carbon emission market, we will give full play to the role of market mechanisms in tackling climate change and promoting green and low-carbon development, promote greenhouse gas emissions reduction, and standardize national carbon emission trading and related activities. These measures are formulated according to the country’s requirements for greenhouse gas emission control。

Article 2 These Measures are applicable to national carbon emission allowance trading and related activities, including carbon emission allowance allocation and payment, carbon emission allowance registration, trading, settlement, greenhouse gas emission reporting, and verification activities, as well as the supervision and management of the foregoing activities。

Article 3 National carbon emissions trading and related activities should adhere to the principles of market orientation, gradual progress, fairness and openness, and honesty and trustworthiness。

Article 4 The Ministry of Ecology and Environment shall build a national carbon emission market in accordance with relevant national regulations。

The types of greenhouse gases and the scope of the industry covered by the national carbon emission market are drawn up by the Ministry of Ecology and Environment, implemented after being submitted for approval according to procedures, and disclosed to the public。

Article 5 In accordance with relevant national regulations, the Ministry of Ecology and Environment organizes the establishment of a national carbon emission allowance registration institution and a national carbon emission allowance trading institution and organizes the construction of a national carbon emission allowance registration and a national carbon emission allowance trading system。

The national carbon emission allowance registration agency records the holding, modification, settelement, and cancellation of carbon emission allowances through the national carbon emission allowance registration system, and provides settlement services。The information recorded by the national carbon emission allowance registration system is the ultimate basis for determining ownership of carbon emission allowances。

The National Carbon Emissions Trading Agency is responsible for organizing and carrying out centralized and unified trading of national carbon emission allowances。

The national carbon emission allowance registration agency and the national carbon emission allowance trading agency shall regularly report to the Ministry of Ecology and Environment on the status of national carbon emission allowance registration, trading, settlement, and other activities and institutional operations, as well as other major matters that should be reported, and ensure that the national carbon emissions allowance registration system and the national carbon emission allowance trading system operate safely, stably and reliably。

Article 6 The Ministry of Ecology and Environment is responsible for formulating technical specifications for national carbon emission trading and related activities, strengthening the supervision and management of local carbon emission quota allocation, greenhouse gas emission reporting and verification, and working with other relevant departments of the State Council on national carbon emission trading and related activities, and shall conduct supervision and provide guidance。

The provincial-level environmental authorities are responsible for organizing and carrying out related activities such as the allocation and payment of carbon emission allowances, the verification of greenhouse gas emission reports, and supervision and management within their administrative areas。

City-level environmental authorities shall be responsible for cooperating with the competent department of ecologogy and environment at the provincial level to implement relevant specific work and implement supervision and management in accordance with the relevant provisions of these administrative measures。

Article 7 National carbon emission allowance registration institutions and national carbon emission allowance trading institutions and their staff shall abide by the technical specifications for national carbon emissions trading and related activities, and comply with the regulations of other relevant national authorities on supervising trading。

　　Chapter 2 Key greenhouse gas emitting enterprises

Article 8 Greenhosue gas emitting enterprises that meet the following conditions shall be included in the list of key greenhouse gas emitting enterprises (hereinafter referred to as key emitting enterprises)：

(1) They are active in the industries covered by the national carbon emission market；

(2) their annual greenhouse gas emissions exceed 26,000 tons of carbon dioxide equivalent。

Article 9 The provincial-level environmental department shall, in accordance with the relevant regulations of the Ministry of Ecology and Environment, determine the list of key emitting enterprises within the administrative area, report to the Ministry of Ecology and Environment, and disclose to the public。

Article 10 Key emitting enterprises should control greenhouse gas emissions, report carbon emission data, settle carbon emission quota, disclose trading and related activity information, and accept the supervision and management of the department of ecology and environemnt of the competent authorities。

Article 11 In one of the following situations, the provincial-level environmental authority that has drawn up the list should remove enterprises from the list of key emitting enterprises：

(1) For two consecutive years, greenhouse gas emissions have not reached 26,000 tons of carbon dioxide equivalent；

(2) Those who no longer engage in production and business activities due to suspension, closure or other reasons, and therefore no longer emit greenhouse gases。

Article 12 When an enterprise applies to be included in the list of key emitting enterprises, the provincial-level environmental authorities that has drawn up the list shall perform verification；Those enterprise verified to meet the requirements of Article 8 of these administartive measures shall be included in the list of key emitting enterprises。

Article 13 Those enterprise that are included as a key emitting enterprise in the national carbon emissions market, shall no longer participate in local pilot carbon emissions markets。

　　Chapter 3 Allocation and registration

Article 14 In accordance with the national greenhouse gas emission control requirements, the Ministry of Ecology and Environment has comprehensively considered factors such as economic growth, industrial structure adjustment, energy structure optimization, and coordinated control of air pollutant emissions, and formulated a plan for determing and allocating total carbon emission quota。

The provincial-level environmental authorities shall, based on the plan for determing and allocating total carbon emission quota as formulated by the Ministry of Ecology and Environment, allocate the prescribed annual carbon emission allowances to key emitting enterprises in their administrative areas。

Article 15 Allocation of carbon emission allowances will primarily be free of charge; paid allocation may be introduced in a timely manner in accordance with relevant national requirements。

Article 16 After the provincial-level environmental authorities have determined the carbon emission quota, they shall notify key emitting enterprises in writing。

If the key emitting enterprise disagrees with the allocated carbon emission quota, it may apply for a review to the provincial-level environmental authorities that assigned the quota, within seven working days from the date of receiving the notification；The competent provincial-level department of ecology and environment shall make a review decision within ten working days from the date of receiving such a review request。

Article 17 Key emitting enterprises shall open accounts in the national carbon emission allowance registration system to conduct the relevant business operations。

Article 18 If a key emitting enterprise undergoes merger, division, etc. and needs to change the organization name, carbon emission quota, etc., it shall be reported to the local provincial-level environmental authorities for review, and it shall apply with the national carbon emission allowance registration agency for making changes to the registration。The national carbon allowance registration agency shall register changes through the national carbon emission allowance registration system and make it public。

Article 19 The state encourages key emitting enterprises, institutions and individuals to voluntarily cancel their carbon emission quota for public welfare purposes such as reducing greenhouse gas emissions。

In the case of voluntary cancellation of carbon emission allowances, the national total amount of carbon emission allowances will be reduced by the same amount, and these cancelled allowances will not be re-allocated, registratered or traded。These cancellations shall be disclosed to the public。

　Chapter 4 Emissions trading

Article 20 The tradeable products in the national carbon emission market are carbon emission allowances, and the Ministry of Ecology and Environment can add other tradeable products in due course in accordance with relevant national regulations。

Article 21 Key emitting enterprises, as well as institutions and individuals that comply with the relevant national trading regulations, are the trading entities in the national carbon emission market。

Article 22 Carbon emission allowance trading shall be carried out through the national carbon emission allowance trading system, which can take the form of a transfer agreement, one-way bidding, or other methods that comply with regulations。

The national carbon emission trading agency shall, in accordance with the relevant regulations of the Ministry of Ecology and Environment, take effective measures to give play to the role of the national carbon emission trading market in guiding greenhouse gas emission reduction, prevent excessive speculative trading activities, and maintain the healthy development of the market。

Article 23 The national carbon emission allowance registration agency shall, based on transaction results provided by the national carbon emission allowance trading agency, update relevant information for trading entities in a timely manner through the national carbon emission allowance registration system。

Article 24 The national carbon emission allowance registration institutions and the national carbon emission allowance trading institutions shall implement timely, accurate and safe data exchange in accordance with relevant national regulations。

　　Chapter 5 Emission verification and allowance settlement

Article 25 The key emitting enterprise shall, in accordance with the technical specifications on greenhouse gas emission accounting and reporting as formulated by the Ministry of Ecology and Environment, compile the enterprise's greenhouse gas emission report for the previous year, specifying the amount of emissions, and report it to the provincial-level environmental authorities where the production site and business is located, before March 31 of each year。The original records and management ledgers of the data involved in the emission report shall be kept for at least five years。

Kkey emitting enterprises are responsible for the authenticity, completeness and accuracy of greenhouse gas emission reports。

The annual greenhouse gas emission report prepared by key emitting enterprises shall be published regularly and subject to public disclosure, except for those componenets involving state secrets and commercial secrets。

Article 26 The provincial-level environmental authorities shall organize and carry out the verification of the greenhouse gas emission reports of key emitting enterprises, and notify the key emitting enterprises of the verification results。The verification results shall be used as the basis for the settlement of carbon emission allowances of key emitting enterprises。

Provincial-level environmental authorities can entrust technical service agencies to provide verification services through government procurement of services。The technical service agency shall be responsible for the authenticity, completeness and accuracy of the submitted verification results。

Article 27 If the key emittng enterprise disagrees with the verification result, it may apply for a review to the provincial-level department of ecology and environment that organized the verification, within seven working days from the date of being notified of the verification result；The competent provincial-level department of ecology and environment shall make a review decision within ten working days from the date of receiving such a review request。

Article 28 The key emitting enterprise, within the time limit specified by the Ministry of Ecology and Environment, settle the carbon emission allowances of the previous year with the provincial-level department of ecology and environment that allocated the allowances。The allowance amount paid should be greater than or equal to the actual greenhouse gas emissions of the enterprise in the previous year, as confirmed by the verification results of the provincial-level department of ecology and environment 。

Article 29 Key emitting enterprises can use national certified voluntary emission reductions to offset the payment of carbon emission allowances each year, whilst the offset ratio shall not exceed 5% of the total carbon emission allowance amount to be paid。Relevant regulations shall be formulated separately by the Ministry of Ecology and Environment。

The national certified voluntary emission reductions used for offsetting shall not come from emission reduction projects covered by quota management of the national carbon emission market。

　　Chapter 6 Supervision and administration

Article 30 The department of ecology and environment at the highest level shall strengthen the supervision, inspection and guidance of the list of key emitting enterpries of lower level departments of ecology and environment, and of the national carbon emission allowance trading and related activities。

Article 31 Local departments of ecology and environment, at or above the municipal level, shall determine the focus and frequency of supervision and inspection, based on the verification results of the greenhouse gas emission reports of key emitting enterprises。

Local departments of ecology and environment, at or above the city level, shall adopt a “double randomization, one openness” approach to supervision and inspection of greenhouse gas emission and carbon emission allowance settlement of key emitting enterprises, and report the relevant information to the Ministry of Ecology and Environment in accordance with procedures。

Article 32 The Ministry of Ecology and Environment and the provincial-level department of ecology and environment shall, in accordance with the division of responsibilities, regularly disclose information on the annual carbon emission allowance settlement of key emitting enterprises。

Article 33 National carbon emission allowance registration institutions and national carbon emission allowance trading institutions shall abide by relevant regulations such as national transaction supervision, establish risk management mechanisms and information disclosure systems, formulate risk management plans, and timely publish carbon emission allowance registration, trading, settlement, and other information。

The staff of the national carbon emission allowance registration agency and the national carbon emission allowance trading agency shall not use the convenience of their positions to seek improper gains, and shall not disclose business secrets。

Article 34 If a market entity violates the regulations on the registration, settlement or trading of carbon emission rights, the national carbon emission allowance registration agency and the national carbon emission allowance trading agency may take measures against them to restrict trading in accordance with relevant national regulations。

Article 35 The public, news media, etc. are encouraged to supervise the carbon emissions trading and related activities of key emitting enterprises and other market entities。

Key emitting eneterprises and other market entities shall, in accordance with the relevant regulations of the Ministry of Ecology and Environment, promptly disclose information about national carbon emissions trading and related activities, and consciously accept public supervision。

Article 36 Citizens, legal persons, and other organizations that discover that key emitting enterprises or other market entities have violated the provisions of these administrative measures have the right to report to the local department of ecology and environment at or above the city-level。

The relevant department of ecology and environment that recieves the report shall deal with it in accordance with the law, and provide feedback on the results of the processing in accordance with relevant regulations, and keep the identity of the reporter confidential。

　　Chapter 7 Penalty provisions

Article 37 Relevant staff members of the Ministry of Ecology and Environment, provincial-level departments of ecology and environment, or municipal -level departments of ecology and environment that abuses their power, neglects their duty, or practices favoritism in the supervision and management of national carbon emission allowance trading and related activities, shall be ordered by the higher-level administrative or supervisory authority to make corrections, and shall be punished according to law。

Article 38 Where the national carbon emission allowance registration agency and the national carbon emission allowance trading agency and their staff violate the provisions of these administrative measures by committing one of the following acts, the Ministry of Ecology and Environment shall give sanctions in accordance with the law, and disclose the results to the public：

(1) Taking advantage of their position to seek illegitimate benefits；

(2) Other acts of abuse of power, dereliction of duty, or malpractice for personal gain。

If staff of the national carbon emission rights registration agency and the national carbon emission trading agency or other organizations violate the provisions of these administrative measures, and where these violations disclosed business secrets or constitute other violations of national trading regulations, they shall be dealt with in accordance with other relevant regulations。

Article 39 If key emitting enterprises false or untruthful greenhouse gas emission reports, or refuse to perform their greenhouse gas emission reporting obligations, the local department of ecology and environment at or above the municipal level where the enterprises' production and business sites are located, shall order corrections within a time limit, and impose a penalty of between 10,000 and 30,000 CNY。If the correction is not made within the time limit set, the provincial-level department of ecology and environment where the key emitting enterprises' production and operation site are located, shall calculate the actual amount of greenhouse gas emissions, and use this amount as the basis for the settlement of carbon emission allowances；The enterprises' carbon emission quota for the next year will further be reduced by the same amount as was falsely or underreported。

Article 40 If a key emitting enterprise fails to settle its carbon emission allowances on time and in full, the local department of ecology and environment at or above the municipal level where the enterprises' production and business sites are located shall order corrections within a time limit, and impose a fine of 20,000 to 30,000 CNY；Where an enterprise fails to make corrections within the time limit, the local department of ecology and environment at or above the municipal level where the enterprises' production and business sites are located shall further reduce its carbon emission quota for the next year, by the same amount as was outstanding。

Article 41 Whwre violation of the provisions of these administrative measures are suspected of constituting a crime, the relevant department of ecology and environment shall transfer the case to the judicial organs in accordance with the law。

　　Chapter 8 Supplementary provisions

Article 42 The meaning of the following terms in these administrative measures：

(1) Greenhouse gas：Refers to the natural and man-made gaseous components in the atmosphere that absorb and re-emit infrared radiation, including carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), hydrofluorocarbons (HFCs), perfluorocarbons (PFCs) ), sulfur hexafluoride (SF6) and nitrogen trifluoride (NF3)。

(2) Carbon emissions：Refers to the greenhouse gas emissions generated by the combustion of coal, oil, natural gas and other fossil energy, and industrial production processes, as well as land use changes and forestry activities. It also includes greenhouse gas emissions caused by the use of purchased electricity and heat。

(3) Carbon emission allowance：Refers to the carbon emission allowance allocated to key emitting enterprises for a specified period。

(4) National certified voluntary emission reductions：Refers to a quantity of verified greenhouse gas emission reductions of renewable energy, forestry carbon sinks, methane utilization and other projects within China, which are registered in the national voluntary emission reduction transaction registration system as such。

Article 43 These administrative measures will come into effect on February 1, 2021。