Implementation Plan for the 2019-2020 national carbon emission trading quota setting and allocation (power generation industry)

To the environmental departments (bureaus) of all provinces, autonomous regions, and directly-controlled municipalities, and the environmental bureau of the Xinjiang Production and Construction Corps ：

In order to implement the relevant decisions and arrangements of the Party Central Committee and the State Council, and to accelerate the construction of a national carbon emission market (hereinafter referred to as the carbon market), the ministry has compiled this "Implementation Plan for the 2019-2020 national carbon emission trading quota setting and allocation (power generation industry)" (hereinafter referred to as "Implementation Plan")。Simultaneously, in order to determine the list of key emitting enterprises subject to quota management, the Ministry has asked the provincial-level environmental authorities to submit relevant materials and confirm them, and on the basis of this information, the "List of key emitting enterprises included in the national carbon emission quota management" (hereinafter referred to as "List of key emitting enterprises") was drafted。

The "Implementation plan" and "List of key emitting enterprises" are now published and distributed to you。Please fill in the relevant infomration sheet for the pre-allocation of quotas for key emitting enterprises in the power generation industry in accordance with the requirements of the "Implementation Plan" and submit it to the ministry in the form of a CD-ROM before January 29, 2021。

Implementation Plan for the 2019-2020 national carbon emission trading quota setting and allocation (power generation industry)

1. Key emitting enterprises included in the lists for quota management

Those enterprsies or other forms of organizations in the power generation industry (including enterprises in other industries with captive or auto-consumer power plants) with verified emissions of 26,000 tons of carbon dioxide equivalent (total energy consumption of about 10,000 tons of standard coal) or more in any one year from 2013 to 2019, have been screened and selected to be included in the list of key emitting enterprises and subject to quota management in the national carbon market from 2019 to 2020, and are included in the directory of enterprises subject to quota management。

Carbon emission allowances refer to limits to the emissions of carbon dioxide produced by generator sets owned by key emitting enterprises, including direct carbon dioxide emissions from fossil fuel consumption and indirect carbon dioxide emissions from net purchases of electricity。The carbon emission limit per unit of electric power (or heat) supply is specified for different types of generator units, referred to as the carbon emission refernce value。

2. Generator unit categories subject to quota management

This implementation plan will cover power generation units opertaing in pure condensing mode and in cogeneration of power and heat mode. Facilities that only supply heat and without power generation capacity are not within the scope of this plan。The four generator unit types subject to quota management for 2019-2020 include conventional coal-fired units of 300MW or more, conventional coal-fired units of less than 300MW, unconventional coal-fired units (including coal-fired circulating fluidized bed units) using coal gangue, coal slurry, or coal–water slurry, and gas-fired generators。For those units that co-fire non-self-produced combustible gases and other fuels (including cases where the utilization of self-produced secondary energy sources accounts for less than 10% by heat content over a full compliance year) in order to to produce electricity (including cogeneration of heat and power), and for those units that co-fire biomass (including MSW, sewage sludge, etc.) to generate electricity (including cogeneration of heat and power) and where the biomass accounts for less than 10% by heat content over a full compliance year, the generator unit category is determined on the basis of the primary fuel。Pure biomass-fired generator units, special fuel generator units, power generator units that utilize self-produced secondary energy resources, co-firing power generator units that meet the requirements of this plan, and other special power generator units are temporarily not subject to the 2019-2020 quota management。The criteria for determining the various types of generator unit categories are detailed in Annex 1。This implementation plan sets corresponding carbon emission reference values for different types of generator units, and allocates emissions allowances according to generator unit category。

3. Total quota volume

The provincial-level environmental authorities shall, on the basis of the actual output [of electricty and heat] of key emitting enterprises within the respective administrative area from 2019 to 2020, and the quota allocation method and carbon emission refernce values as determined in this implementation plan, verify the number of allowances for each key emitting enterprise；the sum of approved quotas of key emitting enterprises within the respective administrative area will form the total emission quota for the respective provincial-level administrative area。The sum of the total emission quotas for each provincial-level administrative area will determine the total emission quota at the national level。

4. Quota allocation methods

All allowances for 2019-2020 will be allocated free of charge, and the benchmark method will be used to calculate allowances for generator units owned by key emitting enterprises。The emisison quota for key emitting enterprises are the sum of the quota of the various generator units that they own。

(1) The total quota for generator are calculated with a formula with a benchmark method. The formula is：Total generator unit quota = power supply reference value × actual power supply × correction factor + heat supply reference value × actual heat supply。For detailed emisison quota calculation methods for various categoires of generator units, please refer to the technical guide for quota allocation (Annex 2 and 3)。

(2) Correction factor

Taking into account the inherent differences in technical characteristics and other factors of different generato units, the fairness of quota allocation for units within the same category is further improved by introducing correction factors。Please please refer to the technical guide for quota allocation for the correction factor for quota allocation for each category of generator unit (Annex 2 and 3)。There is no regional (administrative area-specific) correction factor under the current implementation plan。

(3) Carbon emission reference value and determination principles

Taking into account economic growth expectations, in order to achieve the goal of controlling greenhouse gas emissions, and considering the impact of the epidemic on economic and social development and other factors, the carbon emission reference values for each category of generator unit for 2019 to 2020 are set according to Annex 4。

V. Quota issuance

The provincial-level environment authorities shall, in accordance with the quota calculation method and pre-allocation process, on the basis of 70% of the power (heat) supplied by a generator unit in 2018, pre-allocate 2019-2020 allowances to key emitting enterprises in the repsective administrative area through the 'National carbon emission allowance registration and settlement system' (hereinafter referred to as the "Registration system")。After completing verification of the carbon emission data for 2019 and 2020, final quota will be set according to the actual power (heat) supply of the generator unit over 2019 and 2020。If the final approved quota is inconsistent with the pre-allocated quota, the final approved quota shall prevail, and excess quota shall be retracted or insufficiently pre-allocated quota shall be compensated through the registration system。The quota calculation method, pre-allocation process and verification process are detailed in Annex 2 and 3。

6. Quota settlement

In order to reduce the compliance burden faced by key emitting enterprises with a large quota shortfall, quota settlement will include an upper limit for quota performance gaps, of a value equal to 20% of the verified emissions of key emitting enterprises. That is, if and when a key emitting enterprise is short on emission allowances by more than 20% of their verified emissions, its quota settlement obligations will be equal to its freely allocated quota plus 20% of its verified emissions。

To encourage the development of gas-fired generator units, when settling quota for gas-fired generator units, and when the verified emissions of the gas-fired generator unit exceed its approved freely allocated quota, its quota settlement obligation is equal to all its freely allocated emission quota；When the verified emissions of gas-fired generator units are lower than its the approved freely allocated quota, its quota settlement obligation is the amount of quota equivalent to its verified emissions。

In addition to the above, key emitting enterprises subject to the emission quota management shall, within the prescribed time limit, through the registration system, pay an amount of emission quota of no less than the amount of verified emissions to the provincial-level environmental authorities where their production and business sites are located, and fulfill their quota settlement obligation. Specific requirements for related procedures shall be announced in separate notices。

7. Merger, division and shutdown of key emitting enterprises

When key emitting enterprises subject to the national carbon market quota management merge, split, shut down or move out of the provincial-level administrative area where their production and business sites are located, they should report to the provincial environmental authority where their production and business sites are located within 30 days from the date of the decision。The provincial-level environmental authorities shall adjust the volume of quota freely allocated based on actual conditions, and report to the Ministry of Ecology and Environment, and further publicly announce relevant details。The quota application procedures and verification methods in case of such changes are as follows。

(1) Where key emitting enterprises are merged

In the event of a merger between key emitting enterprises, the remaining or newly established key emitting enterprises will inherit the allocated allowances and perform the quota settlement obligation。The combined carbon emission quota is the sum of the respective carbon emission quota of the key emitting enterprises before the merger。

If a key emitting enterprise merges with an economic organization that is not subject to emission quota management, the remaining or newly established key emitting enterprise will inherit the allocated allowances and perform the quota settlement obligation。The carbon emission quota for 2019-2020 is still based on the carbon emission quota before the merger of the key emitting enterprises, and carbon emission quota for after 2020 are subject to renewed approval。

(2) Where a key emitting enterprise is split up

If a key emitting enterprise is split up, the carbon emission quota and allowances of each key emitting enterprise after the division should be clarified, and reported to the provincial-level environmental authorities where the production and business sites are located。After the division, the key emitting enterprises will obtain emission quota, and shall fulfill their respective payment obligations, in accordance with this plan。

(3) Where a key emitting enterprise is shut down or relocated

Where a key emitting enterprise is shut down or relocated out of the original provincial-level administrative area, this shall be reported to both the provincial-level environmental authority of the original location and of the place to which the enterprise is relocated, within 30 days from the date of the decision。The inspection and verification of quota allocation, transactions and settlement for carbon dioxide emissions produced in year prior to the closure or relocation shall be carried out by the provincial-level environmental authority in the adminstarive area where the key emtting enterprise was located prior to closure or relocation 。If key emitting enterprise cease to exist after they are shut down or relocated, the remaining quota for 2019-2020 will be withdrawn by the provincial-level environmental authorities where their production and business sites are located, and new quota after 2020 will not be issued。

8. Other explanation

(1) Key emitting enterprises in local carbon markets

For key emitting enterprises that have participated in 2019 allowance allocation in local carbon markets, but did not participate in the 2020 allowance allocation, it is temporarily not a requirement to participate in the 2019 allowance allocation and settlement in the national carbon market。For key emitting enterprises that have participated in 2019 and 2020 allowance allocation in local carbon markets, it is temporarily not a requirement to participate in the 2019 or 2020 allowance allocation and settlement in the national carbon market。After the issuance of this implementation plan, local carbon markets will no longer issue emission quota to key emitting enterprises subject to inclusion in the national carbon market。

(2) Circumstances where quota are not freely allocated or withdrawn

Generator units of key emitting enterprises will not be issued quota in one of the following situations, and where key emitting enterprises have already been issued quota in one of the following situations, after verification, the relevant quota will be withdrawn in accordance with the regulations。

1. Where construction was or is in violation of relevant regulations at the national or provincial (regional, municipal) level；

2. Where requirements of relevant documents at the national or provincial (regional, municipal) level are not met；

3. Where there has been a failure to apply for a pollutant discharge permit in accordance with the law, or failure to submit a pollutant discharge permit implementation report as scheduled。

Annex：1. Criteria for different types of generation units

2. Technical guide to the allocation of quota for coal-fired power generating units 2019-2020

3. Technical guide to the allocation of quota for gas-fired power generating units 2019-2020

4. 2019-2020 Carbon emission benchmark values for various types of generator units

5. Information submission sheet for pre-allocation of 2019-2020 quota for key emitting enterprises in the power generation industry in province (autonomous region, municipality) XX

Annex 1

Criteria for different types of generation units

Table 1 Criteria for determining what power generating units are subject to emission quota

Generation unit type	Basis for applicability
Conventional coal-fired units of 300MW or more	Where the conventional thermal coal-fired unit uses bituminous coal, lignite or anthracite as the primary fuel, this standard applies to units with a rated power of 400MW or more
Conventional coal-fired units of less than 300MW	Where the conventional thermal coal-fired unit uses bituminous coal, lignite or anthracite as the primary fuel, this standard applies to units with a rated power of less than 400MW
Unconventional coal-fired units (including coal-fired circulating fluidized bed units) using coal gangue, coal slurry, or coal–water slurry	Applies to generating units (including coal-fired circulating fluidized bed units) that use unconventional thermal coal such as coal gangue, coal slurry, and coal-water slurry as the primary fuel (in a full compliance year, the proportion of unconventional fuels, by energy content, should exceed 50%)
Gas-fired generators	Applies to generating units with natural gas as the primary fuel (in a full compliance year, the use of other fuels will not exceed 10% by energy content)

Note：

1. Where reporting occurs for a combination of generator units, use the least favorable category to determine what category is applicable。

2. Where a generator unit uses fossil fuel as the primary fuel and co-fires up to 10% by heat content of biomass over a full compliance year (including MSW, sewage sludge, etc.), the generator unit type is determined on the basis of the primary fuel。

Where a generator unit uses fossil fuel as the primary fuel uses up to 10% by heat content of other fuels over a full compliance year (including utilization of secondary energy resources), the generator unit type is determined on the basis of the primary fuel。

 

Table 2 Criteria for determining what units are temporarily not subject to emission quota

Generator type	Basis for applicability
Biomass-fired generator units	1. Pure biomass-fired generator units (including MSW and sewage sludge incineration)
Co-firing generator units	2. Generator units that co-fire fossil fuels with biomass：those power generation units (including MSW and sewage sludge incineration units) that co-fire fossil fuels, but where the biomass fuels (including MSW and sewage sludge) account for more than 50% of the energy content on average over a full compliance year 3. Generator units that co-fire biomass (incl. MSW and sewage sludge) with fossil fuels：those power generation units where the biomass fuels (including MSW and sewage sludge) account for more than 10% but not more than 50% of the energy content on average over a full compliance year 4. Generator units that utilize secondary energy resources together with fossil fuels：those power generation units where secondary energy resources account for more than 10% of the energy content on average over a full compliance year
Special fuel generator units	5. Generator units that use coal-bed methane (coal mine gas), semi-coke coke oven gas, waste gasses from carbon black production, coke oven gas, blast furnace gas, converter gas, associated gas from oil production, oil shale, oil sands, gas hydrate, and other special fossil fuel generator sets
Generator units that utilise fuels from own processes	6. Only refers to those units utilizing self-produced waste gas, exhaust gas, or coal gas
Other special generator units	7. Coal-fired boilers that were retrofitted to be gas-fired generators (with the exception of generators that directly used as gas turbines)； 8. Oil-fired generator units, integrated gasification combined cycle power generation (IGCC) units,and internal combustion units

 

 

Annex 2

Technical guide to the allocation of quota for coal-fired power generating units 2019-2020

1. Quota calculation method
The CO2 emission quota for coal-fired power generating units is calculated as follows：
A = Ae+Ah
in which：
A — Total CO2 quota, unit：t CO2
Ae — CO2 quota for electric power generation, unit：t CO2
Ah — CO2 quota for heat supply, unit：t CO2
In which the calculation method for the CO2 quota for electric power generation is：
Ae= Qe×Be×Fl×Fr×Ff
in which：
Qe — Electric power supply, unit：MWh
Be — The reference value for electric power generation for the category of power generator, unit：t CO2/MWh
Fl — Correction factor for generating unit cooling mode. If the condenser cooling mode is based on water cooling, the modifier value is 1；If the condenser cooling mode is based on air-cooling, the modifier value is 1.05
Fr — Correction factor for heat supply by the generator unit; the correction factor for heat supply by coal-fired units is 1-0.22×heat supply ratio [china energy portal note: assumed to be interpreted here as heat supply (GJ)/ heat + electric power supply (GJ)]
Ff — Correction factor for generator unit load factor (capacity factor)

Using the "Energy consumption per unit of output norms for conventional coal-fired generating units" (Standard GB21258-2017) as a reference, the correction factor for generator unit load factor (capacity factor) of generators operating in pure condensing mode are listed in Table 1; the correction factor for generator unit load factor (capacity factor) of all other types of generator units is set to 1。

 

Table 1. Correction factor for generator unit load factor (capacity factor) of generators operating in pure condensing mode

The load (capacity) factor of the generating unit over the statistical period	Correction factor
F≥85%	1.0
80%≤F＜85%	1+0.0014×(85-100F)
75%≤F＜80%	1.007+0.0016×(80-100F)
F＜75%	1.015^(16-20F)
Note：F is the load (capacity) factor of the generating unit, in %

The calculation method for the CO2 quota for heat supply is：

Ah=Qh×Bh

in which：

Qh — Total heat supply, unit：GJ

Bh — Reference value for heat supply for the category of power generator, unit：t CO2/GJ

 

2. Pre-allocated and approved quota

(1) Pre-allocation of quotas

For generators operating in pure condensing mode：

Step 1：Verify the generator unit's condenser cooling method (air-cooled or water-cooled), load factor and 2018 power supply (MWh) data for 2018。

Step 2：Consider 70% of the power supply of the unit in 2018, multiply it by the reference value for electric power generation, the correction factor for cooling mode, the correction factor for heat supply (actually using a value of 1) and correction factor for generator load factor applicable to the category of the generator unit, to calculate the pre-allocated quota for the power supply for the power generation unit。

For generators operating in combined heat and power supply mode：

Step 1：Consider the generator unit's condenser cooling method (air-cooled or water-cooled), load factor and 2018 power supply (MWh) and heat supply (GJ) data for 2018。

Step 2：Consider 70% of the power supply of the unit in 2018, multiply it by the reference value for electric power generation, the correction factor for cooling mode, the correction factor for heat supply, and correction factor for generator load factor applicable to the category of the generator unit (actually using a value of 1), to calculate the pre-allocated quota for the electric power supply for the power generation unit。

Step 3：Consider 70% of the heat supply of the unit in 2018, multiply it by the reference value for heat supply applicable to the category of the generator unit, to calculate the pre-allocated quota for the heat supply for the power generation unit。

Step 4：Add the calculation results of Step 2 and 3 to determine the total amount of pre-allocated quota for the generator unit。

(2) Approved quota

For generators operating in pure condensing mode：

Step 1：Consider the generator unit's condenser cooling method (air-cooled or water-cooled), load factor and actual power supply (MWh) data for 2019-2020。

Step 2：Consider the actual power supply of the unit from 2019 to 2020, multiply it by the reference value for electric power generation, the correction factor for cooling mode, the correction factor for heat supply, and correction factor for generator load factor applicable to the category of the generator unit (actually using a value of 1), to calculate the approved quota for the power generation unit。

Step 3：If the final approved quota is inconsistent with the pre-allocated quota, the final approved quota shall prevail。

For generators operating in combined heat and power supply mode：

Step 1：Consider the generator unit's condenser cooling method (air-cooled or water-cooled), load factor and actual power supply (MWh) and heat supply (GJ) data for 2019-2020。

Step 2：According to the actual power supply of the unit from 2019 to 2020, multiplied by the power supply reference value, cooling mode correction factor and heat supply correction factor of the unit category, the power supply quota of the unit is approved Consider the actual power supply of the unit from 2019 to 2020, multiply it by the reference value for electric power generation, the correction factor for cooling mode, the correction factor for heat supply applicable to the category of the generator unit, to calculate the approved quota for electric power supply for the power generation unit。

Step 3：Consider the actual heat supply of the unit from 2019 to 2020, multiply it by the reference value for heat supply applicable to the category of the generator unit, to calculate the approved quota for heat supply for the power generation unit。

Step 4：Add the calculation results of Step 2 and 3 to determine the total amount of pre-allocated quota for the generator unit。

Step 5：If the final approved quota is inconsistent with the pre-allocated quota, the final approved quota shall prevail。

 

Annex 3

Technical guide to the allocation of quota for gas-fired power generating units 2019-2020

1. Quota calculation method

The CO2 emission quota for gas-fired power generating units is calculated as follows：

A=Ae+Ah

in which：

A — Total CO2 quota, unit：t CO2

Ae — CO2 quota for electric power generation, unit：t CO2

Ah — CO2 quota for heat supply, unit：t CO2

 

In which the calculation method for the CO2 quota for electric power generation is：

Ae=Qe×Be×Fr

in which：

Qe — Electric power supply, unit：MWh

Be — The reference value for electric power generation for the category of power generator, unit：t CO2/MWh

Fr — Correction factor for heat supply by the generator unit; the correction factor for heat supply by gas-fired units is 1--0.6×heat supply ratio [china energy portal note: assumed to be interpreted here as heat supply (GJ)/ heat + electric power supply (GJ)]

 

The calculation method for the CO2 quota for heat supply is：

Ah=Qh×Bh

in which：

Qh — Total heat supply, unit：GJ

Bh — Reference value for heat supply for the category of power generator, unit：t CO2/GJ

 

2. Pre-allocated and approved quota

(1) Pre-allocation of quotas

For generators operating in pure condensing mode：

Step 1：Verify the generator unit's power supply (MWh) data for 2018。

Consider 70% of the power supply of the unit in 2018, multiply it by the reference value for electric power generation for gas-fired power generators and the correction factor for heat supply (actually using a value of 1), to calculate the pre-allocated quota for the power supply for the power generation unit。

For generators operating in combined heat and power supply mode：

Step 1：Verify the generator unit's power supply (MWh) and heat supply (GJ) data for 2018。

Step 2：Consider 70% of the power supply of the unit in 2018, multiply it by the reference value for electric power generation for gas-fired power generators, and the correction factor for heat supply, to calculate the pre-allocated quota for the power supply for the power generation unit。

Step 3：Consider 70% of the heat supply of the unit in 2018, multiply it by the reference value for heat supply applicable to the category of the generator unit, to calculate the pre-allocated quota for the heat supply for the power generation unit。

Step 4：Add the calculation results of Step 2 and 3 to determine the total amount of pre-allocated quota for the generator unit。

(2) Approved quota

For generators operating in pure condensing mode：

Step 1：Consider the generator unit's actual power supply (MWh) for 2019-2020。Step 2：Consider the actual power supply of the unit from 2019 to 2020, multiply it by the reference value for electric power generation for gas-fired power generators, and by the correction factor for heat supply, to calculate the approved quota for the power supply for the power generation unit。

Step 3：If the final approved quota is inconsistent with the pre-allocated quota, the final approved quota shall prevail。For generators operating in combined heat and power supply mode：

Step 1：Verify the generator unit's power supply (MWh) and heat supply (GJ) data for 2019-2020。

Step 2：Consider the generator unit's actual power supply (MWh) for 2019-2020, multiply it by the reference value for electric power generation for gas-fired power generators, and by the correction factor for heat supply, to calculate the approved quota for the power supply for the power generation unit。

Step 3：Consider the generator unit's actual heat supply (GJ) for 2019-2020, multiply it by the reference value for heat supply applicable to the category of the generator unit, to calculate the approved quota for the heat supply for the power generation unit。

Step 4：Add the calculation results of Step 2 and 3 to determine the total amount of pre-allocated quota for the generator unit。

Step 5：If the final approved quota is inconsistent with the pre-allocated quota, the final approved quota shall prevail。

 

Annex 4

2019-2020 Carbon emission reference values for various types of generator units

Generator category	Range to which the generator category applies	Electric power supply reference value（t CO2/MWh）	Heat supply reference value（t CO2/GJ）
I	Conventional coal-fired units of 300MW or more	0.877	0.126
II	Conventional coal-fired units of less than 300MW	0.979	0.126
III	Unconventional coal-fired units such as coal-gangue and coal-water slurry-fired units (including coal-fired circulating fluidized bed units)	1.146	0.126
IV	Gas-fired generators	0.392	0.059

 

 

Annex 5

Information submission sheet for pre-allocation of 2019-2020 quota for key emitting enterprises in the power generation industry in province (autonomous region, municipality) XX

No.

Key emitting enterprise name

Registration number

Generator unit registration number

Primary fuel type

Installed capacity (MW)

Generator type

Product type

Power generation in 2018 （MWh)

Power supply in 2018 （MWh)

Heat supply in 2018 （GJ）

Heat supply ratio in 2018

Heat supply correction factor

Cooling method

Generator unit load (capacity) factor

Pre-allocated quota for 2019-2020

Matters that require specific explanation

1

2

3

4

5

6