China implements stricter rules to combat carbon trading fraud
![China implements stricter rules to combat carbon trading fraud](https://sustainabilityeconomicsnews.com/wp-content/uploads/2024/02/smoke-coming-out-factories-industrial-area.jpg)
On Sunday, China introduced new regulations to better oversee carbon trading and clamp down on emissions data fraud. These rules, approved by China’s cabinet, take effect from May 1.
They aim to strengthen the legal foundation for an emissions trading scheme (ETS) that currently encompasses over 2,000 power plants and handles approximately 5 billion metric tons of annual carbon dioxide emissions.
Shawn He, a Beijing-based lawyer who specializes in carbon compliance said, “Stronger law enforcement by the environment ministry and its local counterparts can be expected after the new regulations enter into force.”
“They now could confiscate illegal gains and impose harsher penalties for market malpractice,” He said.
According to a recent report from the Beijing Institute of Technology, China’s Emissions Trading System (ETS) is projected to grow to over 3,500 companies by the end of 2025. This expansion will include additional sectors such as cement and aluminum.
China’s national ETS permits participants to achieve emission goals by purchasing allowances from other companies. Launched officially in 2021 after several delays, partly due to concerns regarding data accuracy.
The new regulations will set up a new supervision system and require market players to create plans for controlling data quality.
They will also empower authorities to investigate and penalize companies, including third-party firms responsible for monitoring and verifying emissions, that provide false data.
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