Guangdong switches exchange for new CO2 market

China’s Guangdong province has made the Guangzhou Exchange Service Group (GZESG) its favoured trading platform for its pilot emissions trading scheme, replacing the Southern United Asset and Equity Exchange.

In addition to hosting the trading of CO2 permits under the scheme when it launches next year, the GZESG will also assist in designing the scheme rules, an official at the exchange who refused to be named said.

Guangdong officials were not available for comment, but the switch was confirmed by other sources involved in the process of developing the local ETS.

GZESG chairman Li Zhengxi told a side event at the U.N. climate talks in Durban in December his group would invest 100 million RMB ($15.9 million) in developments to prepare for the regional scheme.

Guangdong, China’s most populous province with over 100 million inhabitants, is one of seven regions in China where pilot emissions trading is due to be launched next year.

Meanwhile, the Southern United Asset and Equity Exchange will maintain some interest in carbon trading by taking a minority stake in the GZESG’s carbon activities, according to the GZESG official.

A provincial official told local media in March that the central government has capped Guangdong’s CO2 emissions at 660 million tonnes in 2020, a 30 percent increase on 2010.

It is not clear how much of the province’s emissions will be covered by the ETS, but researchers involved in the design process have previously said that power generation and the building materials sectors are likely to face caps.

One source close to the policy-making process told Point Carbon News this week that the province is unlikely to start trading permits under mandatory rules until 2014, and will seek to get a voluntary market going next year.


(Source: Thompson Reuters)