8 january 2013

[4C note: We received this from Rob Elsworth of the envrionmental group, via the Climate Action Network email-list]

Shanghai includes aviation emissions in CO2 market

08 Jan 2013 10:30 AM

BEIJING/LONDON, Jan 8 (Reuters Point Carbon) – Airlines based in Shanghai will be forced to surrender a carbon permit for each tonne of carbon dioxide they emit on domestic routes under the city’s Emissions Trading Scheme, due to launch this year, according to official documents listing market participants published late December.

According to documents published by the Shanghai Municipal Development and Reform Commission, six airlines will be covered by the scheme, including China Eastern Airlines - one of the biggest carriers possessing RMB132 billion ($21-billion) of assets.

“Shanghai’s aviation ETS will cover all domestic routes operated by the companies, it does not have to be bound to Shanghai geographically,” Qi Kang, an auditor with Shanghai Energy Conservation and Mitigation Center told Reuters Point Carbon.

The decision to regulate airline emissions comes amid an ongoing dispute between China and the EU Commission over the legality of European law that forces all airlines to surrender permits for emissions resulting from journeys to and from Europe under the EU market.

In 2012, China and India ordered their airlines not to comply with the law to pressure EU regulators to drop the legislation, which came into force last year but required airlines to hand over permits in April 2013.

In October, the EU Commission postponed by a year the inclusion of foreign-based airlines in the market to give the U.N.’s aviation body – the International Civil Aviation Organization – time to come up with a global solution.

Separately, the EU has said it would exempt nations that adopt policies to cut emissions from the aviation sector, which accounts for less than 2 percent of global emissions.


China’s government has asked seven cities or provinces to launch pilot carbon markets over the next three years to help the federal government roll out a nationwide market later this decade.

Officials see a market that caps emissions and allows firms to trade permits as the cheapest way to cut greenhouse gas emissions that most scientists say are responsible for warming the planet.

China is the world’s largest emitter and hopes launching a market will help it meet its goal to reduce the carbon intensity of its economy 40-45 percent by 2020.

Shanghai’s scheme will regulate emissions from 197 firms, including state-owned companies such as oil company Sinopec, Bao Steel and China Industrial and Commercial Bank.

It is the only one so far planning to include aviation.

Under the scheme, the government will allocate each airline an unspecified number of carbon permits based on their historical emissions in 2009-2011, according to the documents.

Five auditors have been authorized by the local government to gather data from participants by the end of the month ready a launch in the second half of the year, said Qi.

Local officials still have to determine the exact start date.

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