China considers carbon cap in steel and cement sectors for carbon credit trade

China is considering plans to cap the greenhouse gas emissions of the steel, cement and other industries, effectively preparing the pay for carbon credit trading, according to an official quoted in the media.

The comments from Sun Zhen, a climate official at the National Development and Reform Commission (NDRC), add weight to the recent indications that China’s government is looking into absolute caps on some of its highest-polluting sectors. This would then enable the trading of CO2 emission rights.

The cap-and-trade system would form part of China’s target to cut its carbon intensity by 40-45% by 2020 compared with 2005. Currently, the country is the world’s largest emitter of anthropogenic greenhouses gases.

“Throughout the country, we have adopted a plan for reducing releases of carbon,” Sun told the China Daily, the country’s official English-language newspaper. “But when it comes to actually reducing the emissions of certain businesses, that calls for limiting the absolute quantity of emissions,” said Sun. “Setting limits on the absolute amounts of carbon that can be emitted will make it possible to carry out trades of emissions credits,” Sun added.

Sun did not disclose any time of implementation of such a programme, but according to the China Daily, steel and cement producers would be the primary industries involved in the new scheme. In addition, carbon trading could also be implemented in manufacturing hubs such as the Yangtze River delta near Shanghai and the Pearl River delta region close to Hong Kong.

Furthermore, China is studying how industry-wide emission targets could be implemented in its power sector, which is heavily dependent on coal.

Sun Zhen is not the first official to touch upon the subject of carbon trading. Xie Zhenhua, vice minister at the NDRC, said last month that the country expects to be piloting a carbon trading scheme and gradually build an emissions trading market. Another official at the commission revealed in April that China would trial six emissions trading schemes by 2013 and set up a national trading platform by 2015.