Capacity Building for the Establishment of Emissions Trading Schemes in China Last Update April 2018 Coverage GHG CO2 Scope 277 enterprises 2016 Sectors Electricity, petrochemical, chemical, building materials, iron and steel, nonferrous metals, paper, aviation, and ceramics Threshold Over 10,000t tce/year between 2013 and 2015 Allowance Allocation Allowances are freely allocated on an annual basis, with a possible introduction of auctioning in the future. 10 of the total cap will be reserved for capacity extension and market intervention. Market Stabilization Instruments In case of market imbalances or other issues, the Fujian Economic and Ination Center can buy allowances with government funds or auction allowances from reserves after consultation with the local government and an advisory commitee. Compliance Timeframe for compliance Annual Fine for non-compliance Companies failing to surrender enough allowances are fined one to three times the average market price of the past 12 months, with a maximum of CNY 30,000. Twice the amount of the missing allowances can be withdrawn from the account of the company or deducted from next years allocation. Other fines Failing to an emissions or verification report and other misconduct may lead to a fine ranging from CNY 10,000 to CNY 30,000. Offsets Only China Certified Emission Reduction CCER and Fujian Forestry Certified Emission Reduction FFCER offsets generated in Fuijan province are allowed with a limit of 5 of the annual compliance obligation. This limit can be raised up to 10 if both FFCER and CCER credits are used. 2020 Reduction Target Emission Coverage Compliance Rate Launch Date Fujian ETS 60 of gross emissions 97.8 2016 19.5 CO2 intensity vs. 2015 30 September 2016