The Ministry of Environment expects to implement the draft carbon trading regulations of the domestic carbon rights trading mechanism in the first half of the year. At a public hearing and research meeting held on the 8th, the industry believed that the 5% handling fee charged by the Ministry of Environment for each transaction was too high. The Climate Agency stated that the carbon trading fee is an unusual fee, which reflects the industry's carbon reduction responsibility and cannot be compared to financial products. In order to avoid speculation, the draft does not allow the resale of carbon rights, and each carbon right can only be traded once.
Carbon trading fee 5% industry operators find it too high. Climate Agency: Extraordinary fees
The Ministry of Environment launched the draft "Measures for the Trading, Auction and Transfer of Greenhouse Gas Reduction Credits" (referred to as the Carbon Trading Measures) in December 2023, and held a public hearing and research meeting on the 8th, inviting government agencies, civil society and industry representatives to discuss . Huang Weiming, deputy director of the Climate Agency, said the measures will be implemented in the first half of this year.
The draft stipulates that domestic carbon rights have three methods: pricing transactions, agreement transactions, and auctions. Regardless of the transaction method, the Ministry of Environment will charge a handling fee of 5% to the buyer. A representative of China Petroleum & Chemical Corporation pointed out that general securities transaction fees are usually below 1%, and the handling fee for carbon trading is too high. The Iron and Steel Association believes that "agreed transactions" do not use the carbon trading platform at all, and charging a handling fee of 5% is unreasonable. .
Huang Weiming, deputy director of the Climate Agency, said that carbon trading fees are not general fees or platform service fees and should not be understood from the perspective of financial products. When interviewed, Huang Weiming added that the purchase of carbon rights by businesses to offset emissions does not actually fulfill the obligation to reduce emissions. Foreign countries usually use handling fees to impose additional responsibilities on businesses and contribute to the national carbon reduction fund; taking Singapore, which has a carbon trading system similar to that of China, as an example , the carbon trading fee is 5%.
However, the draft also stipulates that carbon rights transactions under 100 metric tons are exempt from handling fees, which may allow interested parties to cut transactions into multiple transactions to avoid handling fees. The Financial Supervisory Commission also recommended that the Ministry of Environment consider adjusting the threshold. Huang Weiming responded that carbon trading often costs more than 100 tons. If someone circumvents it, the amount may be considerable, and we will further discuss how to solve it.
Will the survival of “garbage carbon rights” affect carbon pricing? The group calls for upper and lower limits
How many times can a carbon right be traded? In order to avoid speculation by interested parties, the draft stipulates that each carbon right can only be traded once. However, the Semiconductor Industry Association believes that the number of transactions should be moderately liberalized, for example, allowing companies to resell 10% of the carbon rights they acquire. Huang Weiming said that if carbon rights can be changed hands, he is afraid that there will be a phenomenon of reluctance to sell and speculation, and in the end there will be "old carbon" that does not meet the carbon reduction benefits on the market. "If you want to sell it, no one will buy it from you." On the contrary, it will be detrimental to the industry. .
The old Environmental Protection Agency once opened some industries to implement "preliminary projects" to obtain carbon reduction credits, but the issuance mechanism at that time was not rigorous, and was therefore criticized by the environmental group as "waste carbon credits." In response to the Ministry of Environment's opening up of such carbon rights to be negotiated and traded, Lin Yuxuan, a researcher at the Taiwan Climate Action Network Research Center, called for further setting upper and lower price limits to prevent low-quality carbon rights from being purchased in large quantities at low prices by businesses and deducting carbon fees, which will affect carbon emissions. Pricing. The Semiconductor Industry Association calls for early-stage projects and the other two types of carbon reduction credits (offset projects and voluntary reduction projects) to be applied for and issued in accordance with the law and should be treated equally. It is unreasonable to restrict only agreement transactions.
Huang Weiming said that the preliminary project was done for encouragement and was not as rigorous as the subsequent carbon reduction methods. The use, carbon trading, and deduction of carbon fees must be strictly limited to avoid misleading the public into thinking that it is equivalent to other types of carbon reduction credits. He emphasized that the carbon fee offset for the early project "will not be one ton for one ton", but must be "several discounts", but he did not respond to whether there would be an upper or lower limit.
As for companies that have their own carbon neutral needs, can they acquire domestic carbon rights? Huang Weiming said that the "Climate Law" stipulates that companies must have needs for incremental offsets, deductions of carbon fees, or other "purposes approved by the Ministry of Environment" before they can participate in transactions. However, the purpose of the latter has not yet been stipulated in the draft carbon trading regulations. , the relevant mechanisms will be re-evaluated.
Source: Environmental Information Center
