Initial Assessment on Chinese ETS allocation

Published: 19/05/2014

As Chinese ETS pilots began to operate, markets are activated and carbon becomes more and more real to the companies. This report by Ecofys assessed the allocation approaches chosen in the Chinese emissions trading pilots, collected industry and other stakeholders’ opinions on these approaches and identifies options for improvement.

The report takes a detailed look at the Chinese allocation methodologies and processes. Based on expert opinions and Ecofys’ analysis of different Chinese allocation plans, it also highlights industry concerns such as cost and fairness, and what might be done to achieve an even more effective allocation.  Key recommendations include: limit the use of debated factors and reduce free allocation; increase transparency and engage industry to develop benchmarking.