(Yicai Global) Nov. 16 -- China will broaden the scope of its carbon emissions trading scheme to include more industries and participants in order to become a greenhouse gas bourse of global influence, an official at the Ministry of Ecology and Environment said yesterday.

The emissions trading scheme is an important tool for China to achieve its carbon peaking and neutrality goals and to control greenhouse gas emissions using market mechanisms, Zhao Yingmin, who is also head of the Chinese delegation in international climate negotiations, said at the 27th United Nations Climate Change Conference.

Carbon trading is a market-based mechanism introduced through the Kyoto Protocol, which an in international treaty to reduce greenhouse gas emissions. Of the six greenhouse gases that need to be reduced worldwide, carbon dioxide is the principal one. Thus the trading market is called the carbon market and transactions are calculated per ton of carbon dioxide equivalent.

China’s carbon emissions trading scheme, which opened in July last year, covers around 4.5 billion tons of carbon dioxide emissions a year, making it the world’s largest carbon market. As of Nov. 11, 197 million tons of carbon emissions had been traded, totaling CNY8.7 billion (USD1.2 billion).

The market is expected to expand to include eight more highly-polluting industries such as petrochemicals, steel, papermaking, electric power and aviation. This will boost its quota to 7 billion tons, accounting for around 60 percent of the country’s total emissions. The value of carbon trades is expected to reach CNY100 billion (USD14.1 billion) by 2030, which is China's carbon peaking goal.

China is finetuning its policies and regulations for the carbon market, the ministry said in its report to the UN. China started to lay out procedures for the registration of carbon emission rights as well as trading and settlements in February. And it is revising policies and technical specifications for greenhouse gases.

China has drawn up a technical guide for verifying greenhouse gas emissions from power plants based on the carbon market’s actual operations during the first commitment period of the Kyoto Protocol, Zhao said. The draft guide is open for public comment until Nov. 18. The country has also deleted unnecessary parameters based on experience from its own carbon market and that of the European Union.

Editors: Shi Yi, Kim Taylor