Carbon credit program launched in Shanghai

Shanghai municipal government issued guidelines for a pilot carbon trade market that will allow companies to buy and sell carbon credits.

The guidelines, which were posted on the government website on Tuesday, said the program will have a trial period from 2013 to 2015. About 200 firms from industries such as steel, petrochemicals, non-ferrous metals and power, plus non-industrial fields, such as airlines, ports, airports and hotels, will join the program.

The authority said companies with large carbon emissions, like Baosteel and Sinopec Shanghai Petrochemical will be included in the scheme.

The carbon dioxide emission of these 200 companies reached 110 million tons last year, accounting for almost half of the city's total emissions.

The carbon trade platform will be based at the Shanghai Environment and Energy Exchange.

Shanghai's move comes on the heels of a decision by the National Reform and Development Commission earlier this year to call on seven cities and provinces, including Beijing, Shanghai and Tianjin, to set up carbon trade markets.

The policy aims to encourage the development of a low carbon economy nationwide. Companies who keep their emissions below their targets can sell their carbon credits to those exceeding their limits and profit from the trade.