No Free Carbon Trading Permits to Companies Failing to Comply Under New Program
During the national fourth emission trading program the Guangdong province warned carbon emitters that if they will not enter any bids for carbon permits at the regulated minimum price they are not eligible to receive any free carbon permits under the program.
The country will be launching seven pilot programs ahead of the planned nationwide program that was supposed to be implemented later this year as part of the key measures planned to cut emissions per unit based on the gross domestic product which is 40 to 45 percent below the previous levels in 2005. Emission trading is still new in china and most are expecting a bumpy ride before the right formula will be found that works well. Although the strategy of Guangdong is unprecedented in the carbon market and the move is said to help boost demand at auctions but might undermine the carbon trading market.
The fist auction of more than 3 million carbon permits will start on December 16th and the second trading of carbon allowance will be done three days after in a program that is said to be the second largest emission trading program. There are 240 companies that are covered by the Guangdong emissions market and are told to have placed successful bids in the program and for future bidding. Those who fail to file for bids will not be given free carbon permits since the free emissions licenses make up 97 percent of what these companies need to comply with the trading program.