China has released plans to create the world’s largest carbon emissions trading scheme, several news outlets reported. The market will initially be focused on the power sector, which produced almost half of the country’s greenhouse gas emissions last year, and will encompass 1,700 energy suppliers producing more than 3 billion tons of CO2 annually, according to Reuters.
In the coming years, China is expected to expand the trading scheme to include seven other sectors, such as iron and steel, chemicals, paper, and aviation.
The new market within China, the world’s biggest emitter of greenhouse gases, will be more than twice as large as the current top carbon market, the European Union’s, which covers 1.4 billion tons of emissions annually.
Chinese officials haven’t given a start date for the new system, but said trading will be based in Shanghai. The New York Times reported that environmentalists who worked with China on the carbon market estimated it would start in the next couple of years. The plan aims to raise the portion of electricity that China gets from renewable energy from 13 percent today to 20 percent by 2020. The country has also pledged to peak its carbon emissions by around 2030.