Hebei Environment Energy Exchange Unveiled      

The Hebei Environment Energy Exchange was unveiled at the Hebei Property Rights Exchange center on February 24th. The new Exchange will engage in the license services of energy saving and environmental protection technologies, investment and financing services, emission rights and energy saving amount trading services, CDM (clean development mechanism) information services and eco-compensation promoting services.
   China is now carrying out various programs to deal with climate changes, with actively exploring the emission trading business. Such environment exchanges are emerging in an increasing number nationwide. Experts said a domestic carbon trading market will surely be formed in the future. As a result, it's urgent for China to set up a standard emission trading market, including carbon emission, to regulate trading in different regions in a market-oriented approach.
   Only in 2008, three such environment right exchange institutions were set up in China: the Beijing Environment Exchange, the Shanghai Environment and Energy Exchange and the Tianjin Climate Exchange. As the central government made it clear to develop a low-carbon economy, more such agencies emerged in 2009 including the Luliang Energy Saving and Emission Reduction Project Trading Center in Shanxi province, and environment and energy exchanges in Wuhan, Hangzhou and Kunming. The Shenzhen United Property Rights Exchange, the Shenzhen International Technology Promotion Center for Sustainable Development and RESET (HK) also on November 17th, 2009 announced to set up an Asian emission trading exchange.
   The National Development and Reform Commission (NDRC) is mulling on related rules to regulate the sector. The number of national energy exchanges will be capped below 10, and to date there are already seven across Beijing, Shanghai and Tianjin, among other cities. As a resource and energy-rich province, Hebei is ahead of others in China in exploring the environment right trading field.
   Some domestic companies with international business have made successful carbon trading deals via exchanges. A large number of agencies have also emerged because of the price gap between domestic and international exchanges, and many companies with big potential in energy saving and emission reduction also set up special departments in charge of the sales of carbon-reduction projects.
   Carbon dioxide emission right must be evaluated and assessed before it can be traded as a commodity. Nations and agencies in the world have started to draw their own standards and trading rules. As more standards are set to be unveiled, cross-border accreditation will be a major issue.
   In China, the Beijing Environment Exchange has released its "Panda Standard" at the end of 2009. As the first emission reduction standard in China, it determines the monitoring standards, the rules to select certification and testing agencies and other corresponding rules. Still, the Panda Standard focuses on carbon emission right approval and trading, but not involved in specific programs yet. (CCR2009 No. 36)
   In addition, although the NDRC set a minimum price of Euro 8 per ton for domestic CDM projects, all such projects still need to be registered at related agency under the United Nations. One example, in early December 2009, the CDM executive board at the UN turned down requests for carbon market funds for the development of 10 wind farms in China, as it suspects China is using its industry policy to rake in wind power subsidies.
   Chinese researchers said that carbon trading is hard to be expanded in large scale in short term given its complexity. In this stage, most will remain at the level of voluntary emission reduction.
   "This means that for a long time, most innovative financial activities in domestic market relating to emission trading will be based on the international carbon trading market."