Decree of the People’s Government of Guangdong Province
No. 197
The Trial Measures of Guangdong Province on the management of carbon emission adopted at the Seventeenth Executive Meeting of the Twelfth Session of the People’s Government of Guangdong Province on December 17, 2013 are hereby promulgated and shall become effective on March 1, 2014.
Governor
Zhu Xiaodan
January 15, 2014
Trial Measures of Guangdong Province on the management of carbon emission
Chapter I General Provisions
Article 1
These Measures are formulated for the purposes of achieving the goals in connection with the control of greenhouse gas emission, giving full play to the role of market mechanisms and regulating activities related to the management of carbon emission in light of the actual situation of this Province.
Article 2
These Measures shall apply to the reporting and verification of information concerning carbon emission, as well as the grant and trade of and payment for carbon emission quotas, inter alia, within the administrative region of this Province.
Article 3
The principles of openness, fairness and good faith shall be followed in the management of carbon emission, and the combination of government guidance and market operation shall be adhered to.
Article 4
The provincial development and reform departments shall be responsible for the organization and implementation, comprehensive coordination and supervision of the management of carbon emission within the administrative region of this Province.
The municipal people’s governments of cities at or above the prefecture level shall be responsible for guiding and supporting the enterprises within their respective administrative region to facilitate work related to the management of carbon emission.
The municipal development and reform departments of cities at or above the prefecture level shall be responsible for organizing the reporting and verification of information concerning carbon emission by local enterprises.
The provincial departments in charge of economy and information technology, finance, housing and urban-rural development, transportation, statistics, price, quality supervision, and banking shall, to the extent of their respective functions and duties, properly fulfill their respective responsibilities in connection with the management of carbon emission.
Article 5
The development of forest carbon sinks and other voluntary greenhouse gas emission reduction projects shall be encouraged, and enterprises and other units shall be guided to adopt measures aimed at saving energy and reducing carbon emission. Public enthusiasm for participation in such efforts shall be enhanced so as to involve the entire society in carbon reduction and energy-saving.
Chapter II Reporting and Verification of Information Concerning Carbon Emission
Article 6
A reporting and verification mechanism for information concerning carbon emission shall be implemented in this Province.
Industrial enterprises with an annual carbon dioxide emission of 10,000 tons or more, and hotels, restaurants, and financial, commercial and public institutions and other units with an annual carbon dioxide emission of more than 5,000 tons shall be designated as enterprises and units subject to emission control (hereinafter referred to as “EUSEC”); industrial enterprises with an annual carbon dioxide emission of more than 5,000 tons but less than 10,000 tons shall be designated as enterprises subject to emission reporting (hereinafter referred to as “ESER”).
The threshold standards and scope of enterprises and units in the transportation sector to be included as EUSECs will be proposed by the development and reform departments of this Province in conjunction with transportation and other sectors concerned. Transportation enterprises and units meeting such standards and scope will, on a batch by batch basis, be included as enterprises and units subject to information reporting and verification.
Article 7
EUSECs and ESERs shall formulate their information reports concerning their carbon emission respectively in the previous year in accordance with relevant regulations and submit such reports to the provincial development and reform of this Province.
The EUSECs shall commission verification agencies to verify their information reports concerning carbon emission, cooperate with such verification agencies in their work, and bear the cost of such verification.
Where a difference of 10% or exceeding 100,000 tons between the amount of carbon emission by an enterprise or unit is identified in its carbon emission information report and/or the verification report, the provincial development and reform department shall conduct a review of the report.
The provincial and prefectural development and reform departments shall conduct random inspections of the carbon emission information reports submitted by enterprises. The cost of such inspection shall be included into the budget for such departments.
Article 8
Any professional institution that provides the verification service in connection with carbon emission information within the administrative region of this Province shall possess the requisite qualification for such verification service and own the permanent business premises and facilities within the administrative region of this Province as may be necessary for providing such service.
Professional institutions offering verification service and the staff thereof shall engage in carbon emission verification in a lawful, independent and impartial manner. They shall be responsible for the compliance, authenticity and accuracy of the verification reports issued, and fulfill their duties of confidentiality in accordance with law and assume responsibility for their work.
Article 9
The rate of carbon emission verification fee shall be determined by the competent price department of this Province.
Chapter III Management of Quota Grant
Article 10
This Province operates a regulatory system based on carbon emission quota (hereinafter referred to as “Quota(s)”), whereby EUSECs and enterprises having a newly developed (including extended or redeveloped) project with an annual carbon emission of 10,000 tons or more (hereinafter referred to as enterprises with newly-built projects) shall be subject to quota-based regulation; other carbon-emitting enterprises and units may, subject to approval by the provincial development and reform department, be included into the quota-based regulation.
Article 11
The total amount of Quotas to be granted by this Province shall be determined by the provincial People’s Government on the basis of the overall targets set by the Central Government for controlling greenhouse gas emission and in light of the development plan of the key industries of this Province and the objective of reasonably controlling the total amount of energy consumption of this Province, which shall be disclosed to the public on a regular basis.
The total amount of quotas to be granted consists of the quotas for EUSECs and the reserve quotas, the latter of which includes the quota for enterprises with newly-built projects and market-adjusted quota.
Article 12
The provincial development and reform department shall formulate an implementation plan for quota allocation in this Province, specifying such matters as the principles, methods and procedures of quota allocation. The plan shall be subject to review by the Quota Allocation Review Committee and shall be submitted to the provincial People’s Government for approval before publication.
The Quota Allocation Review Committee shall be composed of representatives from the provincial development and reform department and the competent departments in charge of relevant industries of this Province, the experts in such areas as the technology, economy, low-carbon, and energy, as well as the representatives from trade associations and enterprises, with such experts accounting for no less than two-thirds of the members of the Committee.
Article 13
The annual Quotas for the EUSECs shall be determined by the provincial development and reform department on the basis of the benchmark level for the industry concerned, potential for emission reduction and the enterprise’s historical level of carbon emission and by such methods as the baseline method, historical emission method, inter alia.
Article 14
The Quotas for EUSECs shall be granted on a partially gratuitous and partially payable basis, with the proportion of gratuitous Quotas to be gradually lowered.
The provincial development and reform department shall, on July 1 each year, grant to the EUSECs a specific proportion of the total Quotas thereof as the gratuitous Quotas.
Article 15
Where any EUSEC is merged, its Quota and corresponding rights and obligations shall be assumed by the surviving enterprise; where a EUSEC undergoes division or split, it shall formulate a plan for the division if its Quota and promptly submit such plan to the provincial and municipal development and reform department for record.
Article 16
Where the operation of a EUSEC undergoes any material change in connection with the product variety or types of the service offered, or its operation and production is suspended due to equipment maintenance or any other reason, such EUSEC shall file a Quota modification application with the provincial development and reform department for Quota re-verification.
Article 17
Where a EUSEC cancels its registration, terminates production and operation, or is relocated out of this Province, it shall, within one month prior to the completion of the termination or relocation procedure, submit the carbon emission information report and verification report and surrender its Quota as required.
Article 18
EUSECs shall, prior to June 20 each year, complete their respective Quota settlement on the basis of their actual carbon emission during the previous year, and the Quota used will be written off by the provincial development and reform department. The balance, if any, of the annual Quota of an enterprise for one year may either be used in subsequent years or used for quota transactions.
Article 19
A EUSEC may use a Chinese Certified Voluntary Emission Reduction as the quota settlement to offset its actual carbon emission, provided that the Chinese Certified Voluntary Emission Reduction used for Quota settlement does not exceed 10% of the actual carbon emission of the enterprise for the previous year, and more than 70% of the Chinese Certified Voluntary Emission Reduction is generated by a voluntary greenhouse gas emission reduction project within this Province.
The Chinese Certified Voluntary Emission Reduction generated by the EUSECs within their scope of carbon emission may not be used to offset carbon emission of the EUSECs within this Province.
One ton of carbon dioxide equivalent in the Chinese Certified Voluntary Emission Reduction may offset one ton of carbon emission.
Article 20
The Quota for enterprises with newly-constructed projects shall be determined by the provincial development and reform department subject to the carbon emission assessment results as reviewed by the development and reform department at or above the prefecture level. Enterprises with newly-constructed projects shall purchase a sufficient amount of payable as is required before they may obtain gratuitous Quota.
Article 21
The provincial development and reform department shall grant the payable Quota through bidding at the platform designated by the provincial People’s Government each year on a regular basis. The floor price for bidding shall be determined by the provincial development and reform department in conjunction with the competent price department.
The Quota granted through bidding is composed of the payable Quota of existing EUSECs, as well as the enterprises with new-constructed projects, plus the market-adjusted Quota.
Article 22
This Province shall operate registration-based regulation of Quotas, whereby the allocation, change, settlement and cancellation of Quotas shall be registered in the quota registration system and shall become effective from the date of registration.
Chapter IV Regulation of the Quota Trading
Article 23
This Province shall operate a Quota trading system, in which the trading parties are EUSECs, enterprises with newly-established projects, other organizations and individuals meeting the requisite standards.
Article 24
The trading platform shall be a carbon emission exchange designated by the provincial People’s Government (hereinafter referred to as “the Exchange”), which shall fulfill the following functions and duties:
(1) To formulate the trading rules;
(2) To provide the venue, facilities and services for the trading, and to organize the trading activities;
(3) To establish a fund settlement system so as to lawfully conduct the trading settlement, liquidation and fund supervision;
(4) To establish a trading information management system to publish such information as the trading market quotations, trading prices, and trading volume, and promptly disclose relevant information that may cause any significant change on the market;
(5) To establish a trading risk management system to supervise and regulate the trading activities and control risks therein; and
(6) Other functions and duties as may be prescribed by laws and regulations.
The trading rules shall be reported to the provincial development and reform department and provincial financial department for examination and approval before being released.
Article 25
The Quota trading shall be carried out through public auction, agreed transfer and such other means as may be permitted by state laws, rules, regulations and standards.
Article 26
The Quota trading prices shall be determined by the trading participants, subject to the supply-demand relationship in the market. No unit or individual is allowed to manipulate the trading price through fraud, malicious collusion or any other improper means.
Article 27
Trading participants shall pay the trading commission fee in accordance with relevant rules and regulations, and the rate of the commission fee shall be proposed by the exchange office and submitted to the provincial price department for approval before implementation.
Article 28
Efforts shall be made to explore the establishment of a cross-regional carbon trading market, so as to encourage enterprises from other regions to participate in carbon emissions trading of this Province.
Chapter V Supervision and Management
Article 29
The provincial development and reform department shall regularly release to the public the information concerning the implementation of these Measures by EUSECs, as well as the reporting enterprises through government websites or news media.
The provincial development and reform department shall make available to the public a list of verification agencies, and enhance its supervision and regulation of such verification agencies and the verification service offered.
Article 30
This Province shall establish a carbon emission information reporting and verification system and a carbon emission Quota trading system. The EUSECs and reporting enterprises shall open accounts with such systems and input the required data into the corresponding systems.
Article 31
Where a EUSEC raises any objection with regard to the verification of its annual actual carbon emission or Quota allocation, it may apply to the provincial development and reform department for review in accordance with the law. For the objection with regard to annual actual carbon emission, the provincial development and reform department shall entrust with the verification agency that assesses the annual carbon emission by the EUSEC to conduct a reexamination; while for the objection with regard to Quota allocation, the department shall verify the Quota allocation and reply to the EUSEC in writing within 20 days.
Article 32
The provincial development and reform department shall keep credit files for EUSECs, verification agencies and exchange offices, and promptly record, integrate and publish relevant credit information concerning the regulation and trading of carbon emission.
Article 33
The priority shall be given, under the same terms, to the enterprises that have fulfilled their responsibilities in applying for relevant financial projects in such areas as low-carbon development, energy saving and emission reduction, renewable energy development and circular economy development, as well as in access to relevant special financial support from the provincial fiscal funding for low-carbon development, energy saving and emission reduction, and circular economy development.
Article 34
Financial institutions are encouraged to explore the financing services for carbon emission trading products, so as to provide the units subject to Quota regulation with financing support related to energy conservation and carbon reduction projects.
Article 35
The Quotas shall be subject to compensated distribution of income, which shall be managed separately by two lines of revenue and expenditure under governmental fiscal management.
Chapter VI Legal Liability
Article 36
Any EUSEC or reporting unit that, in violation of Article 7 of these Measures, engages in any of the following acts shall be ordered by the provincial development and reform department to make corrections within a prescribed time limit, and shall be fined if such corrections fail to be made by the expiry of the said time limit:
(1) Where it falsely reports, intentionally fails to report the required information or refuses to perform the obligation of carbon emission reporting, a fine of not less than 10,000 yuan but not more than 30,000 yuan shall be imposed thereon; and
(2) Where it impedes the verification agency in conducting on-site verification or refuses to submit relevant evidence as required, a fine of not less than 10,000 yuan but not more than 30,000 yuan shall be imposed thereon; or a fine of 50,000 yuan shall be imposed thereon if the circumstances are serious.
Article 37
Any enterprise that, in violation of Article 18 of these Measures, fails to settle its Quota in full amount, shall be ordered by the provincial development and reform department to fulfill the obligation of settlement; or shall be fined 50,000 yuan in addition to a deduction of twice of the amount of such unsettled quota from its annual Quota allocated for the following year, if such enterprise refuses to fulfill the obligation of settlement.
Article 38
An exchange office shall be ordered by the provincial development and reform department to make corrections and shall be fined not less than 10,000 yuan but not more than 50,000 yuan if it:
(1) Fails to publish any trading information as required; or
(2) Fails to establish and implement a risk management system.
Article 39
Where a professional institution offering the verification service violates paragraph 2 of Article 8 of these Measures by any of the following circumstances, it shall be ordered by the provincial development and reform department to make corrections within a prescribed time limit and shall be fined not less than 30,000 yuan but not more than 50,000 yuan:
(1) Issuing a fake or false verification report; or
(2) Exploiting or publishing any trade secrets or carbon emission information of the verified unit without authorization.
Article 40
Where any development and reform department, relevant department or any staff member thereof violates any provision of these Measures by any of the following conduct, such department or staff member shall be ordered by the superior competent department or the supervisory organ to make corrections and a written reprimand shall be circulated; or the person(s) directly in charge and other person(s) directly responsible shall be punished by the personnel appointment and removal department or the supervisory organ subject to their respective authority if the circumstances thereof are serious, or shall be referred to the competent judicial organ for investigating the criminal liability in accordance with law if a crime is suspected of having been committed:
(1) Seeking improper benefits through, inter alia, Quota allocation, carbon emission verification, carbon emission examination and approval, and management of verification agency;
(2) Failing to correct or investigate any illegal conduct after the discovery thereof;
(3) Violating the regulations by disclosing any confidential information related to any quota trade and thus causing a serious impact; or
(4) Any other act of abuse of power, negligence of duty or committing illegalities for personal gains or by fraudulent means.
Chapter VII Supplementary Provisions
Article 41
Specific regulations on information reporting and verification, Quota allocation and financial services in support of the enterprises’ carbon emission will be separately formulated by the provincial development and reform and financial departments in accordance with these Measures.
Article 42
For the purpose of these Measures, the following terms mean:
(1) “Quota for carbon emission” means a quantitative indicator allocated by the government to an enterprise for the emission of carbon dioxide produced or managed thereby. One ton in such quota of is equal to one ton of carbon dioxide emission.
(2) “Quota for a newly-built project” means a quota issued by the development and reform department upon verification of the estimated annual carbon emission after the completion of the new project in accordance with the assessment report of carbon emission of the new project.
(3) The “market-adjusted quota” means the quota for carbon emission reserved by the government for the purpose of regulating the price in carbon market in response to the fluctuations on the market of carbon emission and changes in economic situations, the amount of which is 5% of the total amount of current quota allocated for EUSECs.
(4) The Chinese Certified Voluntary Emission Reduction means the certified emission reduction generated by voluntary greenhouse gas emission reduction projects recorded by the National Development and Reform Commission in accordance with the Interim Measures on the Management of Voluntary Greenhouse Gas Emission Reduction Transactions.
Article 43
These Measures shall become effective as of March 1, 2014.
