Order of the State Council of the People's Republic of China

No. 775

The Interim Regulations on the Administration of Carbon Emission Trading have been passed at the 23rd executive meeting of the State Council on January 5, 2024, and are hereby promulgated. They will come into effect on May 1, 2024.

Premier Li Qiang

January 25, 2024

Interim Regulations on the Administration of Carbon Emission Trading

Article 1　In order to standardize carbon emission trading and related activities, strengthen the control of greenhouse gas emissions, actively and steadily promote carbon peak and carbon neutrality, promote green and low-carbon economic and social development, and advance ecological civilization construction, this regulation is formulated.

Article 2　This regulation applies to carbon emission trading and related activities in the national carbon emission trading market.

Article 3   The management of carbon emission trading and related activities should adhere to the leadership of the CPC, implement the Party's and the country's line, guidelines, policies and decision-making arrangements, adhere to the adaptation of greenhouse gas emission control to economic and social development, adhere to the combination of government guidance and market regulation, and follow the principles of openness, fairness and impartiality.

The country strengthens international cooperation and exchanges in the field of carbon emissions trading。

Article 4　

The competent department of ecological environment under the State Council is responsible for the supervision and management of carbon emission trading and related activities. The relevant departments of the State Council are responsible for the supervision and management of carbon emission trading and related activities in accordance with their respective responsibilities.

The ecological environment department of the local people's government is responsible for the supervision and management of carbon emission trading and related activities within its administrative region. The relevant departments of the local people's government shall be responsible for the supervision and management of carbon emission trading and related activities within their respective administrative regions in accordance with their respective responsibilities.

Article 5　The national carbon emission rights registration agency is responsible for registering carbon emission trading products and providing services such as trading settlement in accordance with relevant national regulations. The national carbon emission trading institution is responsible for organizing and conducting centralized and unified trading of carbon emission rights in accordance with relevant national regulations. The fees for registration and transactions should be reasonable, and the charging items, charging standards, and management methods should be made public to the society.

The national carbon emission registration and trading institutions shall, in accordance with relevant national regulations, improve relevant business rules, establish risk prevention and control and information disclosure systems.

The competent ecological environment department of the State Council, together with the market supervision and administration department of the State Council, the People's Bank of China and the banking regulatory authority of the State Council, supervises and manages the national carbon emission registration institutions and the national carbon emission trading institutions, and strengthens information sharing and law enforcement cooperation.

Carbon emission trading should gradually be incorporated into a unified public resource trading platform system.

Article 6　The types and industry scope of greenhouse gases covered by carbon emission trading shall be proposed by the competent department of ecological environment under the State Council in conjunction with relevant departments of development and reform under the State Council based on national greenhouse gas emission control targets, and shall be implemented after approval by the State Council.

Carbon emission trading products include carbon emission quotas and other spot trading products approved by the State Council.

Article 7　Key greenhouse gas emitting units (hereinafter referred to as key emitting units) included in the national carbon emission trading market, as well as other entities that comply with relevant national regulations, may participate in carbon emission trading.

Personnel from the ecological environment regulatory authorities, other departments responsible for supervising and managing carbon emission trading and related activities (hereinafter referred to as other departments responsible for supervision and management), national carbon emission registration agencies, national carbon emission trading agencies, and technical service agencies as stipulated in this regulation shall not participate in carbon emission trading.

Article 8　The competent department of ecological environment under the State Council, in conjunction with relevant departments of the State Council, shall formulate the conditions for determining key emission units in accordance with the national greenhouse gas emission control targets. The ecological and environmental departments of the people's governments of provinces, autonomous regions, and municipalities directly under the Central Government (hereinafter referred to as the provincial people's governments), together with relevant departments at the same level, shall formulate an annual list of key emission units in their administrative regions according to the conditions for determining key emission units.

The criteria for determining key emission units and the annual list of key emission units shall be made public to the society.

Article 9　The competent department of ecological environment under the State Council, in conjunction with relevant departments of the State Council, shall formulate the total amount and allocation plan of annual carbon emission quotas based on the national greenhouse gas emission control targets, taking into account factors such as economic and social development, industrial structure adjustment, industry development stage, historical emission situation, and market regulation needs, and organize their implementation. Carbon emission quotas will be allocated free of charge, and a combination of free and paid allocation methods will be gradually implemented in accordance with relevant national requirements.

The ecological environment department of the provincial people's government, in conjunction with relevant departments at the same level, shall issue carbon emission quotas to key emission units within its administrative region based on the total annual carbon emission quota and allocation plan, and shall not violate the total annual carbon emission quota and allocation plan by issuing or adjusting carbon emission quotas.

Article 10　According to the provisions of Articles 6, 8, and 9 of this Regulation, the types and industry scope of greenhouse gases covered by carbon emission trading, the criteria for determining key emission units, and the total amount and allocation plan of annual carbon emission quotas shall be studied and proposed. The opinions of provincial people's governments, relevant industry associations, enterprises and institutions, experts, and the public shall be solicited.

Article 11　Key emission units shall take effective measures to control greenhouse gas emissions, formulate and strictly implement greenhouse gas emission data quality control plans in accordance with relevant national regulations and technical specifications formulated by the ecological environment department of the State Council, use measuring instruments that have been legally verified or calibrated to carry out greenhouse gas emission related inspections and tests, truthfully and accurately calculate the greenhouse gas emissions of their own units, prepare the previous year's greenhouse gas emission report (hereinafter referred to as the annual emission report), and submit the emission statistical accounting data and annual emission report to the ecological environment department of the provincial people's government where their production and business premises are located in accordance with regulations.

Key emission units shall be responsible for the authenticity, completeness, and accuracy of their emission statistical accounting data and annual emission reports.

Key emission units shall, in accordance with relevant national regulations, disclose to the public the emission amount, emission facilities, statistical accounting methods, and other information in their annual emission reports. The original records and management ledger of the data involved in the annual emission report should be kept for at least 5 years.

Key emission units may entrust legally established technical service institutions to carry out greenhouse gas emission related inspection and testing, and prepare annual emission reports.

Article 12　The ecological environment department of the provincial people's government shall verify the annual emission reports submitted by key emission units and confirm their actual greenhouse gas emissions. The verification work shall be completed within the prescribed time limit, and feedback on the verification results shall be provided to key emission units within 7 working days from the date of completion of the verification. The verification results should be made public to the society.

The ecological environment department of the provincial people's government shall verify the annual emission reports submitted by key emission units and confirm their actual greenhouse gas emissions. The verification work shall be completed within the prescribed time limit, and feedback on the verification results shall be provided to key emission units within 7 working days from the date of completion of the verification. The verification results should be made public to the society.

Article 13　Technical service institutions entrusted to carry out greenhouse gas emission related inspection and testing shall comply with relevant national technical regulations and specifications, bear corresponding responsibilities for the inspection and testing reports issued by them, and shall not issue false or misleading inspection and testing reports. Key emission units shall produce and submit samples in accordance with relevant national regulations, and be responsible for the representativeness and authenticity of the samples.

Technical service institutions entrusted to prepare annual emission reports and conduct technical audits of annual emission reports shall, in accordance with relevant national regulations, possess corresponding facilities, equipment, technical capabilities, and technical personnel, establish a business quality management system, independently, objectively, and impartially carry out relevant business, assume corresponding responsibilities for the annual emission reports and technical audit opinions issued by them, and shall not tamper with or forge data materials, use false data materials, or engage in other fraudulent behaviors. The specific management measures for the preparation and technical review of annual emission reports shall be formulated by the competent department of ecological environment of the State Council in conjunction with relevant departments of the State Council.

Technical service institutions shall not engage in both annual emission report preparation and technical review within the same province, autonomous region, or municipality directly under the central government.

Article 14　

Key emission units shall, based on the verification results of the annual emission report by the ecological environment department of the provincial people's government, fully pay their carbon emission quotas within the time limit prescribed by the ecological environment department of the State Council.

Key emission units can purchase or sell carbon emission quotas through the national carbon emission trading market, and the purchased carbon emission quotas can be used for clearance.

Key emission units may purchase certified greenhouse gas emission reductions in accordance with relevant national regulations to clear their carbon emission quotas.

Article 15　Carbon emission trading can be conducted through agreement transfer, one-way bidding, or other spot trading methods that comply with relevant national regulations.

It is prohibited for any unit or individual to manipulate the national carbon emission trading market or disrupt the order of the national carbon emission trading market through fraud, malicious collusion, and dissemination of false information.

Article 16　The competent department of ecological environment under the State Council shall establish a national carbon emission trading market management platform, strengthen the supervision and management of the entire process of carbon emission quota allocation, clearance, and greenhouse gas emissions of key emission units, and achieve information sharing with relevant departments of the State Council.

Article 17　The ecological environment supervisory department and other departments responsible for supervision and management may conduct on-site inspections of key emission units, trading entities, and technical service institutions within their respective areas of responsibility.

The ecological environment supervisory department and other departments responsible for supervision and management may conduct on-site inspections, take measures such as consulting and copying relevant materials, querying and inspecting relevant information systems, and may require relevant units and individuals to provide explanations on relevant matters. The examinee shall truthfully report the situation and provide information, and shall not refuse or obstruct.

Conduct on-site inspection, with no less than 2 inspectors and presenting law enforcement credentials. Inspectors are legally obligated to keep confidential any state secrets or trade secrets they become aware of during inspections.

Article 18　Any unit or individual has the right to report any behavior that violates the provisions of this regulation to the ecological environment department and other departments responsible for supervision and management. The department receiving the report shall handle it in a timely manner in accordance with the law, provide feedback on the handling results to the reporter in accordance with relevant national regulations, and keep the reporter confidential.

Article 19　If the staff of the ecological environment supervisory department or other departments responsible for supervision and management abuse their power, neglect their duties, or engage in favoritism and fraud in the supervision and management of carbon emission trading and related activities, they shall be punished in accordance with the law.

Article 20　If the staff of the ecological environment department, other departments responsible for supervision and management, national carbon emission registration and registration institutions, national carbon emission trading institutions, and technical service institutions specified in this regulation participate in carbon emission trading, the ecological environment department of the State Council shall order them to dispose of the carbon emission quotas and other trading products they hold in accordance with the law, confiscate their illegal gains, and may impose a fine of up to the equivalent value of the price of the traded carbon emission quotas and other products; Those who are state employees shall also be subject to disciplinary action in accordance with the law.

Article 21　If a key emission unit falls under any of the following circumstances, the competent department of ecological environment shall order it to rectify and impose a fine of not less than 50000 yuan but not more than 500000 yuan; Those who refuse to make corrections may be ordered to suspend production for rectification:

（1） Failure to develop and implement a quality control plan for greenhouse gas emission data in accordance with regulations;

（2） Failure to submit emission statistical accounting data and annual emission reports in accordance with regulations;

（3） Failure to disclose the emission amount, emission facilities, statistical accounting methods, and other information in the annual emission report to the public in accordance with regulations;

（4） Failure to keep the original records and management ledger of the data involved in the annual emission report in accordance with regulations.

Article 22If a key emission unit falls under any of the following circumstances, the competent department of ecological environment shall order it to rectify, confiscate its illegal gains, and impose a fine of not less than 5 times but not more than 10 times the illegal gains; If there are no illegal gains or the illegal gains are less than 500000 yuan, a fine of not less than 500000 yuan but not more than 2 million yuan shall be imposed; Impose a fine of no less than 50000 yuan and no more than 200000 yuan on the directly responsible supervisors and other directly responsible personnel; For those who refuse to make corrections, their carbon emission quotas for the next year shall be reduced by more than 50% but less than 100%, and they may be ordered to suspend production for rectification:

（1） Failure to calculate greenhouse gas emissions in accordance with regulations;

（2） There are significant deficiencies or omissions in the annual emission report, such as tampering with or falsifying data during the preparation process, using false data, or engaging in other fraudulent activities;

（3） Failure to produce and submit samples according to regulations.

Article 23　If a technical service institution issues false or misleading inspection and testing reports, the competent department of ecological environment shall order it to rectify, confiscate its illegal gains, and impose a fine of not less than 5 times but not more than 10 times the illegal gains; If there are no illegal gains or the illegal gains are less than 20000 yuan, a fine of not less than 20000 yuan but not more than 100000 yuan shall be imposed; For serious cases, the department responsible for qualification certification shall cancel their inspection and testing qualifications.

If there are significant defects or omissions in the annual emission report or technical review opinion issued by the technical service agency, and data is tampered with or forged during the preparation of the annual emission report or the technical review process of the annual emission report, false data is used, or other fraudulent behaviors are carried out, the competent ecological environment department shall order correction, confiscate illegal gains, and impose a fine of not less than 5 times but not more than 10 times the illegal gains; If there are no illegal gains or the illegal gains are less than 200000 yuan, a fine of not less than 200000 yuan but not more than 1 million yuan shall be imposed; Those with serious circumstances are prohibited from engaging in the preparation of annual emission reports and technical review business.

If a technical service institution is punished for illegal acts as stipulated in the first and second paragraphs of this article, its directly responsible supervisors and other directly responsible personnel shall be fined not less than 20000 yuan but not more than 200000 yuan, and shall be prohibited from engaging in greenhouse gas emission related inspection and testing, annual emission report preparation, and technical audit business for 5 years; Those with serious circumstances shall be prohibited from engaging in the aforementioned business for life.

Article 24　If key emission units fail to pay their carbon emission quotas in accordance with regulations, the competent department of ecological environment shall order them to make corrections and impose a fine of not less than 5 times but not more than 10 times the average market transaction price of the unpaid carbon emission quotas in the month before the deadline for payment; For those who refuse to make corrections, their carbon emission quotas for the next year shall be reduced by the same amount as the unpaid carbon emission quotas, and they may be ordered to suspend production for rectification.

Article 25　Those who manipulate the national carbon emission trading market shall be ordered to rectify by the competent department of ecological environment under the State Council, their illegal gains shall be confiscated, and a fine of not less than one time and not more than ten times the illegal gains shall be imposed; If there are no illegal gains or the illegal gains are less than 500000 yuan, a fine of not less than 500000 yuan but not more than 5 million yuan shall be imposed. If a unit is punished for the aforementioned illegal acts, its directly responsible supervisors and other directly responsible personnel shall be given a warning and fined not less than 100000 yuan but not more than 1 million yuan.

Those who disrupt the order of the national carbon emission trading market shall be ordered by the competent department of ecological environment under the State Council to make corrections, have their illegal gains confiscated, and be fined between 1 and 10 times their illegal gains; If there are no illegal gains or the illegal gains are less than 100000 yuan, a fine of not less than 100000 yuan but not more than 1 million yuan shall be imposed. If a unit is punished for the aforementioned illegal acts, its directly responsible supervisors and other directly responsible personnel shall be given a warning and fined between 50000 yuan and 500000 yuan.

Article 26　Those who refuse or obstruct the ecological environment management department or other departments responsible for supervision and management from carrying out supervision and inspection in accordance with the law shall be ordered to make corrections and fined between 20000 yuan and 200000 yuan by the ecological environment management department or other departments responsible for supervision and management.

Article 27　The competent department of ecological environment under the State Council, in conjunction with relevant departments of the State Council, shall establish a credit record system for key emission units and other trading entities and technical service institutions. Information on administrative penalties imposed on key emission units and other trading entities and technical service institutions for violating the provisions of this Regulation shall be included in the relevant national credit information system and published to the public in accordance with the law.

Article 28　Those who violate the provisions of this regulation and cause harm to others shall bear civil liability in accordance with the law; Those who violate public security management shall be subject to public security management penalties in accordance with the law; Those who commit crimes shall be held criminally responsible in accordance with the law.

Article 29　Local carbon emission trading markets established before the implementation of this regulation shall refer to the provisions of this regulation to improve relevant management systems and strengthen supervision and management.

After the implementation of this regulation, no new local carbon emission trading markets will be established, and key emission units will no longer participate in carbon emission trading in local carbon emission trading markets for the same types of greenhouse gases and industries.

Article 30　The meanings of the following terms in this regulation:

（1） Greenhouse gases refer to natural and anthropogenic gaseous components in the atmosphere that absorb and re emit infrared radiation, including carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons, sulfur hexafluoride, and nitrogen trifluoride.

（2） Carbon emission quota refers to the amount of greenhouse gas emissions, such as carbon dioxide, allocated to key emitting units within a specified period of time. One unit of carbon emission quota is equivalent to emitting 1 ton of carbon dioxide equivalent into the atmosphere.

（3） Clearance refers to the act of key emission units paying carbon emission quotas equivalent to their verified and confirmed actual greenhouse gas emissions from the previous year to the ecological environment department within the prescribed time limit.

Article 31　Key emission units that consume non fossil energy electricity shall have their carbon emission quotas and greenhouse gas emissions adjusted accordingly in accordance with relevant national regulations.

Article 32　The competent department of ecological environment under the State Council, together with the competent departments of civil aviation and other industries under the State Council, may formulate specific management measures for the establishment of a list of key emission units, the issuance and payment of carbon emission quotas, the statistical accounting of greenhouse gas emission data, and the submission and verification of annual emission reports in the civil aviation and other industries in accordance with the principles stipulated in these Regulations and based on actual needs, taking into account the characteristics of greenhouse gas emission control in these industries.

Article 33　This regulation shall come into effect on May 1, 2024.