The National Development and Reform Commission ("NDRC") has recently issued the Plan for Building the National Carbon Emission Trading Market (Power Generation Industry) (the "Plan").

The Plan states that efforts to build the carbon emission trading market will be made steadily and gradually through three stages, including the phase of basic construction, the phase of pilot running and the phase of further improvements. In particular, in the phase of further improvements, quota spot trading shall be conducted among market players in the power generation industry. Where the aim of the deal is to perform the contract (perform the obligation of emission reduction), the quota in relation to the contract performance could be deregistered, while the remaining quota could be transferred or traded across the period of contract performance. According to the Plan, market players in the transactions at the initial stage will be major emitting entities in the power generation sector, to be specific, the enterprises or other types of economic organizations in the power generation industry whose annual emission reaches 26,000 tonnes of carbon dioxide equivalent or above (the overall energy consumption amount of around 10,000 tonnes of standard coal). The self-supply power plant owned by an enterprise in another industry shall be administered as a major emitting entity in the power generation industry, if it discharges 26,000 tonnes of carbon dioxide equivalent or above in a year alone. Furthermore, the Plan regulates the institutional development, administration of quotas for the power generation industry, transition of the pilot scheme from in the regional market to the national market, etc.