A chimney from a factory in Shanghai, China.

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AFP

Difficult commitments to keep?

China launched its carbon market on Monday, set to become the largest on the planet, as the world's largest polluter pledged to achieve carbon neutrality by 2060.

This Chinese emissions trading system entered into force on Monday, according to the official China New news agency.

Energy companies can trade polluting rights

For the first time, it authorizes provincial authorities to set quotas for thermal power plants and allows energy companies to exchange rights to pollute.

The objective of this program, which was initially to be launched in 2017, is to lower polluting emissions by making them more costly for the companies that generate them.

Given the size of the Chinese economy, this system should dethrone the one set up in 2005 in the European Union to become the world's leading emissions trading system (or ETS according to the initials taken from English).

According to the new rules, the approximately 2,000 power plants that emit more than 26,000 tonnes of greenhouse gases per year are affected.

Once at full speed, the new system is expected to cover one-third of China's carbon dioxide emissions, according to the International Carbon Action Partnership.

29% of carbon emissions come from China

For now, the country is still largely fueled by coal, one of the most polluting energies.

Chinese power plants are 60% coal-fired, and experts expect this powerful lobby group to push for comfortable allowances - and therefore a low carbon price.

In 2019, the country emitted nearly 14 billion tonnes of CO2, or 29% of the global total.

"China is pursuing ambitious clean energy objectives" but "the carbon market in its current form will not play a major role in the realization of these ambitions", however qualified with AFP Lauri Myllyvirta, of the Energy and Clean Air Research Center (CREA), based in Helsinki.

"It could become an important tool in the future, and very quickly, if the government decides to give it real substance," added the analyst.

Fines too low?

The fines planned for companies that exceed emission quotas are "too low to be dissuasive," also said Zhang Jianyu, vice president for China of the American environmental association Environmental Defense Fund.

New coal-fired power plants have also emerged despite commitments to reduce emissions.

And according to Li Shuo, energy expert for Greenpeace China, coal production is returning to levels observed between 2012 and 2014 when emissions peaked.

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