Our newspaper commented: What are the new characteristics of the third performance period of the national carbon market?

The carbon emissions trading market is a powerful policy tool for my country to achieve the "double carbon" goal. Recently, the Ministry of Ecology and Environment issued the "Notice on Doing a Good Job in the Allocation and Payment of National Carbon Emissions Trading Quotas in the Power Generation Industry in 2023 and 2024", marking the start of the third performance period of the carbon market, and also clarifying the first in advance. Arrangements for quota allocation and payment during the four performance periods. In 2024, the third round of compliance in the national carbon market will be completed. As the first performance since the promulgation of the Interim Regulations on the Administration of Carbon Emissions Trading, what changes have been made in this round of performance and what new characteristics are there? The author summarizes the following points.

First, the benchmark value of quotas has been further tightened. The benchmark value setting follows the principle of "overall breakeven and slight gap", and more consideration is given to the need for carbon reduction. According to comparable standards, the benchmark for the new round of performance period has been tightened. This quota allocation design is conducive to cooperating with the strengthening of energy conservation and carbon reduction actions during the "14th Five-Year Plan"; is conducive to promoting the consumption of surplus quotas in the first two performance periods; is conducive to consolidating the steady and rising trend of carbon market transaction prices; It is also conducive to guiding enterprises to buy more certified voluntary emission reductions within the specified proportion and promote the healthy and orderly development of the national voluntary greenhouse gas emission reduction trading market. Although the quota benchmark has been tightened, considering that thermal power generation capacity will increase by 6.4% year-on-year in 2023, the overall scale of carbon emission quotas for the national power generation industry will still become larger. In addition, this round of performance no longer considers indirect emissions generated by companies using purchased electricity, which is consistent with the requirements of subsequent carbon market expansion to cover industries.

Second, the quota advance policy will no longer be implemented. During the second performance period, taking into account the impact of the epidemic in 2021 and 2022 and the pressure of ensuring energy supply, in order to alleviate the performance burden of the power generation industry, my country introduced quota advance and personalized relief policies for the first time. On the one hand, it did temporarily alleviate the company's difficulties in clearing and performance at that time; on the other hand, it also objectively caused the pressure of clearing and performance to be superimposed on the next performance cycle, and as the transaction price in the carbon market rose, the pressure on enterprises to perform increased. This round of performance and the elimination of quota advance and personalized relief policies will help create good market expectations and promote the formation of an atmosphere and environment for normalized and cyclical performance.

The third is to propose a quota carry-over plan for the first time. Since the national carbon emission rights trading was launched in 2021, due to the relatively loose allocation of quotas, there are still quota products for 2019-2020, 2021, and 2022 in the market, and the problem of carry-over of existing quotas has become increasingly prominent. During the second performance period, the quota carry-over policy is unclear. The new compliance policy clarifies the policy requirements for the carry-over of carbon emission quotas from 2019 to 2024, and proposes a calculation method for the maximum carry-over amount, as well as relevant time arrangements and processes. According to the new policy arrangements, the carry-over amount of corporate carbon emission quotas is mainly positively "linked" to the net sales quota, which will help change the reluctance of enterprises with surplus quotas to sell, improve market expectations, promote carbon emission trading, and enhance market price discovery function and activity.

Fourth, the penalties for failure to perform are more severe. In the first two performance periods, if an enterprise fails to complete the quota payment in full and on time, it can only impose a fine of between 20,000 yuan and 30,000 yuan in accordance with the "Carbon Emissions Trading Management Measures (Trial)"; if it fails to correct within the time limit, the amount of carbon emission quotas for the next year will be reduced in the same amount for the unpaid portion. This round of performance can be based on the "Interim Regulations on the Administration of Carbon Emissions Trading". Enterprises that fail to pay carbon emission quotas in accordance with regulations will be subject to a fine of more than 5 times and less than 10 times the average market transaction price one month before the payment time limit for the outstanding carbon emission quotas; if they refuse to make corrections, their carbon emission quotas for the next year will be reduced in accordance with the same amount of unpaid carbon emission quotas, and they may also be ordered to suspend production for rectification. This change will help stimulate enterprises 'enthusiasm for performance, promote performance in full and on time, improve the overall performance rate, and strengthen the role of the carbon market in promoting carbon reduction.