China has laid out a set of rules and regulations guiding a ground-breaking emissions trading scheme, which looks set to be launched next month.

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The Ecology & Environment Ministry (EEM) on Monday published a set of regulations governing emissions trading after three months of public review and comment.

The Carbon Emission Trading Management Methods will come into effect on 1 February.

The national emissions trading scheme centre will be located in Shanghai, while the carbon dioxide registration system will be set up in Wuhan, the capital of Hubei province, Ecology & Environment Minister Huang Runqiu said this week.

Under the new rules, the emission trading scheme covers businesses that have emitted a minimum of 26,000 tonnes of CO2 in any single year between 2013 and 2019. Those businesses will be removed from the emissions control list if emissions fall below 26,000 tonnes per annum for two consecutive years.

The scheme will initially cover coal or gas-fired power plants and manufacturing facilities with captive power plants — 2225 in total — as well as major refineries owned by state giants Sinopec, PetroChina and Sinochem.

The rule stipulates that listed businesses will be entitled to free carbon emissions quotas covering 70% of electricity and heat produced in 2018.

They will also be able to use China Certified Emissions Reduction (CCER) projects to offset as much as 5% of emissions by volume.

Huang said that his ministry is also working on an action plan for emissions to peak by 2030, as pledged by Chinese President Xi Jinping, who previously announced that China will target carbon neutrality by 2060.

China has already operated pilot emissions trading schemes in seven cities and provinces, covering more than 20 industrial sectors and close to 3000 entities, with more than 430 million tonnes of CO2 traded by the end of last year.

China is currently responsible for 10 billion tpa of CO2 emissions, representing about 30% of the world's current total.