Hubei ETS plans to include forest industry

The Hubei Emission Trading Scheme (ETS) is expected to add local forest industry to the carbon trading system, according to a conference held by ETS, Hubei Provincial Development and Reform Commission and Hubei Forestry Department.

Wang Hai, deputy general manger of the Hubei Emission Exchange, told ICIS that the Hubei provincial government has started to communicate with forest cultivators, measure forest areas and valuate the difficulty of developing carbon sink projects, with the results to be released soon.

Hubei was rich in forest resources, especially in two areas – Tongshan county and Shennongjia Natural Conservation Region, Wang also said.

Hubei allows the covered entities to offset their obligations with up to 10% of Certified Carbon Emission Reduction, which is one of the highest among the seven pilot ETS in China. However, the CCER adopted for compliance have to be produced by projects located within Hubei province. According to data released by China Certified Emission Reduction Exchange Info-Platform, there are 10m-15m tonnes of CCER gap. Considering abundant forestry resources in Hubei, the market potential and low cost of forest carbon credits will be appealing to investors.

As of 22 August, 5.186m tonnes of emission allowances have been being traded in Hubei ETS since its launch, with a total value of yuan 123m, both of which are top among the seven pilot ETS. However, the daily trading volume has significantly declined recently because of the lack of momentums. Kun Yang