China’s Ministry for Ecology and Environment released the final rules governing the national emissions trading scheme (“China ETS”) in January 2021 to take effect from February 1, 2021. These are the most comprehensive set of rules so far for regulating the China ETS. We have summarized the rules with a comparison with the European Union emissions trading scheme (“EU ETS”) to provide a reference point for international investors interested in participating in the China ETS. We have also provided some future considerations for the China ETS based on lessons learnt from the EU ETS as well as some insights on the usage of blockchain and Internet-of-Things technology to support the China ETS.
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