Decree of Shanghai Municipal People's Government
No. 10
The Trial Procedures of Shanghai Municipality on Carbon Emission Administration were adopted at the 29th Routine
Meeting of the Municipal People's Government on November 6, 2013, and are hereby promulgated. They shall be
effective as of November 20, 2013.
Mayor: Yang Xiong
November 18, 2013
Trial Procedures of Shanghai Municipality on Carbon Emission Administration
(Promulgated by Decree No. 10 of Shanghai Municipal People's
Government on November 18, 2013)
Chapter I General Provisions
Article 1 (Purposes and Basis)
With a view to promoting enterprises to fulfill their responsibilities for carbon emission control, achieving the objectives of
carbon emission control of this Municipality, standardizing the management activities relevant to this Municipality's
carbon emission, and facilitating healthy development of this Municipality's carbon emission trading market, these
Procedures are formulated in accordance with relevant regulations such as the State Council's Work Plan for
Greenhouse Gas Emission Control During the 12th Five-year Plan Period and in the light of the actual circumstances of
this Municipality.
Article 2 (Application Scope)
These Procedures apply to relevant management activities such as allocation, settlement and trading of carbon emission
quotas as well as monitoring, reporting, checking and approving of carbon emissions within the administrative area of
this Municipality.
Article 3 (Administrative Department)
The municipal development & reform department is the competent administrative department for the work of carbon
emission administration in this Municipality, responsible for the integrative coordination, organization of implementation,
and supervision guarantee concerning the Municipality's carbon emission administration.
The departments of economy and informatization, urban construction and communications, commerce, transport and
port, tourism, finance, statistics, quality and technical supervision, public finance, and state assets administration of this
Municipality, shall cooperatively implement these Procedures according to their respective functions and duties.
The responsibilities for administrative punishments defined in these Procedures shall be performed by the Shanghai
Energy Conservation Supervision Center entrusted by the municipal development & reform department.
Article 4 (Publicity and Training)
The municipal development & reform department and relevant departments shall strengthen the publicity and training of
carbon emission administration, and encourage enterprises, public institutions and social organizations to participate in
carbon emission control.
Chapter II Quota Administration
Article 5 (The Quota Administration System)
This Municipality shall establish a carbon-emission quota administration system. The emission units whose annual
carbon emission volume reaches the stipulated volume shall be brought into the quota administration; other emission
units may file an application to the municipal development & reform department for being brought into the quota
administration.
The scope of industries under the quota administration as well as the determination and adjustment of the emission units'
carbon emission volumes shall be drawn up by the municipal development & reform department jointly with the
competent departments in charge of the relevant industries, and reported to the Municipal People's Government for
approval. The municipal development & reform department shall publicize the list of the emission units under the quota
administration.
Article 6 (Total Volume Control)
The total carbon emission quota of this Municipality shall be determined in accordance with the State's compulsory index
for greenhouse gas emission control and in the light of this Municipality's objectives of economic growth and rational
control of the total energy consumption.
A unit under the quota administration shall control its total carbon emission in accordance with the carbon emission quota
for it, and perform its duties for emission control, monitoring and reporting as well as quota settlement.
Article 7 (The Allocation Scheme)
The municipal development & reform department shall, jointly with relevant departments, work out a carbon-emission
quota allocation scheme of this Municipality, clarify such matters as the principle, the method and the procedure of quota
allocation, and report them to the Municipal People's Government for approval.
In formulating the quota allocation scheme, the opinions of the units under the quota administration, relevant experts,
and social organizations shall be solicited.
Article 8 (Quota Determination)
The municipal development & reform department shall comprehensively consider the historical emission level and
industrial characteristics of the units under the quota administration as well as factors such as their earlier actions of
energy conservation and pollution reduction, and adopt the historical emission method and the base line method to
determine the carbon emission quota for each unit.
Article 9 (Quota Allocation)
The municipal development & reform department shall, in accordance with the objectives and work plan for carbon
emission control of this Municipality, allocate quotas to units under the quota administration in the forms of payment or
non-payment and through the quota registration system.
Article 10 (Quota Inheritance)
Where a unit under the quota administration is merged, its quota as well as corresponding rights and obligations shall be
inherited by the unit that survives the merger or the newly-established unit.
Where a unit under the quota administration is separated, a rational quota partition scheme shall be worked out
according to where the emitting facilities will be located, and the scheme shall be submitted to the municipal
development & reform department. The unit's quota as well as corresponding rights and obligations shall be inherited by
the new unit that owns the emitting facilities after the separation.
Chapter III Carbon Emission Inspection and Quota Settlement
Article 11 (The Monitoring System)
A unit under the quota administration shall work out a carbon emission monitoring scheme for the next year before
December 31 every year to make clear such contents as the scope, mode, frequency and persons responsible for
monitoring, and report these to the municipal development & reform department.
A unit under the quota administration shall strengthen management of energy measurement, and implement monitoring
in strict accordance with the monitoring program. Where the monitoring program has been significantly modified, it shall
be reported to the municipal development & reform department in a timely manner.
Article 12 (The Reporting System)
A unit under the quota administration shall work out the carbon emission report in the previous year before March 31
every year, and submit it to the municipal development & reform department.
A unit whose annual carbon emission volume exceeds 10,000 tons but which has not been brought into the quota
administration shall, before March 31 every year, submit to the municipal development & reform department a report on
its carbon emission in the previous year.
A unit that submits a carbon emission report shall be responsible for the authenticity and completeness of the submitted
data and information.
Article 13 (The Carbon Emission Inspection System)
This Municipality shall establish a carbon emission inspection system, and a third party agency shall inspect the
submitted carbon-emission report, and submit its inspection report to the municipal development & reform department
before April 30 every year. The municipal development & reform department may entrust a third party agency to conduct
the inspection; and in accordance with the Municipality's work plan for carbon emission administration, the unit under the
quota administration may also entrust a third party agency for the inspection.
In the process of inspection, the unit under the quota administration shall cooperate with the third party agency and
truthfully provide the relevant documents and materials. The third party agency and its staff members shall observe the
relevant provisions of the State and this Municipality to independently and impartially carry out its carbon emission
inspection.
The third party agency shall be responsible for the standardization, authenticity and accuracy of the inspection report,
and bear the confidentiality liability for the commercial secrets and carbon emission data of the inspected unit.
Article 14 (Administration on Third Party Agencies)
The municipal development & reform department shall establish a system of third-party-agency filing management and
rules for the inspection compatible with the carbon emission inspection, establish and publish a list of third party
agencies, and strengthen supervisory administration on third party agencies and their carbon emission inspection.
Article 15 (Examination and Approval of Annual Carbon Emission Volume)
The municipal development & reform department shall, within 30 days from receipt of the inspection report by a third
party agency, examine and approve the annual carbon emission volume in accordance with the inspection report and in
the light of the carbon emission report, and inform the unit under the quota administration of the department's
examination and approval result. The department shall also send copies of the carbon emission report, the inspection
result, and the examination and approval result to the relevant departments.
Where a unit under the quota administration has one of the following situations, the municipal development & reform
department shall organize a re-inspection of the unit to determine its annual carbon emission volume:
1. The discrepancy between the annual carbon emission volume determined in the annual carbon emission report and
that in the inspection report reaches 10% or 100,000 tons and above;
2. The discrepancy between the current year's carbon emission volume and the previous year's carbon emission volume
reaches over 20%;
3. The unit under the quota administration has objections to the inspection report and may provide relevant proof; and
4. Other circumstances that justify a re-inspection.
Article 16 (Quota Settlement)
A unit under the quota administration shall, in the period between June 1 and June 30 every year, submit its quota in the
full amount and fulfill its duty of quota settlement on the basis of the carbon emission volume approved by the municipal
development & reform department and through the registration system. The quota of the unit under the quota
administration that has been settled shall be cancelled from the registration system.
The quota for settlement this year is the approved quota of the previous year or the year before. Where the quota for the
unit this year is insufficient for the quota settlement, the unit can, through trading, buy quota for the settlement; where the
quota for the unit this year exceeds the amount for the settlement, the balance may be used in the next year or used for
trading.
Article 17 (The Deduction Mechanism)
A unit under the quota administration may use a certain proportion of CCER (Chinese Certified Emission Reduction)—
voluntary emission reduction—for quota settlement, in which one ton of CCER is equivalent to one ton of the carbon
emission quota. The municipal development & reform department shall determine and publish the proportion of CCER
eligible for quota settlement.
The CCER within the emission boundary of a unit under the quota administration in this Municipality shall not be used for
the quota settlement of this Municipality.
Article 18 (Quota Settlement for Units That Shut Down or Move Out of the City)
Any unit under the quota administration that dissolves, is canceled, ceases its production and business, or moves out of
this Municipality shall, within 15 days, report its carbon emission that year to the municipal development & reform
department. After the department receives the report, a third party agency shall inspect the unit's carbon emission, and
then the department shall examine and approve the unit's carbon emission volume that year.
The unit under the quota administration shall fulfill its duty of quota settlement in accordance with the examination and
approval conclusion by the municipal development & reform department. Where the unit has obtained 50% of the next
year's quota free of charge, the department shall withdraw this 50%.
Chapter IV Quota Trading
Article 19 (The Quota Trading System)
This Municipality practises a carbon emission trading system, with the carbon emission quotas as the subjects.
This Municipality encourages exploration and innovation of relevant products for carbon emission trading.
The carbon emission trading platform is located at the Shanghai Environment and Energy Exchange (hereinafter referred
to as the Exchange).
Article 20 (Rules for Trading)
The Exchange shall formulate rules for carbon emission trading, make clear the qualifications of trading participants, their
rights and obligations, trading procedures and costs, and handling of abnormalities and disputes, and publish them upon
approval by the municipal development & reform department.
The Exchange shall formulate detailed rules on relevant business such as membership administration, information
release, business settlement and completion, and risk control in accordance with the rules for carbon emission trading,
and submit them to the municipal development & reform department for the record.
Article 21 (Trading Participants)
A unit under the quota administration as well as other organizations and individuals in conformity with this Municipality's
rules for carbon emission trading may participate in quota trading.
Article 22 (Members' Trading)
Members of the Exchange fall into two categories: self-operating members and comprehensive members. Self-operating
members may engage in trading for themselves, while comprehensive members may engage in both self-trading and
brokerage.
Where a unit under the quota administration is a self-operating member of the Exchange, it may apply for comprehensive
membership.
Article 23 (Trading Mode)
Quota trading may be conducted via public bidding, transfer by an agreement, or other modes in conformity with the
provisions of the State and this Municipality.
Article 24 (Trading Prices)
The trading prices of carbon emission quotas shall be voluntarily determined by the trading participants in accordance
with the supply and demand relationship in the market. No unit or individual may adopt fraud, malicious collusion or other
modes to control the carbon emission trading prices.
Article 25 (Trading Information Management)
The Exchange shall establish an information management system of carbon emission trading, publicize such trading
information as the trading quotations, volume and value, and disclose in a timely manner the information that may cause
major fluctuations of the market.
Article 26 (Fund Settlement and Quota Transfer)
The transfer of the carbon emission fund shall be handled through a special account of the settlement bank designated
by the Exchange. The settlement bank shall manage and transfer the trading fund in accordance with the provisions of
the carbon emission trading rules.
Carbon emission trading shall realize the completion of a quota transfer through the registration system.
Article 27 (Trading Costs)
To engage in trading, a trading participant shall pay the trading service charges, whose standards shall be formulated by
the municipal competent department for pricing.
Article 28 (Risk Management)
The municipal development & reform department shall, in accordance with the situations of economic and social
development, and carbon emission control, and in conjunction with relevant departments, adopt the corresponding
regulatory measures to maintain the stability of the carbon emission trading market.
The Exchange shall strengthen management of carbon emission trading risks, and establish the following risk
management systems:
1. the system of restricting the range of price rises and falls;
2. the system of restricting the maximum quota possession and the system of reporting of big traders;
3. the system of risk warnings;
4. the system of risk reserve funds; and
5. other risk management systems defined by the municipal development & reform department.
Article 29 (Handling of Abnormalities)
When an abnormal situation occurs in the trading market, the Exchange may adopt such emergency measures as
adjusting the restriction on the range of price rises and falls, adjusting the limit on the maximum quota possession of the
trading participants, and suspending transactions, and shall report these immediately to the municipal development &
reform department. The Exchange shall cancel the emergency measures in a timely manner after the abnormal situation
disappears.
The abnormal situation mentioned in the preceding clause means an act of manipulating the trading prices in the
transaction, a force majeure event, or other circumstances defined by the municipal development & reform department.
Article 30 (Trans-regional Trading)
This Municipality shall explore the establishment of a trans-regional carbon emission trading market, and encourage
enterprises in other regions to participate in this Municipality's carbon emission trading.
Chapter V Supervision and Guarantee
Article 31（Supervisory Administration）
The municipal development & reform department shall strengthen supervisory administration of the following activities:
1. the carbon emission monitoring and reporting as well as the quota settlement by the unit under the quota
administration;
2. the carbon emission inspection by a third party agency;
3. the carbon emission trading, fund settlement and quota transfer carried out by the Exchange; and
4. other activities concerning carbon emission quota administration and carbon emission trading.
The municipal development & reform department may adopt the following measures in its supervisory administration:
1. conducting on-the-spot inspection on units under the quota administration, the Exchange, and third party agencies;
2. inquiring the party concerned as well as the unit and individual relevant to the matter under investigation; and
3. consulting and duplicating the carbon emission trading records, the finance and accounting data, and other relevant
documents and data of the party concerned as well as the unit or the individual relevant to the matter under investigation.
Article 32 (The Registration System)
This Municipality shall establish a carbon emission quota registration system, and practise unified registration for carbon
emission quotas.
Acquisition, transfer, alteration, settlement, and cancellation of quotas shall be registered according to law, and shall
come into effect as of the date of their registration.
Article 33 (The Exchange)
The Exchange shall be staffed with professionals, establish and perfect various rules and regulations, strengthen risk
control and internal supervisory administration, and shall perform the following duties:
1. providing trading places, systems and trading services for carbon emission trading;
2. organizing and supervising the trading, account settlement, and quota transfers;
3. exercising supervisory administration over the trading participants, including members and their clients; and
4. other duties defined by the municipal development & reform department.
The Exchange and its staff shall conscientiously observe the provisions of relevant laws, rules and regulations,
implement all systems of the trading rules, regularly report the trading situations to the municipal development & reform
department, and accept its guidance and inspection.
Article 34 (Finance Support)
Such financial institutions as banks shall give priority to providing units under the quota administration with financing
support related to their energy conservation and carbon emission reduction projects, and explore new-type financial
services such as guarantee financing for carbon emission quotas.
Article 35 (Fiscal Support)
This Municipality shall allocate funds from the special funds of energy conservation and emission reduction to support
the development of this Municipality's carbon emission administration.
Article 36 (Policy Support)
When carrying out energy-conserving renovations, phasing out backward productive capacity, and developing and
utilizing renewable energy, the unit under the quota administration may continue to enjoy the support policy of special
funds of energy conservation and emission reduction defined by this Municipality.
This Municipality shall support units under the quota administration by giving priority to their application for projects
funded by the State's policy of supporting energy conservation and emission reduction and by budgetary investments.
This Municipality's policy of supporting energy conservation and emission reduction shall give priority to the projects
applied for by the units under the quota administration.
Chapter VI Legal Liability
Article 37 (Punishment for Failure to Perform the Duty of Reporting)
Where a unit under the quota administration, in violation of the provisions of Article 20 of these Procedures, makes a
false report, conceals facts from relevant authorities, or refuses to perform its duty of reporting, the municipal
development & reform development shall order it to make a correction within a prescribed time limit; if the unit fails to
make the correction within the prescribed time, a fine of not less than 10,000 yuan and not more than 30,000 yuan shall
be imposed.
Article 38 (Punishment for Failure to Accept the Inspection as Required)
Where a unit under the quota administration, in violation of the provisions of Clause 2 of Article 13 of these Procedures,
provides false and untruthful documents and materials or conceals major information when a third party agency conducts
an inspection, the municipal development & reform department shall order the unit to make a correction within a
prescribed time limit; where the unit fails to make the correction, a fine of not less than 10,000 yuan and not more than
30,000 yuan shall be imposed; where a unit unreasonably resists or obstructs the third party's inspection, the municipal
development & reform department shall order it to make a correction within a prescribed time limit, and impose a fine of
not less than 30,000 yuan and not more than 50,000 yuan.
Article 39 (Punishment for Failure to Perform the Duty of Quota Settlement)
Where a unit under the quota administration fails to perform the duty of quota settlement in accordance with the
provisions of Article 16 of these Procedures, the municipal development & reform department shall order it to perform the
duty of quota settlement, and impose a fine of not less than 50,000 yuan and not more than 100,000 yuan.
Article 40 (Administrative Handling Measures)
In the case of a unit under the quota administration in violation of the provisions of Article 12, Clause 2 of Article 13, and
Article 16 of these Procedures, the municipal development & reform department shall adopt the following measures in
addition to the provisions of Articles 37, 38 and 39 of these Procedures:
1. making an entry of the law-breaking act in the unit's credit information records in accordance with relevant provisions,
circulating the credit information among the departments of industry and commerce, taxation, and finance, and
publicizing it via the government website or mass media;
2. disqualifying the unit from this Municipality's special fund support policy for energy conservation and emission
reduction for the current year and the next year as well as disqualifying it from this Municipality's appraisal and selection
of advanced collectives and individuals in energy conservation and emission reduction in the next three years; and
3. notifying the relevant project examination and approval departments of this Municipality of the unit's law-breaking act
so that these departments shall not accept the energy-conserving evaluation form or booklet for the unit's new fixedasset investment project for the next year.
Article 41 (Responsibilities of Third Party Agencies)
Where a third party agency commits any one of the following acts in violation of the provisions of Clause 3 of Article 13,
the municipal development & reform department shall order it to make a correction within a prescribed time limit and
impose a fine of not less than 30,000 yuan and not more than 100,000 yuan:
1. producing a false and untruthful inspection report;
2. gross mistakes in the inspection report; or
3. arbitrarily using or disseminating, without permission, the commercial secrets and carbon emission information of the
inspected unit.
Article 42 (Responsibilities of the Exchange)
Where the Exchange commits one of the following acts, the municipal development & reform department shall order it to
make a correction within a prescribed time limit, and impose a fine of not less than 10,000 yuan and not more than
50,000 yuan:
1. failing to publicize the trading information as required;
2. collecting trading service charges in violation of the provisions;
3. failing to set up and implement a system of risk management; or
4. failing to submit the relevant documents and materials to the municipal development & reform department as required.
Article 43（Administrative Responsibilities）
Where a staff member of the municipal development & reform department or other relevant departments commits one of
the following acts, he/she shall be punished with a warning, a recorded demerit or a serious recorded demerit as the
case may be according to law; if the case is serious, he/she shall be punished with demotion, dismissal from his/her post,
or discharge from employment; where a crime is constituted, he/she shall be investigated for criminal liability according to
law:
1. committing favoritism and irregularities, or seeking illegitimate gains in his/her work of quota allocation, carbon
emission inspection, examination and approval of the carbon emission volume, or administration over third party
agencies;
2. failing to make a rectification and/or investigation according to law upon discovery of law-breaking acts;
3. disclosing relevant confidential information on carbon emission trading in violation of the rules and causing serious
consequences; or
4. other circumstances of failing to perform his/her duty of supervisory administration according to law.
Chapter VII Supplementary Provisions
Article 44 (Interpretation of Terms)
The meanings of the following terms in these Procedures:
1. "Carbon emission" means the direct and indirect emission of such greenhouse gases as carbon dioxide.
"Direct emission" means the emission of greenhouse gases in the burning of fossil fuels such as coal, natural gas and
petroleum and in the process of industrial production.
"Indirect emission" means the emission of greenhouse gases through purchased electric power and thermal power.
2. "Carbon emission quota" means the quota for such greenhouse gases as carbon dioxide discharged by an enterprise
in the process of its production and business, with one ton of SHEA being equivalent to 1 ton of CO2 (1tCO2).
3. "The historical emission method" means the method for determination of the next year's carbon emission quota of a
unit under the quota administration based mainly on its carbon emission data of the past years.
"The base line method" means the method for determination of the next year's carbon emission quota of a unit under the
quota administration based mainly on the benchmark of its carbon emission efficiency.
4. "Emission facilities" mean those productive operation systems with relatively independent functions that directly or
indirectly discharge greenhouse gases, including production units, buildings and structures.
5. "The emission boundary" means the scope of greenhouse gases emission calculation defined by the Manual of
Shanghai Municipality on Calculation and Reporting of Greenhouse Gases Emission and the relevant industrial codes.
6. "CCER (Chinese Certified Emission Reduction)" means the voluntary emission reduction volume that is filed and
registered in the state registration system in accordance with the provisions of the Interim Procedures for the
Administration of the Trading of Voluntarily Reduced Greenhouse Gases made by the national development & reform
department.
The terms of "not less than" and "not more than" mentioned in these Procedures include the stated numbers themselves.
Article 45（Effective Date）
These Procedures shall be effective as of November 20, 2013.