(Adopted by the 29th ordinary meeting of the Municipal Government of 6 November 2013, No. 10 of the Supreme People's Government Order No. 10 of 18 November 2013, which came into force on 20 November 2013)

Chapter I General

Article 1

In order to promote corporate responsibility for carbon emission control and to achieve the objectives of carbon emission control in the city, regulate carbon-related management activities in this city, promote the health development of the current market for carbon emissions trading and develop this approach in line with the relevant provisions of the State Department's Programme of Work for the Control of greenhouse gas emissions.

Article 2

This approach applies to the distribution of carbon emission quotas in the city's administration, the collection, transaction and carbon emissions monitoring, reporting, verification, and clearance.

Article 3 (Management)

The urban development reform sector is the competent authority for the management of carbon emissions in the city and is responsible for the integrated coordination, organization and monitoring of carbon emissions management in the city.

The city's economic informationization, construction of transportation, commerce, transport ports, tourism, finance, statistics, quality technics, finance and national qualifications, are in line with their respective responsibilities.

The administrative penalties set out in this approach are carried out by the Urban Development Reform Unit, which is mandated by the Shanghai Measuring Centre.

Article IV

The municipal development reform sector and the relevant sectors should strengthen the dissemination, training of carbon emissions management and encourage business units and social organizations to participate in carbon emission control activities.

Chapter II

Article 5

The city has established a carbon emission quota management system. Annual carbon emissions have reached the required scale of emission units and are included in the quota management; other emission units can apply to the urban development reform sector for the inclusion of quotas.

The sectoral scope of the quota management and the determination and adjustment of the scale of carbon emissions of emission units will be developed by the municipal development reform sector with the relevant industry authorities and reported to the municipalities for approval. The list of emission units included in the quota management is published by the urban development reform sector.

Article 6 (Comprehensive control)

The total carbon emission quotas in the city are determined in conjunction with the objectives of economic growth in the city and with the goal of rationalizing energy consumption.

The units included in the quota management should control their aggregate carbon emissions in accordance with the carbon emission quotas of this unit and perform carbon emission control, monitoring, reporting and quota-accounting responsibilities.

Article 7

The urban development reform sector should develop the current municipal carbon emission limitation allocation programme with the relevant sectors to clarify the principles, methods and processes of the allocation of quotas and to report on the approval of the municipal government.

In the development of the quota allocation programme, the views of the units, relevant experts and social organizations included in the quota management should be heard.

Article 8

The urban development reform sector should consider in an integrated manner the historical level of carbon emissions, the industrial characteristics, and the factors such as the first-time energy-efficient mitigation action, and adopt methods such as historical emission laws, baseline line law, to determine carbon emission quotas for each unit.

Article 9 (Percentage)

The municipal development reform sector should allocate quotas to units included in the quota management system, either free or reimbursable, in accordance with the objectives of carbon emission control in the city and the deployment of work.

Article 10

The unit included in the quota management is consolidated and its quotas and corresponding rights obligations are followed by the merged units or new units.

The inclusion of units in the quota management should be based on the location of emission facilities, the development of a reasonable quota-breaking programme and the introduction of the urban development reform sector. Its quotas and corresponding rights obligations are followed by units with emission facilities.

Chapter III

Article 11

The units included in the quota management should be established by 31 December each year for the next annual carbon emission monitoring plan, clear monitoring coverage, frequency, responsibility and etc., and for the urban development reform sector.

The units included in the quota management should strengthen energy measurement management, strictly based on monitoring plans. Significant changes in the monitoring plan should be reported to the urban development reform sector in a timely manner.

Article 12 (Report system)

The units included in the quota management should be prepared by 31 March each year for the preparation of the previous annual carbon emissions report of the unit and for the urban development reform sector.

The annual carbon emissions of more than 10,000 tons but not included in the quota management units shall be reported to the urban development reform sector by 31 March of the previous annual carbon emissions report.

The units submitting carbon emissions reports should be responsible for the authenticity and integrity of the reported data and information.

Article 13

The establishment of the carbon emission verification system in the city is verified by third-party bodies for carbon emissions reports submitted by the quotas management units and submitted verification reports to the urban development reform sector by 30 April each year. The urban development reform sector may entrust third-party bodies with verification; deployments based on carbon emissions management in the city may also be delegated to third-party bodies by units incorporated in the quota management.

In the verification process, units incorporated in the quota management should be aligned with the work of third-party bodies, such as the provision of documentation and information. Third-party agencies and their staff should comply with the relevant provisions of the State and the city, independently and impartially carry out carbon emissions verification.

Third-party bodies should be responsible for the normative, authentic and accurate nature of the verification report and have confidential obligations with respect to commercial secrets and carbon emissions data from the verification units.

Article 14.

The municipal development reform sector should establish a management system and verification rules for third-party bodies that are responsive to carbon emissions verification, establish a directory for public third-party institutions in society and strengthen oversight management for third-party agencies and their carbon emissions verification.

Article 15 (Option of annual carbon emissions)

The municipal development reform sector should, within 30 days of the date of receipt of verification reports from third-party agencies, validate annual carbon emissions, in conjunction with carbon emissions reports, and incorporate the findings notice into the unit of the quota management. Carbon emissions reports, as well as verification, validation, are transmitted to the relevant sectors by the urban development reform sector.

In one of the following cases, the municipal development reform sector should organize the review and validation of annual carbon emissions for units incorporated in the quota management:

(i) Annual carbon emissions reports vary from 10 per cent to more than 100,000 tons, as determined in the verification report;

(ii) Annual carbon emissions vary from more than 20 per cent to the previous year;

(iii) A unit incorporated in a quota management objected to the verification report and provided the relevant documentation;

(iv) Other needs for review.

Article 16

The units included in the quota management should meet their obligations in full through the registration system, in accordance with the prior annual carbon emissions of the urban development reform sector, for the period from 1 June to 30 June each year. The units included in the quota management system were used for the payment of the quota and cancelled within the registration system.

The quota for the payment should be the previous year or the previous annual quota; the unit's quota is not sufficient to fulfil the obligation to pay, and the purchase of the quota could be made available through the transaction. The quota has a balance that could be used in subsequent years or could be used for quotas.

Article 17

The units included in the quota management can certify a proportion of national voluntary emission reductions (CCERs) to be used for quotas. The voluntary emission reductions per metric to be certified by each of the metric tons are equivalent to one tons of carbon emissions. The proportion of contributions certified by the State for voluntary emission reductions is determined by the urban development reform sector and made available to society.

The units incorporated in the quota management system in this city shall certify that voluntary emission reductions are not used for the quota of the city.

Article 18

The removal, write-off, cessation of production or relocation of units included in the quota management system should be reported to the urban development reform sector on carbon emissions during the year. Following reports from the urban development reform sector, the carbon emissions of the unit were verified by third-party agencies and the municipal development reform sector was validated for the year.

The units included in the quota management system complete the payment obligation based on the findings of the municipal development reform sector. The unit has received 50 per cent of the annual quota since then, recovered by the urban development reform sector.

Chapter IV

Article 19

In this city, the carbon emissions trading system was introduced and the tradingmark was a carbon emission limitation.

The city encourages the exploration of innovative carbon emissions-related products.

The carbon emissions trading platform is based on the Shanghai Environment Energy Exchange (hereinafter referred to as “the Exchange”).

Article 20

The exchange should establish rules for carbon emissions trading, specifying the conditions of the transaction participants, the rights obligations of the transaction participants, the transaction process, transaction costs, the omnibus handling and the handling of disputes, and be published by the exchange after approval by the municipal development reform sector.

Exchanges should develop relevant operational rules, such as member management, information dissemination, settlement and risk control, in accordance with the carbon emissions trading rules, and submit to the municipal development reform sector for submission.

Article 21

The units included in the quota management and other organizations and individuals consistent with the provisions of the present municipal carbon emissions trading rules may be involved in quotas.

Article 2 (Member transactions)

The members of the exchange are divided into self-employed and integrated categories of membership. Self-employment can be carried out by members of the battalion; integrated categories of members can operate self-employment or be entrusted with the activist operation.

The unit incorporated in the quota management is a self-employment member of the exchange and can apply as an integral member of the exchange.

Article 23 (Times)

The quota trading should be carried out using open competitive prices, the transfer of agreements and other means consistent with the provisions of the State and the city.

Article 24 (Time price)

The price of the carbon emission quota is determined by the trading agent on the basis of the market for supply. No unit or individual may resort to fraud, malicious collation or other means to manipulate carbon emissions trading prices.

Article 25 (Transaction Information Management)

The exchange should establish an information management system for carbon emissions trading, publish trade information, such as the transaction, the volume, the amount of the transaction and disclose information that may affect significant changes in the market in a timely manner.

Article 26

The transfer of carbon emissions trading funds should be carried out through the exchange of earmarked accounts developed by the settlement banks. The settlement banks should manage and debate the transaction funds in accordance with the provisions of the carbon emissions trading rules.

Carbon emissions trading should be achieved through registration systems.

Article 27

The transaction activity of the transaction participants shall pay the transaction fee. The transaction fee standard is developed by the municipal price authorities.

Article 28 ( Risk management)

The urban development reform sector, in accordance with the economic and social development situation, carbon emissions control, etc., will take the appropriate regulatory measures to preserve the stability of the carbon emissions trading market.

Exchanges should strengthen carbon emissions trading risk management and establish the following risk management systems:

(i) Absorption regime;

(ii) The largest system of limitations and the large-scale reporting system;

(iii) Risk alert systems;

(iv) Risk reserve systems;

(v) Other risk management systems identified in the urban development reform sector.

Article 29

When the trading market emerges in an unusual situation, the exchange can take urgent measures such as the adjustment of the downturn, the adjustment of the maximum number of participants in the transaction, the suspension of the transaction and the immediate reporting of the urban development reform sector. After the omnibus disappear, the exchange of emergency measures should be lifted in a timely manner.

The abnormal situation referred to in the preceding paragraph refers to the occurrence of manipulation of transaction prices in the transaction or the occurrence of unobservable emergencies, as well as other situations explicitly identified in the urban development reform sector.

Article 33 (Regional transactions)

The city explores the establishment of a cross-regional carbon emissions trading market and encourages other regional enterprises to participate in carbon emissions trading in the city.

Chapter V

Article 31

The urban development reform sector should enhance oversight management of the following activities:

(i) Activities such as carbon emissions monitoring, reporting and quota-scale crediting in the quota management units;

(ii) Activities of third-party agencies in carbon emission verification;

(iii) The exchange of activities such as carbon emissions trading, financial settlement, and quota removal;

(iv) Other activities related to carbon emission quotas management and carbon emissions trading.

The following measures can be taken when the urban development reform sector implements oversight management:

(i) On-site inspection of the incorporation of quotas management units, exchanges, third-party agencies;

(ii) Inquired parties and units and individuals associated with the investigation;

(iii) Access, replication of parties and carbon emissions trading records, financial accounting information and other relevant documents and information relating to the survey.

Article 32 (A registry system)

The city has established a registration system for carbon emission quotas, with a unified registration of carbon emission quotas.

The acquisition, transfer, change, surrender, write-off, etc. shall be registered in accordance with the law and, since registration is effective.

Article 33 (Assessment)

Exchanges should be staffed by professionals to establish sound regulations, enhance risk control and internal oversight management of transaction activities and perform the following functions:

(i) Provide transaction sites, systems facilities and transaction services for carbon emissions trading;

(ii) Organizing and overseeing transactions, settlement and removal;

(iii) Oversight management of transactions involving members and their clients;

(iv) Other responsibilities identified in the urban development reform sector.

Exchanges and their staff should be aware of compliance with relevant laws, regulations, regulations and regulations, implementation of the trading rules, reporting on transactions to the urban development reform sector and receiving guidance and oversight in the urban development reform sector.

Article 34 (Financial support)

Financial institutions, such as banks, are encouraged to provide financial support related to energy efficiency projects and to explore new types of financial services such as carbon emission security.

Article 55 (Financing support)

The city arranges funds in the context of specific funding for emission reductions to support the activities related to carbon emissions management in the city.

Article 36 (Policy support)

The units that incorporate quotas are able to renovate, phase-out and develop renewable energy sources can continue to benefit from specific funding support policies for emission reductions under this city.

The city supports the inclusion of a quota management unit that prioritizes the announcement of national energy-efficient mitigation-related enabling policies and funding support projects within the budget. This section reduces the relevant enabling policies and gives priority to supporting projects declared by the units that incorporate the quotas.

Chapter VI Legal responsibility

Article 37 (Option of non-compliance with reporting obligations)

The unit incorporated in the quota management violates article 12 of this scheme, reports, conceals or rejects the fulfilment of the reporting obligations, which are modified by the municipal development reform sector's time limit, and is fined by over 3,000 dollars.

Article 338 (Currence not subject to verification)

In violation of article 13, paragraph 2, of this scheme, units incorporated in the quota management provide false, unrealistic documentation when verification is conducted by third-party bodies, or conceal important information, which is being converted by the municipal development reform sector; uncorrected fines of up to 3,000 dollars; unreasonable resistance, obstructing verification by third-party institutions, and is fined by over 3,000 yen.

Article 39 (Currence to fulfil the quota-collection obligation)

The units included in the quota management do not fulfil their obligations under article 16 of this scheme, which is charged by the municipal development reform sector to meet the quota-collection obligations and may be fined by more than 100,000 dollars.

Article 40 (Administrative handling measures)

In addition to the application of article 17, article 33, paragraph 2, and article 16 of this scheme, the municipal development reform sector may take the following measures:

(i) In accordance with the relevant provisions, credit information records of the unit are recorded, to inform the business, tax, financial and other sectors, and to make public the case available to society through the Government website or through the media;

(ii) Remove its eligibility for specific funding support policies for emission reductions in the current year and in the next year, as well as for three years to participate in this section to reduce the eligibility of advanced collective and individual evaluations;

(iii) The offence is communicated to the relevant project approval services in this city and is inadmissible by the Project Approval Unit for its next year's new fixed-term asset investment project section.

Article 40

In violation of article 13, paragraph 3, of this approach, a third-party institution has one of the following cases, which is being converted by the time limit for the urban development reform sector, with a fine of over 30,000 dollars:

(i) Reports of false and unrealistic verification;

(ii) There is a significant error in verification reports;

(iii) Information on commercial secrets and carbon emissions from verification units without authorization.

Article 42

One of the following acts of the transaction is being changed by the time limit for the municipal development reform sector, with a fine of more than 500,000 dollars:

(i) No transaction information is published in accordance with the provisions;

(ii) A transaction fee charged in violation of the provisions;

(iii) Failure to establish and implement a risk management system;

(iv) No relevant documentation and information were sent to the urban development reform sector, as required.

Article 43

Staff in the urban development reform sector and other relevant sectors have one of the following acts, which have been warned by law, taken over or taken over by law; serious circumstances, giving downgradation, dismissal or dismissal; and legal accountability:

(i) In its work on quotas, carbon emissions verification, carbon emissions validation, third-party institutional management, in favour of private fraud or inadvertent interest;

(ii) Inadequate redress and investigation of the founding offences;

(iii) Disclosure of confidential information relevant to carbon emissions trading, which has serious implications;

(iv) Other cases where oversight functions are not performed by law.

Chapter VII

Article 44

The meaning of the following terms of this approach:

(i) Carbon emissions refer to direct and indirect emissions of greenhouse gases such as carbon dioxide.

Direct emissions refer to greenhouse gas emissions from fossil energy combustion activities such as coal, natural gas, oil and industrial production processes.

Indirect emissions refer to greenhouse gas emissions resulting from the use of electricity and heat.

(ii) Carbon emissions quotas refer to the extent of emissions of greenhouse gases, such as carbon dioxide equivalent in the production process, and a metric carbon emissions quota (hereinafter referred to as the SHEA) equal to 1 tons of carbon dioxide equivalent (tCO2).

(iii) Historical emission laws refer to methods for determining carbon emission quotas for future years based on carbon emission data for units that incorporate quotas management.

The baseline line law refers to a methodology for determining carbon emission quotas for future years based on the baseline of carbon efficiency criteria that incorporate the quota management units.

(iv) Emission facilities refer to production operation systems that have relatively independent functions, either directly or indirectly, of greenhouse gases, including production equipment, buildings, constructions, etc.

(v) The emission boundary refers to the extent to which greenhouse gas emissions are accounted for under the Guidelines on Accounting and Reporting for greenhouse gas emissions in the Shanghai City and the relevant industry methods.

(vi) The State certifys voluntary emission reductions by means of voluntary emission reduction projects that are submitted and registered in the national registry system, in accordance with the provisions of the National Development Reform Sector's Interim Approach to the Management of Greenhouse gases.

This approach refers to “more” and to the following”, including the figure.

Article 42 (As of implementation)

This approach has been implemented since 20 November 2013.