PetroChina, the state-owned oil and gas company, bought 10,000 Chinese carbon offsets from wind power producer Longyuan on Friday for 16 yuan ($2.62) each, which Reuters reports is six times higher than international prices.
The purchase, carried out on the China Beijing Environment Exchange, was the first Chinese Certified Emissions Reduction (CCER) transaction and happened a day after Beijing became the third Chinese city to launch a carbon trading program.
Beijing’s program allows high-emitting companies to use CCERs to meet up to 5 percent of their compliance obligations, and half of that must be from projects based in the city, Reuters reports.
The world’s second-biggest carbon market will start this month with the launch of a cap-and-trade system in China’s Guangdong province. The program will cap CO2 emissions from 202 companies at 350 million tons for 2013, with most permits handed out free.
China has a strong policy framework in place to transition to a green economy, but significant challenges — including pollution problems — stand in the way, according to a study sponsored by the United Nations Environment Programme and the Chinese Ministry of Environmental Protection.