Shanghai prepares to pioneer pollution quota trading

A pollutant discharge quota exchange platform is to be established in Shanghai next year to control emissions and trade in surplus quotas, the city’s environmental protection authority has said.

Next year, the Shanghai Municipal Environmental Protection Bureau will issue new permits to industrial plants to regulate the type of pollutant, the maximum amount allowed and how it is discharged.

The permit system and quota exchange platform will be in line with a national rule on pollutant discharge permit management, which is to be introduced soon, and also be based on previous trials in the city, according to bureau officials.

Many provinces and municipalities including Shanghai were allowed to launch pollutant discharge permit programs in the 1990s, but China needs a national rule to regulate the practice and tighten pollution administration, according to Ministry of Environmental Protection.

The new tradable pollutant permits will cover wastewater, waste gases, noise and solid waste.

Businesses without a permit can’t discharge pollutants at all, according to the draft of the national rule. Plants can’t discharge more pollutants than allowed in their permit and the government is encouraging plants to reduce emissions through clean production and renovated technology.

The surplus quota can be stored by the plant itself for further use but can also be traded while being in line with the regional total pollutant discharge control, according to the draft regulations.

Discharging pollutants without a permit will attract penalties of up to 1 million yuan (USUSD157,085) and those causing serious environmental pollution can be fined an extra daily penalty of up to 20,000 yuan (USD3,138) or have the relevant equipment sealed or confiscated.