Original Title: Notice of the General Office of the People’s Government of Shandong Province on Issuing the Administrative Measures for the Collection, Storage, and Allocation of Carbon Emission Quotas for “High-Energy Consumption and High-Emission” Construction Projects in Shandong Province (Trial) Lu Zheng Ban Zi [2022] No. 172
Administrative Measures for the Collection, Storage, and Allocation of Carbon Emission Quotas for “High-Energy Consumption and High-Emission” Construction Projects in Shandong Province

(Trial)

Article 1: To strengthen the safeguarding of ecological and environmental factors, promote high-level ecological and environmental protection, and foster high-quality economic and social development, these Measures are formulated in accordance with the provisions of the “Opinions of the State Council on Supporting Shandong in Deepening the Transformation of New and Old Growth Drivers and Promoting Green, Low-Carbon, and High-Quality Development” (Guo Fa [2022] No. 18) and other relevant documents.

Article 2 These Measures apply to the provincial-level acquisition, storage, and allocation of carbon emission quotas for “high-energy-consumption and high-emission” construction projects within the administrative region of Shandong Province.

Article 3: The term “carbon emission quotas” as used in these Measures refers to the reduction in carbon emissions achieved through measures such as capacity transfer, enterprise shutdown or conversion, elimination of outdated production capacity, reduction of excess production capacity, and the replacement of fossil fuels with nuclear power.

Article 4: The collection and allocation of carbon emission credits shall adhere to the principles of government leadership, coordinated resource management, precise allocation, and prioritizing efficiency.

Article 5: For carbon emission credits generated by the replacement of coal-fired power with incremental nuclear power generation across the province, 80% shall be retained at the provincial level, and the remaining 20% shall be retained by the prefecture-level city where the project is located. For carbon emission credits generated by the integration of production capacity across prefecture-level cities or its transfer outside the province, 60% shall be retained at the provincial level, and the remaining 40% shall be retained by the prefecture-level city where the project is located.

Article 6: Provincial-level key projects, as well as key projects related to the province’s industrial layout and economic and social development, may utilize carbon emission allowances allocated to the provincial government.

Article 7: The allocation and use of carbon emission quotas held by the provincial government shall follow the procedures below:

(1) Submission of Application. A prefecture-level city facing a shortfall in carbon emission quotas for provincial key projects shall, in accordance with the principle of “case-by-case consideration,” have its Municipal Ecology and Environment Bureau submit an application for the allocation of carbon emission quotas to the Provincial Department of Ecology and Environment, simultaneously submitting relevant materials such as proof of the provincial key project and a statement detailing the carbon emission quota shortfall;

(2) Expert Review. The Provincial Department of Ecology and Environment shall commission a third-party review agency to verify and evaluate the authenticity, accuracy, and scientific validity of the carbon emission quota allocation application and related materials submitted by the Municipal Bureau of Ecology and Environment, and formulate a review opinion;

(3) Review and Approval. For the use of provincially allocated carbon emission quotas of 3 million metric tons or less, the Provincial Department of Ecology and Environment shall review and determine the allocation based on the review opinion of the third-party review agency and issue the quota to the Municipal Department of Ecology and Environment; for the use of carbon emission quotas exceeding 3 million metric tons, the Provincial Department of Ecology and Environment shall organize and implement the allocation after obtaining approval from the Provincial Government.

Article 8: Provincial-level carbon emission quotas held in reserve shall be made available for free use upon application; a paid allocation mechanism shall be introduced in a timely manner in accordance with relevant national policies.

Article 9: Carbon emission quotas generated within the administrative regions of prefecture-level cities through the shutdown or restructuring of enterprises, the phasing out of outdated production capacity, or the reduction of excess production capacity shall be acquired and allocated by the respective prefecture-level cities. For carbon emission quotas generated through other substitution methods, the acquisition and allocation ratios shall be reasonably determined by the provincial and municipal governments.

Article 10. These Measures shall take effect from the date of issuance. Where laws, regulations, rules, or higher-level policies contain separate provisions regarding the acquisition, storage, and allocation of carbon emission quotas, such provisions shall prevail.