Sino-German cooperation: establishing emissions trading and reducing nitrous oxide emissions

Project description

Project title: Sino-German Cooperation on Emissions Trading, Market Mechanisms and Mitigation of Industry-Related N2O Emissions
Commissioned by: German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU)
Country: People’s Republic of China
Lead executing agency: Ministry of Ecology and Environment of the People’s Republic of China, Department of Climate Change (MEE DCC)
Overall term: 2012 to 2022


China is the world’s largest emitter of greenhouse gases that are harmful to the climate. The country has set itself the goal of reducing its CO2 emissions by 2030 and becoming carbon-neutral by 2060. The national emissions trading system (ETS) should play a central role in achieving these targets.

China’s national ETS has become operational in 2021 and initially limited to the power generation sector, the Chinese ETS covers around 4.5 Gt of CO2. Following a step-by-step approach, it is foreseen to expand the system to six industrial sectors and domestic civil aviation. These eight sectors represent the major CO2 emission sources in China, accounting for more than two-thirds of China’s energy related CO2 emissions.

China’s current climate change mitigation measures primarily concentrate on reducing CO2 emissions. In the future, emissions of other greenhouse gases will also need to be reduced. The reduction of nitrous oxide emissions plays an important role here, as nitrous oxide, or N2O, is a particularly potent greenhouse gas. The Chinese Government therefore needs to develop appropriate measures to achieve a sustainable reduction in these emissions.


Chinese institutions have additional expertise and improved policy options for establishing a national ETS and other innovative instruments to reduce greenhouse gases.


The project advises and trains Chinese governmental institutions in the national ETS. It does this in cooperation with the National Center for Climate Change Strategy and International Cooperation (NCSC). It provides support in planning and implementing measures to reduce N2O emissions from the industrial production of nitric acid, adipic acid and caprolactam.

The project offers training courses for companies subject to emissions trading and companies responsible for industrial N2O emissions. Particular attention is paid here to practical implementation.

Last updated: June 2022

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