National carbon market launched for power sector

China launched the world's largest carbon trade market on Tuesday, but it will be another three years before an actual transaction takes place.

The nationwide carbon market will only be open to the power generation sector during the early phase, according to the National Development and Reform Commission.

Still, it is expected to exceed the European Union's, with around 1,600 power generation enterprises generating 3.3 billion metric tons of carbon involved in the market, according to the commission.

The power sector in China accounts for one third of China's carbon dioxide emissions, data from the commission showed.

The government plans to spend a year to build a nationwide registration system covering all participants in the power generation sector, and spend another year to improve supervision schemes by allowing mock carbon trade in the sector, according to the commission's three-year road map.

Real nationwide transactions are expected to take place after preparation work is done.

More sectors are expected to be added in 2020, the document said.

No financial products such as carbon futures will be available in the first two years, according to the document.

A variety of financial products might be introduced once "conditions become mature", referring to well-established supervision schemes, the document said.