China taxes the EU Emissions Trading Scheme

China pollution

Credit: SIO/UCSD

According to ‘The Economist’, the Chinese government is pocketing millions of Euros through the taxation of green-house gas capture schemes. HFC-23 is a by-product of HCFC-22 production – the ozone depleting gas banned in most of the developed world but still produced in China. Tonne for tonne – it is 11,700 times more potent than CO2 as a green house gas (GHG). Capturing HFC-23 and burning it off during the production process costs only €1 for the equivalent of one tonne of CO2, but generates a Certified Emissions Reduction (CER) Credit worth €11 – more than the value of the end product, and certainly not providing and incentive to switch to less damaging technologies.  The Chinese government has spotted this booming (multi-billion Euro) trade. It has levied a 65% tax on the revenues from these Carbon Credit Schemes, paid for by European consumers through increases in electricity bills resulting from the EU Emissions-Trading Scheme (EU ETS) and its links with the Clean Development Mechanism (CDM).

This is surely an example of the worst type of opportunistic exploitation of the EU ETS, both by business and government in China, and will do little to improve its image with members of the public.

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3 Responses to China taxes the EU Emissions Trading Scheme

  1. matt says:


    I’m going off-grid today

    (now where’s that boat catalogue …. )

  2. Wow thats shocking!

    China isn’t coming off too well with this!

  3. the Grit says:

    Hi y’all,

    What is so shocking? It’s much the same reason the US Government is hesitant to raise the fleet fuel economy standards. Since various local, state, and our national government split between $0.50 and $0.75 per gallon, if they actually cut back on gasoline sales, they loose money! Historically speaking, governments rarely act in ways that lower the flow of coin into their coffers.

    the Grit

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