China’s carbon trading offers little gas-to-power help

Generation from the cleanest fossil fuel looks set to struggle to expand in China despite the start of carbon trading

China’s much-delayed carbon market went live at the start of February, a decade after the idea was first floated and initially covering only the power sector. The scheme includes some 2,225 coal and gas-fired generation facilities, responsible for more than 40pc of China’s carbon emissions, and is not expected to begin trading until June. The gas industry had hoped the start of carbon trading would boost the competitiveness of gas-to-power by raising the cost of coal generation to more than gas, which is one of the most expensive forms of electricity production in China. [Gas-fired power plants] are largely still relegated to filling peak demand requirements rather than operating basel