42056-012: Design of the National Sulfur Dioxide Emission Trading System | Asian Development Bank

China, People's Republic of: Design of the National Sulfur Dioxide Emission Trading System

Sovereign (Public) Project | 42056-012 Status: Closed

Project's objective is reduced acid rain in the People's Republic of China.

Project Details

Project Officer
Pajarillo, Merlita East Asia Department Request for information
  • China, People's Republic of
  • Technical Assistance
  • Energy
Project Name Design of the National Sulfur Dioxide Emission Trading System
Project Number 42056-012
Country China, People's Republic of
Project Status Closed
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 7191-PRC: Design of the National Sulfur Dioxide Emission Trading System
Technical Assistance Special Fund US$ 500,000.00
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Drivers of Change Governance and capacity development
Sector / Subsector

Energy / Energy efficiency and conservation

Gender Equity and Mainstreaming No gender elements
Description Project's objective is reduced acid rain in the People's Republic of China.
Project Rationale and Linkage to Country/Regional Strategy The promotion of SO2 trading aligns closely with the Government?s 11th Five-Year Plan target of reducing SO2 emissions. Support for establishing an SO2 trading system is also consistent with ADB's (i) long-term strategic framework 2008?2020 (Strategy 2020) priority of ?environmentally sustainable growth?, and (ii) PRC country partnership strategy (2008?2010) strategic pillar of ?resource efficiency and environmental sustainability?. ADB has been actively supporting SO2 emission reduction in the PRC. In 2004, ADB supported one of the first pilot projects of an SO2 trading scheme in Taiyuan City. ADB also extended a loan for Anhui Province that targeted industrial retrofits to reduce SO2 emissions. ADB currently has six ongoing loans in the PRC energy sector, resulting in an annual reduction of 66,000 tons SO2 when the projects become fully operational.
Impact Improved environment through reduced SO2 emissions
Project Outcome
Description of Outcome Establishment of a national SO2 trading system
Progress Toward Outcome A two-day final workshop for the TA output dissemination was successfully conducted on 8-9 September 2011 in Beijing. The workshop was attended by about 40 participants mostly from the provincial environmental bureaus and power plant operators who will be involved in the implementation of the proposed SO2 Emissions Trading System (ETS). MEP emphasized the relevance of the TA in their effort to control emissions while aiming to improve measurement of environmental outcomes and reducing abatement costs. MEP reported the achievement of the targets for reducing key pollutants and the targets under the 12th Five- Year Plan. They also outlined the efforts being done to meet those targets, among which is expanding the implementation of the SO2 ETS to 10 more pilot provinces (in addition to the present 10 pilot provinces, which are implementing the SO2 ETS on their own). The team of consultants presented the TA outputs and recommendations. International experts shared the experiences in the successful implementation of the SO2 ETS in the US, Canada and Europe. They also discussed the monitoring methods and made specific recommendations for PRC based on the experiences in implementing these in the power plants in the US. The national consultants presented the design framework of the SO2 ETS and demonstrated the application of the software. There was also sharing of actual experiences by participants in the implementation of the SO2 ETS among the pilot provinces. The presentations were well received and active discussions followed each session. Copies of the presentation materials and the TA Final Report were distributed to the participants.
Implementation Progress
Description of Project Outputs

1. Establishment of a draft emissions tracking system (ETS) and draft allowance tracking system (ATS), including operational manuals, software, and training activities

2. Draft emission monitoring, verification, and reporting standards

3. Capacity development and information dissemination workshops

Status of Implementation Progress (Outputs, Activities, and Issues) The activities of the Project have been completed. The TA closing date was extended to 31 December 2011 to complete the documents required to liquidate the outstanding claims of the EA and the consulting firm.
Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design ADB and MEP have maintained ongoing dialogue regarding SO2 trading drawing lessons from the ADB assisted SO2 trading pilot scheme implemented in Taiyuan, Shanxi Province. A Reconnaissance mission was held on 12 March 2008. MEP will act as the EA and fully supports the project.
During Project Implementation
Business Opportunities
Consulting Services International and national consultants will be recruited in accordance with ADB's Guidelines on the Use of Consultants (2007, as amended from time to time). Coordination among the consultants will be managed by the Executing Agency through the Foreign Economic Cooperation Office (FECO), which will act as the project management office.
Procurement Equipment will be financed under the TA and will be procured by international consultants in accordance with ADB's Procurement Guidelines (2007, as amended from time to time). This equipment will be handed over to the Executing Agency upon completion of the TA project.
Responsible ADB Officer Pajarillo, Merlita
Responsible ADB Department East Asia Department
Responsible ADB Division Energy Division, EARD
Executing Agencies
Ministry of Environmental Protection
Lu Yiqing
[email protected]
115 Nanxiaojie, Xizhimennei Beijing 100035 PRC
Concept Clearance 02 Apr 2008
Fact Finding 26 May 2008 to 30 May 2008
Approval 10 Dec 2008
Last Review Mission -
PDS Creation Date 02 May 2008
Last PDS Update 14 Dec 2011

TA 7191-PRC

Approval Signing Date Effectivity Date Closing
Original Revised Actual
10 Dec 2008 11 Feb 2009 11 Feb 2009 31 Jan 2010 31 Dec 2011 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
500,000.00 0.00 200,000.00 0.00 0.00 0.00 700,000.00 10 Dec 2008 477,292.39

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