On December 31, 2021, the Ministry of Ecology and Environment of the People's Republic of China issued a document stating that the first performance cycle of the national carbon emissions trading market has successfully ended. This is the first time that China has consolidated the responsibility for greenhouse gas emission control at the national level to enterprises, and it is also the first year which the national carbon market has officially been put into operation. According to the statistics of the Ministry of Ecology and Environment, a total of 2162 key emission units in the power generation industry were included in the first perfomance cycle of the national carbon market, covering an annual greenhouse gas emissions of approximately 4.5 billion tons of carbon dioxide. The cumulative trading volume of carbon emission quotas is 179 million tons, with a cumulative trading volume of 7.661 billion yuan and an average trading price of 42.85 yuan/ton., and The closing price on December 31 is 54.22 yuan/ton; The performance completion rate of the first performance cycle of the national carbon market is 99.5%; In terms of trading, the healthy and orderly operation of the national carbon market has initially shown its role in promoting enterprises to reduce greenhouse gas emissions and accelerate green and low-carbon transformation.

（2021年7月16日-2月31日）

Trading volume and transaction prices in the national carbon market [2]

(July 16-February 31, 2021)

In the context of " carbon peaking and carbon neutrality goals", it is crucial for key emission units to comply with relevant institutional rules and carry out carbon compliance construction. This article will refer to current laws and regulations to sort out and review the specific situation of the first performance cycle of the national carbon market, clarify the compliance obligation list of key emission units as the performance  subjects, in order to assist key emission units in effectively fulfilling carbon compliance obligations and help achieve the  carbon peaking and carbon neutrality goals.

Ⅰ. Which enterprises will be included in the list of key emission units

As the primary trading and registration  entities in the national carbon market, key emission units undertake obligations such as controlling greenhouse gas emissions, reporting carbon emission data, clearing carbon emission quotas, and publicly trading， etc.. The "Management Measures for Carbon Emission Trading (for Trial Implementation )" (hereinafter referred to as the "Management Measures") stipulates that key emission units refer to enterprises that belong to industries covered by the national carbon emission trading market and have annual greenhouse gas emissions of 26000 tons of carbon dioxide equivalent [3]. Key emission units included in the national carbon market will no longer participate in local carbon emission trading pilot markets. The list of key emission units will be adjusted in a timely manner based on the carbon emissions of enterprises. If the greenhouse gas emissions of key emission units are less than 26000 tons of carbon dioxide equivalent for two consecutive years or no longer emit greenhouse gases due to shutdown or other reasons, the provincial-level ecological environment regulatory department will remove them from the list of key emission units.

Considering the large carbon dioxide emissions and relatively sound management systems in the power generation industry, the Ministry of Ecology and Environment has decided to use the emission-intensive power generation industry as the breakthrough point for the first batch of responsible parties to fulfill the contract. According to the specific implementation plan announced by the Ministry of Ecology and Environment, the provincial ecological environment regulatory department will select and draft from enterprises or other economic organizations in the industry that have emitted 26000 tons of carbon dioxide equivalent (with a comprehensive energy consumption of about 10000 tons of standard coal) or above in any year from 2013 to 2019. It is expected to include 2225 power generation enterprises, and the actual fulfillment subject is 2162 power generation enterprises. With the normalization of the national carbon emissions trading system, in the end of the 14th Five Year Plan period the national carbon emissions trading will ultimately cover eight industries including power generation, petrochemical, chemical, building materials, steel, non-ferrous metals, papermaking, and domestic civil aviation.

Ⅱ.Performance cycle of Carbon market trading According to the "Management Measures", a performance cycle of the carbon emission trading market includes four stages: carbon emission quota  distribution, carbon emission trading, carbon emission reporting and verification, and carbon emission quota  clearance.

Distribution of carbon emission quotas

The Interim Regulations on the Management of Carbon Emission Trading (Revised Draft) (hereinafter referred to as the Revised Draft of Regulations) clearly states in the attached provisions that the carbon emission rights refer to the carbon emission quotas allocated to key emission units during the specified period; One unit of carbon emission quota is equivalent to releasing one ton of carbon dioxide equivalent into the atmosphere.

The Implementation Plan for the Setting and Allocation of the Total Amount of National Carbon Emission Trading Quota for the Power Generation Industry from 2019 to 2020 (hereinafter referred to as the "Implementation Plan") further clarifies the carbon emission quota of the power generation industry: the carbon dioxide emission quota generated by the power generation units owned by key emission units, including direct carbon dioxide emissions generated by fossil fuel consumption and indirect carbon dioxide emissions generated by net purchase of electricity. The carbon emission limit for the unit power (heat) supply specified for different types of units, abbreviated as the carbon emission reference value.

The allocation results of carbon emission quotas directly determine the difficulty of clearing quotas for key emission units and the operating costs of enterprises,  which also affect the setting of enterprise output, layout of investment locations, and other major decisions and deployments of enterprises. According to the Management Measures, the current allocation of carbon emission quotas is mainly free of charge, and in the future, paid allocation can be introduced in a timely manner according to relevant national requirements. The approval and allocation plan for carbon emission quotas is determined by the Ministry of Ecology and Environment in accordance with national greenhouse gas emission control requirements, with taking into account factors such as economic growth, industrial structure adjustment, energy structure optimization, and coordinated control of atmospheric pollutant emissions. The provincial ecological and environmental  regulatory departments shall refer to this plan to allocate annual carbon emission quotas to key emission units within their respective administrative regions. Key emission units  which have objections to the allocation can apply to the provincial environmental departments for review.

According to the Implementation Plan, the national carbon market currently adopts a "pre allocation+ ratified allocation" approach for the distribution of carbon emission quotas. Taking the distribution of national emission quotas from 2019 to 2020 as an example, the Ministry of Ecology and Environment pre allocates quotas for the year 2019 to 2020 through the National Carbon Emission Rights Registration and Settlement System (hereinafter referred to as the registration system) based on 70% of the power (heat) supply of units in 2018. In 2021, after completing the verification of carbon emission data for the year 2019 to 2020, the quota will be finally approved based on the actual power (heat) supply for that year. After comparing with the issued quota, it will be implemented refunds for more and compensations for less through the registration system.

The allocation of carbon emission quotas directly affects the timely and full  clearance of quotas by key emission units. During the pilot period of carbon trading, Shenzhen Xiangfeng Container Co., Ltd. failed to fully fulfill its obligations on time due to a significant decrease in enterprise electricity consumption and market impact output value, and an unreasonable allocation of carbon emission quotas. Eventually, the Shenzhen Development and Reform Commission made a decision to deduct the  quotas insufficiently paid from the next year and impose an administrative penalty of three times of fine totaling over 660000 yuan. Subsequently, the company filed an administrative lawsuit  withthe Futian District People's Court of Shenzhen, but the relevant application was not supported by the court. It was also  dismissed by the Shenzhen Intermediate People's Court. [4]

Carbon emission trading

(1) Trading products: carbon quotas+Chinese certified voluntary emission reductions

Article 18 of the "Interim Measures for the Management of Carbon Emission Trading"(expired) issued by the National Development and Reform Commission in 2014  stipulates that the initial trading products of the carbon emission trading market are emission quotas and Chinese Certified Emission Reduction (CCER), and other trading products  would be added in a timely manner. Although the current "Management Measures" and relevant transaction management rules do not specify whether the trading products of the national carbon emission trading market include CCER, they all recognize that key emission units can purchase certified and registered greenhouse gas emission reductions to offset a certain proportion of their carbon emission quota  clearance.

On October 26, 2021, the Ministry of Ecology and Environment issued the notice on the clearance of carbon emission quotas for the first performance cycle of the national carbon emission trading market. Article 3 clearly states that "key emission units that are willing to use national certified voluntary emission reduction to offset carbon emission quotas should quickly open a general holding account in the national voluntary emission reduction registration system, and open a trading system account  in the registered greenhouse gas voluntary emission reduction trading institution to complete the purchase of CCER and apply for CCER cancellation as soon as possible." This shows that in the national carbon emission trading market, There are two types of actual trading products: carbon quotas and  CCER.

(2) Trading Rules

The Revised Draft of Regulations clearly states that after key emission units have fully paid their carbon emission quotas, if there is still surplus in the quotas, they can sell their carbon emission quotas obtained legally; Those with insufficient quotas can purchase quotas, or they can also purchase certified and registered greenhouse gas emissions reductions to offset a certain proportion of carbon emission quota payments. Carbon emission trading should be carried out through the national carbon emission trading system, which can adopt negotiated transfer, one-way bidding, or other compliant methods.

The national carbon emission trading should follow the principles of openness, fairness, impartiality, and good faith, and prohibit any unit or individual from manipulating the carbon emission trading market through fraud, malicious collusion, and dissemination of false information. If there  are disputes between trading parties, they can negotiate and resolve them by themselves, or apply for mediation to the trading institution. They can also apply for arbitration to the arbitration institution or file a lawsuit with the people's court in accordance with the law.

(3) Carbon emission reporting and verification

According to the provisions of the "Management Measures", key emission units shall, in accordance with the technical specifications for greenhouse gas emission accounting and reporting formulated by the Ministry of Ecology and Environment, prepare their greenhouse gas emission report for the previous year, expressing the emission amount, and report to the provincial ecological environment regulatory department in the place where the production and business premises are located before March 31 of each year. At the same time, enterprises should also keep the original records and management records of the data involved in emission reports for at least five years. Pilot provinces and cities such as Beijing and Shanghai have also formulated corresponding carbon emission rights management measures, requiring key emission units to undertake annual reporting obligations. Shenzhen also requires quarterly reporting due to the large number of small and medium-sized enterprises and large indirect emissions.

Correspondingly, the provincial ecological and environmental departments and their entrusted third-party verification institutions have the right to verify the annual carbon emission reports submitted by key emission units, and the verification results will serve as the basis for the clearance of carbon emission quotas for key emission units. In the first performance cycle, the submission of verification data for the power generation industry will be completed by June 30, 2021.

Verification workflow diagram [7]

(4) Clearance of carbon emission quotas

According to the provisions of the "Management Measures", key emission units shall, within the specified period, timely finish the clearance of the carbon emission quotas of the previous year to the provincial ecological and environmental departments that allocate quotas based on their actual greenhouse gas emissions; The amount of carbon emission quota clearance should be greater than or equal to the actual greenhouse gas emissions of the unit in the previous year verified and confirmed by the provincial ecological environment regulatory departments. Key emission units can clear their carbon emissions by purchasing carbon emission quotas or using  CCER to  offset, with the offset ratio not exceeding 5% of the carbon emission quotas that should be  cleared. The CCER used for offsetting shall not  be included in emission reduction projects  managed by the national carbon emission trading market.

In the first performance cycle, in order to effectively reduce the performance burden faced by enterprises with large quota gaps, the Ministry of Ecology and Environment has set relevant preferential policies for the power generation industry in the Implementation Plan. Firstly, in the work related to quota clearance, the upper limit of quota performance gap is set at 20% of the enterprise's carbon emissions, that is, when the quota gap of key emission units accounts for more than 20% of their emissions, The maximum obligation to clear the quota is quota obtained freely plus 20% of the verified emissions. Secondly, In order to encourage the development of gas turbines, the portion of quotas obtained freely during the quota clearance work for gas turbines that is less than the verified emissions will not be required to be purchased temporarily. Any excess quotas exceeding the verified emissions can be sold to the market.

Ⅲ. List of compliance obligations of key emission units

According to the "Management Measures" of the Ministry of Ecology and Environment and  all pilot regulations on carbon emission trading management in various provinces and cities, combined with the specific situation of the first performance cycle, key emission units should fulfill their obligations of carbon emission monitoring, reporting, cooperation in verification, and payment in accordance with the law.

Implementing carbon emission monitoring

Pilot provinces and cities such as Beijing, Shanghai, Chongqing, Fujian, Hubei, and Tianjin have  imposed key emission units the obligation to implement carbon emission monitoring. As stipulated in Article 11 of the " Trial Implementing Measures for Carbon Emission Management in Shanghai", the relevant monitoring system is as follows: Units included in quota management should formulate a carbon emission monitoring plan for the next year before December 31 of each year, clarifying the monitoring scope, monitoring methods, frequency, responsible personnel and other contents, and report to the municipal development and reform department. Monitoring should be strictly implemented in accordance with the monitoring plan. If there are significant changes in the monitoring plan, it should be reported to the municipal development and reform department in a timely manner

Report carbon emission data truthfully

Article 25 of the Management Measures stipulates the obligation of key emission units to truthfully report carbon emission data, requiring relevant enterprises to prepare greenhouse gas emission reports and submit them to the corresponding provincial ecological and environmental authorities on March 31 of each year. For enterprises that fail to fulfill their reporting obligations as required, the "Management Measures" of the Ministry of Ecology and Environment and pilot provinces and cities such as Beijing and Shanghai have set corresponding penalty clauses, with fine amounts ranging from 10000 yuan to 30000 yuan orless than 50000 yuan. The Revised Draft of Regulations by the Ministry of Ecology and Environment also noted the low penalty amount in the current Management Measures, and raised the fine range for failing to submit greenhouse gas emission reports in a timely manner as required, or refusing to fulfill greenhouse gas emission reporting obligations, to  from 50000 yuan  to 200000 yuan.

Therefore, key emission units should prepare a report based on the greenhouse gas emission accounting methods and reporting guidelines formulated by the Ministry of Ecology and Environment, as well as relevant technical specifications, which includes information on the greenhouse gas emissions, emission facilities, emission sources, accounting boundaries, accounting methods, activity data, emission factors, etc. of key emission units, and should be accompanied by original records and ledgers. To ensure data quality, key emission units should develop data quality control plans, and make specific arrangements and plans for the accounting and reporting of greenhouse gas emissions and related information.

Cooperate with carbon emission verification

The "Management Measures" grant the provincial ecological and environmental authorities the right to verify carbon emission reports, and key emission units have the obligations  of  cooperation. Pilot provinces and cities such as Beijing, Shanghai, Shenzhen, Shanghai, and Hubei have all clarified the legal responsibilities of key emission units for not cooperating with inspections and resisting or obstructing inspections. For example, Shanghai has established penalties for fines, which stipulate that the  units included in quota management  that violate the provisions of Article 13, Paragraph 2 of the Measures by providing false or untrue documents or concealing important information during the verification work of third-party institutions shall be ordered by the Municipal Development and Reform Department to make corrections within a time limit. Those who fail to make corrections within the time limit shall be fined not less than 10000 yuan but not more than 30000 yuan. Those who unreasonably resist or obstruct third-party institutions from carrying out verification work shall be ordered by the Municipal Development and Reform Department to make corrections within a time limit, with a fine of not less than 30000 yuan but not more than 50000 yuan shall be imposed. Hubei has set up a regulation to halve the carbon emission quotas of enterprises that do not cooperate in verification, which stipulate that  if enterprises violate Article 37 of the measures and are unable to conduct effective verification, the competent department shall  issue a warning and the enterprise shall accept verification within a specified time limit. If they fail to accept verification within the specified time limit, their quotas for the next year shall be determined by halving the quotas of the previous year." The  Revised Draft of Regulations drafted by the Ministry of Ecology and Environment has also been clarified, For key emission units that resist supervision and inspection, the relevant competent authorities may order them to make corrections and impose a fine of not less than 20000 yuan but not more than 200000 yuan.

Timely and fully clearance of carbon emission quotas

Timely and full clearance of carbon emission quotas is a legal obligation imposed on key emission units by the Management Measures and relevant legal provisions. Specifically, key emission units should fulfill their obligation to clear carbon emissions quotas in accordance with the following requirements: firstly, based on their actual greenhouse gas emissions, within the time limit specified by the Ministry of Ecology and Environment, they should clear the carbon emissions quota of the previous year to the provincial-level ecological and environmental management department that allocated the quota; secondly, The amount of carbon emission quota clearance should be greater than or equal to the actual greenhouse gas emissions of the unit in the previous year verified and confirmed by the provincial ecological environment management department; thirdly, If the full clearance cannot be made,  it can be completed by purchasing quotas in the national carbon emission trading market or other  methods; CCER can be used annually to offset the clearance of carbon emission quotas, but the offset ratio shall not exceed 5% of the amount of carbon emission quotas that shall be cleared.

For key emission units that fail to pay or fail to pay their carbon emission quotas in full, the "Management Measures" have imposed fines ranging from 20000 yuan to 30000 yuan; for those who fail to make corrections within the prescribed time limit, the carbon emission quotas of the relevant units for the next year shall be reduced by an equal amount for the unpaid portion. The Revised Rraft of  Regulation will increase the fine range for not clearing or not fully clearing carbon emission quotas to from 100000 yuan to 500000 yuan, from which the punishment intensity will significantly increase. In addition, the draft also sets up credit punishment clauses, stipulating that the ecological environment regulatory department of the State Council, in conjunction with relevant departments, shall establish a national credit record system for carbon emission trading entities, and incorporate relevant credit records into the national credit information sharing platform.

4、 Conclusion

In the context of carbon peaking and carbon neutrality becoming a long-term national strategy, China's laws and regulations on carbon emission trading management are improving day by day, the punishment measures for key emission units are becoming increasingly strict, and the law enforcement strength and intensity of the ecological environment authorities are also increasing. With the construction of the dual carbon target carbon peaking and carbon neutrality goals, the scope of emission control industries and enterprises will gradually  extend. It is urgent to develop sound and reasonable carbon compliance plans for key emission industries and enterprises such as petrochemical, chemical, building materials, steel, non-ferrous metals, papermaking, power, aviation, etc.

In order to meet compliance requirements and avoid legal risks, key emission units and related high energy consuming enterprises should establish a comprehensive carbon compliance plan based on their own actual situations, including enterprise organizational structure, daily production and operation, carbon compliance culture construction, internal monitoring and reporting system, violation accountability mechanism, and long-term enterprise development planning, which includes pre planning, in-process response, and post punishment. In the face of strict regulation, enterprises in key emission industries should attach importance to laws, regulations, and policy documents related to carbon emission trading management, pay attention to and effectively fulfill relevant compliance obligations, and do a good work in carbon emission compliance.

reference:

[1] Ministry of Ecology and Environment: "The First Compliance Cycle of the National Carbon Market Successfully Ends"

[2] Ministry of Ecology and Environment: "The First Compliance Cycle of the National Carbon Market Successfully Ends"

[3] Carbon dioxide equivalent: refers to a unit of measurement used to compare different greenhouse gas emissions, and the contribution of different greenhouse gases to the Earth's greenhouse effect varies. In order to unify the results of measuring the overall greenhouse effect and because carbon dioxide is the main gas that produces the greenhouse effect through human activities, it is ruled to use carbon dioxide equivalent as the basic unit for measuring the greenhouse effect. The carbon dioxide equivalent of a gas is obtained by multiplying its tonnage by its global warming potential (GWP) (this method can standardize the effects of different greenhouse gases).

[4] Administrative Judgment of Second Instance between Shenzhen Xiangfeng Container Co., Ltd. and Shenzhen Development and Reform Commission

[5] Quantitative certification of greenhouse gas emission reduction effects of renewable energy, forestry carbon sequestration, methane utilization and other projects within China and registration of greenhouse gas emissions reduction in the national voluntary greenhouse gas emission reduction transaction registration system.

[6] Since March 2017, the National Development and Reform Commission has temporarily suspended the acceptance of national certified voluntary emission reduction filing applications based on Document No. 1668, which has affected the market growth of this trading product to some extent. For CCER stocks that have already completed registration and filing, they have the offsetting effect of carbon emission performance payment in accordance with the law, and can still be traded.

[7] Ministry of Ecology and Environment: Guidelines for Verification of Greenhouse Gas Emission Reports by Enterprises (Trial)

"Ensure the compliance of carbon emission trading and operate in accordance with laws and regulations."

Author: Wang Zhaofeng

On December 31, 2021, the Ministry of Ecology and Environment announced that the first compliance cycle of the national carbon emission trading market was successfully completed. This is the first time that China has implemented greenhouse gas emission responsibilities on enterprises at the national level, and it is also the first year of formal operation of the national carbon market.

According to statistics from the Ministry of Ecology and Environment, a total of 2,162 key emitting units in the power generation industry were included in the first compliance cycle of the national carbon market, with an annual coverage of approximately 4.5 billion tons of carbon dioxide emissions. The cumulative trading volume of carbon emission quotas was 179 million tons, with a total transaction value of 7.661 billion yuan, and an average transaction price of 42.85 yuan/ton, with a closing price of 54.22 yuan/ton on December 31. The completion rate of the first compliance cycle of the national carbon market was 99.5%. In terms of trading, the healthy and orderly operation of the market has initially shown its role in promoting enterprises to reduce greenhouse gas emissions and accelerate green and low-carbon transformation.

Under the background of "dual carbon", it is essential for key emission units to follow relevant institutional rules and carry out carbon compliance construction. This article will review the specific situation of the first compliance period of the national carbon market based on current laws and regulations, clarify the compliance obligations list for key emission units as the main compliance subject, in order to assist them to fulfill their carbon compliance obligations and contribute to the achievement of the "dual carbon" target.

Which companies will be included in the key emission unit list?

As the primary trading entity and registration subject of the national carbon market, key emission units are responsible for controlling greenhouse gas emissions, reporting carbon emissions data, paying carbon emission quotas, and conducting public trading. The "Management Measures for Carbon Emission Rights Trading (Trial)" (hereinafter referred to as the "Management Measures") stipulate that key emission units refer to enterprises that belong to the industries covered by the national carbon emissions trading market and have an annual greenhouse gas emission of 26,000 tons of carbon dioxide equivalent [3]. Key emission units that have been included in the national carbon market will no longer participate in local carbon emissions trading pilot markets. The key emission unit list will be adjusted in a timely manner based on the carbon emissions of enterprises. If the greenhouse gas emissions of key emission units are lower than 26,000 tons of carbon dioxide equivalent for two consecutive years, or if they no longer emit greenhouse gases due to suspension of business, closure, and other reasons, the provincial ecological environment authority will remove them from the key emission unit list.

Considering that the power generation industry has large carbon dioxide emissions and a relatively sound management system, the Ministry of Ecology and Environment decided to take the emission-intensive power generation industry as a breakthrough for the first batch of compliance entities. According to the specific implementation plan announced by the Ministry of Ecology and Environment, the provincial ecological environment authorities will select and designate enterprises or other economic organizations in this industry with annual emissions of 26,000 tons of carbon dioxide equivalent (comprehensive energy consumption of about 10,000 tons of standard coal) or more from 2013 to 2019, and it is expected that 2,225 power generation companies will be included, with 2,162 actual compliance entities. With the normal operation of the national carbon emissions trading system, the national carbon trading in the late 14th Five-Year Plan period will finally cover eight industries, including power generation, petrochemical, chemical, building materials, steel, non-ferrous metals, papermaking, and domestic civil aviation.

Carbon market trading compliance period

According to the "Management Measures", a compliance period of the carbon emissions trading market includes four stages: carbon emission quota allocation, carbon emission trading, carbon emission reporting and verification, and carbon emission quota payment.

Carbon emission quota allocation

The "Interim Measures for the Management of Carbon Emissions Trading (Draft Amendment)" (hereinafter referred to as the "Amendment Draft") stipulates in the attachment that carbon emission rights refer to the carbon emission quotas allocated to key emission units during a specified period. One unit of carbon emission quota is equivalent to 1 ton of carbon dioxide equivalent emitted into the atmosphere.

The "2019-2020 National Carbon Emissions Trading Quota Setting and Allocation Implementation Plan (Power Generation Industry)" (hereinafter referred to as the "Implementation Plan") further clarifies the carbon emission quotas for the power generation industry: the carbon dioxide emission limit generated by the power generation unit owned by key emission units includes the direct carbon dioxide emissions generated by fossil fuel consumption and the indirect carbon dioxide emissions generated by net purchased electricity. The carbon emission limit value for the unit power supply (heat) consumption specified for different types of units is called the carbon emission baseline value.

The allocation results of carbon emission quotas directly determine the difficulty and operational costs of key emission units to pay off their quotas, as well as major decision-making and deployment of enterprises such as production volume and investment location. According to the "Management Measures," carbon emission quotas are currently mainly allocated for free, but paid allocation may be introduced in the future according to national requirements. The determination and allocation scheme of carbon emission quotas are determined by the Ministry of Ecology and Environment in consideration of national greenhouse gas emission control requirements, economic growth, industrial restructuring, energy structure optimization, coordinated control of atmospheric pollutant emissions, and other factors. The provincial ecological environment department distributes the annual carbon emission quotas to key emission units within the administrative region according to this scheme. Key emission units can apply to the provincial environmental department for a review if they have objections to the allocation.

According to the "Implementation Plan," the national carbon market currently adopts a "pre-allocation + verified allocation" method to distribute carbon emission quotas. Taking the national emission quota distribution in 2019-2020 as an example, the Ministry of Ecology and Environment pre-allocated the quotas for 2019-2020 through the national carbon emission rights registration and settlement system (hereinafter referred to as the registration and settlement system) based on 70% of the unit's power (heat) supply in 2018. After completing the verification of the 2019-2020 carbon emissions data in 2021, the quotas were finally verified based on the actual power (heat) supply in that year, and multi-refunds or less payments were implemented through the registration and settlement system after comparing them with the already distributed quotas.