Shenzhen Allowances

Tradable carbon credits issued under the Shenzhen Emissions Trading Scheme (ETS), one of China’s pilot carbon markets. These allowances grant holders the right to emit a specified amount of carbon dioxide or equivalent greenhouse gases (usually measured in tons) within a given period. Companies operating within Shenzhen that are covered by the ETS are allocated a certain number of allowances, which they must hold to cover their emissions. If a company emits less than its allocated amount, it can sell excess allowances on the market. Conversely, if it emits more, it must purchase additional allowances. This system is designed to incentivize companies to reduce their carbon footprint and contribute to the broader goal of carbon neutrality.