China's financial centre Shanghai has confirmed it will start its carbon emissions trading this coming month of June. Although no specific date was provided, it made sure the system will be up and running before the month ends.

It becomes the country's second state to employ the carbon cap-and-trade scheme, which when already fully operational, will help Shanghai reduce its energy consumption and carbon releases per unit of gross domestic product.

Manufacturers of steel, petrochemicals and electricity with annual carbon emissions of at least 20,000 tonnes are the ones included in Shanghai's trial carbon emission trading program. Approximately 200 companies in 16 industries that dispensed 110 million tonnes of carbon dioxide annually will be involved, including China's state-owned oil companies PetroChina and Sinopec, as well as chemical company BASF SE and ThyssenKrupp AG.

See below complete initial list of included companies.

Carbon emissions trading is a market-based approach used to control pollution by providing economic inventives for achieving reductions in the emissions of pollutants. For 2013 alone, according to the Shanghai Municipal Development & Reform Commission, the city wants to slash by 3.5 per cent its energy consumption and carbon releases.

Based on estimates made by analysts at Bloomberg New Energy Finance, the city's pilot carbon emissions trading will cover 120 million to 130 million tonnes. Trading will be managed through the Shanghai Environment & Energy Exchange.

The way carbon emissions trading go, a central authority sets a limit or cap on the amount of a pollutants an entity may emit. This is then sold to firms via emissions permits. A firm normally has more than two number of permits or allowances or carbon credits, equivalent to their emissions. However, the total number of permits cannot exceed the cap, thus limiting total emissions to a certain level only. If firms need to increase their volume of emissions, then they must buy permits from those who require fewer permits.

The trading concept occurs once a transfer of permits happen between entities. The buyer will pay a charge for polluting, while the seller gets being rewarded for having reduced emissions.

Carbon emissions trading pilot enterprises in Shanghai list

No.

Name of pilot enterprises

1.

Baoshan Iron & Steel Co., Ltd.

2.

Baosteel Stainless Steel Co., Ltd.

3.

Baosteel Special Materials Co., Ltd.

4.

Baosteel Automotive Steel Sheets Co., Ltd.

5.

Shanghai Krupp Stainless Steel Co., Ltd.

6.

Yatai Special Steel Group Co., Ltd.

7.

Shanghai Shida Precision Stainless Steel Co., Ltd.

8.

Shanghai the Baihe Hua Sintra Special Steel Products Co., Ltd.

9.

The Shanghai Donghai colored alloy plant

10.

Sapa Heat Transfer (Shanghai) Co., Ltd.

11.

Chinalco Shanghai Copper Co., Ltd.

12.

Shanghai Sigma Metals Co., Ltd.

13.

Shanghai Xin Ye Copper Co., Ltd.

14.

Shanghai Dachang Copper Industry Co., Ltd.

15.

Shanghai Longyang precision composite Copper Tube Co., Ltd.

16.

Shanghai Hailiang Copper Co., Ltd.

17.

Five Star Copper (Shanghai) Co., Ltd.

18.

Shanghai Highly Casting Co., Ltd.

19.

The Shanghai Nanhui State Casting Co., Ltd.

20.

The Shanghai Shenhuo aluminum foil Limited

21.

Shanghai Hu Xin foil Co., Ltd.

22.

Shanghai Jing Yuan Heavy Machinery Co., Ltd.

23.

Shanghai Huaxin alloy Co., Ltd.

24.

Sunlight Copper Co., Ltd. in Shanghai

25.

China Sinopec Shanghai Petrochemical Company Limited

26.

China Petroleum & Chemical Corporation Shanghai Gao Qiao Branch

27.

Shanghai Coking Co., Ltd.

28.

Shanghai Gaoqiao-SK Solvent Co., Ltd.

29.

Shanghai Secco Petrochemical Co., Ltd.

30.

Shanghai Chlor-Alkali Chemical Co., Ltd.

31.

Shanghai Baosteel Chemical Co., Ltd.

32.

Shanghai Chemical Industry Park Industrial Gases Co., Ltd.

33.

Shanghai Cabot Chemical Co., Ltd.

34.

China Petrochemical Group Assets Management Co., Ltd. Shanghai Branch Takahashi

35.

Bayer MaterialScience (China) Co., Ltd.

36.

BASF Chemical Co., Ltd.

37.

Wu Jing, Shanghai Chemical Co., Ltd.

38.

Shanghai BASF Polyurethane Co., Ltd.

39.

Far Eastern Industries ( Shanghai ) Co., Ltd.

40.

Shanghai Petrochemical BOC Gases Co., Ltd.

41.

Oriental Petrochemical ( Shanghai ) Co., Ltd.

42.

Evonik Degussa Specialty Chemicals (Shanghai) Co., Ltd.

43.

Shanghai Huayi Acrylic Acid Co., Ltd.

44.

Lianheng Isocyanate Co. Ltd.

45.

Shanghai COSCO Chemical Co., Ltd.

46.

Shanghai Bluestar POM Co., Ltd.

47.

Shanghai Hualin Industrial Gases Co., Ltd.

48.

Shanghai Heng Yi polyester.

49.

Shanghai Takahashi - BASF Dispersions Co., Ltd.

50.

Shanghai Sinopec Mitsui Chemical Co., Ltd.

51.

Shanghai 3F New Materials Co., Ltd.

52.

Shanghai No.5 Steel Gas Co., Ltd.

53.

Lucite International (China) Chemical Co., Ltd.

54.

Flint Chemicals ( China ) Co., Ltd.

55.

BACC

56.

Shanghai Johnson Ltd.

57.

Shanghai Golden Phillips Petrochemical Co., Ltd.

58.

Praxair Semiconductor Gas Co., Ltd. (Shanghai)

59.

Previous Haiakema Peroxide Co., Ltd

60.

Shanghai Jinhai Albemarle Fine Chemical Co., Ltd.

61.

Sheng Precision product gas ( Shanghai ) Co., Ltd.

62.

Taiyo Nippon Sanso Gas Co., Ltd.

63.

Shanghai Peng Bo titanium dioxide Co., Ltd.

64.

Shanghai blonde Science and Technology Development Co., Ltd.

65.

BASF Takahashi Performance Chemicals (Shanghai) Co., Ltd.

66.

Upper Haihengsimai Polyurethane Co., Ltd.

67.

Shanghai Coatings Co., Ltd.

68.

Shanghai Coking & Chemical Development Company

69.

Shanghai Evergreen gas industry limited liability company

70.

Shanghai Yoo Chemical Manufacturing Co., Ltd.

71.

First Nico Chemical (Shanghai) Co., Ltd.

72.

Double Coin Holdings Ltd.

73.

Double Coin Tire Co., Ltd. Shanghai Donghai

74.

Shanghai Michelin Warrior Tire Co., Ltd.

75.

Shanghai Wenlong Chemical Fibre Co., Ltd.

76.

The Invista synthetic fiber (Shanghai) Co., Ltd.

77.

INVISTA fibers (Shanghai) Co., Ltd.

78.

INVISTA special fiber ( Shanghai ) Co., Ltd.

79.

Invista Fiber Co., Ltd.

80.

Shanghai Lianji Synthetic Fibers Co., Ltd.

81.

Shanghai on Caojing Power Company Limited (Caojing power plant)

82.

Shanghai Caojing Thermal Power Company Limited (Caojing Thermal Power Plant)

83.

Shanghai Waigaoqiao Power Generation Company Limited (the Waigaoqiao a plant)

84.

Shanghai Wujing Power Generation Co., Ltd. (Wu Jing plant)

85.

Shanghai Electric Power Company Limited Wu Jing Thermal Power Plant

86.

Huaneng Power International Inc. Shanghai SHIDONGKOU, the first power plant

87.

Second Power Plant, Huaneng Power International Inc. SHIDONGKOU

88.

Huaneng Shanghai Combined Cycle Power Co., Ltd. (Huaneng gas turbine power plant)

89.

Shanghai Waigaoqiao Power Generation Co., Ltd. (Waigaoqiao Plant)

90.

Shanghai Waigaoqiao Power Generation Co., Ltd. (Waigaoqiao three plants)

91.

Wu Jing, Shanghai Power Generation Company Limited (Wu Jing Power Plant)

92.

Shanghai Shenergy Harbor gas turbine power generation Limited

93.

Energy Co., Ltd. Shanghai Wei steel

94.

Huaneng Shanghai Shidongkou Power Generation Co., Ltd.

95.

Shanghai Wan An Enterprise Corporation

96.

The Shanghai Baoshan Southern Cement Co., Ltd.

97.

Shanghai Conch Cement Co., Ltd.

98.

The Shanghai Jinshan Southern Cement Co., Ltd.

99.

Shanghai Building Material Group Cement Co., Ltd. Pudong cement plant

100.

Australian Associated Glass Co., Ltd.

101.

Fuyao Group ( Shanghai ) Automotive Glass Co., Ltd.

102.

Saint-Gobain's Han the glass world firmly SinoServices glass (Shanghai) Co., Ltd.

103.

The Shanghai Yiu Picao, Bridge Auto Glass Co., Ltd.

104.

Shanghai Shanghai Yaohua Pilkington Glass Works Ltd.

105.

To Hesse Davis Glass Co., Ltd.

106.

The Haibo homes Industry Co., Ltd.

107.

Shanghai Follet Glass Co., Ltd.

108.

Elegant Glass Co., Ltd. in Shanghai

109.

The Shanghai Grace and Electronic Materials Co., Ltd.

110.

The Ai Jiewei (Shanghai) glass fiber material Co., Ltd.

111.

New Building Materials Co., Ltd. Shanghai Bao Tin

112.

Shanghai, eastern Zhejiang Building Materials Co., Ltd.

113.

Boro gypsum Systems (Shanghai) Co., Ltd.

114.

Boro gypsum building materials (Shanghai) Co., Ltd.

115.

Shanghai Armstrong Building Products Co., Ltd.

116.

The Shanghai soup was founded Pile Co., Ltd.

117.

Shanghai Jianhua Concrete Pile Co., Ltd.

118.

Shanghai new building materials, rock wool Limited

119.

The Shanghai building components Products Co., Ltd.

120.

Saint-Gobain Gypsum Building Materials (Shanghai) Co., Ltd.

121.

Hase Ceramics Co., Ltd.

122.

On Hay Co., Ltd.

123.

Jinxing Ceramic ( Shanghai ) Co., Ltd.

124.

Shanghai Urban Construction Materials Co., Ltd.

125.

Shanghai CIMIC ceramic Co., Ltd.

126.

Shanghai CIMIC holding Co., Ltd.

127.

Shanghai Yin Thailand Paper Co., Ltd.

128.

Long Paper Co., Ltd. in Shanghai

129.

The Unicharm life supplies ( China ) Co., Ltd.

130.

Jin Feng Yuan Paper (Shanghai) Co., Ltd.

131.

Shanghai Orient Champion Paper Co., Ltd.

132.

Kimberly-Clark Paper Co., Ltd. Shanghai

133.

Shanghai Jialin Jie Textile Company Limited

134.

The Shanghai King Kong Lun Printing and Dyeing Co., Ltd.

135.

Hongyuan Development ( Shanghai ) Co., Ltd.

136.

Shanghai Uchino Co., Ltd.

137.

Shanghai Xiao Printing Co., Ltd.

138.

Shanghai Knitting nine plant

139.

Shanghai Ka Lok Co., Ltd.

140.

The Shanghai Tiqiao textile yarn dyeing Co., Ltd.

141.

China Eastern Airlines Corporation Limited

142.

China Cargo Airlines Co., Ltd.

143.

Shanghai Airlines Co., Ltd.

144.

Shanghai auspicious Airlines Co., Ltd.

145.

Spring Airlines Co., Ltd.

146.

Yangtze River Express Airlines Co., Ltd.

147.

Shanghai International Port (Group) Co., Ltd.

148.

Crown of the East Shanghai International Container Terminals Limited

149.

Shanghai HUDONG Container Terminal Co., Ltd.

150.

Shanghai Sheng Dongguo International Container Terminals Limited

151.

East of Shanghai Container Terminals Limited

152.

Shanghai Luojing Ore Terminal Co., Ltd.

153.

Shanghai Pudong International Container Terminals Limited

154.

Shanghai International Port (Group) Logistics Co., Ltd.

155.

Vopak Shanghai Port Co., Ltd.

156.

Shanghai Pudong New Area, Shangri-La Hotel Limited

157.

Shanghai Hua Ting Hotel Co., Ltd.

158.

Shanghai Jin Jiang Hotel Co., Ltd.

159.

Shanghai Jin Jiang Oriental Hotel Co., Ltd.

160.

Hotel Equatorial Shanghai Co., Ltd.

161.

Jing'an Hilton Hotel ( Shanghai )

162.

Shanghai Jin Jiang International Hotels (Group) Co., Ltd. Jin Jiang Tower Hotel

163.

Radisson Shanghai New World Hotel Co., Ltd.

164.

Garden Hotel (Shanghai)

165.

By the International Plaza Co., Ltd. in Shanghai Sheraton Hotel

166.

Shanghai Summit Hotel Management Co., Ltd. Long Dream Hotel

167.

Shanghai at Tomorrow Square Co., Ltd.

168.

Shanghai Skyway Hotel Co., Ltd.

169.

Shanghai Everbright Convention and Exhibition Center Co., Ltd.

170.

Shanghai SIIC South Pacific Hotel Co., Ltd. Four Seasons Hotel Shanghai

171.

Shanghai Railway Bureau (Shanghai Railway Station, Shanghai South Railway Station)

172.

Shanghai Airport (Group) Co., Ltd. (Hongqiao International Airport)

173.

Shanghai International Airport Co., Ltd. (Pudong International Airport)

174.

First Shanghai Yaohan Co., Ltd. (Yaohan)

175.

Shanghai New World Co., Ltd. (New World City)

176.

Shanghai Pacific Department Store Co., Ltd. (Pacific Department Store (Xujiahui))

177.

Shanghai Jiu Guang Department Store Co., Ltd. (Joinbuy Square)

178.

The Shanghai Brilliance Department Store Management Co., Ltd. Shanghai First Department Store (Department Store)

179.

Shanghai of Wenfeng 1000 Hui Shopping Centre Ltd. (, Wenfeng Shopping Plaza)

180.

Shopping Mall Management Limited (Shopping Mall (Zhongshan Park))

181.

Shanghai Golden Bund Real Estate Co., Ltd. (Golden Bund Center)

182.

Shanghai Huaqing Real Estate Development Co., Ltd. (Raffles City)

183.

Shanghai Grand Gateway Real Estate Development Co., Ltd. (Grand Gateway 66)

184.

The Shanghai Heng state Real Estate Development Co., Ltd. (Square 66)

185.

Shanghai CITIC Square Co., Ltd. (CITIC Square)

186.

Shanghai Westgate Mall Co., Ltd. (Westgate Mall)

187.

The Shanghai Brilliance West Shopping Mall Co., Ltd. (Brilliance West Shopping Mall)

188.

Festival Walk shopping mall Shanghai Co., Ltd. (UBP Festival Walk shopping center)

189.

Co., Ltd. Shanghai Branch, China Construction Bank (World Financial Tower)

190.

Industrial and Commercial Bank of China Co., Ltd. Shanghai Branch (Century Financial Tower)

191.

Bank of Communications Co., Ltd. Shanghai Branch (BOCOM Building)

192.

Bank of Communications Co., Ltd. (Kam Ming Building)

193.

Bank of China Shanghai Branch (Bank of China Building, Jiading Branch Building)

194.

Shanghai Pudong Development Bank (Zhong Shan Dong Yi Building No. 12 )

195.

Bank of Shanghai (Shanghai Bank Building, Fu Shida Building, Shiquan Building)

196.

Shanghai Futures Exchange (Futures Building)

197.

China UnionPay (CUP Building)

Last week, Shenzhen, a Special Economic Zone in China, announced it will start its carbon emissions trading on June 17, which will initially include 635 companies.

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China's Shenzhen Sets June 17 as Start of Carbon Emissions Trading