Policy Overview
The Hubei Emissions Trading Scheme (Hubei ETS) is one of China’s most robust regional carbon market pilots, featuring a dedicated offset mechanism that includes CCUS activities. Under the 2024 Allocation Plan, covered entities in Hubei can purchase CCERs (National Certified Voluntary Emission Reductions), including those from CCUS projects, to offset up to 5% of their annual allowance compliance obligations.
The strategic value of this policy lies in its ability to convert physical CCUS outcomes from engineering metrics into liquid market assets. In 2024, synchronized with the re-launch of the National CCER Market, Hubei prioritized the verification of industrial CCUS methodologies. This mechanism has significantly lowered compliance costs for the province’s dominant sectors—such as steel, cement, and power—effectively incentivizing early-movers like China Huaneng and E-Cheng Steel to accelerate their carbon capture infrastructure investments.