[{"bbox": [96, 153, 1134, 205], "category": "Text", "text": "well as promote discussions on cost-effective and a market-based systems relevant to underpin China's climate ambitions for its national framework."}, {"bbox": [96, 218, 1134, 405], "category": "Text", "text": "The activities of this Action will also feed into discussions of the EU-China Policy Dialogue on emissions trading, established by the MoU on ETS in 2018 and based on which former EVP Timmermans and his counterpart - the First Vice Premier Ding Xuexiang - agreed to intensify cooperation on emissions trading during the 4th EU-China High-Level Dialogue on Environment and Climate in Beijing in July 2023. An updated MoU reflecting recent developments and future priorities is expected to be signed in early 2024, which was further highlighted during the EU-China Summit held on 7th December 2023, when leaders welcomed continued cooperation on climate change in areas such as emissions trading."}, {"bbox": [87, 431, 506, 461], "category": "Section-header", "text": "## 1.3 Zone benefitting from the Action"}, {"bbox": [87, 477, 1145, 506], "category": "Text", "text": "The Action shall be carried out in the People's Republic of China, which is included in the list of ODA recipients."}, {"bbox": [87, 533, 322, 566], "category": "Section-header", "text": "# 2 RATIONALE"}, {"bbox": [87, 598, 233, 626], "category": "Section-header", "text": "## 2.1 Context"}, {"bbox": [96, 656, 1134, 818], "category": "Text", "text": "The European Council Conclusions of 30th June 2023 on China reaffirmed, along with the \"EU-China Strategic Outlook - Joint Communication\" of March 2019, the validity of the EU's multifaceted policy approach towards China, where it is simultaneously a partner, a competitor and a systemic rival. This approach has served to address the different aspects of the relationship, through a period when economic and political relations have required flexibility and agility in bilateral dealings with China. It also kept open the space for bilateral engagement on matters of common or global interest."}, {"bbox": [96, 828, 1134, 1069], "category": "Text", "text": "In recent years, there has been an intensification of the systemic rivalry and competition dimensions. Readjusting and recalibrating relations between the EU and China are necessary in light of the evolving circumstances, including China's own actions and posture. In her 2023 State of the Union speech, President von der Leyen underlined the importance for the EU to keep open lines of communication and dialogue with China on topics where cooperation is needed such as climate change. At the same time, it is critical to de-risk (not de-couple) our relations with China, through diplomatic and economic means to reduce vulnerabilities and increase resilience. At the 2023 December EU-China Summit, the leaders discussed several bilateral issues, notably the need to rebalance the trade relationship, and also global challenges, including continued cooperation on ETS, an important climate policy initiative considering the EU and China have the biggest ETS in the world."}, {"bbox": [96, 1079, 1134, 1317], "category": "Text", "text": "This Action aims at supporting further development of the CN ETS towards an effective and reliable instrument to cope with greenhouse gas (GHG) emissions in an efficient and effective manner. Robust monitoring, reporting and verification systems are key in this respect and should be accompanied by credible efforts to improve the design and functioning of the CN ETS and its carbon market, so as to help China to achieve its climate targets under the Paris Agreement. Currently China is responsible for 28 percent of global GHG emissions, therefore exploiting the potential of the CN ETS to reduce GHG emissions is in the EU's interest and in line with the external dimension of the European Green Deal¹. The fight against climate change is a shared responsibility and an effective EU-China partnership in this area is key to the future of our planet, as recently stated by the High Representative / Vice President Borrell²."}, {"bbox": [87, 1333, 340, 1365], "category": "Section-header", "text": "## 2.2 Problem Analysis"}, {"bbox": [96, 1379, 1134, 1486], "category": "Text", "text": "China is the world's largest emitter of GHG and its emissions trading system has a huge potential to develop into an important policy tool to achieve China's carbon neutrality goals. Officially launched in 2021, China's emissions trading system (ETS) is currently the largest in the world, covering more than three times as many emissions as the EU ETS (the second largest)."}, {"bbox": [96, 1497, 1134, 1552], "category": "Text", "text": "At the United Nations General Assembly in September 2020, President XI Jinping pledged to reach China's CO2 emissions peak before 2030 and to achieve carbon neutrality before 2060, a vision integrated in the current 14th"}, {"bbox": [87, 1597, 282, 1621], "category": "Footnote", "text": "¹ COM(2019) 640 final"}, {"bbox": [87, 1621, 745, 1647], "category": "Footnote", "text": "² https://www.eeas.europa.eu/eeas/eu-china-summit-rivalry-and-partnership_en"}, {"bbox": [1038, 1681, 1144, 1707], "category": "Page-footer", "text": "Page 4 of 17"}]