Chinese refiners and petrochemical producers plan to set up a system for benchmarking their carbon dioxide (CO2) emissions as the first step toward setting up an emissions market for the sector. The China Petroleum and Chemical Industry Federation (CPCIF), a lobbying group for the country’s oil industry, said in its China Chemical Industry News newsletter it will make a proposal by September on how to set benchmarks for the CO2 produced while manufacturing products ranging from diesel fuel to benzene.

According to CPCIF, the benchmarks will be used to set CO2 emissions caps for nearly 2,400 companies in the sector under the national carbon market slated to start next year. This will help create reduction targets for the large petrochemical and chemical plants said to account for up to 70% of the sector's CO2 emissions. China is the world's second-largest oil consumer behind the US. Altogether 8,000 companies in eight industries are planned to be included in the national carbon trading scheme, including players in the power, steel, cement and transportation sectors.

Petrochemical and other chemical producers participating in China's domestic carbon market will account for one-third of all companies participating nationally, Li Yongliang, a CPCIF official, told China Chemical Industry News.