The reading: Recently, the National Development and Reform Office issued the “Management Measures for Carbon Energy Quota of New Energy Vehicles” to solicit public opinions, requiring relevant ministries, companies, and industry associations to provide written comments before August 25. The management plan is planned to begin in 2017 and be implemented in 2018.

The issuance of the management measures indicates that the promotion of new energy vehicles in China has changed from relying primarily on the encouragement of financial subsidies to the enforcement of controls through market instruments and regulations. “This system has released the signal that the government supports new energy vehicles, and the proportion of new energy vehicles that are conducive to market sales of vehicles is in line with government expectations. Compared with financial subsidies, there is no policy dependency or unsustainability in the carbon credit integration policy. Question, said Cui Dongshu, Secretary-General of the National Passenger Vehicle Market Information Association.

Carbon allowances for new energy vehicles refer to the reduction in carbon dioxide emissions of new energy vehicles in comparison with fuel vehicles. The draft of the consultation stated that the policy was formulated based on two reasons. On the one hand, with the continuous growth in the production and sales volume of new energy vehicles, large-scale fiscal subsidies are difficult to sustain. On the one hand, the problem of structural overcapacity of fuel vehicles has become prominent. The enterprises that are included in the implementation of the management measures include enterprises that have produced and imported fuel vehicles that have reached a certain scale; those that have not reached a certain scale for the production and sales of fuel oil vehicles, but have reached a certain number of new energy vehicles, and have voluntarily incorporated management.

The new energy vehicles referred to in this management method mainly include pure electric vehicles, plug-in hybrid vehicles and fuel cell vehicles complying with national standards or industry standards such as GB/T19596, GB/T24548, and QC/T837.

In the Opinions, the National Development and Reform Commission set the annual production and sales ratio of new energy vehicles and fuel vehicles for “fuel vehicle scale enterprises”, and used this to calculate the amount of new energy vehicle carbon allowances that companies should pay.

The Opinions stipulate that domestic automobile manufacturers and import vehicle general agents can generate carbon allowances for new energy vehicles through the production and import of new energy vehicles. These carbon allowances can be traded in the carbon market. If the number of new energy vehicles produced and sold by some auto companies is insufficient, carbon allowances can be purchased from enterprises with excess carbon allowances through the carbon emissions trading market.

Prior to this, China has adopted incentives to encourage auto companies to produce new energy vehicles through fiscal subsidies. At the same time, it has continuously increased the limits of fuel consumption for passenger cars and forced them to reduce emissions. According to the requirements of the fourth-phase standard for fuel consumption of passenger cars in China, the average fuel consumption of domestic passenger cars will be reduced to 5.0 kilometers per 100 kilometers by 2020. From 2016 to 2020, the annual limits are 6.7 liters, 6.4 liters, 6 litres, 5.5 litres and 5 litres per 100 kilometers respectively. If car companies do not produce new energy vehicles, this goal can hardly be reached.

The introduction of the management measures will be combined with the existing fuel consumption management policies for fuel vehicles to manage the carbon emissions from automobiles and force companies to expand the production of new energy vehicles. It is reported that this management approach draws on the ZEV policy in California.

"The carbon quota system allows traditional car companies that are unwilling to produce new energy vehicles to pay higher penalties or purchase quota costs, so as to use market forces to inspire and force companies to invest more resources in product research and development and technological innovation. At the same time, we ensured the upgrading and upgrading of traditional car companies and stabilized the production and sales ratio of new energy vehicles so that government subsidies can be withdrawn smoothly and market adjustments can be used to stimulate the development of new energy vehicles,” said Cui Dongshu.

However, whether the cancellation of the subsidy policy will affect the enthusiasm of consumers to purchase new energy vehicles? In this regard, Cui Dongshu acknowledged that the big can not be worried, because the carbon quota mandatory policies will take the initiative to take risks, the introduction of relevant stimulus policies to drive sales, such as self-financing subsidies to consumers.