A SHENZHEN-BASED enterprise recently purchased 377 tons of carbon offsets through the bike-sharing firm Hello Inc. for environmental pollution caused by its operations via the Shenzhen carbon emission spot trading system.

This new form of punishment has aroused widespread curiosity, with the public eager to understand the system and its potential benefits for the environment.

According to Shenzhen Evening News, the enterprise came under scrutiny from Luohu’s ecology and environment authority in May due to excessive exhaust emissions from a rotary drilling rig at its construction site, which violated established standards.

The company faced both an administrative fine and an obligation to compensate for the ecological damage caused by the particles released from the drilling rig.

Later, the Shenzhen Municipal Ecology and Environment Bureau signed a damage compensation agreement with the enterprise, which stipulated that the compensation payer should deposit the funds into an account at the China Emission Exchange, where the money would be frozen until carbon inclusion products became available.

With the launch of carbon inclusion products in June, the obligor was required to purchase the necessary carbon offsets via the trading system. Among the sellers of these carbon inclusion projects was Hello Inc.’s Shenzhen office.

Ultimately, the enterprise paid over 24,000 yuan (US$3,290) to acquire 377 tons of carbon offsets from Hello Inc., effectively concluding an alternative remediation plan.

The transaction also marks the first instance of ecological environmental damage compensation in Guangdong Province, where the ecological remediation was completed through the purchase of carbon offsets, according to the News report.

Carbon inclusion is an incentive mechanism designed to reward environmentally responsible behavior by individuals, communities, and small and micro enterprises in their daily consumption.

Under this mechanism, emission reductions resulting from low-carbon practices of individuals and entities can offset their own carbon emissions, participate in carbon trading, or be converted into various other incentives.

“Shenzhen is also exploring models to encourage public participation in the carbon trading system. For example, in the future, citizens can earn points when using public transport, which can then be redeemed for benefits. Meanwhile, companies have the option to purchase carbon inclusion products to support carbon reduction efforts,” Wei Fulei from the China Development Institute said.

Over the years, Shenzhen has launched many carbon inclusion applications, with the user base now exceeding 6 million, according to data from the municipal ecology and environment bureau.

(Shen Minglai, Wang Jingli)