China on Friday launched the world’s largest emissions trading market to reduce the polluting emissions of the Asian giant, the world’s largest emitter of greenhouse gases, informs AFP.

Emissions trading began locally at 9:30 a.m. (1:30 GMT) on a Shanghai stock exchange platform, New China news agency reported.

This market allows provincial authorities for the first time to impose quotas for power plants and allow companies to buy pollution rights from other companies with a lower carbon footprint. Specifically, the authorities will issue a certificate for each tonne of carbon dioxide that a company is authorized to emit. In case of non-compliance, the latter must pay a fine. In order to ensure transparency, companies must make public their pollution data, which will then be verified by a third party, according to Agerpres.

For the time being, this emissions trading market only includes the electricity sector, in the context in which China’s power plants operate largely on coal, one of the most environmentally harmful fuels. However, given that more than 2,000 power plants, responsible for more than four billion tonnes of CO2 emissions, will be included in the first phase of transactions, this is the world’s largest market for emissions trading.

However, some analysts are concerned that the price of pollution certificates is very low for the Chinese system, about 48 yuan ($7.42) per tonne of CO2, compared to about $36 in the European Union and $17 in California, last year. Another controversial point is that pollution certificates are distributed free of charge instead of being put up for auction. The result is that companies are less encouraged to reduce their emissions quickly.