The Tianjin Climate Exchange is preparing to launch China's first domestic carbon market.

The Financial Times said today that the exchange had started recruiting members for a cap-and-trade scheme which it expects to begin in six to 12 months, according to Jeff Huang, assistant chairman of Tianjin Climate Exchange and vice-president of Chicago Climate Exchange.

The scheme is designed to allow companies with high greenhouse gas emissions to buy an emission allowance from companies with fewer emissions, in a bid to reduce the overall impact to the environment.

TCX, based in Tianjin’s Binhai New Area (BNA) and unveiled in the fall of 2008, is a joint venture between the China National Petroleum Corporation Asset Management Company, the municipal government of Tianjin and Chicago Climate Exchange (CCX).

According to the BNA Coordinated Reform Pilot Scheme approved by the State Council in the spring of 2008, TCX aims to be a platform for environmental finance and establishing market-based mechanisms to environmental management and natural resource protection.

Currently it has 36 members including the Sino-Singapore Eco-city, Tianjin Economic and Development Area (Teda), and Industrial and Commercial Bank of China, the country’s largest lender.

On December 23, China’s first online trade of sulfur dioxide emissions was completed via the TCX.

By Guo Changdong