Carbon emission quota trading is a means of using market mechanisms to control and reduce greenhouse gas emissions, as well as an important way to implement China's carbon peak goals and carbon neutrality vision. When disputes arise during the carbon emission quota trading process, is the procurement of carbon emission quotas subject to the bidding and tendering law? How to determine the effectiveness of carbon emission quota trading contracts where the trading entity lacks qualifications? How to determine the loss of default in carbon emission quota trading? Recently, the first carbon emission quota trading case in Beijing, which was tried by the Chaoyang District People's Court, has come into effect. The Chaoyang District Court ruled in the first instance that the contractual relationship between the two parties was legal and valid, and that a Beijing based environmental protection company constituted a fundamental breach of contract. The court ordered the company to pay a carbon emission quota purchase price difference of over 2.89 million yuan and interest to a Sichuan based power generation company in accordance with the law. The judgment in this case clarifies the rules for the establishment and validity determination of carbon emission quota trading contracts, which is of positive significance for guiding civil subjects to fulfill their obligations in relevant transactions in accordance with the law and promoting the improvement of market liquidity. It also further reflects the green principle of civil law. On December 14, 2021, a power generation company in Sichuan Province issued a comparison announcement regarding the purchase of carbon emission quotas. On the same day, a Beijing environmental protection company sent it a "quotation sheet" stating the trading quota quantity, unit price, delivery time, and breach of contract liability. The company provided 460000 tons of carbon emission quotas, with a tax inclusive unit price of 44.7 yuan/ton, and attached a "certificate of holding national carbon emission trading market quotas" after the "quotation sheet". At the same time, it promised that "if our company cannot fulfill the above commitment, your company can purchase the same amount of national carbon emission trading market quotas as the contract trading subject in a commercially reasonable manner in the market. If there is a price difference, our company should make up for it". The next day, a power generation company in Sichuan sent a "Bid Winning Notice" to an environmental protection company in Beijing, confirming the company as the winning bidder. A certain environmental protection company in Beijing applied to postpone the signing of the contract and delivery of the subject matter to December 28 of the same year or earlier due to market reasons, while a power generation company in Sichuan only agreed to postpone it to December 22 of the same year or earlier. On December 22, 2021, an environmental protection company in Beijing sent a letter to a power generation company in Sichuan, stating that due to practical difficulties in market transactions, they proposed to supplement the agreement or terminate the winning bid contract. The transaction cannot continue. A Sichuan power generation company stated that after learning that a Beijing environmental protection company refused to fulfill its obligations, it immediately contacted a petrochemical company to ensure its normal production and operation. Due to time constraints, the Sichuan power generation company had little room for further negotiation and ultimately purchased corresponding quotas at a unit price of 51 yuan/ton including tax. The transaction was completed on December 23, 2021. A power generation company in Sichuan believes that a Beijing based environmental protection company has breached its contract and should pay the carbon emission quota purchase price difference of 2891844.9 yuan and interest as promised. The interest will be based on the price difference and will be calculated from December 24, 2021 until the price difference is paid in full according to the loan market quotation interest rate published by the National Interbank Funding Center. On August 14, 2023, the Chaoyang District People's Court of Beijing publicly heard the first instance of a contract dispute between a power generation company in Sichuan and an environmental protection company in Beijing. A Beijing based environmental protection company argues that it does not have the qualifications required by a power generation company in Sichuan for a limited carbon emission trading entity. Its company only provides industry consulting services for carbon emission trading and is actually an intermediary service company. The notice issued by a power generation company in Sichuan, although named as a selection announcement, is actually a bidding for the procurement of carbon emission quotas. However, this bidding does not comply with the relevant provisions of the Tendering and Bidding Law and its implementation regulations, and the bidding is invalid due to procedural violations. During the trial, both parties submitted relevant evidence and engaged in thorough debate. The performance method refers to the true intention expressed by both parties regarding whether the contractual relationship between the two parties is established. After trial, the court found that a power generation company in Sichuan issued a selection announcement, which stated the name, quantity, delivery time, quotation method, etc. of the procurement subject matter, and belonged to an invitation to make an offer. A certain environmental protection company in Beijing participated in the selection and sent a "quotation table" to a certain power generation company in Sichuan, clarifying the trading quota quantity, unit price, delivery time, and breach of contract liability, and attaching a "certificate of holding national carbon emission trading market quotas". The "quotation table" not only bears the official seal of a certain environmental protection company in Beijing, but also has specific content, including the main elements of the contract, which should be recognized as an offer made by a certain environmental protection company in Beijing to a certain power generation company in Sichuan. On December 15, 2021, a power generation company in Sichuan made a commitment by sending a "Notice of Award". The contractual relationship between the two parties was established on December 15, 2021, upon the arrival of the "Notice of Award". Regarding the validity of the contractual relationship between the two parties, the court held after trial that the subject matter of the procurement announced by a power generation company in Sichuan is carbon emission quotas, which does not belong to the procurement of important equipment, materials, etc. related to engineering construction projects and is not a project that must be tendered according to law, and is not subject to the constraints of the Tendering and Bidding Law. A power generation company in Sichuan purchases carbon emission quotas through comparative selection, which does not violate mandatory provisions of laws and regulations. The competent department of ecological environment shall determine the list of key emission units in accordance with regulations. Key emission units are one of the main entities in carbon emission trading, and the trading products in the carbon emission trading market include carbon emission quotas. In this case, both the plaintiff and defendant confirmed that a certain environmental protection company in Beijing is not a key emission unit determined by the ecological environment regulatory department and does not enjoy carbon emission quotas. However, the "Quotation Sheet" sent by a Beijing based environmental protection company to a Sichuan based power generation company is accompanied by a "Certificate of Holding National Carbon Emission Trading Market Quotas", which displays information such as the name of the target and registered available quantity; On December 21, 2021, the WeChat chat records of the staff of both parties showed that "200000 tons of 50 yuan were settled and then continued", and requested a power generation company in Sichuan to provide "invoicing information" and "quota trading account". After the Sichuan power generation company provided the above information as requested by a Beijing environmental protection company, the Beijing environmental protection company informed that another 230000 tons had been confirmed that evening, and the remaining quantity could be confirmed the next morning. Based on the above evidence and WeChat records, it can be seen that although a certain environmental protection company in Beijing does not have the qualification of a national carbon emission trading entity, it has the possibility to obtain disposable carbon emission quotas and complete the delivery of carbon emission quotas to a power generation company in Sichuan. The above performance method is the true expression of intention of the plaintiff and defendant, and does not violate mandatory provisions of laws and regulations. According to Article 22 of the "Measures for the Administration of Carbon Emission Trading (Trial)", the defaulting company shall be liable for the difference in price and interest. Carbon emission trading shall be conducted through the national carbon emission trading system, and may be conducted through agreement transfer, one-way bidding, or other methods that comply with regulations. From the inquiry of a Beijing based environmental protection company about the "quota trading account" of a Sichuan based power generation company, it can be seen that if both parties fulfill their obligations normally, the Beijing based environmental protection company is aware of and prepared to deliver its disposable carbon emission quotas to the Sichuan based power generation company through the national carbon emission trading system. The Sichuan based power generation company also has a system account to accept trading quotas, and the trading method for obtaining the traded carbon emission quotas does not violate the above regulations. Based on the evidence submitted by both parties, it can be determined that the act of a Beijing environmental protection company submitting a "quotation form" and other related documents should be considered a normal transaction between the two parties, and is a genuine expression of their intentions. Although a certain environmental protection company in Beijing does not have the qualification of a national carbon emission trading entity, it has the possibility to obtain disposable carbon emission quotas and complete the delivery of carbon emission quotas to a power generation company in Sichuan. The above performance method is the true intention of the plaintiff and defendant, and does not violate mandatory provisions of laws and regulations. In summary, the contractual relationship between a Beijing based environmental protection company and a Sichuan based power generation company for the delivery of carbon emission quotas is a true expression of the intentions of both parties, and does not violate mandatory provisions of laws and administrative regulations, nor does it violate public order and good customs. It should be considered legal and valid. Regarding how to calculate the amount and calculation method of the loss request, the court believes that a certain environmental protection company in Beijing has promised in multiple letters and WeChat chat records with a power generation company in Sichuan that "if our company is unable to fulfill the above commitments, your company can purchase the national carbon emission trading market quota equivalent to the contract transaction subject in a commercially reasonable manner in the market, and if there is a price difference, our company should make up for it". Therefore, there is factual and contractual basis for a power generation company in Sichuan to request the defendant to pay the price difference for the purchase of carbon emission quotas. Civil subjects engaged in civil activities shall follow the principle of good faith, uphold honesty, and abide by commitments. Due to the fundamental breach of contract by a Beijing based environmental protection company, a Sichuan based power generation company was relatively passive in the subsequent procurement of carbon emission quotas. The Sichuan based power generation company's statements regarding the subsequent procurement of quotas and prices were not clearly unreasonable, and the Beijing based environmental protection company did not provide evidence to prove that the procurement process violated commercial rationality and the procurement price was significantly high. Therefore, the court supports the Sichuan based power generation company's request for the defendant to pay a carbon emission quota purchase price difference of 2891844.9 yuan. The interest on the price difference is the actual loss incurred due to the breach of contract by a certain environmental protection company in Beijing. A power generation company in Sichuan requires the payment of interest, which complies with legal regulations and has reasonable and appropriate calculation standards. The interest on the price difference should be calculated from the day after the grace period granted by the Sichuan power generation company to the Beijing environmental protection company for payment of the price difference until the actual payment date of the price difference. Realizing carbon peak and carbon neutrality is a major strategic decision made by the country to participate in and lead global environmental governance, an inevitable choice to address prominent resource and environmental constraints, and a solemn commitment to building a community with a shared future for mankind. In order to achieve carbon peak and carbon neutrality, the country has formulated medium and long-term plans and clarified phased work goals. Carbon emission quota trading is a means of using market mechanisms to control and reduce greenhouse gas emissions, as well as an important way to implement China's carbon peak goals and carbon neutrality vision. With the continuous development of the national carbon market and the promotion of green and low-carbon transformation in the power industry, carbon emission quota trading has also entered a new stage of marketization. According to the Civil Code, civil subjects engaged in civil activities should be conducive to conserving resources and protecting the ecological environment. The parties shall avoid wasting resources, polluting the environment, and damaging the ecology during the performance of the contract. Civil entities should comply with relevant national laws and industrial policies in carbon emission quota trading, fulfill their obligations in accordance with the law and the contract, which not only reflects the spirit of the contract but also embodies the practice of socialist core values. If civil entities only focus on commercial interests and avoid social responsibility, the carbon emission quota trading market is prone to periodic supply-demand imbalances, significant price fluctuations, and other problems, which are not conducive to the steady progress of energy conservation and carbon reduction work. Civil subjects should fully, accurately, and comprehensively implement the new development concept in civil activities, enhance their awareness of environmental protection, fulfill their obligations with honesty and trustworthiness, promote the formation of a green production and lifestyle, and help achieve the goals of carbon peak and carbon neutrality. In summary, the Chaoyang District Court ruled in accordance with the law that a Beijing based environmental protection company shall pay a carbon emission quota purchase price difference of 2891844.9 yuan and interest to a Sichuan based power generation company. The interest shall be calculated from February 1, 2022 to the date of full payment of the price difference, based on the loan market quotation interest rate published by the National Interbank Funding Center; Reject other litigation requests from a power generation company in Sichuan. After the first instance verdict, the defendant, a power generation company in Sichuan, appealed. The second instance court considers that the first instance judgment has clearly established the facts and correctly applied the law, and rejects the appeal