China’s Bulk Carbon Allowances Being Offered Below Launch Prices
(Bloomberg) -- China’s national carbon market traders are offering prices below the level at which the market launched, as emitters look to dump surplus allowances before they are canceled later this year.
Bulk contracts closed at 45 yuan/ton on Thursday via bilateral deals, well below the the launch price four years ago of 51.23 yuan/ton, according to data from the Shanghai Environment and Energy Exchange.
Beijing sees the mechanism as a key decarbonization tool as it targets a 7–10% cut in greenhouse gas emissions over the next decade. The system is being expanded to cover 8 billion tons/year of emissions across four industries, up from 4.5 billion tons/year, but continues to face oversupply as new sectors are exempt from payments in their first year.
The Ministry of Ecology and Environment plans to cancel some idle allowances this year to prevent them from rolling over, which has prompted holders to sell and exacerbate the surplus.
Meanwhile, China’s output from fossil fuel power plants made a rare decline this year amid weaker industrial activity and trade tensions with the US, which in turn reduced demand for carbon allowances.
China’s spot carbon price fell to the lowest level in over two years on Monday, but have traced back some losses since then. That product is trading above its launch price from 2021.
Policy
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- The Vietnamese Government Oct. 19 announced measures expanding the list of tax-exempt income, including for first-time transfers of carbon credits and green bonds
- The number of emitters captured by Australia’s Safeguard Mechanism should be expanded, said Chevron Australia Managing Director Balaji Krishnamurthy at the Australian Financial Review Energy and Climate Summit in Sydney on Wednesday
- This year’s United Nations climate negotiations are likely to deliver modest progress on pledges to rein in emissions, says BloombergNEF
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- For more news and research:
- BNEF Carbon Market Analysis
- Carbon Markets
- BI ESG Dashboard
Terminal Tools
- Carbon market monitor: CO2E
- Carbon allowances & offsets prices
- Government Climate Scores
Key Prices
- The following table shows a snapshot of various carbon emission prices around the world. Some contracts are integral to national cap-and-trade schemes and some are voluntary. More pricing data is available here.
NOTE: Units are metric tons except for RGGI in short tons. Prices from some sources can be delayed. Some prices are quoted in units of Environmental Offset, and these are equivalent to one ton of CO2 avoided.
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