Week at a Glance

China’s national Carbon Emissions Allowance (CEA) market had a very quiet week with a weekly total volume of 2,151 tons. Block trades were absent for the fourth week in a row. Open market transaction prices closed the week at 56.88 yuan/ton ($8.99/ton), a slight increase of 1.30% from the previous week, while the volume-weighted average open market price for the week was down by 3.18% to 56.64 yuan/ton. 

Activities across the nine China certified emission reductions (CCER) markets further decreased 6.6% from the previous week to a low total volume of 55,601 tons. Tianjin again led the markets. The Sichuan market saw a weekly average CCER price of 64.38 yuan/ton, topping all CEA price records, daily or weekly, set on the national CEA market. 

On February 15, led by the National Development and Reform Commission, the Ministry of Industry and Information, the Ministry of Ecology and Environment, and the National Energy Administration jointly published the Implementation Guidelines for Energy Conservation and Carbon Reduction for Key Sectors of High-Energy-Consumption Industries. The Guideline covers 17 key sectors. It sets the specific numerical target, for each of the 17 sectors, of the proportion of the total national production capacity that should achieve sector-specific “target energy efficiency level” by 2025. The 17 key industrial sectors include many from the building and construction, non-ferrous metals, and steel production industries. These three high-energy-consumption industries are widely expected to be covered next by the national CEA trading system.

By Sam Boro, Malica Moore, Logan Payne

Weekly Update: Feb 21, 2022

posted in INDUSTRY UPDATES

Week at a Glance

China’s national Carbon Emissions Allowance (CEA) market resumed trading after the week-long Chinese New Year holiday. Its total weekly volume recovered from preholiday lows but still sat at a very low 72,438 tons. Block trades were absent for the third week in a row. Open market transaction prices closed the week at 56.15 yuan/ton ($8.84/ton), decreasing 8.52% from the previous trading week. 

Activities across the nine China certified emission reductions (CCER) markets retreated 84.6% from a relatively active week before the holiday break to a low total volume of 59,560 tons. Only Tianjin and Sichuan had trades, with the former accounting for the majority of the total volume. 

On February 8, led by the People’s Bank of China, the State Administration for Market Regulation, the Banking and Insurance Regulatory Commission, and the Securities Regulatory Commission jointly published the Development Plan for Financial Standardization for the 14th Five-Year Plan (the “Development Plan”) aiming to build “a standards system befitting a modern financial system” by 2025. On financial innovation, the Development Plan names, among others, the following major work areas: developing carbon emissions standards for financial institutions, establishing a standards system for ESG evaluation, establishing an accounting standard for quantifiable carbon reductions from loans, and promoting the synchronization of domestic and international green finance standards.

By Sam Boro, Malica Moore, Logan Payne

Weekly Update: Feb 14, 2022

posted in INDUSTRY UPDATES

Week at a Glance

The total weekly trading on China’s national Carbon Emissions Allowance (CEA) market continued to dry up from an already very low volume during the previous week to only 1,459 tons, setting the second-lowest volume on record behind the week of August 30, 2021. Block trades were absent for the second week in a row. On the other hand, prices for open market transactions remained robust, closing the week at an all-time high of 61.38 yuan/ton ($9.65/ton), up 6.82% from the previous week. The volume-weighted average open market price for the week also set an all-time high at 60.41 yuan/ton ($9.50/ton), up 7.78% from the previous week. However, the extremely low volumes make these all-time highs less meaningful.

Activities across the nine China certified emission reductions (CCER) markets continued to rebound this week, reaching 387,293 tons. Tianjin again led with 68.9% of the total volume, followed by Sichuan at 28.5%, with Shanghai rounding out the remaining volume.

The State Council, China’s top administrative authority, issued a Comprehensive Work Plan for Energy Conservation and Emissions Reduction for the 14th Five-Year Plan on January 24. The Comprehensive Plan establishes quantitative and qualitative goals by 2025 for energy efficiency and pollution reduction, including carbon emissions. Regarding energy efficiency and carbon emissions, the Comprehensive Plan further defines the GDP energy intensity goal to be a 13.5% reduction per unit value added for industrial enterprises above the designated size of 20 million yuan ($3.14 million) annual revenue. The Comprehensive Plan also specifies that 30% of the production capacity of key industries such as steel, electrolytic aluminum, and cement, etc., as well as data centers will achieve their respective target energy efficiency level by 2025. 

By Sam Boro, Malica Moore, Logan Payne

Weekly Update: Jan 31, 2022

posted in INDUSTRY UPDATES