China Carbon Market Weekly Update – 12 June 2023

Week at a glance (June 5 – June 9, 2023)

  • Activity on China’s national Carbon Emissions Allowance (CEA) market declined to below the 2023 median level held over the previous two weeks, closing with a weekly total volume of 104,560 tons. On Tuesday, the State Council published its 2023 plan for regulation development. The much-anticipated Interim Regulation for the Management of Carbon Emissions Trading was downgraded to be among several regulations that will be “prepared for development”, below the newly used list of “to be reviewed” regulations for the Council’s immediate consideration. With the generous allowance allocation plan announced in March and the lowered priority for the Interim Regulation’s development, it appears that regulators have taken a step back on the further development of the CEA market or the emissions trading scheme that the market represents.  The closing price for open market transactions remained unchanged from the previous week at 58.50 yuan ($8.23) per ton, remaining at a 2023 high. The volume-weighted average price for all of the week’s trades, dragged down by the low average price of block trades, was 43.64 yuan ($6.14) per ton, setting another low since early December 2021.
  • Activity across the nine regional China Certified Emission Reductions (CCER) markets decreased to a combined total weekly volume of 48,699 tons, the second lowest of 2023. Tianjin led the markets, with Sichuan also seeing a meaningful volume. The volume-weighted average price of all trade types on the Sichuan market reached another CEA-era high at 175.30 yuan ($24.65) per ton, surpassing the previous record set only two weeks before.
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