Week at a glance (August 28 – September 1, 2023)
- Activity in China’s national Carbon Emissions Allowance (CEA) market jumped to a 2023 high, closing the week with 6.46 million tons of total volume. Both open market transactions and block trades reached their 2023 highs as well. The market has been active since the last week of July when the 2021 and 2022 allowances were determined and distributed to covered entities. Starting on Monday, August 28, allowances have been traded separately for the three different vintages of 2019-2020, 2021, and 2022, all of which are eligible for use in the current 2021-22 compliance cycle.
- Open market transaction prices, after setting four weeks of consecutive all-time highs in a row, retreated markedly. The weekly closing price of open market transactions for the week was 68.43 ($9.53) yuan per ton, 6.3% lower than the previous week. The volume-weighted average price for all of the week’s trades was 62.96 yuan ($8.77) per ton.
- There was a clear preference for newer vintage allowances. In addition to volumes showing more trades for the newer vintages, weekly volume-weighted average prices for all trades of each vintage increased as the vintage got newer, going from 59.39 yuan per ton for the oldest 2019-20 vintage, to 62.87 yuan per ton for the 2021 vintage, and to 64.21 yuan per ton for the 2022 vintage. Activity across the nine regional China Certified Emission Reductions (CCER) markets increased along with the surge of national CEA market activity, rising to 108,972 tons of combined volume, just above the 2023 weekly median. Tianjin led the markets with half of their combined volume. Meaningful CCER price information was available from Beijing, Sichuan, and Shenzhen. Beijing was able to keep a small price premium for open market transactions over the CEA market while Sichuan and Shenzhen registered deep discounts.
- Activity across the nine regional China Certified Emission Reductions (CCER) markets increased along with the surge of national CEA market activity, rising to 108,972 tons of combined volume, just above the 2023 weekly median. Tianjin led the markets with half of their combined volume. Meaningful CCER price information was available from Beijing, Sichuan, and Shenzhen. Beijing was able to keep a small price premium for open market transactions over the CEA market while Sichuan and Shenzhen registered deep discounts.