China Carbon Market Weekly Update – 7 July 2023

Week at a glance (July 3 – July 7, 2023)

  • Activity in China’s national Carbon Emissions Allowance (CEA) market jumped to a 2023 high with a weekly total volume of over 1.5 million tons. Block trades were also at a 2023 high of just over 1 million tons for the week, while open market transactions were the second highest of the year at just shy of half a million tons. The closing price for open market transactions retreated from a 12-month high and ended the week at 58.17 yuan ($8.07) per ton. However, the volume-weighted average price for open market transactions rose to a ten-month high of 58.86 yuan per ton. The volume-weighted average price for all of the week’s trades was 51.02 yuan ($7.08) per ton, dragged down by the much lower prices of block trades.
  • Activity across the nine regional China Certified Emission Reductions (CCER) markets increased for the second consecutive week to a combined total weekly volume of 95,085 tons. Tianjin led the markets for the third week in a row, accounting for nearly 90% of their combined volume. Meaningful CCER price information was available from the Guangdong, Shenzhen, Sichuan, and Beijing markets. Prices varied widely among the four markets, with Guangdong registering an average low of 39.37 yuan ($5.46) per ton and Sichuan registering a high of 158.43 yuan ($21.99) per ton.
  • On July 7, the Ministry of Ecology and Environment (MEE) released a draft of the Administrative Rules on the Trading of Voluntary GHG Emission Reductions (trial) for a 30-day public comment period, moving a significant step closer toward the reopening of CCER project registration and the launch of a national CCER market. The draft rules broadly align the project and GHG emission reduction registration processes with those used by leading international registries. The State Administration for Market Regulation will become the administrative and supervision agency, along with the MEE, for the validation and verification bodies. Please refer to the main text of this issue for details.
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