China Carbon Market Weekly Update – 11 September 2023

Week at a glance (September 4 – September 8, 2023)

  • Activity in China’s national Carbon Emissions Allowance (CEA) market continued to rise to a new 2023 high for the second consecutive week, closing the week with 14.6 million tons of total volume. Among this volume, 1.4 million came from the 2019-2020 vintage, 10.7 million from the 2021 vintage, and 2.5 million from the 2022 vintage. The 2021 vintage saw a near five-fold volume increase while the 2022 vintage decreased by 27%.
  • Open market transaction prices, after retreating during the previous week from a series of all- time highs, rebounded this week and once again stayed near those all-time highs. The closing price of open market transactions for the week was 72.22 yuan ($10.01) per ton, 5.5% higher than the previous week. The volume-weighted average price for all of the week’s trades was 59.15 yuan ($8.20) per ton.
  • As market participants continued to adjust their allowance holdings according to their vintage, last week’s price action told an interesting story—the oldest allowances, the 2019-20 vintage, commanded the highest prices, ending the week with a closing price of 72.94 yuan per ton for open market transactions, and a volume-weighted average price of 69.44 yuan per ton for all trades. These prices were 1.7% and 21.6% higher than their counterparts for the 2021 vintage, which had the highest volumes but lowest prices among the three vintages.
  • Activity across the nine regional China Certified Emission Reductions (CCER) markets increased along with the continued increase of national CEA market activity, rising to 134,832 tons of combined volume and above the 2023 weekly average. Sichuan led the markets with more than half of their combined volume. Meaningful CCER price information was available from Beijing, Sichuan, and Shanghai. These prices were all higher than the previous week. Compared to CEA prices, CCERs in these markets were traded closest to their counterparts of the 2019-20 vintage CEAs.
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