China Carbon Market Weekly Update – Aug 16, 2021

Week at a glance

For the trading week of August 9 through August 13, the China National Carbon Emissions Allowance (CEA) Market closed at RMB 54.00/ton with a weekly total volume of 379,868 tons, which included a block trade1 of 279,856 tons. The week also saw a continued trend of relatively high prices and low volume after the first day of trading at the launch of the national CEA market on July 16. Several factors may explain this low volume-limited market participants, ample emissions allowances allocated free, long way from allowance fulfillment, limited availability of trade information, or hesitance by newly covered entities.

On the policy and regulation front, China continues its push to implement a national market- based carbon reduction strategy after the launch of the national CEA market. Both the Politburo and the People’s Bank of China (PBOC) highlighted carbon reduction as a key work area in their respective work planning meeting for the second half of 2021. The Politburo called for an action plan to be drafted soon to achieve the goal of reaching peak carbon emission by 2030. The PBOC stated that it would work on developing a “green financial system” through financing high-efficiency carbon reductions, promoting carbon disclosure, and managing climate risk, among other areas.

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