China Carbon Market Weekly Update – Jan 31, 2022

Week at a glance

  • The total weekly trading on China’s national Carbon Emissions Allowance (CEA) market continued to dry up from an already very low volume during the previous week to only 1,459 tons, setting the second-lowest volume on record behind the week of August 30, 2021. Block trades were absent for the second week in a row. On the other hand, prices for open market transactions remained robust, closing the week at an all-time high of 61.38 yuan/ton ($9.65/ton), up 6.82% from the previous week. The volume-weighted average open market price for the week also set an all-time high at 60.41 yuan/ton ($9.50/ton), up 7.78% from the previous week. However, the extremely low volumes make these all-time highs less meaningful.
  • Activities across the nine China certified emission reductions (CCER) markets continued to rebound this week, reaching 387,293 tons. Tianjin again led with 68.9% of the total volume, followed by Sichuan at 28.5%, with Shanghai rounding out the remaining volume.
  • The State Council, China’s top administrative authority, issued a Comprehensive Work Plan for Energy Conservation and Emissions Reduction for the 14th Five-Year Plan on January 24. The Comprehensive Plan establishes quantitative and qualitative goals by 2025 for energy efficiency and pollution reduction, including carbon emissions. Regarding energy efficiency and carbon emissions, the Comprehensive Plan further defines the GDP energy intensity goal to be a 13.5% reduction per unit value added for industrial enterprises above the designated size of 20 million yuan ($3.14 million) annual revenue. The Comprehensive Plan also specifies that 30% of the production capacity of key industries such as steel, electrolytic aluminum, and cement, etc., as well as data centers will achieve their respective target energy efficiency level by 2025.
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