China Carbon Monthly Market Update – September 2022

Carbon market update (September 2022)

Trading in China’s national carbon emissions allowance (CEA) market ended September with a monthly total volume of 10,810 tons, a new record low for the second time in two months. Block trades were absent the entire month for the first time since the launch of the market in July 2021.

The market has seen trading slowed to a trickle after a surge of activity around the allowance submission deadline on the last day of 2021 for the trading scheme’s first compliance cycle. Regulatory and economic uncertainties held back market participants–power generators covered by the allowance trading scheme–from engaging in the market.  A September 28 update from the Ministry of Ecology and Environment on the status of the much-anticipated Interim Regulation for the Management of Carbon Emissions Trading did not give a clear signal on the timing of the regulation’s issuance, which has kept the market in a wait-and-see mode.

Market prices, on the other hand, continued to hold up well amid record low volumes, with open market transactions closing September at 57.50 yuan ($8.08) per ton, down less than 0.9% from August. The September volume-weighted average price, on the other hand, increased by 4.6% from August to 58.70 ($8.25) yuan per ton.

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