China Carbon Weekly Market Update – 18 July, 2022

Week at a glance (July 11 – July 15, 2022)

  • Activity in China’s national Carbon Emissions Allowance (CEA) market plummeted for the third week in a row to a weekly total volume of 30,024 tons. Open market transactions entirely accounted for the volume, as block trades were absent for the second consecutive week. Open market transaction prices gained ground after the previous week’s drop, halting a two-week price decline and closing the week at 58.24 yuan/ton ($8.62/ton), up 2.14%. In the absence of block trades, the average price for all of the week’s trades was the same as the open market transaction price at 57.34 yuan/ton ($8.49/ton).
  • Activity across the nine China Certified Emission Reductions (CCER) markets dropped sharply from the previous week, totaling only 47,447 tons for the week. Shanghai led the markets with nearly 80% of the total volume. Shenzhen and Sichuan were the only other markets that saw any activity. Meaningful CCER credit price information was available from the Sichuan and Shanghai markets. Sichuan’s weekly volume-weighted price was lower on a small total volume to 71.49 yuan/ton ($10.58/ton), though it was still at a 25% premium over the CEA’s. Shanghai’s CCER prices, on the other hand, were on average at a 21% discount for the week.
  • China’s State Council lists as a priority the enactment of the Interim Regulation for the Management of Carbon Emissions Trading for 2022 in its annual legislative plan. The Interim Regulation was also on the 2021 priority list but did not materialize then. If enacted, the Interim Regulation will provide the CEA market with a stronger legal foundation for future development, including greater penalties for non-compliance.
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