China Carbon Weekly Market Update – 28 November, 2022

Weeks at a glance (November 21-November 25, 2022)

  • Activity in China’s national Carbon Emissions Allowance (CEA) market jumped again off of the previous week’s 10-month high, totaling nearly 3.5 million tons for the week. Open market transactions and block trades were both active, with volumes above or near the 90th percentile of both their historic records. Open market transaction prices remained stable throughout the week, closing at 57.80 yuan/ton ($8.10/ton), slightly higher than the previous week. Open market transaction prices have held up relatively well amid surging volumes, suggesting that the volume-weighted average price of 57.81 yuan/ton ($8.10/ton) since the start of 2022 has been generally accepted as the current benchmark price for the CEAs.  The volume-weighted average price for all of the week’s trades was 55.62 yuan/ton ($7.80/ton), 3.3% lower than the previous week, having been pulled down by the lower prices of block trades.
  • Activity across the nine China Certified Emission Reductions (CCER) markets plummeted from the previous week, ending the week with a weekly volume of only 30,139 tons.  Volume dried up in all but the Shanghai and Sichuan markets, with the Shanghai market accounting for nearly all of the market’s combined total volume. With the CEA market given more demand clarity by the draft allowance allocation plan, market participants were likely turning away from the limited CCER supplies and instead focusing on obtaining allowances on the CEA market. Meaningful CCER credit price information was available from the Shanghai and Sichuan markets. Shanghai’s all-offline volume averaged 67.52 yuan/ton ($9.46/ton).
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