China Carbon Weekly Market Update – Nov 22, 2021

Week at a glance

  • The total trading volume on China’s national Carbon Emissions Allowance (CEA) market rose by a robust 89.1% to 5,182,600 tons, making it the second-highest weekly volume on record. Open market transaction prices closed slightly higher than the previous week at 43.05 yuan/ton ($6.74/ton). The total volume-weighted average for the week was down by 13.5% to 36.52 yuan/ton ($5.72/ton).
  • The total weekly volume of the China certified emission reductions (CCER) markets increased by 156.6% from the previous week to 12,656,314 tons, hitting another high for 2021 with the help of a surge in trading volume on the Shanghai market. The rapid volume increase on both the CCER and national CEA markets took place as the interim milestone for allowance submission for the first compliance cycle of the China nascent national CEA market is less than a month away on December 15.
  • China set energy efficiency benchmarks for key sectors in high-energy-consumption industries on November 15. These efficiency rules target five industrial sectors, which are further divided into 12 sub-sectors and 18 categories. Two benchmarks have been established for each category—the less stringent “baseline” level and the more stringent “target” level. Implementation of these rules will begin on January 1, 2022. Three years will be allowed for the covered factories and plants to either upgrade to the baselines or be phased out.
  • On November 17, The State Council Established a 200 billion Yuan ($31.3 billion) reloan program to help support clean coal development. This program is on top of the low- interest lending facility for carbon emission reduction projects announced by the PBOC the week before. The reloan program will lend to national banks the equivalent of 100% of the loan principals that the banks provide to eligible projects at rates comparable to the market loan prime rates.
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