China Carbon Weekly Market Update – Oct 4, 2021

Week at a glance

• Over the holiday-shortened 4-day trading week, China’s national carbon emissions allowance (CEA) market saw a trading volume surge to 9,157,992 tons but had a lower closing price than the previous week, down 4.85% to 42.21 yuan/ton ($6.55/ton). Block trades came back for the first time in 5 weeks with a volume of 8,983,359 tons. Most of the block trades (8,403,359 tons) took place on September 30, making it the most active day on record.
• About 90% of the entities covered by the national CEA market have opened their trading accounts. The completion of the national emissions verification process for the covered entities has been delayed until October. As the compliance deadline nears, most market observers predict a much more active market in the final quarter of the year.
• The total weekly volume of China certified emission reductions (CCER), led by the Tianjin market at 969,138 tons, decreased by 29.7% to 2,681,254 tons. The Sichuan market saw a near doubling of volume to 836,144 tons. Beijing, Fujian, and Hubei once again did not see any CCER trades.
• Shanghai announced its 8th consecutive year of 100% CEA submission compliance by the covered entities in its regional CEA trading scheme. The Shanghai Environment and Energy Exchange (SEEE) announced on a separate notice that the second regional CEA auction for the 2020 compliance year, planned for September 30, did not receive any bid. The SEEE cited the fact that all covered entities had secured required CEAs for the current compliance year prior to the auction as the reason for the lack of bids.