Guangdong will hold its second CO2 allowance auction for the 2015 emissions year on Dec. 21, offering 300,000 permits at a minimum price of 12.80 yuan, the China Emissions Exchange in Guangzhou announced Thursday.

In the previous auction in September, Guangdong sold all 300,000 allowances on offer at 16.10 yuan each.

The southern province, hosting the biggest of China’s seven pilot markets in terms of coverage, will sell 2 million allowances over four auctions before the June 2016 surrender date.

Guangdong is the only Chinese pilot market that holds regular auctions, but has lowered the volume and changed pricing rules this year as its 2013 and 2014 auctions suffered from the minimum price being set too high.

The minimum price is now 80% of the average secondary market price in the three months prior to the auction announcement date.

The secondary price in Guangdong is currently hovering around 15 yuan, although liquidity has more or less vaporised after trading volumes spiked in September and October, which sources attributed to foreign traders entering the market.

By Stian Reklev – stian@carbon-pulse.com

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