Guangdong on Monday sold all 300,000 carbon allowances on offer at the second auction of the 2015 emissions year at 15 yuan ($2.31) each, the provincial carbon exchange said, slightly below prices in the secondary market.
The second of four planned auctions for 2015 had a cover ratio of 1.56 with the highest bid received at 18.20 yuan. The minimum price for the auction was 12.80 yuan, set as 80% of secondary market prices in the three months running up to the auction.
Nine companies, most of them electricity generators according to sources, bid in the auction, with seven of them successful.
“Among carbon stakeholders, the low carbon price is not necessarily a bad thing. Aggregators for instance have access to stocked up carbon assets at a lower price. Of course, this perspective is based on the bullish perspective of the carbon and carbon-related financial sectors in the years to come in China,” said Chai Hongliang, a carbon analyst with Thomson Reuters Point Carbon.
Meanwhile, the spot GDEAs closed untraded at 15.10 yuan in the secondary market Monday.
Liquidity in the secondary market remains limited, with a mere 2,700 allowances trading so far this month, mostly due to an overall surplus of permits and the fact that most of the ETS participants prefer to stay on the sidelines until they have verified their complete 2015 emissions, expected in February or March.
By Stian Reklev – firstname.lastname@example.org