Shenzhen has allocated CO2 permits for 2015 to ETS participants and trading in the new contract will commence on July 1, the China Emissions Exchange in Shenzhen announced.
China’s smallest pilot carbon market, covering around 30 million tonnes of CO2 per year, is the only one to trade 2013 and 2014 vintage permits separately, and from next week 2015 allowances will be added to the mix, according to the local carbon exchange.
After the recent price drop in Beijing, which touched a new record low of 38.83 yuan ($6.25) on Thursday, Shenzhen sports the highest carbon price in China with permits trading in the mid-40s.
However, market dynamics are primarily fuelled by a small group of traders betting on the spread between the 2013 and 2014 contracts.
The 635 scheme participants are gearing up to hand over permits to the government by June 30 to cover their 2014 emissions, although according to the exchange, 556 companies have already done so.
The exchange said the municipal government has issued 2015 permits, which should arrive in all accounts ahead of July 1.
RECORD LOWS IN CHONGQING, GUANGDONG
Meanwhile, Friday saw prices in two other pilot markets – Chongqing and Guangdong – plunge to all-time lows.
Both had announced June 23 was the compliance deadline for 2014, although only Guangdong has released results, saying one company failed to meet the deadline.
Chongqing, whose market has been largely untraded since it launched last year, has not made any statements about the deadline. However, Friday saw 21,000 permits trade, around a quarter of its total volume this year, suggesting some local emitters are still scrambling to get the allowances they need for compliance.
But the price has crumbled, falling 36% over two days to 14.65 yuan.
In Guangdong, meanwhile, permits closed Friday at 14 yuan, the lowest level since the market began. Traders said the drop was a result of the passed true-up date, meaning there is a full year until the next time compliance comes around.
By Stian Reklev – stian@carbon-pulse.com
