GENEVA (16 July) –– IETA welcomes the successful launch of trading operations in China’s nation-wide emissions trading system, with the news on Friday that the first deal was closed at the price of 52.78 RMB/t (US$8.24/t) for a volume of 160,000 tonnes. The deal was worth some 7.9 million RMB (US$1.23 million).
Chinese Emission Allowance prices rose by the maximum daily limit of 10% before ending their first day of trading at 51.23 RMB, with 4.1 million allowances changing hands, according to media reports.
“The start of trading in China’s emissions market is a major step in the global drive for climate ambition,” said Dirk Forrister, CEO of IETA.
“It is now the largest carbon market in the world – and it aspires to rise to the challenge of delivering China’s ambition for the covered sectors over time. It will need to grow wider to reach other sectors to enable China to meet its share of global net zero emissions, so we hope that this humble beginning is a sign of great things to come.”
China’s ETS covers only the power sector in its first phase, and sets carbon intensity targets for more than 2,000 power plants across the country. Plants are given free allowances matching their benchmark, and any installations that cannot meet that benchmark must buy allowances to cover any shortfall.
China relies on coal-fired power for more than 60% of its electricity, but aims to reach peak greenhouse gas emissions before 2030 and net zero emissions by 2060.
With an estimated coverage of emissions totalling over 4,000 MtCO2 in 2021, China is now operating the largest Emissions Trading System in the world.