China: Interest down at third Guangdong auction

28 February 2014 15:58 Source:ICIS

Demand for carbon permits slumped further during the third auction held by China’s Guangdong emission trading system (ETS).

Compliance companies and new entrants bid for 1.13m permits, or 44% less than the 2m allowances up for auction.

The number of participants also reflected declining interest, as the third auction attracted 24 participants, almost half the number when compared to the previous auction, according to a notice by the Guangdong Emission Exchange on Friday.

The third auction cleared at CNY60/tonne (€7.12/tonne).

Demand started to decline in the Guangdong ETS already during the second auction in January. A Guangdong official cited the fact that bidding and trading carbon are still new to local companies as obstacles.

Also, only 98 Guangdong entities, or around 40% of the total number covered, can trade allowances once they have joined the auctions, according to the ETS’ regulation. The Guangdong development and reform commission (DRC) is the government body in charge of the local ETS.

The Guangdong ETS fourth fourth auction is planned to take place in one or two months, the same official said. Ling Ma

By Ling Ma