Guangdong releases quota allocation for 2014 carbon emissions

Guangdong Development and Reform Commission announced on Monday an allocation plan for the province’s carbon emissions in 2014, with changes in the total quota and the opening bid.

According to the plan, Guangdong will provide a total of 408m tonnes of emission quotas in 2014, to 193 emission-controlled enterprises and 18 new projects that cover power generation, steel, cement and chemical industries. The total quota for emission-controlled companies will climb to 370m tonnes in 2014, up by 20m tonnes from 2013, while the reserved quota for auction and new entrants will remain at 38m tonnes. The increase in quotas for emission-controlled enterprises was because some projects added last year were turned into emission-controlled ones in 2014, a Guangdong government official explained to ICIS.

There are also quite significant changes in the opening bidding in 2014. The government set the opening bids at yuan (CNY) 25/tonne, CNY30/tonne, CNY35/tonne and CNY40/tonne for the four quarters of 2014, down from CNY60/tonne in 2013.

The power generation industry will receive 95% of free allowances in 2014, down from 97% in 2013, while free quotas for cement, steel and chemical companies will stay at 97%.

“The opening bid of CNY60/tonne for last year’s auctions was barely affordable for quite a few power companies, so lower opening bids for this year are well received. However, economic burdens became heavier as the ratio for free quotas fell to 95% (for the power industry). Our trading strategy will be made after the plan is finalised for power generation in the second half of the year,” said a source from a power company. Kun Yang