Guangdong sells 70% emission quota in year’s 2nd auction

The China Emissions Exchange (Guangdong) held the second emission quota auction of 2014 compliance period on Tuesday, with about 700,000 tonnes of emission quota traded, which was 70% of the planned total amount.

Ten compliance entities and two new entrant entities participated in the bidding with a total amount of 701,442 tonnes. And the quotas settled at yuan (CNY) 30/tonne, which was the floor price of the second auction.

The rest of the emission quota planned for the auction, which was nearly 300,000 tonnes, would be retrieved and accounted as part of the market adjustment reserve. And based on the regulation of the Guangdong emission trading scheme (ETS), the retrieved quota is not likely to be used for the prospective auctions of 2014 compliance period.

Compared with the first auction of the Guangdong ETS held in September, the higher floor price of the second auction led to a 15.4% increase in settlement price. However, the Guangdong carbon market was not active lately, which depressed participants from bidding in the auction, and institutional investors was absent. Kun Yang