Guangdong emission quota price below CNY30/tonne for first time

15 October 2014 | Kun Yang

The emission quota price of Guangdong emission trading scheme (ETS) slumped by 9.02% to yuan (CNY) 28.25/tonne on Monday, below CNY30/tonne for the first time since Guangdong ETS was launched.

Guangdong ETS held its first allowance auction for the 2014 compliance period on 26 September.  The floor price was CNY25/tonne and the total volume was two million tonnes. All the allowances were settled at CNY26/tonne. And the spot market price has dropped rapidly since then. On Tuesday, 630 tonnes of emission quota were traded in Guangdong ETS and the total turnover was CNY17,970, with the average price setting a new low in the Guangdong carbon market. 

The daily trading volume was less than 1,000 tonnes on Monday when only some individual investors dumped their allowances under pessimistic market expectation, a manager from Guangzhou Exchange told ICIS on Tuesday. Dumping might go on during the week, market sources said. 

The two million tonnes auctioned in September is relatively limited compared to 300 million tonnes of annual quota of Guangdong ETS. Therefore, the price in a single auction is not likely to have large impacts on the price over the long term. Additionally, as the floor prices of the three other auctions of Guangdong ETS are CNY30/tonne, CNY35/tonne and CNY40/tonne, hopefully the spot market price in the next few months will tend to lie in the interval between CNY30/tonne and CNY40/tonne.

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