Established energy market intelligence provider ICIS now provides market participants within the Beijing pilot scheme with a price forecast that they can use when trading allowances to meet their compliance obligation.
China’s economy has grown significantly over recent years. However, this rapid growth has been accompanied by a rapid increase in greenhouse gas emissions.
To address this issue, China has made a voluntary pledge in its 12th five-year plan to lower CO2 emissions per unit GDP by 17%. The plan also sets out an objective to develop pilot carbon markets in seven locations to test different rules and scheme structures: Shenzhen, Guangdong, Hubei, Chongqing, Shanghai, Tianjin and Beijing.
The Beijing pilot Emission Trading Scheme (ETS) commenced trading on 28 November 2013. Since then, carbon prices in the Beijing ETS have experienced a roller-coaster ride. Beijing Carbon Allowances (BJEA) prices rose from Chinese yuan (CNY) CNY50 to a high of almost CNY80 in July 2014 before falling back to the CNY50s range.
This volatility in carbon price, especially during the compliance period, will expose many compliance companies to price risks. In addition, all seven pilot schemes are still evolving – the rules are changing on a regular basis. Hence, it is paramount for compliance companies to understand what lies ahead as well as the price and policy risks they might face before the next compliance period.
ICIS is the only provider of a quantitative outlook on the Chinese pilot carbon markets, all of which are available in the China ETS Portal.
By adding a Beijing price forecast, ICIS ensures compliance players can judge when to trade allowances and maximise profits. The Portal also includes traded positions data (the market balance illustrating which sectors are long or short) to ensure market participants understand the various price drivers behind the price forecast.
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Stay up-to-date with China's rapidly evolving pilot schemes
Ensure you don’t miss a significant policy development in one of the 7 Chinese pilot schemes with the ICIS China Emission Trading Scheme (China ETS) Portal.
The China ETS Portal contains price forecasts based on a unique and highly predictive model which combines carbon market fundamentals and behavioural patterns of major market players.
A Beijing price forecast has also been newly added to help compliance players judge when to trade allowances to meet their compliance obligation and/or maximise profits.
A new carbon asset custody mechanism is expected to be launched in Shenzhen Emission Trading Scheme (ETS) by the end of 2014. It allows compliance entities to entrust professional agencies to manage their carbon assets to achieve better efficiency.