China ETS: Trading volume recovers, prices dip

Trading volumes in China's national emissions trading scheme (ETS) almost doubled this week, while the closing settlement price edged lower.

Total trading volumes from 18-22 October were 960,536t of CO2 equivalent (CO2e), up from 498,093t last week. This included 120,536t settled in open bidding, up by 7.1pc from a week earlier, with a weighted average price of Yn43.05/t ($6.70/t) — down by 3.6pc.

Bulk agreements totalled 840,000t of CO2e this week, compared with 385,539t a week earlier. But the weighted average price of this transaction category fell by 5.9pc to Yn41.32/t.

Open bid trading settled at Yn42.99/t today, down by 2.1pc from 15 October.

Weekly policy review

The Chinese government has published action plans to accelerate energy conservation and carbon reduction in key industrial sectors that are considered energy- and emissions-intensive, including steel, aluminium, oil and petrochemicals. Under the plans, which cover 2021-25, refineries smaller than 2mn t/yr (40,000 b/d) will be phased out and new refineries with less than 10mn t/yr or 200,000 b/d of crude distillation unit (CDU) capacity will be banned.

The plans are part of a sector-by-sector breakdown of how China aims to achieve peak emissions by 2030. A general plan for peak emissions is expected to finally be published this month.

China increased its installed thermal power capacity, mostly coal- and gas-based, to 1,281.8GW from 1,266.6GW at end of June, according to the NEA's latest September update. Wind and solar power installations reached 297.3GW and 278.4GW respectively by the end of September, up from 291.9GW and 267.6GW at the end of June.