Shanghai Sells First Carbon Permits as Chinese Trading Expands

The Shanghai Environment and Energy Exchange started trading today, with carbon permits selling for 27 yuan ($4.43) a metric ton as China promotes seven pilot programs as tools for reducing the world’s highest emissions.

The volume for 2013 permits totaled 5,000 tons, according to a statement on the website of the Shanghai Environment and Energy Exchange. The price for 4,000 permits for 2014 was 26 yuan, while 500 permits for 2015 sold at 25 yuan.

China Petroleum & Chemical Corp. (386), Huaneng Power International Inc. (902) and Shenergy Co. (600642) joined in the first day of trading, the exchange said.

Shanghai’s carbon platform, the first to begin since Shenzhen sold allowances for about 28 yuan at its debut in June, includes about 200 companies, the Shanghai Daily reported. While China has said it will reduce the intensity of its emissions as much as 45 percent compared with 2005 level, the country joined India at this month’s climate conference in Warsaw in resisting longer-term commitments until the U.S. and Europe agree to a heavier burden.

The exchange in Shanghai, China’s financial hub, precedes the scheduled introduction of trading in Beijing on Nov. 28. The Chinese government has said its seven pilot exchanges are a precursor to nationwide trading, Bloomberg New Energy Finance said in a note this month.

Shanghai’s emissions trading pilot will cover total emissions of as much as 130 million tons, according to Bloomberg New Energy Finance. The seven Chinese pilot programs are forecast to regulate 800 million to 1 billion ton of emissions by 2015 in the world’s biggest cap-and-trade program after the one in Europe, according to New Energy Finance.

Companies based in Shanghai will be eligible to use local offsets known as China Certified Emission Reductions for as much as 5 percent of their obligations, according to a July statement from officials in Shanghai.

To contact Bloomberg News staff for this story: Feifei Shen in Beijing at fshen11@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net

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