Carbon Permits Rise on China’s First Market to Exceed EU Price

Carbon permits rose on the Shenzhen Emissions Exchange, the first of seven trial markets in China, to a price exceeding those in Europe, according to Bloomberg New Energy Finance.

Shenzhen carbon allowances for 2013 increased to 43 yuan ($7) a metric ton yesterday, up from 28 to 32 yuan a ton on June 18, the first day of trading, said Charlie Cao, a Beijing-based analyst for New Energy Finance.

“Those trades show that at least some companies are increasingly serious about carbon trading,” he said.

Shenzhen’s new cap and trade market includes about 635 companies. It traded 21,112 tons of carbon in eight transactions valued at 613,236 yuan on June 18, according to a video presentation at the opening ceremony. China’s seven CO2 markets, including Shanghai, Beijing, Guangdong, Tianjin, Chongqing and Hubei, are set to regulate 800 million to 1 billion tons of emissions by 2015 in the world’s biggest cap- and-trade program after Europe’s, New Energy Finance forecasts.

While trading volume is low in Shenzhen, its carbon price is 20 percent higher than European Union futures for December, Cao said. EU allowances settled yesterday at 4.36 euros ($5.85), down 7.2 percent from June 18, on the ICE Futures Europe exchange in London.

The Shenzhen exchange had no carbon trades in July, and volume ranged from 500 to 7,000 tons from Aug. 5 to Aug. 10, Cao said.

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