The smooth operation of the national carbon market promotes the formation of effective price signals

After the national unified carbon emission trading market was officially launched on July 16, how is its operation status? Where is the follow-up effort? On July 26, the spokesperson of the Ministry of Ecology and Environment, Liu Youbin, briefed on the status quo of the national carbon trading market and the direction of next steps.

Statistics released by the Ministry of Ecology and Environment show that as of July 23, the total transaction volume of carbon emission allowances in the national carbon market was more than 4.8 million tons, with a total transaction volume of nearly 250 million yuan; the closing price on July 23 rose to 56.97 yuan/ton. This is 11.20% higher than the first day of market opening.

According to Liu Youbin, there are 2,162 key emission units in the power generation industry that are included in the national carbon market’s compliance cycle, covering approximately 4.5 billion tons of carbon dioxide emissions per year. The power generation industry is testing the waters, but the power generation industry will never be “outstanding” in the future. The Ministry of Ecology and Environment has commissioned relevant industry associations to study and propose industry standards and technical specifications that meet the requirements of the national carbon market. In the next step, we will further expand the scope of the carbon market to cover industries in accordance with the principle of “mature one, approve and release one”. The Ministry of Ecology and Environment has made a plan: during the “14th Five-Year Plan” period, eight energy-intensive industries, including power generation, petrochemicals, chemicals, building materials, steel, non-ferrous metals, papermaking, and domestic civil aviation, will be included in the national carbon market.

From the perspective of the industry, one of the core elements of the operation of the national carbon market is to form a unified carbon price signal across the whole society to guide and encourage low-carbon transformation of various industries, strengthen the rational allocation of resources, and promote investment. After experiencing the trend of “six consecutive sunshine”, on July 26, the price of carbon emission allowances in the national carbon market ushered in a callback, and the closing price fell by 4.41% from the previous trading day. Looking ahead to the market, industry professionals generally believe that the carbon price will continue to fluctuate in the range of RMB 50/ton to RMB 60/ton.

The pricing mechanism is one of the core elements that affect the development of the carbon market. The builder and operator of the national carbon market trading system, Shanghai Central Exchange, carried out relevant research and formed the “2021 Domestic Carbon Price Formation Mechanism Research Report.” The report believes that the current allocation of allowances in my country’s carbon market is still dominated by free distribution, which is likely to cause the lack of a price discovery mechanism in the allocation of allowances. After the national carbon market starts, it should be considered as soon as possible to introduce a paid distribution method, gradually increase the auction ratio, and give clear price guidance to the secondary market.

In essence, carbon prices change with changes in market supply and demand. In addition, factors such as the stability of policy expectations, the abundance of trading products, market trading systems, information disclosure requirements, and corporate internal decision-making mechanisms affect the formation of the national carbon market price from different levels.

First of all, the carbon market is a policy-oriented market, and carbon prices are easily affected by government actions. For example, the tightness of the total amount, the auction price setting, the validity period of allowances, and changes in offset ratios will all have an impact on the secondary market price. Shadow. A clear and definite policy path can provide companies with strong predictability and help companies make long-term plans for energy conservation and emission reduction, thereby enhancing their willingness to participate in carbon market transactions.

Secondly, gradually enriching transaction varieties, transaction methods and transaction subjects, and increasing market activity will help promote market price discovery. The currently operating allowance issuance and emissions trading markets are the primary spot trading of the carbon market. The carbon market has obvious financial attributes. The introduction of carbon futures, carbon options, carbon swaps, carbon asset securitization, carbon forwards and other over-the-counter derivatives in the secondary market can provide risk management tools for trading participants and enhance market liquidity The formation of market expectations, strengthen the price discovery function, and at the same time help attract more financial institutions, investment institutions, and individuals to participate in carbon trading in depth, which is of great significance for enhancing market activity.

In terms of carbon futures innovation, the Guangzhou Futures Exchange has high hopes. Zhu Lihong, general manager of the Guangzhou Futures Exchange, publicly stated that at present, the Guangzhou Futures Exchange is actively and steadily advancing the research and development of carbon emission rights futures under the guidance of the China Securities Regulatory Commission. In the next step, we will continue to pay attention to the operation of the carbon spot market and system construction, and study and launch futures related to carbon emission rights when conditions are ripe.

The healthy development of the market is also inseparable from the constraints of the system. Liu Youbin said that at present, the Ministry of Ecology and Environment is actively cooperating with the Ministry of Justice to promote the legislative process of the “Interim Regulations on the Administration of Carbon Emission Trading of the State Council”, establish and improve the national carbon market joint supervision mechanism, strengthen the supervision of all links of the national carbon market, and effectively prevent the market. risk.

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