Before and after the Spring Festival of the year of the tiger, the carbon emission quota prices in Guangdong and Hubei carbon markets staged a “roller coaster” market, attracting market attention.
On February 15, the carbon market quota prices in Guangdong and Hubei both strengthened. According to relevant official website data, the quota price of carbon market in Guangdong increased by 3.71% to 76.59 yuan / ton, and the closing price in Hubei was 54.01 yuan / ton, with a daily increase of 1.91%.
Previous data showed that from January 27 to February 9, the quota prices in the carbon markets of Hubei and Guangdong rose for five consecutive trading days, with cumulative increases of 44.39% and 38.18% respectively. After that, the price quickly corrected. From February 10 to February 14, the quota price in Guangdong carbon market decreased by 22.48% and that in Hubei by 13.79%.
“Guangdong and Hubei are the two most active markets for local carbon quota trading. They have good liquidity and are easy to attract speculators to participate in trading, thereby amplifying price fluctuations.” Nanhua Futures Co.Ltd(603093) Xiao Yan, a master of overseas market analysis, told the Securities Daily that the carbon quota prices of the two places soared before and after the Spring Festival. On the one hand, the carbon emission price in Europe rose sharply, with a cumulative increase of more than 8% from January 28 to February 8. On the other hand, in 2022, the Ministry of ecological environment proposed a series of documents, such as promoting the coordinated governance of pollution reduction and carbon reduction, studying and formulating the normative documents for the management of environmental impact assessment of “two high” industries, which gave market confidence and some support for the rise of carbon quota prices. “The reason why there has been another sharp decline, the market fundamentals have not changed, the carbon spot market transactions are cold, the market speculation is unsustainable, and the price returns to rationality.” Fu Xiaoyan said.
According to Liu Yan, director of the digital business promotion service committee of China circulation industry management and Political Research Association, this wave of roller coaster market is mainly based on investors’ speculation. He told the Securities Daily that before and after the Spring Festival, some speculators took advantage of the rising price of carbon emissions in Europe to hype. There are few participants in China’s carbon market and it is easy to be hyped by a few speculators. However, from the perspective of Guangdong’s carbon market, the supply and demand are basically flat, and the fundamentals do not support the market, with more room for price rise.
It is noteworthy that recently, the price of carbon emission quota in the national carbon market has not fluctuated significantly. As of the closing on February 15, the national carbon market quota price was 58.40 yuan / ton, basically the same as the price of 58.08 yuan / ton on the first day of the year of the tiger.
Industry experts attributed the stable price of quota in the national carbon market to the inactive trading. Fu Xiaoyan believes that the structure of traders in the national carbon market is relatively single, the degree of participation of traders is low and the impact of power restriction policy. Under the condition of certain carbon quota supply, enterprises’ demand for carbon quota decreases, resulting in “excess” of carbon quota as a whole.
“At present, it is in the off-season of carbon quota trading, and the stable price trend is a normal phenomenon.” Liu Yan said that at present, the national carbon market only includes enterprises in the power industry, and the market covers less industries. At the same time, the saturation of the market is not enough, the capacity is small, the trading varieties are relatively single, and there are also some problems in the operation process. In addition, in the face of a new market, traders are not familiar with the trading rules and do not grasp the law of market change is also an influencing factor.
It is not difficult to see that there is a large gap in the price of carbon emission quotas between the above two places, which also occurs in the carbon market in other regions. “Local carbon market prices and transactions are different, mainly related to local industrial institutions and quota allocation mechanism.” Fu Xiaoyan told reporters that the industrial structure is a medium and long-term factor guiding prices and a slow variable affecting prices; Quota accounting and allocation are short-term and main factors to guide prices, and they are fast variables.
In order to further reasonably guide the market price expectation and further improve the construction of local carbon market, Fu Xiaoyan suggested that, on the one hand, improve the local quota scheme, including timely announcing the changes of incorporated enterprises, the total annual quota, the quota distribution structure and the change of quota distribution mode; On the other hand, conditional regions actively introduce carbon quota auction and offset mechanism to guide the carbon price close to a reasonable range.
Liu Yan believes that we should improve the market trading rules, improve the registration system, improve the quality of carbon emission data, take control of the data base, and improve the supervision and management mechanism. At the same time, we should improve the quota allocation method, introduce offset mechanism and other policy measures to guide market expectations and guide the formation of a reasonable carbon price. Local trading centers should actively explore the market and industry characteristics of the region, gradually establish trading varieties and trading market operation mechanism with regional characteristics, and promote the stable operation of national carbon trading.
