On 16 July 2021, trading under China’s national ETS commenced on the trading platform operated by the Shanghai Environment and Energy Exchange (SEEE).

According to Chinese media, the opening price of the carbon emission allowances (CEAs) was CNY 48 (USD ) per ton. The first transaction occurred in the second minute after the opening at 9:30 local time, with 160,000 tons of CEAs traded at CNY 52.78 (USD 8.15). By the end of the first trading day, according to SEEE, the closing price was CNY 51.23 (USD 7.89) per ton. The total trading volume was 4.1 million tons at CNY 210 million (USD 22.12 million).

Earlier this year, the Ministry of Ecology and Environment (MEE) published a series of policy documents outlining the overall administrative framework and rules about cap setting and allowance; monitoring, reporting, and verification (MRV); and trading and registry. In late June, SEEE further released detailed trading rules. Two days before trading started, the vice minister of the MEE stated in a press conference that the market infrastructure of the national ETS, including the national registry and trading platform, was finalized. Having the foundation in place, this signaled the imminent launch of trading.

Guest post from ICAP