Guangdong to Freeze Trading Unless Emitters Take Part in Auction

December 15, 2013 Leave a comment

Guangdong to Freeze Trading Unless Emitters Take Part in Auction

China’s southern province of Guangdong won’t allow companies to trade emission permits they receive free of charge from the government unless they participate in auctions starting next week, an official said. The 242 participating companies won’t be able to buy or sell permits accounting for 97 percent of their emission quotas until they purchase the balance at auctions, said the official with the Guangzhou-based China Emissions Exchange. He asked not to be named because he isn’t authorized to speak to the media.Guangdong, the largest of seven carbon markets planned in China, will start auctioning 3 million metric tons of carbon permits on Dec. 16 at a minimum price of 60 yuan ($9.90) each ton, the provincial Development and Reform Commission said Dec. 10. That’s the highest debut price in the nation.

China, the world’s biggest emitter of greenhouse gases linked to climate change, started markets in three cities earlier this year as the nation tries to reduce the intensity of its emissions. The Guangdong floor price is more than the minimum of 28 yuan a ton in Shenzhen, 25 yuan in Shanghai and 50 yuan in Beijing.

The price of the first trade “will probably be even higher and would be the highest starting price of the Chinese pilots so far,” Charlie Cao, a Beijing-based analyst from Bloomberg New Energy Finance, said in an e-mail.

Guangdong will allocate quotas for 388 million tons of carbon emissions to 242 companies by mid-December, the commission said Nov. 26. Quotas for the auction next week are part of 29 million-ton charged quotas planned this year.

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

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