What’s new: China’s state energy giant China Petroleum & Chemical Corp. (Sinopec) inked a deal Wednesday to purchase 100,000 tons of carbon emission quota from China Resources Group, marking the first bulk transaction since the official launch of the country’s national carbon market.
The transaction totaled 5.29 million yuan ($817,190), equivalent to 52.92 yuan ($8.18) per ton, according to data from the Shanghai Environment and Energy Exchange, which operates the carbon market.
Analysts said petrochemical companies like Sinopec are engaging in national carbon trading with their own power generation units, which are under mounting pressure to meet emission goals.
A total of 17 Sinopec subsidiaries with their own power plants are included in the national carbon market so far.
The background: China kicked off its long-awaited national carbon market last week. The goal is to reduce the volumes of carbon dioxide, the main greenhouse gas, going into the atmosphere by imposing limits on emissions by factories, generating plants and others. Installations that emit less than their quota can sell excess credits to operations that can’t meet the limits.
China’s market is expected to become the world’s largest, outpacing Europe’s, as total annual carbon emissions of just the first batch of companies involved amount to more than 4 billion tons.
The participants include more than 2,162 power generation companies, which account for more than 40% of China’s energy-related carbon emissions.
As of Wednesday, the market completed transactions totaling 4.6 million tons of carbon quotas.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (bobsimison@caixin.com)
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