China's carbon price reached a record high on August 15, closing at 70.07 yuan (US$9.60) per ton, a 2.55 percent increase from the previous day.
When the carbon trading market in China opened in 2021, the price was set at 48 yuan per ton. Over 2,000 energy companies have participated in the trading so far.
A major contributor to the rise is policy. The Ministry of Ecology and Environment has allowed surplus quotas to be carried over to the next compliance cycle, in addition to being traded in the market. Since China entered its second compliance cycle in 2022, the benchmark has been lowered, leading to a greater allowance deficit.
The first half of 2023 has seen a surge in transactions, with monthly volumes consistently rising. Over 1.8 million tons of allowances have already changed hands in August, but prices still fall short of expectations. In Europe the price is more than 80 euros (US$87, 640 yuan) per ton, providing more incentive for companies to reduce emissions.
