Multiple measures to stimulate the vitality of the carbon market in the future

As an important policy tool to promote the realization of China's carbon peak and carbon neutralization goal, the national carbon emission trading market (hereinafter referred to as the "national carbon market") was officially launched in 2021, and the first performance cycle ended smoothly. How to manage the second performance cycle and further stimulate the vitality of the national carbon market? On behalf of the committee members and industry experts, it is suggested to further expand the scope of industry coverage and transaction subjects, improve systems and rules, and strengthen information synergy.
"In the verification one year before the operation of the national carbon market, we completed the submission of compliance data and realized the enterprise's' carbon surplus' under the environment of 'carbon loss' of enterprises under separate control and emission control in the region." Chen Jie, energy-saving benchmarking specialist of Ningxia Power Investment Yinchuan Thermal Power Co., Ltd., said frankly that the establishment of carbon emission management system needs to be explored step by step.

The first layout also allows enterprises to taste the "sweetness" after the opening of the national carbon market. After Ningxia Power Investment Yinchuan Thermal Power Co., Ltd. went online in the national carbon market, it reached 10 cooperation intentions with its counterparties through nearly a month of negotiation, and completed 1.7 million tons of carbon quota transactions. Among them, there were 5 listed transactions and 5 block transactions, and the transaction prices were higher than the average market unit price of the current period, making a profit of 71.52 million yuan for the enterprise.

At present, the first performance cycle of the national carbon market has been successfully concluded and the second cycle has been opened. According to the data of the Ministry of ecology and environment, in the first performance cycle, 2162 key emission units in the power generation industry have been included, the cumulative trading volume of carbon emission quota is 179 million tons and the cumulative trading volume is 7.661 billion yuan. According to the performance volume, the performance completion rate is 99.5%. On December 31, 2021, the closing price was 54.22 yuan / ton, up 13% from the opening price on the first day of July 16. The market operated healthily and orderly, and the trading price increased steadily. The role of promoting enterprises to reduce greenhouse gases and accelerate green and low-carbon transformation has initially appeared.

"The performance of the national carbon market exceeded expectations, and more than half of the key emission units participated in market transactions." Liu Jie, general manager of Shanghai environment and energy exchange, combined with data analysis, said that according to the performance volume, the performance completion rate of the national carbon market in 2021 reached 99.5%, exceeding expectations. It can be seen that the development space of the national carbon market is still very large.
Lin Wei, managing partner of KPMG China environment, society and Governance (ESG), pointed out that as a "market-oriented" environmental and economic policy tool, the national carbon market is undoubtedly an important policy tool and major institutional innovation to achieve carbon peak and carbon neutralization in China. Through the operation of the national carbon market in recent years, the national carbon market has further optimized and improved the trading rules, operation mechanism and price mechanism, It has played a positive role in enhancing market liquidity, improving transaction matching rate and stimulating market vitality.
However, the construction of carbon market is a long process that needs to be gradually developed and improved. Therefore, the national carbon market, which is still in its infancy, still needs to deal with the challenge of insufficient activity.
Nan Cunhui, member of the Standing Committee of the CPPCC National Committee and chairman of Chint Group, proposed that at this stage, the allocation of carbon emission quotas is mainly free, and the supply is relatively sufficient, which affects the price and liquidity of carbon market transactions and is difficult to form an effective incentive for enterprise emission reduction. In addition, a sound carbon emission monitoring and verification system (MRV system) is a prerequisite for the expansion of the carbon market. Li Yonglin, member of the National Committee of the Chinese people's Political Consultative Conference, member of the Party group of Sinopec and deputy general manager, also said that at present, the trading in the carbon market is light in the non performance period, the average daily trading volume is only maintained at about hundreds of tons, and there are some loopholes in data quality control.
In order to enhance market activity, it is urgent to further expand the scope of industry coverage and trading subjects. Zhang Yichen, member of the CPPCC National Committee, chairman and CEO of CITIC Capital, suggested that high energy consuming industries such as petrochemical, steel and building materials should be orderly included in the transaction subjects to improve market activity. At the same time, introduce financial institutions and other market subjects with willingness to participate in carbon trading, and develop and use carbon futures and other financial derivatives to improve the activity of carbon market and improve the price discovery function of carbon market.
Li Yuhua, deputy to the National People's Congress and director of the development and Reform Commission of Ningxia Hui Autonomous Region, has a similar view. He believes that while gradually expanding market coverage and actively developing green finance, we should improve the quota distribution management. Promote high emission industries under carbon market control, realize green and low-carbon industrial structure and energy consumption, and promote high emission industries to reach the peak first. In addition, build a carbon market offset mechanism, offset carbon quotas through national certified voluntary emission reductions, expand the categories of voluntary emission reduction certification projects, and vigorously promote the development of renewable energy, forestry carbon sequestration, methane utilization, carbon dioxide storage and capture projects.
In the long run, while covering the expansion and upgrading of the industry, the future national carbon market can also improve the system and rules, strengthen information synergy and promote transactions. Wang Yanxin, member of the National Committee of the Chinese people's Political Consultative Conference and President of China University of Geosciences (Wuhan), believes that it is necessary to introduce the climate change response law, environmental information sharing regulations and carbon market trading regulations, so as to effectively solve the problem of non sharing of environmental information in the carbon market by improving relevant laws and improving the carbon emission information sharing system, carbon market trading system and carbon market supervision system There are few transactions of entry subjects, only spot transactions and lack of futures option transactions.
According to the reporter, after the stable operation of the carbon market in the power generation industry, it is planned to expand the industry coverage of the national carbon market and include more high emission industries. Lai Xiaoming, chairman of Shanghai environment and energy exchange, revealed that according to the overall deployment of the competent authorities, the national carbon market will actively promote the expansion of industry coverage in the next step. "Now it is the power industry, and two to three industries may be added next year, striving to bring all eight emission control industries into the national carbon market during the 14th Five Year Plan period".