UPDATE 1-First Shanghai carbon permits trade as China moves on emissions

Tue Nov 26, 2013 9:19am IST

Stocks

   

* Total 14,000 permits traded for 2013-2015

* State power company Huaneng involved in first trades (Updates with total number of permits issued and more information on trades)

SHANGHAI Nov 26 (Reuters) - The first carbon permits in Shanghai traded at 27 yuan ($4.43) on Tuesday, as the financial hub launched China's second such trading scheme in a bid to cut its fast-growing greenhouse gas emissions.

Three trades for a total of 9,500 permits for 2013 compliance, known as Shanghai Emissions Allowances (SHEAs), went through in the first half-hour after the market opened. A third carbon market will open in Beijing on Thursday.

China is the world's biggest emitter of greenhouse gas emissions, but it has pledged to reduced its emissions per unit of GDP to 40-45 percent below 2005 levels by 2020.

Bin Hui, vice director at the Shanghai Environment and Energy Exchange, told reporters that state-owned power company Huaneng was one of the companies involved in the Tuesday deals, but gave no further details.

The opening price matched the first trades that went through when the Shenzhen emissions market opened in June, but prices there have since risen to around 60 yuan.

A batch of 4,000 permits for use in 2014 also traded in Shanghai at 26 yuan, and 500 for 2015 changed hands at 25 yuan.

Shanghai's scheme caps carbon dioxide emissions from 191 big energy users in the financial centre, spanning electricity generation, manufacturing, airlines, harbours and commercial buildings.

Participants get free permits from the government to cover most of their expected emissions. If they exceed those levels they must buy permits in the market from companies that have a surplus, or from offset projects elsewhere in China regulated by the central government.

Ni Qianlong of the Shanghai Development and Reform Commission, which administers the market, told reporters on Tuesday that around 160 million permits had been issued for the scheme's first year, although the number may be adjusted later.

The Shanghai government said last week companies that have taken action to reduce their emissions over the 2006 to 2011 period will be given additional permits.

Among the companies participating are leading steel producer Baoshan Iron and Steel and chemical company BASF.

The central government has planned seven regional carbon markets as China steps up efforts to limit its impact on global warming, which scientists say cause rising sea levels, extreme weather events and prolonged droughts.

"China will make efforts to contribute to building an international emissions trading scheme in the future," Xie Zhenhua, vice director of the National Development and Reform Commission (NDRC) said at the Tuesday launch. (Reporting by Kathy Chen, writing by Stian Reklev; Editing by Himani Sarkar and Tom Hogue)

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Public Health

REUTERS SHOWCASE

Cost Cutting

Cost Cutting

PM Narendra Modi boots officials out of the first class cabin  Full Article 

Airtel Profit Jumps

Airtel Profit Jumps

Bharti Q2 net profit more than doubles   Full Article 

Leisure Riding

Leisure Riding

Harley-Davidson woos affluent young Indians with bike culture  Full Article 

Maruti Earnings

Maruti Earnings

Maruti Suzuki net profit up 29 percent, beats estimates.  Full Article 

ICICI Results

ICICI Results

ICICI Bank Q2 profit up 15 percent, beats estimates.  Full Article 

Moody's on India

Moody's on India

Moody's welcomes India's policy steps, but wants to see more.  Full Article 

End Of QE

End Of QE

U.S. Fed ends bond buying, exhibits confidence in U.S. recovery.  Full Article 

Cook Comes Out

Cook Comes Out

Apple's Cook: "I'm proud to be gay"  Full Article 

Refining Margins

Refining Margins

BPCL aims to double refining margins with refinery expansion.  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage