China Carbon Watch: Supply Glut Holds Down Carbon Prices
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Trading in China’s national carbon emissions allowance (CEA) market during the second quarter was marked by a continued slump in prices over the first two months, followed by a rebound in June accompanied by rising volumes.
From its all-time high of 105.66 yuan ($14.79) per ton on Nov. 13, 2024, the daily closing price fell 36% to a low of 67.51 yuan on June 3, marking the steepest decline in the CEA market’s four-year history. The 30-week near-continuous slide in weekly closing prices set a record for the longest losing streak.
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- China’s carbon emissions allowance prices fell 36% from November 2024 to June 2025, hitting a record low before rebounding in late June as trading volume surged to a quarterly high of 32.2 million tons.
- The drop was mainly due to banking rules tied to surplus allowances; open trades rose to 30% of total volume, indicating higher participation by smaller entities.
- Policy shifts announced in May 2025 advocate for volume control, more paid allocations, and market stability measures to support prices.
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Who’s Who
- Singapore-based Alpha Ladder Group
- Singapore-based Alpha Ladder Group's executive chairman is Bai Bo. The article mentions no further information about the group itself.
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What Happened When
- Nov. 13, 2024：
- China’s CEA market reaches an all-time high of 105.66 yuan per ton.
- End of 2024：
- Compliance pressure eases; holders of surplus allowances face new banking rule for conversion of older vintages.
- Late April 2025：
- The 2024 vintage enters the market following initial allocation to covered entities.
- May 29, 2025：
- State Council and CPC Central Committee jointly issue Opinions on Improving the Market-Based Allocation System for Resource and Environmental Elements.
- June 3, 2025：
- Daily closing price of CEA market hits a four-year low of 67.51 yuan per ton.
- By final full week of June 2025：
- Weekly trading volume reaches a first-half high of 6.5 million tons.
- By end of second quarter 2025：
- Quarterly trading volume totals 32.2 million tons, a record high for Q2.
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