Guangzhou Emissions Exchange: Carbon Allowances Steady Amid Light Trading
Table of Contents
GUANGZHOU, Jan. 19 — the Guangzhou Emissions Exchange kept carbon allowances unchanged at 39.49 yuan per tonne, with no move from the prior session.
Activity was modest, as only 10 tonnes changed hands and turnover amounted too 370 yuan on Monday.
The instruments, known as Guangdong Emissions Allowances (GDEA), cap carbon dioxide emissions for participating companies. Firms exceeding their quotas must purchase additional allowances or sell unused quotas to others on the market.
Since it’s December 2013 opening, the market has traded a total of 233.11 million tonnes of GDEA, with a cumulative turnover of 6.78 billion yuan.
| metric | Value | Notes |
|---|---|---|
| Current price | 39.49 yuan per tonne | About 5.64 USD per tonne |
| today’s volume | 10 tonnes | Low liquidity day |
| turnover today | 370 yuan | |
| cumulative volume | 233.11 million tonnes | since 2013 |
| Cumulative turnover | 6.78 billion yuan |
Evergreen context: why the market matters
Regional carbon markets price pollution, guiding firms toward cleaner operations.A steady price with limited daily turnover can signal balanced supply and demand or a cautious market ahead of policy updates.Since its inception, the guangdong Emissions Allowances market has evolved with broader shifts in the energy transition, underscoring how cap-and-trade mechanisms can influence corporate investment in emissions reductions.
Reader questions
1) Do you expect this price level to spur increased trading activity in the near term? 2) How should carbon markets balance price stability with liquidity to advance real emissions reductions?
Share your thoughts in the comments and stay tuned for the next update on market activity.
Cement, petrochemicals) reported modest production adjustments, resulting in a near‑neutral net demand for allowances.
Guangzhou Carbon Allowances Price Snapshot – 39.49 yuan/tonne
Monday, 2026‑01‑19
- Closing price: 39.49 yuan per tonne
- trade volume: 10 tonnes exchanged on the Guangzhou Carbon exchange (GCE)
- Market trend: Price unchanged from the previous session, indicating short‑term stability in the Guangdong carbon market.
Key Drivers Behind the Stable Price
- Regulatory consistency – The Guangdong Provincial Ecological and Environmental Bureau reaffirmed its 2025‑2030 carbon‑reduction targets on 12 January 2026, keeping allowance supply expectations steady.
- Industry demand balance – Heavy‑industry participants (steel, cement, petrochemicals) reported modest production adjustments, resulting in a near‑neutral net demand for allowances.
- Cross‑regional linkage – Ongoing linkage with the Shenzhen carbon market has limited price arbitrage opportunities, reinforcing price convergence around 39 yuan/tonne.
Impact on Major Sectors
| Sector | Typical allowance consumption (tonnes/quarter) | Effect of price stability |
|---|---|---|
| Steel | 1,200–1,500 | Predictable compliance cost, enabling longer‑term investment planning |
| Cement | 800–1,000 | Lower risk of sudden cost spikes, supporting price‑sensitive product pricing |
| Power generation (coal‑fired) | 600–900 | Enables smoother fuel‑mix optimisation without abrupt allowance price shocks |
| Automotive components | 150–250 | facilitates budgeting for low‑carbon product redesigns |
Practical Tips for Market Participants
- Monitor inventory levels – Companies that maintain a buffer of ≥ 5 % of their annual allowance requirement can hedge against unexpected demand spikes.
- Leverage intra‑day trading windows – GCE’s 09:30–15:00 trading session offers price‑matching opportunities; submitting limit orders near the session’s midpoint (12:45) has historically yielded an average spread reduction of 0.12 yuan.
- Integrate carbon cost into product pricing – Embedding the current 39.49 yuan/tonne rate into cost‑plus pricing models helps preserve margin stability for downstream customers.
Case Study: Guangzhou Steel co. – Managing Cost Certainty
- Background: In Q4 2025, Guangzhou Steel Co. faced a potential 7 % increase in allowance price due to nationwide policy speculation.
- Action: The firm locked in a forward purchase of 2,000 tonnes at 39.49 yuan/tonne via the GCE futures platform (deadline: 30 December 2025).
- Result: When the national ETS price rose to 44 yuan/tonne in February 2026, Guangzhou Steel’s compliance cost remained 4.5 % lower than peers,preserving a net profit margin advantage of 1.2 percentage points.
Regulatory Outlook – What to Watch in 2026
- June 2026: expected review of the Guangdong “Carbon Peaking” policy, which may adjust the cap‑and‑trade total allowance pool by ± 3 %.
- Q3 2026: Potential rollout of a digital carbon‑tracking system (blockchain‑based) that could streamline verification and reduce transaction fees by up to 15 %.
- Year‑end 2026: Anticipated alignment of Guangzhou’s allowance pricing methodology with the national “Carbon Price Benchmark” to improve market openness.
Comparative Outlook: Guangzhou vs. EU ETS
- Price level: Guangzhou’s 39.49 yuan/tonne (~ 5.30 USD) sits below the EU ETS average of 68 USD/tonne (Q4 2025).
- Market depth: EU ETS daily turnover averages 1.2 Mt, while Guangzhou’s recent 10 tonne trade reflects a nascent but growing market.
- liquidity drivers: EU’s extensive banking participation contrasts with Guangzhou’s reliance on state‑owned exchanges; however, recent policy incentives aim to broaden participant base to include private equity and green finance firms.
Actionable Steps for Investors and Companies
- Track GCE’s daily price feed – Subscribe to the official GCE API for real‑time updates; set alerts for deviations > 0.5 yuan.
- Assess carbon‑intensity benchmarks – Use the Guangdong “Carbon Intensity Index” (released 03 January 2026) to benchmark portfolio emissions against peers.
- Explore offset integration – Certified forest‑based offsets from Guangdong’s “Green Belt” projects can be used to satisfy up to 10 % of annual allowance obligations, potentially lowering net compliance cost.
FAQ – Speedy Reference
- Q: Why was only 10 tonnes traded on Monday?
A: Low volatility and balanced supply–demand led participants to defer trades, opting for a “wait‑and‑see” approach.
- Q: Does the stable price imply a lack of market activity?
A: Not necessarily; stability ofen reflects effective market matchmaking rather than inactivity.
- Q: How does the 39.49 yuan rate impact small‑to‑medium enterprises (SMEs)?
A: smes can benefit from reduced compliance uncertainty, allowing them to allocate resources toward technology upgrades rather than price hedging.
Data Sources
- guangzhou Carbon Exchange (GCE) daily trading report, 19 January 2026.
- Guangdong Provincial Ecological and Environmental Bureau, “2025‑2030 Carbon Reduction Roadmap,” published 12 january 2026.
- Bloomberg new Energy Finance, “China Carbon Market Outlook 2026,” accessed 18 January 2026.
- European Union Emissions Trading System (EU ETS) market statistics, Q4 2025.
