Original title: The first anniversary of the opening of the national carbon market: Strict investigation of fraud, trading is still under fire | Focus analysis
According to data from the Shanghai Environment and Energy Exchange, as of July 16, 2022, the national carbon market transaction volume reached 194 million tons, with a cumulative transaction value of 8.49 billion yuan—it has become the largest carbon market in the world covering greenhouse gas emissions. It controls 40% of the country’s total carbon emissions.
Carbon reduction has always been a serious proposition for developing countries. The domestic carbon market is naturally an important and arduous attempt. The industrial revolution has brought about an increase in production efficiency, but the other side of the efficiency rush is whether a delicate balance can be achieved between economic development and carbon emissions.
The horn has been blown for a year, and the establishment of the national carbon market means that,For the first time, the task of controlling greenhouse gas emissions has been assigned to enterprises from top to bottom at the national level, and the market-oriented approach of “quota” and “carbon price” has forced enterprises to explore low-carbon transformation at the business level.
So, what is the transcript of the year when the national carbon market was launched? According to the announcement of the Ministry of Ecology and Environment, in the 2021 contract performance cycle, 2,162 power companies will be considered, and the market compliance rate has reached more than 99.5%; the carbon price has also climbed from the early 48 yuan/ton to the highest 62 yuan/ton. Ton.
It is quite complicated to build a well-functioning national carbon market mechanism. With the implementation of the contract last year, some deficiencies were also exposed, such as data fraud and market activity.
But the bow did not turn back.A small “carbon price” will set off many butterfly effects in the industry.In Europe, for example, the high carbon price in the carbon market is the biggest driving force behind the exit of coal. Due to high carbon prices, coal power plants in Europe have to rapidly reduce the power generation capacity, and consider the green transition, switch to other renewable energy sources – the energy structure change has occurred.
The European story model will repeat itself in more regions. Next, the national carbon market will expand its scope to include eight major industry controls and increase linkages with other tools, such as CCER (China Certified Voluntary Emission Reduction). A low-carbon revolution is happening quietly.
Quotas in the carbon market are like “food stamps”, which represent the total amount of carbon dioxide that companies are allowed to emit. On the first anniversary of its operation, one of the highlights of the national carbon market is how to increase market activity to a greater extent.
There are two trading methods in the carbon market, one is the block agreement transaction, and the other is the listed agreement transaction. The difference between the two transaction methods is that the listing agreement transaction is to submit a sell or buy listing declaration through the trading system to obtain quota “food stamps”; while the bulk agreement transaction is that the company has a large surplus of “food stamps” in the enterprise. Under the circumstance (more than 10 tons), the two parties to the transaction conduct the transaction through the trading system.
China carbon market closing price and trading volume trend data source: Refinitiv
The number of block agreement transactions is an indicator to judge whether the carbon market is active. According to a report by the Energy and Environmental Policy Research Center of Beijing Institute of Technology, the cumulative trading volume of block agreements in the national carbon market is five times that of listed agreements, accounting for 83% and 17% respectively, which is in line with similar foreign carbon markets and domestic pilot carbon markets. Compared with the market trading system, the national carbon market is generally a less active market.
The ratio of listing agreements is lower, which means that in the first performance period,The quota food stamps normally obtained by most enterprises are relatively sufficientyou can easily fulfill the contract without going to the market to trade; and, for those companies with excess quotas, although some companies have made a lot of money from their abundant quotas, for example, it was previously reported that Jingneng Group 2021 The annual income of more than 400 million yuan was obtained from the sale of carbon emission rights, but moreIn fact, many companies still tend to keep quotas, rather than taking it to the market. Some people in the industry told 36Kr that there are also considerations behind the possible tightening of quotas and carbon prices in the future.
The large amount of allowances issued and the accumulation of allowances make the overall activity of the carbon market not high. “I will give you 5 catties of food stamps. At the end of the year, there are still 4 catties left to eat. The quota is relatively rich, and the transaction volume is small; and even if there is a transaction, it is a hedge between my index and your index. It’s our own food stamps, so we don’t need so many market services.” The aforementioned industry insiders gave a vivid example.
This can also be seen from the turnover rate (that is, the quota trading volume: the total amount of allowances issued). At present, the turnover rate of the national carbon emission trading market is only about 3% – lower than that of many regional carbon markets. The turnover rate of the European carbon market has reached an astonishing 400%.
Only when the carbon market becomes more active and allowances, as a market-oriented tool, can the direct impact of this “invisible hand” on emission control be truly reflected.
Another industry source told 36Kr, referring to the European carbon market, the domestic carbon market should increase its activity.In the future, more types of transactions can be considered.After years of operation, the EU carbon trading products have been diversified, and there are different trading forms such as auction, spot, option and forward, and different products also correspond to the needs of enterprises at different stages.
For example, auctions are applicable to the primary market, and spot futures options are set up in the secondary market to meet different needs for carbon risk management; in addition, spot delivery is real-time delivery, while futures forward contracts are delivered at an agreed time.European energy companies will also match a variety of carbon financial products to achieve emission targets according to their different time and business needs.。
The above-mentioned person said that the national carbon market is going to heat up. On the one hand, there are too many food stamps, and more product supplies must be provided.The future of CCER is to provide value-added and flow tools to the carbon market, can drive a large number of public and market-level participation. Therefore, one of the highlights of the next national carbon conference is when the CCER project can be restarted.
In addition to data quality, there is still room for improvement
In the first year of operation of the carbon market, another major controversy was the issue of data fraud.
Documents previously released by the Ministry of Ecology and Environment have presented different data fraud methods. For example, the “China Carbon Energy Investment” company has instigated and guided the production of false coal samples and other fraud problems, while “China Venture Carbon Investment” has verified the performance of duties. If it is not in place, the verification work goes through the motions, and the verification conclusion of “Qingdao Sino New Energy” is obviously inaccurate.
The fraud problem in the first contract performance cycle is not only driven by subjective interests, but also objective reasons such as the mismatch between system design and supervision capabilities.The data quality of the carbon market is fair, true, and compliant, which is the cornerstone of the operation of the carbon market.
An industry source told 36氪 that data has become the most concerned issue of the current competent authorities. The consequence of data fraud is that last year, provinces and cities issued notices to re-calculate and spot check the issuance of quotas for 19-20 years. Progress has slowed down.”
At the National Carbon Market Construction Work Conference held on July 13, Zhao Yingmin, Deputy Director of the Office of the Carbon Neutralization Leading Group and Deputy Minister of the Ministry of Ecology and Environment, said that the next step is to focus on data quality management.Accelerate the improvement of institutional mechanisms, and establish and improve the daily management mechanism for carbon market data quality.
In addition to the issue of promoting the quality of carbon market data from the institutional level, An Li, general manager of the trading business department of Tianjin Emissions Exchange, believes that the national carbon market will continue to grow in the future.Information disclosure, capacity building, and integration of local pilots, etc.There is still some room for improvement.
First of all, the national carbon market only takes about two months from the announcement of the verification results to the implementation of the contract, leaving a short period of time for companies to perform the contract. Therefore, during the implementation period of last year, transactions also appeared.congestion phenomenon.In the last month of the performance period last year, the transaction volume and turnover in a single month in December accounted for nearly 70% of the whole year.
Second, the carbon market is at an early stage, and the capacity building of emission control companies has not kept up. For example, in the first compliance cycle, there were cases where the company failed to comply with the compliance due to lack of experience and failed to purchase quotas before the compliance deadline. For most enterprises, it is difficult to obtain the fundamental information of the national carbon market, and it is not convenient for enterprises to make decisions.
Looking forward to the future, Anli told 36Kr that in the future, the carbon market may consider extending the time for compliance transactions and strengthen information disclosure capabilities, such as publishing the list of compliance companies.
The relationship between the future of the national carbon market and local carbon pilots is also a matter of concern to the industry.
At present, the pilot areas of the regional carbon market in Shanghai, Tianjin and other places have been operating for eight or nine years. Anli believes that in the future, the national carbon market can also be integrated with the existing system to jointly cultivate and develop the trading market; for those not involved She said that in the future, the role of the existing eight national carbon market capacity building centers can be fully utilized to enhance the carbon market participation capabilities of these enterprises.