China's carbon price hit 100 yuan for first time as regulations tighten


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China's carbon price has surpassed 100 yuan for the first time since the market's launch in mid-2021, as major polluters ramp up purchases ahead of the implementation of stricter standards.

On April 24, emissions allowances increased by 1%, reaching 100.59 yuan per ton, according to the National Carbon Trading Agency.

Despite a 30% increase this year, these allowances remain significantly cheaper than in EU, which closed at 66.47 euros per ton on the same day.

The Ministry of Ecology and Environment, which oversees the trading, is considering measures to address overallocation of allowances and to impose limits on permit carryovers to the following year.

These proposed changes aim to absorb the current surplus of allowances, while the inclusion of new industries, potentially including aluminum and cement sectors in the next phase according to Reccessary, would drive additional demand.

Currently, China's national carbon market encompasses around 2,200 power utilities responsible for approximately 4.5 billion tons of CO2 emissions annually.

By 2030, authorities plan to expand the system to cover more than 70% of the country's CO2 emissions. According to a report from the Beijing Institute of Technology in January, this expansion could drive prices up to 200 yuan per ton.

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