Beijing's carbon market trades 2.1 million tonnes in first year, just 4.5% of total

The number of carbon permits traded on China's pilot emissions market in Beijing in its first year of operations totalled 2.1 million, or just 4.5 percent of those on offer, according to exchange data released on Saturday. -- PHOTO: AFP
The number of carbon permits traded on China's pilot emissions market in Beijing in its first year of operations totalled 2.1 million, or just 4.5 percent of those on offer, according to exchange data released on Saturday. -- PHOTO: AFP

SHANGHAI (Reuters) - The number of carbon permits traded on China's pilot emissions market in Beijing in its first year of operations totalled 2.1 million, or just 4.5 percent of those on offer, according to exchange data released on Saturday.

The low volumes traded on the Beijing exchange highlight the liquidity challenge facing all of China's seven pilot carbon markets, with the firms covered by the schemes given little incentive to trade large volumes in the first year.

A total of 2.1 million tonnes of carbon quotas were traded as of Friday, with the average price of the openly traded permits at 59.74 yuan (S$12.69) a tonne, the China Beijing Environment Exchange said.

The exchange put 47 million permits on offer in the 2013 compliance year.

Traders and auditors have blamed poor liquidity on a lack of expertise among participants, which include universities and hospitals, and on complaints that drove others away.

Beijing is the third of seven pilot schemes set up by China, in a bid to curb its greenhouse gas emissions - currently the highest in the world. China has not yet set a binding legal national cap, so some large firms, including state-owned enterprises, question the legitimacy of local government in Beijing to curb CO2 emissions.

The seventh pilot scheme was launched in the southwestern city of Chongqing in June.