Shanghai firms comply with their carbon targets after last-day permit auction
A total of 7,220 tonnes of CO2 permits were auctioned by the Shanghai carbon exchange on Monday, enabling local firms to meet a deadline to comply with their carbon targets.
The permits, sold to companies at a minimum price of 48 yuan ($7.73) per tonne, were only a small fraction of the 580,000 tonnes of permits put on offer by the Shanghai government, but were enough to allow seven laggard firms to meet their targets.
The 191 local firms covered by the scheme faced a Monday deadline to buy permits to cover their emissions in 2013. The secondary market for permits closed last Friday, with a final price of 39.4 yuan per tonne.
Companies buying permits have to surrender them to the government by June 30 to cover their emissions, but a shortage of permits on the market had made it difficult for some of the bigger emitters to comply, forcing Shanghai to announce the last-day auction.
The Shanghai Environment Energy Exchange launched the market last November, and is one of seven pilot carbon trading exchanges in China. Shanghai issued 160 million permits overall for the compliance year 2013, and more than 1.5 million permits changed hands in the seven months since the market opened.
Also, Shenzhen pilot carbon market has now become the first market to breach the 1 billion Yuan ($161 million) turnover as well. The landmark was achieved, precisely, one day before the allowance surrendering deadline for the first compliance year.