As a country with large total carbon emissions, China has a long way to go to set it off. The coal, oil and natural gas account for 71.11%, 14.93% and 5.83% of the country’s total carbon emissions, respectively, which will be further reduced under the national dual carbon goals.
Ren Na, a researcher at the Market Strategy Department of Sinopec Group United Petrochemical Company, pointed out the problem directly. She believed that it is wise for the petroleum and petrochemical industry to adopt a market-oriented approach to achieve the dual carbon goal. There are currently eight pilot carbon markets in China, including Shenzhen, Shanghai, Beijing, and Tianjin, though numerous, fragmented and can not be interconnected.
The development of carbon markets in various regions is uneven and fragmented, and carbon quotas cannot flow freely, with significant differences in trading volume and prices among different markets. In 2022, the price of carbon quotas in Beijing once soared to CNY 140 yuan per ton, the highest priced local carbon market. Guangdong, however, became the most active due to its most total trading volume.
Ren Na predicts that the market may usher in a booming period this year. At present, the vast majority of enterprises have not yet entered the market. As the compliance period approaches and carbon quota supply tightens, transaction activity may gradually rebound. Thus carbon trading financial and tax invoices, and judicial disposal order need to be further clarified from the competent authorities.
In addition, since the beginning of this year, there has been a frequent occurrence of more than ten consecutive trading days with only 10 tons listed for trading each day. Pilot carbon markets in Beijing and other places often experience multiple consecutive trading days without transactions, with insufficient liquidity leading to some oligopoly carbon merchants hoarding and manipulating carbon quota prices.
Zhao Wenming, General Manager of the Innovation and Strategy Department of Sinochem Energy Co., Ltd suggests to coordinate relationship between development and carbon reduction. Specific industry and enterprise goals and implementation paths should be determined under the overall consideration of the whole country, industry, and group. Technological innovation and policy support are important and guarantees for accelerating the green and low-carbon development of the industry.
Xu Qingyang, Chief Technical Officer of Sinochem Energy Technology Co., Ltd proposed to improve the carbon emission statistical accounting system, establishing an online monitoring system for carbon emissions, laying a solid foundation for carbon market construction, coordinating and planning the inclusion of mandatory carbon markets in key areas of the industry and voluntary carbon markets, to form a long-term mechanism construction of effective coupling and coordinated development between mandatory and voluntary carbon markets.
