Connection

China: Restructuring the carbon market

China plans to tighten carbon market rules for 2024-2025, potentially influencing emissions prices.

Partagez:

According to a consultation document observed by S&P Global Commodity Insights, the Chinese government is planning to change the rules for allocating emissions allowances for the power generation sector. These changes could reduce the supply of emission rights and, consequently, increase prices, although the proposed rules remain subject to modification according to feedback from the industry.

Analysis of excess supply

The Chinese emission rights market, launched in July 2021 and the world’s largest in terms of volume, has been criticized for its oversupply and inefficient pricing. However, the recent consultation shows the government’s determination to counter these problems. Adjustments have been proposed to avoid the excessive allocations of previous years and the practice of companies stockpiling quotas.

Specific quota adjustments

For 2020, a downward revision is planned. For example, a coal-fired generating unit of over 300 MW that received 877 mt of emission rights free of charge in 2020 will see this number reduced to 865 mt. Such retroactive adjustments are intended to bring allocations more closely into line with actual emissions.

Strategy against quota stockpiling

From 2024 onwards, the use of allowances from different years will be limited to encourage market liquidity and reduce speculative stockpiling. Only allowances for the year 2025 can be used to cover emissions for that year, thus modifying market dynamics and encouraging the judicious use of allowances.

This restructuring should stimulate demand for vintage-specific financial derivatives, such as carbon futures, and help establish more robust long-term price signals. Analysts anticipate increased price volatility as the market adapts to the new rules.

  • Populaires ​
Minéraux Stratégiques Abitibi opens talks for biomass project in Amos
US ethane imports to China set to hit record after Trump-Xi call
Mexico targets up to $9bn in private investment for renewable energy
China’s Coal Imports Fall by 18%, Affected by Low Domestic Prices
Brazil activates 27 rare earth projects to secure its supply chain
Brussels increases pressure on states to guarantee affordable energy
At a conference held on June 11, Brussels reaffirmed its goal to reduce energy costs for households and businesses by relying on targeted investments and greater consumer involvement.
Brussels seeks to accelerate permitting for renewable energy projects
The European Commission held a high-level dialogue to identify administrative obstacles delaying renewable energy and energy infrastructure projects across the European Union.
Liberia mobilises $300mn for its power grid but still faces a 51.8% supply gap
Despite increased generation capacity and lower tariffs, Liberia continues to rely on electricity imports to meet growing demand, particularly during the dry season.
Lee Jae-myung could slow nuclear expansion in South Korea
South Korea's new president, Lee Jae-myung, is reviewing the national energy policy, aiming to rebalance nuclear regulations without immediately shutting down reactors currently in operation.
CRE adopts 237 decisions and targets grid adaptation by 2028
The French Energy Regulatory Commission released its 2024 annual report, highlighting sustained activity on grid infrastructure, pricing, and evolving European regulatory frameworks.
Washington significantly reduces penalties imposed on foreign LNG tankers and vehicle carriers
The United States is easing proposed penalties for foreign LNG tankers and vehicle carriers, sharply reducing initial costs for international operators while maintaining strategic support objectives for the American merchant marine.
Africa captures only 2% of global clean energy investment in 2025
While capital is flowing into clean technologies globally, Africa remains marginalised, receiving only a fraction of the expected flows, according to the International Energy Agency.
United States cancels fuel economy standards set by Biden
The U.S. Department of Transportation is withdrawing strict fuel economy standards adopted under Biden, citing overreach in legal authority regarding the integration of electric vehicles into regulatory calculations for automakers.
Renewable energies accounted for 33.9% of electricity consumption in France in 2024
In 2024, renewable energies covered 33.9% of electricity consumption in metropolitan France, driven by increased hydropower output and solar capacity expansion.
The CRE unveils its strategic guidelines for 2030
The French Energy Regulatory Commission (CRE) has announced its strategic guidelines for 2030, focusing on the energy transition, European competitiveness and consumer needs.
Spain settles $26.8 million debt in international energy dispute
Madrid paid an arbitration award to Blasket Renewable Investments after more than ten years of litigation related to the withdrawal of tax advantages for renewable energy investors.
The renewable energy market reaches $1,200 billion in 2024
The global renewable energy market continues to grow, reaching $1,200 billion in 2024, according to a report by the International Energy Agency (IEA), supported by investments in solar and wind energy.
Saint-Jean-Baptiste Cooperative secures $3.43mn to modernise electrical grid
The Québec government is granting $3.43mn to the Saint-Jean-Baptiste Electric Cooperative to deploy smart meters and upgrade infrastructure across 16 municipalities.
Tariff increases slow down energy projects in the United States
New US tariff measures are driving up energy sector costs, with a particularly strong impact on storage and solar, according to a study by Wood Mackenzie.
Europe Faces Critical Stagnation in Climate and Environmental Investments
Despite the proclaimed urgency, European climate investments stagnate around €500 billion per year, far from the estimated needs of nearly €850 billion. New financial instruments are attempting to revive an indispensable momentum.
African Debt: Why Investors Must Anticipate Immediate Climate Impacts
African countries now spend more on debt service than on education and healthcare, limiting essential investments despite significant energy potential. The G20, under pressure, struggles to provide an adequate response to the financial and climate challenges.
Egypt authorises four private producers to supply 400 MW of electricity to industrial clients
Four renewable energy producers have been authorised to sell 400 MW directly to Egyptian industrial companies without public support.
Up to 30% of ASEAN data centres could be powered without batteries by 2030
A report by Ember shows ASEAN could supply nearly one-third of its data centres with wind and solar power by 2030 without storage, provided appropriate public policies are implemented.
Madrid rejects claims of experiment linked to nationwide power outage
Spanish authorities and grid operator REE denied conducting any experiment on the national electricity network prior to the massive outage on April 28, the cause of which remains unknown.
Wood Mackenzie’s tariff scenarios reshape global energy policy
Three trade trajectories projected by Wood Mackenzie show how tariff tensions could shift demand, prices and investment in the global energy sector.

LEGAL

FOSSILS

POLICY

RENEWABLE

PLUS

VERVANT

Welcome

Your subscription

Included in this subscription:

COMMUNICATE ON ENERGYNEWS