(Updates to confirm that all firms now in compliance, adds
Reuters Instrument Codes)
BEIJING, June 30 A total of 7,220 tonnes of CO2
permits were auctioned by the Shanghai carbon exchange on
Monday, the bourse said, 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 exchange confirmed.
"All of the companies have complied with their targets, with
two of the seven laggard companies buying the permits they
needed from the auction and the other five surrendering on
time," said Tong Yan, founder of ideacarbon, a Chinese
consultancy based in Shanghai.
"We didn't expect a higher bidding price from the auction
-all the big shortfalls had been filled if you look at the
trading volumes since the auction was announced," said Tong.
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
Seventy percent of carbon permits on the exchange are
allocated to large state firms such as the Baoshan Iron and
Steel Corp., Huaneng Power, and Shenergy
Corp, which has impeded liquidity.
But after a rise in activity in the last few days of trade,
only seven of the 191 companies had not yet met their targets,
according to an official note published on Friday.
"There is limited demand from the remaining seven companies,
and the ratio of sellers to buyers was rising in the last couple
of days, which put pressure on prices and encouraged most
companies to buy all they needed from the market," said Tong.
The Shanghai Environment Energy Exchange launched the market
last November, and is one of seven pilot carbon trading
exchanges in China.
Shanghai handed over three years of permits for free in a
one-off allocation in 2013, and it allows companies to bank
surplus permits to use over the following years.
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.
Shanghai has not yet opened its market to speculative
investors, and the permits made available at Monday's auction
could only be bought by companies struggling to meet their
($1 = 6.2062 Chinese yuan)
(Reporting by Kathy Chen and David Stanway; Editing by Richard
Pullin and Muralikumar Anantharaman)