Financial institutions encouraged to enter carbon market to lift China's pricing power
Published: Sep 27, 2021 10:57 PM
Shanghai Environment and Energy Exchange Photo: CFP

Shanghai Environment and Energy Exchange Photo: CFP

Financial institutions will be encouraged to actively participate in the carbon market, and more carbon financial services, at home and abroad, will be promoted to help enhance China's pricing power internationally, Zhou Xiaoquan, President of the Shanghai United Assets and Equity Exchange, said during a seminar held in Shanghai on Monday. 

Efforts are being made to build Shanghai into a carbon market pricing center with international influence, said Zhou.

Relying on Shanghai's mature financial market, the Exchange, a comprehensive platform for assets and equity transactions, will focus on the creation of the national carbon trading market and the promotion of innovation and systematic development of carbon financing, such as carbon funds and bonds, Zhou said, adding that more carbon derivatives trading will be launched.

Zhou made these remarks during a seminar held in Shanghai on Monday at the same time as the conference of the Carbon Neutral Action Alliance. A number of member enterprises took part in the conference that was held for the first time since its launch in July. The alliance was led by the Shanghai Environment and Energy Exchange (SEEE), which aims to regulate carbon neutrality standards and compel enterprises to better reach carbon neutrality goals.

China aims to peak carbon emissions by 2030 and achieve carbon neutrality before 2060.

China's national carbon market trading started on July 16 at the SEEE with an opening price for the carbon quota of 48 yuan ($7.42) per ton.

Over 2,000 power companies were included in the first batch of carbon emissions market trading which is expected to exceed 4 billion tons annually, making it the largest carbon trading scheme in the world. 

Carbon trading is the process of purchasing and selling permits to emit carbon dioxide. For many companies emissions trading is a new concept but the larger companies will play a leading role in building the initial capacity, sharing know-how and creating market standards, Zhou Xuetao, Managing Director of Fixed Income, Commodities and Currency from China International Capital Corp, told the Global Times on Monday.

Li Gao, Director General of the Department of Climate Change at the Ministry of Ecology and Environment, addressed the seminar through video link. Cheng Peng, Director of the Shanghai Ecology and Environment Bureau, and Hu Guangjie, Hongkou district chief in Shanghai, also delivered speeches.