Core Insights - The national carbon market in China is developing steadily, with industry expansion, improved methodologies, and mature market operations, but recent declines in carbon emission allowance (CEA) prices have raised concerns [1] - As of June 27, the average transaction price of CEA was 74.96 yuan/ton, a decrease of approximately 30% from the peak in November of the previous year [1] - Multiple factors, including a significant drop in international energy prices and a loosening of policies, have contributed to the recent decline in carbon prices [2] Market Dynamics - Demand for carbon allowances has weakened due to a decline in thermal power generation, which is the main industry in the national carbon market, with total power generation growth of only 0.1% from January to April, significantly lower than the 6.1% growth in the same period last year [2] - The manufacturing PMI fell below 50% after April, leading to a slowdown in industrial electricity growth, while higher temperatures reduced residential electricity demand [2] - The launch of the national voluntary greenhouse gas reduction trading market (CCER) and the increase in supply expectations have also contributed to the downward pressure on carbon prices [3][4] Future Price Trends - Despite the current decline, experts believe that carbon prices are likely to stabilize and rise in the long term due to the ongoing push for carbon neutrality and the gradual implementation of industry expansion [1][5] - The carbon price is expected to rise as high-emission industries transition and the renewable energy sector grows, with a higher carbon price incentivizing companies to adopt disruptive technologies [5] Global Influences - China's carbon prices may be influenced by other major global carbon markets, such as the EU's carbon border adjustment mechanism (CBAM), which will impose fees on certain products based on carbon market price differences starting in 2026 [6] - The International Monetary Fund (IMF) has suggested that to meet the Paris Agreement goals, the global average carbon price should exceed $85 per ton by 2030, which could also impact China's carbon pricing [6] Market Structure and Regulation - The EU carbon market serves as a reference for improving the financial attributes of carbon markets globally, with a well-established legal framework and a diverse range of trading products [9] - Experts suggest that financial institutions should be gradually introduced into carbon market trading to enhance liquidity and market activity, while ensuring that carbon prices do not rise too quickly [8][10] - There are challenges in the development of carbon finance in China, including the need for clearer legal definitions regarding carbon emission rights and the limitations on financial institutions' direct participation in the carbon market [8]

Report Investment Rating - No investment rating information is provided in the report. Core Viewpoints - In 2025, the remaining 40% of mandatory circulation allowances can only meet part of the market demand, and about 0.5 - 0.6 billion tons of market demand may be met by the voluntary sales of surplus enterprises. The market selling pressure in 2025 will be less than that in Q4 2024 [3]. - There is no quota gap for the newly included industries in the 2024 annual compliance. The gap in the national carbon market is slightly adjusted down, but it has limited impact on the supply - demand balance. The expansion plan brings short - term emotional bearishness and may accelerate the release of mandatory circulation allowances. The short - term support level for the comprehensive price is around 86 yuan, and if it breaks below, the lower level is seen at 76 yuan/ton [3]. - Pay attention to the trading activity around the pre - allocation deadline of the 2024 annual allowances (April 14). The exhaustion node of mandatory circulation allowances is postponed, and the strong upward momentum may appear in Q2 2025 and later [3]. Summary of Each Section 1. National Carbon Market Comprehensive Data - This week, the comprehensive price of the national carbon market was weak, with a closing price of 85.4 yuan/ton, a week - on - week decrease of 0.84% and a year - on - year decrease of 2.59%. The carbon allowances of 2019 - 20 and 2023 decreased by 2.34% and 1.08% respectively compared with last week. The weekly total trading volume was about 1.74 million tons, a 40% increase from last week [1]. - The weekly average trading price of the national carbon market was 76.76 yuan/ton, a 10.28% week - on - week decline, mainly dragged down by large - scale agreement transactions [2]. - Among them, the volume of listed agreement transactions was about 170,000 tons, accounting for 9.9% of the weekly total trading volume. The trading popularity of the 2023 carbon allowances was still the highest, accounting for 96% of the weekly total trading volume (a 3 - percentage - point decline) [1]. 2. Carbon Allowance Market Data by Year - The trading volume and turnover data of carbon allowances of different years are presented in detail in Table 1, including weekly total trading volume, listed agreement trading volume, large - scale agreement trading volume, weekly total turnover, listed agreement turnover, large - scale agreement turnover, weekly average trading price, listed agreement average trading price, and large - scale agreement average trading price [12]. - The latest prices, week - on - week and year - on - year growth rates of carbon allowances of different years are shown in Table 2 [12]. - Since the launch of the annual label, the trading volume and average trading price data of carbon allowances of different years are presented in Table 3, including listed agreement and large - scale agreement trading volume, average trading price, price difference, total trading volume, and the proportion of large - scale trading [20]. 3. National Greenhouse Gas Voluntary Emission Reduction Registration and Market Trading Data - The first batch of registered emission reduction volumes in 2025 are shown in Table 4, including project owners, methodologies, registration dates, applied registered emission reduction volumes, and expected error rates [21]. - The weekly trading data of the national greenhouse gas voluntary emission reduction trading market are presented in Table 5, including weekly total trading volume, weekly total turnover, average trading price, week - on - week growth rate, and premium rate [22]. Recommended Strategy - It is recommended that enterprises with allowance gaps make batch purchases at low prices in the range of 76 - 80 yuan/ton [4].