Report Summary 1. Investment Rating The report does not mention the industry investment rating. 2. Core View The report tracks important dynamics in the domestic and international "dual carbon" fields from September 8th to September 12th, 2025, mainly in the carbon quota trading area. It shows that last week, carbon quota trading prices in European and American carbon markets decreased, while prices in the South Korean carbon market increased. The trading volume in the South Korean carbon market rose significantly, while the cumulative trading volume of carbon emission allowances in the national carbon market decreased. There were also significant developments in the green - development field [2][5]. 3. Summary by Directory 3.1 International Carbon Trading Market Tracking - **European Carbon Quota Price and Volume**: EUA spot price dropped by 1.75% from September 8th to September 12th, and the trading volume increased by 314.67% to 31.10 tons. EUA futures price decreased by 1.79%, and the trading volume decreased by 45.63% to 216.50 tons [6]. - **US Carbon Quota Price and Volume**: EUA futures price declined by 1.81%, and the total trading volume decreased by 7.59% to 169.99 million tons. UKA futures price dropped by 1.73% [12]. - **South Korean Carbon Quota Price and Volume**: KAU25 spot price rose by 10.76%, and the trading volume increased by 72.31% to 60.93 tons [17]. 3.2 Domestic Carbon Market Tracking - **National Carbon Market Carbon Quota Volume and Average Transaction Price**: The cumulative trading volume of carbon emission allowances (CEA) was 532.81 tons, and the cumulative transaction amount was 332.6115 million yuan, with decreases of 36.42% and 38.62% respectively compared to the previous week. The average daily transaction price of CEA was 62.58 yuan/ton, a 4.29% decrease [21]. - **Weekly Average Transaction Price of Carbon Quotas in Domestic Pilot Provincial and Municipal Carbon Markets**: Except for HBEA in Hubei and GDEA in Guangdong, the weekly average transaction prices of carbon quotas in domestic pilot carbon markets showed a downward trend. FJEA in Fujian had the largest decline, reaching 10.00% week - on - week and 26.41% month - on - month [25]. - **Trading Volume and Transaction Amount of Carbon Quotas in Domestic Pilot Provincial and Municipal Carbon Markets**: The carbon quota trading in domestic pilot carbon markets was mainly concentrated in Shenzhen, Shanghai, Beijing, and Tianjin, accounting for 97.23% of the total weekly trading volume and 98.10% of the total weekly transaction amount. The total weekly trading volume of domestic pilot carbon markets was 21.60 tons, a 118.54% increase [27]. 3.3 Dual - Carbon Frontier Technology Tracking - **China's First Offshore Carbon Dioxide Storage Project Exceeds 100 Million Cubic Meters in Storage**: The Enping 15 - 1 oilfield carbon storage project has successfully stored over 100 million cubic meters of carbon dioxide, marking the maturity of China's offshore carbon dioxide storage technology and providing a new model for marine energy recycling [29]. - **China's Largest All - Vanadium Redox Flow Battery Photovoltaic - Energy Storage Integration Project Conducts Its First Charging Experiment**: The energy storage power station of the project in Jimsar, Xinjiang, has successfully started the first charging experiment, providing key technical support for solving the problem of large - scale new energy grid - connected consumption [32].

Core Insights - The article discusses the development and significance of China's national carbon market, which has entered a new phase aimed at enhancing its vitality and international influence [4][5][9]. Group 1: Carbon Market Overview - The national carbon market consists of two components: a mandatory carbon market for key emission units and a voluntary carbon market to encourage self-reduction efforts [6][11]. - As of August 22, 2023, the mandatory carbon market has seen a cumulative trading volume of over 680 million tons of carbon emission allowances (CEA) with a transaction value of 47.41 billion yuan [7]. - The voluntary carbon market has registered 2.49 million tons of certified voluntary emission reductions (CCER) with a transaction value of 210 million yuan [7]. Group 2: Future Goals and Development - The government aims for the mandatory carbon market to cover major industrial sectors by 2027 and to establish a comprehensive quota control system by 2030 [9]. - The voluntary carbon market is expected to achieve full coverage of key areas by 2027 and to align with international standards by 2030 [9][10]. Group 3: Financial Mechanisms and Innovations - The article highlights the introduction of carbon pledge and repurchase policies to enhance financing channels for emission-reducing enterprises [13]. - Carbon emissions can now be used as collateral for loans, and insurance products related to forestry carbon sinks are being developed [14]. Group 4: Market Dynamics and Participation - The article emphasizes the need to expand the participant base in both carbon markets to improve liquidity and effectiveness [15][16]. - The current structure primarily involves high-emission enterprises, and expanding participation could lead to more continuous price signals in the market [16].

Core Viewpoint - The establishment of a national carbon market in China marks a significant step towards utilizing market mechanisms to address climate change and promote green transformation in the economy and society [1][5]. Group 1: Carbon Market Structure - The national carbon market consists of two main components: the mandatory carbon market, which started in 2021, and the voluntary carbon market, set to launch in 2024 [2][6]. - The mandatory carbon market will cover over 2,000 key emission units by 2024, with a nearly 100% compliance rate for quota clearance [3][6]. - The voluntary carbon market aims to incentivize self-directed emission reductions and is expected to achieve full coverage in key areas by 2027 [6]. Group 2: Market Performance and Impact - As of August 22, 2023, the mandatory carbon market has seen a cumulative transaction volume of over 680 million tons of carbon emission allowances (CEA), with a total transaction value of 47.41 billion yuan [3]. - The voluntary carbon market has recorded a cumulative transaction of 2.49 million tons of certified voluntary emission reductions (CCER), amounting to 210 million yuan [3]. - The carbon market is expected to drive the transformation of key industries, including steel, cement, and aluminum, by promoting the use of renewable energy and enhancing energy efficiency [3][6]. Group 3: Future Development Goals - By 2027, the mandatory carbon market aims to cover all major industrial sectors, transitioning to a total control system for carbon emissions by 2030 [6]. - The voluntary carbon market is set to establish a transparent and unified methodology by 2030, aligning with international standards [6]. - The government plans to increase the proportion of paid carbon allowances, moving from a free allocation system to a combination of free and paid allocations [6]. Group 4: Financial Mechanisms and Innovations - The carbon market will introduce policies for carbon pledging and repurchase, allowing companies to use carbon assets as collateral for loans, thereby enhancing financing channels [9]. - Carbon emissions can also be insured, with innovative products like forestry carbon index insurance being developed to protect against carbon loss due to natural disasters [10][11]. - The establishment of a robust carbon pricing mechanism is expected to stimulate green technology innovation and attract broader participation from financial institutions and individuals in the carbon market [12].

Core Viewpoint - The recently published "Opinions on Promoting Green and Low-Carbon Transition and Strengthening National Carbon Market Construction" marks the first central document in China's carbon market sector, outlining a roadmap for the long-term development of the national carbon market [1] Group 1: National Carbon Market Development - The document provides a clear roadmap for building a more effective, vibrant, and internationally influential carbon market, detailing the requirements for establishing a national voluntary greenhouse gas emission reduction trading market [1] - The establishment of both the national carbon emission trading market (mandatory carbon market) and the national voluntary greenhouse gas emission reduction trading market (voluntary carbon market) has been achieved, creating a comprehensive national carbon market system [1][2] - As of August 22, 2025, the cumulative transaction volume of carbon emission allowances (CEA) in the national carbon market reached 680 million tons, with a total transaction value of 47.41 billion yuan [2] Group 2: Regulatory Framework and Market Expansion - Over 30 regulations and technical standards have been developed, forming a multi-level and relatively complete regulatory framework for the carbon market [2] - The coverage of the mandatory carbon market is set to expand, with the steel, cement, and aluminum smelting industries being included this year, effectively managing over 60% of national carbon emissions [2] - The carbon allowance allocation method will transition from free allocation to a combination of free and paid allocation, gradually increasing the proportion of paid allocation [2] Group 3: Financial Instruments and Market Vitality - The introduction of carbon pledge and carbon repurchase systems aims to enhance financing channels for key emission units, activate carbon assets, and reduce financing costs [3] - Financial institutions will be encouraged to participate in the national carbon market transactions, with the potential inclusion of non-compliance entities and eligible individuals in the voluntary carbon market [3] - The Ministry of Ecology and Environment will continue to strengthen the institutional foundation for carbon market construction, aiming to build a more effective, vibrant, and internationally influential national carbon market [3]

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]

Core Viewpoint - The national carbon market has experienced a significant price decline, with carbon emission allowances (CEA) dropping to 68.48 yuan/ton, a decrease of approximately 35% from the historical high of around 105 yuan/ton reached in November of the previous year. This decline is attributed to weakened demand, increased supply expectations, and deteriorating market sentiment. However, long-term prospects suggest that carbon prices may stabilize and rise due to tightening policies, industrial upgrades, and deeper international linkages [1][2][4]. Group 1: Price Decline Factors - The primary demand side for carbon market is thermal power, which has seen a decrease in generation, directly impacting the motivation to purchase carbon allowances. From January to April, total electricity generation, including thermal power, grew by only 0.1% year-on-year, significantly lower than the 6.1% growth in the same period last year [2]. - The manufacturing PMI fell below 50 after April due to trade frictions, leading to a slowdown in industrial electricity growth. Additionally, higher temperatures this year have reduced residential electricity consumption, further impacting demand for carbon allowances [2]. - The introduction of a "zero gap" for new industry allowances and the restart of the voluntary emission reduction market (CCER) have also contributed to downward pressure on prices [3]. Group 2: Long-term Market Outlook - Despite the current price decline, there is a consensus that the long-term upward trend of carbon prices remains intact. The total allowance will tighten annually in line with the "dual carbon" goals, leading to increased scarcity [4]. - The European Union's Carbon Border Adjustment Mechanism (CBAM), set to impose a "carbon tax" in 2026, is expected to align domestic carbon prices with major markets [4]. - The transition of high-emission industries will require higher carbon price signals, supporting the long-term price increase [4]. Group 3: Financial Innovations and Risk Management - The China Securities Regulatory Commission has proposed the development of carbon futures, which will help companies manage carbon price volatility through hedging strategies [5]. - The establishment of a well-functioning carbon futures market is seen as essential for stabilizing carbon costs and avoiding adverse impacts on business operations due to price fluctuations [5][6]. - The future development of a carbon futures market is viewed as an opportunity for gaining international pricing power in major energy commodities [6].

Investment Rating - The report assigns an "Overweight" rating for the environmental protection industry [1][30]. Core Insights - The report emphasizes the investment opportunities arising from the resolution of hidden local government debts, which is expected to improve the balance sheets of environmental companies. Since 2018, risks associated with local government hidden debts have been alleviated, with a target to completely resolve these debts by the end of 2028, involving an increase of 6 trillion yuan in local government debt limits to replace existing hidden debts [4][9][11]. Summary by Sections Weekly Investment Perspective - The report highlights the ongoing efforts to limit new local government debt while addressing existing hidden debts, focusing on the investment opportunities this creates for environmental companies. The goal is to resolve all hidden debts by the end of 2028, with a total of 6 trillion yuan in new debt limits to facilitate this process [4][8][9]. Environmental Sector Performance - The environmental sector experienced a slight increase of 0.46% in the week of June 3 to June 6, 2025. In comparison, the gas and water sectors rose by 1.95% and 0.79%, respectively. The report also lists the top five gainers and losers among environmental stocks during this period [12][13][14]. Carbon Neutrality Tracking - The report provides data on carbon market transactions, noting that the national carbon emissions trading quota (CEA) saw a transaction volume of 2.22 million tons, a 5% increase from the previous week, with an average transaction price of 67.21 yuan per ton. Local trading exchanges saw a significant drop in transaction volume, down 74% [16][21]. Investment Recommendations - The report recommends specific companies within the environmental sector based on their potential for growth due to the ongoing debt resolution policies. Key recommendations include: - Solid Waste: China Everbright International, Sanfeng Environment, Green Power, and Hanlan Environment - Water Services: Beijing Enterprises Water Group and Guangdong Investment - Engineering Services: Delin Hai - Environmental Monitoring Equipment: Xuedilong [11][12].

Report Industry Investment Rating - Not provided in the given content Core Viewpoints - The carbon quota trading prices in the European and American carbon markets decreased last week, while the KAU24 spot price in the South Korean market increased. The trading volumes in the American and South Korean carbon markets rose, and the cumulative trading volume of carbon emission allowances in the national carbon market in China increased significantly. The weekly trading volume in domestic pilot carbon markets also increased [2]. - Two important events occurred in the field of international green development cooperation: China and CELAC reached a cooperation plan, and RE100 unconditionally recognized Chinese green certificates, which shows China's continuous improvement in green rule - guiding ability and technology export capacity [2]. Summary by Directory 1. International Carbon Trading Market Tracking 1.1 European Carbon Quota Price and Volume - EUA spot price dropped from 72.31 euros/ton on May 12 to 69.94 euros/ton on May 16, a weekly decline of 3.28%. The trading volume was 7.1 tons last week, a 44.96% decrease from the previous week. EUA futures price fell from 73.41 euros/ton to 70.99 euros/ton, a 3.3% decline, and the trading volume was 279.1 tons, a 35.94% decrease [6]. 1.2 American Carbon Quota Price and Volume - EUA futures price decreased from 73.41 euros/ton on May 12 to 70.99 euros/ton on May 16, a 3.3% weekly decline. The total trading volume of EUA futures was 180.02 million tons, a 15.03% increase from the previous week. UKA futures price dropped from 52.71 pounds/ton to 48.36 pounds/ton, an 8.25% decline [10]. 1.3 South Korean Carbon Quota Price and Volume - KAU24 spot price rose from 8810 won/ton on May 12 to 8910 won/ton on May 16, a 1.14% weekly increase. The trading volume was 47.48 tons, a 107.79% increase from the previous week [16]. 2. Domestic Carbon Market Tracking 2.1 National Carbon Market Carbon Quota Volume and Average Transaction Price - The cumulative trading volume of carbon emission allowances (CEA) in the national carbon market last week was 3.672 million tons, and the cumulative transaction amount was 265.7224 million yuan, with increases of 212.14% and 222.83% respectively from the previous week. As of May 16, the average daily transaction price of CEA last week was 71.16 yuan/ton, a 1.71% increase [19]. 2.2 Weekly Average Transaction Price of Carbon Quotas in Domestic Pilot Provincial and Municipal Carbon Markets - Except for Guangdong Province, the weekly average transaction prices of carbon quotas in domestic pilot carbon markets showed a downward trend last week, with the largest decline of 5.66% in Fujian's FJEA. Compared with the same period last month, except for Beijing, Tianjin, Hubei, and Shenzhen, the prices in other pilot markets declined, with the largest decline of 28.69% in Chongqing's CQEA [23]. 2.3 Carbon Quota Volume and Transaction Amount in Domestic Pilot Provincial and Municipal Carbon Markets - The carbon quota trading in domestic pilot carbon markets last week was mainly concentrated in Chongqing, Shenzhen, Tianjin, and Shanghai, accounting for 96.47% of the total weekly trading volume and 94.90% of the total weekly transaction amount. The total weekly trading volume in domestic pilot carbon markets was 181,600 tons, a 71.19% increase from the previous week [25]. 3. Double - Carbon Frontier Technology Tracking 3.1 China - CELAC Cooperation Plan: Exploring Cooperation and Investment Opportunities in Energy Transition and Advanced Energy Storage Technology - On May 13, China and CELAC jointly formulated a cooperation plan (2025 - 2027), emphasizing cooperation and investment opportunities in energy transition and advanced energy storage technology to promote green and low - carbon energy transformation [28]. 3.2 RE100 Announces Unconditional Recognition of Chinese Green Certificates - Recently, RE100 announced unconditional recognition of Chinese green certificates. This is a major achievement of China's green certificate system improvement, which will boost confidence in Chinese green certificate consumption, expand demand, and enhance the green competitiveness of Chinese enterprises [28].

Core Insights - The national carbon market in China experienced increased trading activity in April, driven by news of industry expansion, with daily average trading volume of carbon allowances (CEA) reaching 233,100 tons, a nearly 50% increase from March's 158,800 tons [1][2] - Despite the rise in trading activity, carbon prices continued to decline, with the average closing price for CEA in April at 82.26 yuan per ton, down 6.42% from March's 87.90 yuan per ton [2] Group 1 - The Ministry of Ecology and Environment issued a notification on April 23 regarding the management of the national carbon market, outlining key tasks and deadlines for major emitting sectors including power generation, steel, cement, and aluminum smelting [1][2] - The notification mandates that units with annual direct emissions of 26,000 tons of CO2 equivalent must be included in the key emissions unit directory, which will prevent overlapping management with local carbon markets [2] Group 2 - The research center forecasts that carbon prices in the national market will continue to decline in May, with expected buying price at 78.37 yuan per ton and selling price at 82.66 yuan per ton, indicating a downward trend in market expectations [2] - The indices for buying and selling prices are projected to decrease by 7.70% and 7.32% respectively, reflecting a broader trend of declining carbon prices [2]