China's national carbon market saw a sharp rebound in trading activity last week (Jul 27-Jul 31), driven by sustained price gains and the release of a draft quota allocation plan.

The benchmark carbon emission allowance (CEA) price hit a weekly high of 99.50 yuan/t, approaching the 100 yuan/t threshold, before closing at 98.59 yuan/t on July 31, up 5.35% from the previous week (July 24).

Total weekly CEA trading volume surged 157.84% month on month to 5.69 million tonnes, with bulk contract transactions growing 166.68% to 3.77 million tonnes and listed contract deals up 142.08% at 1.92 million tonnes. No one-way bidding transactions were concluded.

Total weekly turnover reached 522 million yuan ($76.88 million), up 158.86% from a week earlier, with bulk contracts accounting for 338 million yuan and listed contracts 185 million yuan.

Daily volumes ranged from a weekly low of 437,400 tonnes on July 27 to a high of 1.64 million tonnes on July 28.

Cumulative CEA trading since the start of the year through July 31 totaled 70.22 million tonnes, with turnover of 5.61 billion yuan. Since the market's inception, cumulative volumes reached 935.09 million tonnes, valued at 63.27 billion yuan.

CCER prices followed CEA gains last week, trading between 86.43 yuan/t and 94.92 yuan/t, with trading volumes remaining elevated.

Policies in Focus

In international markets, US Regional Greenhouse Gas Initiative (RGGI) allowance prices rose to a five-week high above $22/t, supported by pre-heating season power sector demand, expectations of tighter auction supply and stronger natural gas prices.

China's Ministry of Ecology and Environment on July 27 released a draft quota allocation plan covering the power sector for 2025-2026 and the steel, cement and aluminum smelting industries for 2026, with public comment period ending August 5. The plan tightens quotas through lower benchmarks, reduced compensation, cancellation of carryovers and introduction of paid allocation.

The ministry also joined 18 other government departments on July 29 to release the national climate change plan for the 15th "Five-Year Plan" period, targeting a 17% reduction in carbon dioxide emissions per unit of GDP by 2030 from 2025 levels and a 3% decline in emissions per unit of product in sectors covered by the carbon market.