China's national carbon market saw prices stall in August after a policy-driven rally, with the benchmark CEA allowance trading in a wide range between 96.5 and 100 yuan as repeated attempts to break above the 100-yuan threshold failed.

The average daily closing price of CEA allowances rose about 9.08% month on month to 98.12 yuan/tonne in August, up from 89.95 yuan/tonne in July, according to data from the China National Carbon Market.

CCER prices continued their upward trend in August, narrowing the gap with CEA allowances. The average transaction price rose 8.12% from the previous month to 94.68 yuan/tonne, with cumulative turnover reaching 364 million yuan ($53.68 million) on volume of 3.86 million tonnes. The highest single-day average price of 96.94 yuan/tonne was recorded on August 26.

The market's highest price for the month was 100.00 yuan/tonne, with a low of 92.00 yuan/tonne. The closing price on the last trading day was 0.70% lower than the July 31 settlement.

Trading volumes

Daily average CEA trading volume surged about 27.8% month on month to 958,700 tonnes in August, with several sessions exceeding one million tonnes. August 26 saw the year's highest daily volume at 2.95 million tonnes. However, the volume expansion was not accompanied by a price breakout, with late-month sessions showing rising turnover but stagnant prices, indicating intensifying divergence between bulls and bears.

Total August trading volume reached 25.61 million tonnes, up 48.37% month on month. Listed contract transactions rose 7.19% to 6.26 million tonnes, while bulk contract transactions jumped 69.44% to 19.35 million tonnes. No one-way bidding transactions were concluded during the month.

Total transaction value reached 2.43 billion yuan in August, up 59.55% month on month. Listed contract turnover rose 15.55% to 615 million yuan, while bulk contract turnover increased 83.24% to 1.81 billion yuan.

From January 1 to August 31, cumulative quota transactions totaled 95.83 million tonnes with a value of 8.04 billion yuan. As of August 31, cumulative transactions since the market's launch reached 960.69 million tonnes, worth 65.70 billion yuan.

Policies

In policy developments, the Supreme People's Court on August 6 issued the first judicial interpretation supporting the Ecological Environment Code, effective August 15 alongside the code itself.

The Ministry of Ecology and Environment and five other departments on August 11 released the 15th "Five-Year Plan" for ecological protection, encouraging social capital participation in ecological restoration and promoting innovation in carbon financial products and derivatives.

At a State Council Information Office press conference on August 13, officials said the 15th "Five-Year Plan" period is decisive for achieving carbon peaking, with the ministry focusing on green transition, carbon market development, emissions accounting, climate resilience and international cooperation.

Three ministries jointly issued the 2026 edition of carbon emissions measurement capacity guidelines on August 18, expanding key measurement parameters from 39 to 58 and testing standards from 82 to 169 methods.

The Ministry of Ecology and Environment on August 24 approved the 2025-2026 quota allocation plan covering power, steel, cement and aluminum smelting sectors — the first time all four industries are managed under a single quota document. The plan lowers the preliminary allocation ratio from 70% to 50%, cancels quota carryover and reduces baseline values by 0.35% annually.

On August 25, the central government published guidelines on advancing green transition and strengthening carbon market construction, targeting coverage of major industrial emitters by 2027 and a fully established market with total volume control and combined free and paid allocation by 2030.

September Forecast

For September, Fudan University's Sustainable Development Research Center forecasts CEA buy and sell prices of 91.47 yuan/tonne and 98.84 yuan/tonne respectively, with a mid-price of 95.16 yuan/tonne. CCER buy and sell prices are expected at 89.13 yuan/tonne and 99.25 yuan/tonne, with a mid-price of 94.19 yuan/tonne.