China ETS: Emissions prices settle at record low

: Coal, Emissions
21/08/20

Prices in China's emission trading scheme (ETS) have fallen to the lowest level since the market started trading last month, while trading volumes also dropped this week.

Prices settled at 49 yuan/t ($7.50/t) of CO2 equivalent (CO2e) today, below the Yn51.23/t settlement on the first trading day on 16 July.

Total volumes were 1.42mn t of CO2e this week, including 22,012t of open-bid trades and 1.4mn t of bulk agreements. The volume of open-bid trades has now fallen for five straight weeks.

The weighted-average open-bid price was Yn50.54/t this week, 7.6pc lower than a week earlier. The average price for the bulk agreement transactions was Yn45/t, down by 10.5pc from last week.

The ETS is a new initiative for China, has many shortcomings and needs to be improved, Huang Runqiu, China's ecology and environment minister, said this week. "We must be cautious and steady in the progress," he said.

The environment ministry is the government body overseeing the ETS and China's climate change policies.

More details on regulation of emissions trading are likely to be published soon, Huang said. China will set up a voluntary emissions reduction mechanism and include more emissions entities and third-party traders in the ETS to help increase market activity.

China certified emissions reduction (CCER), a voluntary emissions reduction programme that typically covers forestry and renewable power projects, has not yet been adopted by the national ETS. CCER trading has been included in the pilot ETSs that operate in seven cities and provinces, with total CCER volumes of 1.94mn t last week.

China's national forestry and grassland administration is pushing ahead with a trading scheme for forestry and grassland carbon sinks, officials said in a briefing today. The ministry will encourage forestry projects to participate in the national ETS as part of the carbon offset mechanism.

Weekly policy review

China's top economic planning body the NDRC has issued new warnings to some local governments that missed targets to control energy intensity in the first half of this year.

Nine provinces or regions — Guangdong, Jiangsu, Yunnan, Fujian, Shaanxi, Guangxi, Ningxia, Qinghai and Xinjiang — have been issued code red warnings after increasing their energy intensity in January-June. These provinces must suspend approvals of new energy-intensive projects for the rest of the year, the NDRC said in a statement on 17 August.

The warnings could encourage some provinces to consider power rationing over the high demand winter season.

China ETS volumes, prices

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25/04/03

New tariffs could upend US tallow imports

New York, 3 April (Argus) — New US tariffs on nearly all foreign products could deter further imports of beef tallow, a fast-rising biofuel feedstock and food ingredient that had until now largely evaded President Donald Trump's efforts to reshape global trade. Tallow was the most used feedstock for US biomass-based diesel production in January for the first month ever, with consumption by pound rising month to month despite sharp declines in actual biorefining and in use of competing feedstocks. The beef byproduct benefits from US policies, including a new federal tax credit known as "45Z", that offer greater subsidies to fuel derived from waste than fuel derived from first-generation crops. Much of that tallow is sourced domestically, but the US also imported more than 880,000t of tallow last year, up 29pc from just two years earlier. The majority of those imports last year came from Brazil, which until now has faced a small 0.43¢/kg (19.5¢/lb) tariff, and from Australia, which was exempt from any tallow-specific tariffs under a free trade agreement with US. But starting on 5 April, both countries will be subject to at least the new 10pc charge on foreign imports. There are some carveouts from tariffs for certain energy products, but animal fats are not included. Some other major suppliers — like Argentina, Uruguay, and New Zealand — will soon have new tariffs in place too, although tallow from Canada is for now unaffected because it is covered by the US-Mexico-Canada free trade agreement. Brazil tallow shipments to the US totaled around 300,000t in 2024, marking an all-time high, but tallow shipments during the fourth quarter of 2024 fell under the 2023 levels as uncertainty about future tax policy slowed buying interest. Feedstock demand in general in the US has remained muted to start this year because of poor biofuel production margins, and that has extended to global tallow flows. Tallow suppliers in Brazil for instance were already experiencing decreased interest from US producers before tariffs. Brazil tallow prices for export last closed at $1,080/t on 28 March, rising about 4pc year-to-date amid support from the 45Z guidance and aid from Brazil's growing biodiesel industry, which is paying a hefty premium for tallow compared to exports. While the large majority of Brazilian tallow exports end up in the US, Australian suppliers have more flexibility and could send more volume to Singapore instead if tariffs deter US buyers. Export prices out of Australia peaked this year at $1,185/t on 4 March but have since trended lower to last close at $1,050/t on 1 April. In general, market participants say international tallow suppliers would have to drop offers to keep trade flows intact. Other policy shifts affect flows Even as US farm groups clamored for more muscular foreign feedstock limits over much of the last year, tallow had until now largely dodged any significant restrictions. Recent US guidance around 45Z treats all tallow, whether produced in the US or shipped long distances to reach the US, the same. Other foreign feedstocks were treated more harshly, with the same guidance providing no pathway at all for road fuels from foreign used cooking oil and also pinning the carbon intensity of canola oil — largely from Canada — as generally too high to claim any subsidy. But tariffs on major suppliers of tallow to the US, and the threat of additional charges if countries retaliate, could give refiners pause. Demand could rise for domestic animal fats or alternatively for domestic vegetable oils that can also be refined into fuel, especially if retaliatory tariffs cut off global markets for US farm products like soybean oil. There is also risk if Republicans in the Trump administration or Congress reshape rules around 45Z to penalize foreign feedstocks. At the same time, a minimum 10pc charge for tallow outside North America is a more manageable price to pay compared to other feedstocks — including a collection of charges amounting to a possible 69.5pc tax on Chinese used cooking oil. And if the US sets biofuel blend mandates as high as some oil and farm groups are pushing , strong demand could leave producers with little choice but to continue importing at least some feedstock from abroad to continue making fuel. Not all US renewable diesel producers will be equally impacted by tariffs either. Diamond Green Diesel operates Gulf Coast biorefineries in foreign-trade zones, which allow companies to avoid tariffs on foreign inputs for products that are ultimately exported. Biofuel producers in these zones could theoretically refine foreign tallow, claim a 45Z subsidy, and avoid feedstock tariffs as long as they ship the fuel abroad. Jurisdictions like the EU and UK, where sustainable aviation fuel mandates took effect this year, are attractive destinations. And there is still strong demand from the US food sector, with edible tallow prices in Chicago up 18pc so far this year. Trump allies, including his top health official, have pushed tallow as an alternative to seed oils. By Cole Martin and Jamuna Gautam Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Funding cuts could delay US river lock renovations

25/04/03

Funding cuts could delay US river lock renovations

Houston, 3 April (Argus) — The US Army Corps of Engineers (Corps) will have to choose between various lock reconstruction and waterway projects for its annual construction plan after its funding was cut earlier this year. Last year Congress allowed the Corps to use $800mn from unspent infrastructure funds for other waterways projects. But when Congress passed a continuing resolutions for this year's budget they effectively removed that $800mn from what was a $2.6bn annual budget for lock reconstruction and waterways projects. This means a construction plan that must be sent to Congress by 14 May can only include $1.8bn in spending. No specific projects were allocated funding by Congress, allowing the Corps the final say on what projects it pursues under the new budget. River industry trade group Waterways Council said its top priority is for the Corps to provide a combined $205mn for work at the Montgomery lock in Pennsylvania on the Ohio River and Chickamauga lock in Tennesee on the Tennessee River since they are the nearest to completion and could become more expensive if further delayed. There are seven active navigation construction projects expected to take precedent, including the following: the Chickamauga and Kentucky Locks on the Tennessee River; Locks 2-4 on the Monongahela River; the Three Rivers project on the Arkansas River; the LaGrange Lock and Lock 25 on the Illinois River; and the Montgomery Lock on the Ohio River. There are three other locks in Texas, Pennsylvania and Illinois that are in the active design phase (see map) . By Meghan Yoyotte Corps active construction projects 2025 Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Trump to 'stand firm' on tariffs as markets crash

25/04/03

Trump to 'stand firm' on tariffs as markets crash

Washington, 3 April (Argus) — President Donald Trump does not intend to back down from his plan for sweeping import tariffs that have already caused a sell-off in global equity markets and some commodities, administration officials say. The tariffs — which will start at 10pc for most imports on 5 April before steeper country-specific tariffs take effect on 9 April, with exceptions for some energy and mineral imports — have caused key stock indexes to drop by as much as 5pc, with even larger declines in crude futures, as investors brace for lower growth and a higher chance of a recession. Trump earlier today defended the tariffs, as he prepared to leave the White House for a dinner tonight at a golf tournament at one of his resorts in Florida. "THE OPERATION IS OVER! THE PATIENT LIVED, AND IS HEALING," Trump wrote in a social media post before major stock markets opened. Trump's cabinet has downplayed the short-term price effect of the tariffs, which they say will boost economic growth in the US and cause a resurgence in domestic manufacturing. US commerce secretary Howard Lutnick said he does not think there is "any chance" that Trump will rescind the tariffs, and said Trump will only begin to work on new trade deals once a country has "really, really changed their ways" on trade practices. "Trump is going to stand firm because he is reordering global trade," Lutnick said today in an interview with CNN. "Make no mistake about it, America has been exploited, and he is done allowing America to be exploited." Other administration officials have suggested a greater potential for lower tariffs in the near-term. US treasury secretary Scott Bessent has encouraged world leaders to "take a deep breath" and not to "panic" because the tariff rates that Trump announced were a "ceiling" that might come down, so long as there was no retaliation. "Don't immediately retaliate, let's see where this goes, because if you retaliate, that's how we get escalation," Bessent said on 2 April during interview on Fox News. The tariffs have caused bipartisan backlash on Capitol Hill, but so far legislative action has been symbolic and unlikely to become law. The US Senate, in a bipartisan vote on 2 April, approved a joint resolution that would end the justification Trump has used to put tariffs on Canada. US senators Chuck Grassley (R-Iowa) and Maria Cantwell (D-Washington) introduced a bill today to eliminate most new presidential tariffs after 60 days without approval by the US Congress. Democrats say the tariffs will force consumers to pay far more on everyday goods, with revenue offsetting Republican plans to provide more than $5 trillion in tax cuts. "Donald Trump is using tariffs in the dumbest way imaginable. In fact, Donald Trump slapped tariffs on penguins and not on Putin," US Senate minority leader Chuck Schumer (D-New York) said today, in reference to Trump's decision to put a 10pc tariff on an island populated only with penguins. Trump has claimed his country-specific tariffs are "reciprocal" even though they have no relation to the tariffs each country charges on US imports. Instead, Trump's tariffs were calculated based on a universal equation that is set at half of the country's trade deficit with the US, divided by the country's imports from the US, with a minimum tariff rate of 10pc. Major US trading partners are preparing for retaliatory tariffs. Canada's prime minister Mark Carney said he would respond to Trump's tariffs on automobiles, which took effect today, by "matching the US approach" and imposing a 25pc tariff on auto imports that do not comply with the US-Mexico-Canada free trade agreement. China said it was preparing unspecified countermeasures to US tariffs that would be set at 54pc. Trump's cabinet today dismissed the market reaction to the tariffs. Stock markets are going through a "short-term adjustment" but the tariffs will ultimately result in more growth and additional investments, US Small Business Administration administrator Kelly Loeffler said today in an interview on Fox News "The gravy train is over for the globalist elites," said Loeffler, who previously was a top executive at US exchange operator ICE. By Chris Knight Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Mexico manufacturing extends contraction in March

25/04/02

Mexico manufacturing extends contraction in March

Mexico City, 2 April (Argus) — Mexico's manufacturing sector contracted for a 12th consecutive month in March, with production and employment both deepening their slides, according to a survey released today. The manufacturing purchasing managers' index (PMI) ticked up to 47.2 in March from 47.1 in February, but remained below the 50-point threshold between contraction and expansion, according to the latest PMI survey from the finance executive association IMEF. Manufacturing, which accounts for about a fifth of Mexico's economy, is led by the auto sector, contributing about 18pc of manufacturing GDP. Within the manufacturing PMI, the new orders index rose by 1.3 points to 45.3, still deep in contraction. Meanwhile, production fell by 0.6 points to 44.6. The employment index also declined 0.6 points to 46.4 in March, now in contraction for 14 consecutive months. Meanwhile, the non-manufacturing PMI — covering services and commerce — declined 0.8 points to 48.8 in March from 49.6 in February, holding in contraction for a fourth consecutive month. Within the non-manufacturing PMI, new orders fell 1.5 points to 48.2 and production declined 1 point to 47.5 with employment down a point as well in March to 47.5, as all three pushed deeper into contraction. In contrast, the inventories component rose 3.5 points to 50.6 into expansion territory in March. But this may be the result of company strategies to stockpile inventories ahead of US tariffs and the reciprocal measures Mexico is set to announce on 3 April, IMEF technical advisory board member Sergio Luna said. PMI data show that the economic stagnation that began in late 2024 persisted through March, with results from January and February pointing to a sharp slowdown in the first quarter, IMEF said. This follows annualized GDP growth of 0.5pc in the fourth quarter of 2024, slowing from 1.7pc in the third quarter, according to national statistics agency data. Luna said concerns over US tariffs continue to drive much of the uncertainty reflected in the PMI data. Internal factors — such as reduced government spending to contain the fiscal deficit and investor unease over judicial reforms passed last year — are also weighing on activity, Luna added. By James Young Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Article 6 credits 'could provide CBAM cost flexibility'

25/04/02

Article 6 credits 'could provide CBAM cost flexibility'

Lisbon, 2 April (Argus) — Allowing the use of credits issued under Article 6 of the Paris climate agreement for compliance with the EU's carbon border adjustment mechanism (CBAM) could provide flexibility for developing countries that lack the capacity to set up their own carbon pricing systems in response to the measure, delegates at a conference in Lisbon, Portugal, heard today. The CBAM regulation provides for a carbon price already paid on a product in its country of origin to be deducted from CBAM costs, providing an incentive for countries importing products covered by the measure to the EU to introduce equivalent carbon pricing systems. But developing countries often lack the capacity to enact such policies, the chief sustainability and innovation officer at ACT Group, Federico di Credico, told delegates, and allowing the use of Article 6 credits for compliance could provide an alternative. This could in one form take place implicitly, di Credico said, if CBAM liabilities are adjusted down in relation to pricing systems that themselves allow some compliance using Article 6 credits. An example of this is Singapore, where 5pc of the country's carbon tax can be offset through the purchase of Article 6 internationally traded mitigation outcomes (Itmos). A more direct inclusion of Article 6 credits for compliance could entail a calculation on a euro-for-euro basis, di Credico suggested, for example reducing a CBAM liability of €100 to €50 if the importer has purchased €50-worth of Article 6 credits. Using a tonne-for-tonne basis would not work because the CBAM is not volume based, he said. But the uncertainty surrounding Article 6 credits means that their inclusion would bring an added layer of complexity to the CBAM, Cedric de Meeus of cement producer Holcim said. Article 6 credits are not usable in the EU emissions trading system (ETS), which forms the reference price for the CBAM, he pointed out, while not all activities producing Article 6 credits would be equivalent to the deep decarbonisation being carried out by European industry. It remains unclear how the EU will take into account carbon prices in other jurisdictions for the purposes of the CBAM. The CBAM regulation includes the ability to credit a "carbon price… effectively paid in the country of origin" but does not define what falls within this term, and the implementing regulation that will provide further detail on the matter has not yet been tabled. Article 6 of the Paris deal provides for two carbon pricing mechanisms allowing countries to collaborate voluntarily to reduce their emissions. Article 6.2, which is already fully operational, produces Itmos through bilateral agreements on emissions reduction or removal projects, while Article 6.4 establishes the soon-to-be-implemented Paris Agreement Crediting Mechanism (Pacm), a UN-regulated global carbon crediting system. By Victoria Hatherick Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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