Guangdong Province in south China commenced carbon emission trading on Thursday, with seven deals for about 120,000 tonnes on the first day.
The transactions involving seven companies were worth 7.22 million yuan ( 1.2 million U.S. dollars), with prices between 60 yuan and 61 yuan per tonne, according to the provincial carbon emission trading market.
"Our carbon emission quota is not enough. Today we bought a quota of 25,000 tonnes through the system, which is smooth and convenient in operation, just like the stock market," said the manager of an energy company in Zhanjiang City. He bought the quota from another power generation company in Shaoguan City, at a price of 60 yuan per tonne.
As an important manufacturing province and big energy consumer, the carbon emission trading market should help businesses develop low carbon technology and reduce emissions, said Chen Yijun of Guangdong Development and Reform Commission.
In 2011, the National Development and Reform Commission, the top economic planning agency, approved pilot trading schemes in Beijing, Tianjin, Shanghai, Chongqing, Hubei, Shenzhen and Guangdong, and trading started in Beijing, Shanghai, Shenzhen earlier this year.
In Guangdong, the total carbon emission quota is 388 million tonnes. For 2013 and 2014, 97 percent of the quota will be free and 3 percent will be sold at auction.
"The auction mechanism will increase business costs, but will save energy and reduce emissions," said Xu Yunzhao of the Taiwan Cement Yingde Co., Ltd.
The pilot schemes were a landmark for a China intent on building a nationwide carbon trading market. The country has pledged to reduce carbon dioxide emissions by 40 to 45 percent per unit of GDP by 2020, in comparison with 2005.