The status of China’s voluntary carbon market
This report summarizes the current status of the China GHG Voluntary Emission Reduction Program. The report examines the design of offset mechanisms in China’s local carbon markets, in turn providing reference material for the voluntary program’s future development and for the introduction of offset mechanisms into China’s national emissions trading system.
The Chinese government targeted 2020 as the start of spot trading for China’s national carbon market, and plans to use China Certified Emission Reductions (CCERs) as offset credits, which are generated or traded within the voluntary program.
Some of the latest developments noted in the report include:
- By April 2020, China GHG Voluntary Emission Reduction Program certified or approved nine exchanges, 12 verification bodies, and 200 emission reduction methodologies.
- It validated 2,856 CCER projects and registered 1,047 CCER projects.
- It approved for issuance the emission reductions of 287 CCER projects, 254 of which have detailed project information published on the China Certified Emission Reduction Exchange Info-Platform. This allows officials to calculate the amount of approved emissions reductions.
Management milestones:
- The National Development and Reform Commission (NDRC) set the guidelines for the China GHG Voluntary Emission Reduction Program’s project development and clarified its working procedures in 2009 and 2012.
- In January 2015, the voluntary program’s registry was launched, marking the official start of trading and signifying that CCERs can be used for compliance in China’s local carbon markets
- In March 2017, the NDRC announced it was revising the “Interim Measures” in order to improve and standardize the China GHG Voluntary Emission Reduction Program, to promote green and low-carbon development, and to optimize the relevant administration and management processes. Since the announcement, national authorities have suspended applications for methodologies, projects, emission reductions issuance, verification bodies, and exchanges for the China GHG Voluntary Emission Reduction Program. Transactions, deliveries, and retirements of CCERs that were issued prior to March 14, 2017 will not be affected.
- In March 2018, the responsibilities for addressing climate change and managing the China GHG Voluntary Emission Reduction Program were transferred from the NDRC to the Ministry of Ecology and Environment. The MEE is now responsible for revising the “Interim Measures.” Once the revision is complete, applications related to the China GHG Voluntary Emission Reduction Program will be handled by the MEE in accordance with the new measures.
Carbon offset mechanisms in China’s local carbon markets:
- China’s local carbon markets have all adopted The China GHG Voluntary Emission Reduction Program for their offset mechanism. Due to the different rules for each of China’s local carbon markets, emission reductions have varying restrictions, including those on the type of emission reduction project, the originating region, quantity and vintage of the emission reductions.