On 26 August 2024, China’s National Energy Administration (NEA) and Ministry of Ecology and Environment (MEE) jointly issued a Notice to relevant bureaus and departments. The Notice outlined four steps to be taken to coordinate the development of the Green Electricity Certificate (GEC) market with the China Certified Emission Reduction (CCER) market. The Notice took effect from 1 October 2024 and is valid for two years.
What are the four steps?
1) Establishment of a two-year transition period
During the transition period, deep-sea offshore wind power and Concentrated Solar Power (CSP) projects (that are connected to the grid) can independently choose to issue and trade GECs or apply for the CCER. Solar photovoltaic and other wind power projects will not be newly included in the CCER for the time being. After the transition period, the requirements for the linkage between GEC and CCER markets for deep-sea offshore wind power and solar thermal power generation projects will be adjusted in a timely manner based on the operation of the GEC and CCER markets.
2) Avoiding the duplication of benefits from GEC and CCER
For deep-sea offshore wind power and solar thermal power generation projects, if they intend to choose to participate in GEC trading, the corresponding amount of electricity shall not apply for CCER. For projects who choose to apply for CCER, the untraded GECs generated will be frozen by the NEA after the completion of the verification and registration of CCER projects. After the verification and registration of CCER is completed, the NEA will cancel the untraded GECs corresponding to the CCER registered and disclose the information to the public. Relevant departments should safeguard and protect the rights and interests of renewable energy power generators to independently choose to participate in either scheme.
3) Establishing an information sharing mechanism for GEC and CCER markets
The NEA and MEE have established an information sharing mechanism through the National Green Electricity Certificate Issuance and Trading System and the CCER Registration Platform to exchange information in a timely manner on: the issuance and trading of GECs for deep-sea offshore wind power and solar thermal power generation projects; and CCER applications.
4) Strengthening the supervision of transactions
To ensure the authenticity and traceability of GEC and CCER data, the NEA and MEE have instructed relevant parties to use big data, blockchain and other technical means to strengthen the development of the GEC issuance and trading system and CCER registration platform. Relevant parties have been tasked to regularly verify and inspect the data to prevent renewable energy power generation projects from duplicating the benefits of GECs and CCER.
Preventing double-counting of environmental attributes
The Notice provides measures that will be taken to prevent renewable energy projects from issuing both GECs and carbon credits for the same energy produced. In other words, if a generator issues GECs, it cannot issue carbon credits for that same energy, and vice versa. Systems and frameworks will be set up to prevent such scenarios and technology will be utilised as well to achieve this end.
Business can be assured that the GEC provides verifiable claims of renewable energy consumption. The GEC is also currently recognised by RE100 as a credible tool for proof of renewable energy use. For MNCs with operations in China, GEC’s are essential to meeting your sustainability goals.
Contact REDEX at enquiry@redex.eco to find out more about GECs and how we can support your renewable energy journey.
