According to a commentary published on @Dialogue Earth, the price of Green Electricity Certificates (GECs) have risen from as low as CNY 0.15 in 2024 to more than CNY 2.3 in April 2025 with a month-on-month increase of 63%. What are the factors driving this increase?
Factors Impacting GEC Price
The rise in the price of GECs is due to an increase in demand for the GEC. This increase in demand is due to policies implemented by the Chinese government. Policies include:
1. Compulsory use of GECs as proof of consumption of renewable energy
A consortium of government bodies, spearheaded by the National Development and Reform Commission, issued a document in March 2025 that made it mandatory for businesses in energy-intensive sectors – iron and steel, nonferrous metals, construction materials, petrochemicals and chemicals, and data centres – to buy GECs.
By 2030, enterprises in these sector have to prove that the share of renewable power in their overall consumption at least matches that of China as a whole, which currently stands at around 35%. For newly built data centres at national computing hubs, their target will be exceed the existing 80%.
2. Designation of GECs as sole instrument to prove production and consumption of renewable energy
In August 2023, the Chinese government clarified that GECs were China’s only recognised proof of the production and consumption of renewable electricity.
3. Removing practical barriers to access GECs
The Chinese government has also implemented policies that removed uncertainty on GEC use. For instance, the environmental attributes of green electricity can be presented in either amount of power generated or carbon emissions avoided. There was uncertainty over whether those attributes should be traded on carbon markets or on green electricity markets, as well as the question of avoiding double-counting. This was clarified in February 2025 when National Development and Reform Commission and National Energy Administration mandated that all renewable power should be traded on the electricity market. Measures are also being implemented to sync the GEC market with the voluntary carbon (or China Certified Emission Reduction) market to prevent double-counting.
Growth potential of GEC market
Based on their power consumption in 2023, the iron and steel, nonferrous metal and chemicals sectors would require 900 million GECs. Meanwhile, BloombergNEF has forecasted China’s data centres will consume 320 million GECs a year. These sectors would at least require 1.22 billion GECs, nearly three times the 446 million GECs traded in 2024.
Furthermore, in May 2025, RE100 announced that the GEC aligns with international standards unconditionally. This should drive demand for GECs domestically and internationally.
Adopt Renewable Energy
As China strives to achieve its dual carbon goals of achieving peak emission by 2030 and reaching carbon neutrality by 2060, the country is developing a green economy, with renewable energy as one of the engines.
Powering the green economy hand-in-hand with renewable energy are GECs which could catalyse increased investment in renewables. Using GECs, businesses can enhance their sustainability credentials and support China’s goal to reach carbon neutrality.
To learn more about GECs and our other renewable energy solutions can support your clean energy journey, contact us at enquiry@redex.eco or visit www.redex.eco.
