Can blockchain work in climate policy? China may use immutable records in green power trading pilot plan as transactions kick off

The scheme will be led by the National Development and Reform Commission (NDRC), and the power distributors State Grid and China Southern Power Grid

A trading centre in Beijing and another one in Guangzhou will be established under the plan

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Wind turbines at a wind farm in Youyu county in the Shanxi provincial capital of Taiyuan in northern China on July 24, 2017. Photo: Xinhua

Published: 7:30am, 9 Sep 2021Updated: 3:34pm, 9 Sep 2021

China has launched a pilot trading scheme for renewable electricity to allow carbon dioxide emitters to partly offset their footprint through direct purchases of green power from generators, with blockchain technology likely to be deployed.

The initiative, which will provide financial support to generators, is part of Beijing’s plan to mobilise the major emitters of greenhouse gases to help achieve the nation’s twin climate goals, for carbon emissions to peak before 2030 and to achieve net zero emission by 2060.

The scheme will be led by the National Development and Reform Commission (NDRC), besides the dominant power distributors State Grid Corporation of China and China Southern Power Grid. A trading centre in Beijing and another one in Guangzhou will be established under the plan following the start of a national trading scheme for carbon emission permits in Shanghai.

“Solar and wind power output’s intermittency means absorbing more of the green power will result in higher operating costs for the power distribution system,” the commission said on Tuesday. “Through the direct trading, consumers willing to shoulder more social responsibility will be able to use the market-based method to better reflect the environmental value of green power, and financially support its producers.”

Policymakers are confident that such a scheme will be welcomed because research show many companies have already expressed the interest to pay extra for their electricity as part of their social responsibility, while some local governments have already prepared to enable such trading, the NDRC said.

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