China has moved a step closer to rebooting its suspended voluntary carbon market, the China Certified Emission Reduction (CCER) scheme, a part of its plans to develop a more comprehensive market mechanism to support the country’s greenhouse gas emissions goals. China Beijing Green Exchange, which oversees the scheme, announced on Saturday that it has finished developing the registration and trading systems for CCER, and that these are ready for inspection before operations resume. These, it said, are “important infrastructure for building the voluntary carbon market.” First launched in 2012, the CCER scheme was suspended in March 2017 by the National Development and Reform Commission (NDRC), China’s central economic planner, because of low trading volume and a lack of standardisation in carbon audits. Applications for new CCER projects have been suspended ever since, but transactions, deliveries, and the decommissioning of existing CCERs were unaffected. CCER is considered an important supplementary mechanism to China’s national Emissions Trading Scheme (ETS), the world’s largest carbon market in terms of the emissions it covers, when it comes to achieving China’s goal of reaching peak emissions by 2030 and carbon neutrality by 2060. Its relaunch will greatly boost the development of carbon reduction projects such as clean energy, afforestation – planting trees on previously non-forested land – and methane utilisation, said Yuan Li, an analyst at Shanghai-listed Soochow Securities, in a report on Monday. CCER refers to emissions reduction activities conducted by companies on a voluntary basis that are certified by the Chinese government. Such activities include renewable power generation and waste-to-energy projects, as well as forestry projects. Under the national ETS, which currently regulates more than 2,000 emitters from China’s power generation sector, companies are given a limited amount of emissions allowances based on their emissions intensity and can sell the unused allowances to companies that need them to offset higher emissions. They can use the carbon credits purchased under the CCER scheme to offset up to 5 per cent of any emissions that exceed the national ETS targets. According to the Ministry of Ecology and Environment (MEE), in the first compliance cycle of the national ETS throughout 2021, a total of 179 million tonnes of carbon allowances changed hands out of the 4.5 billion tonnes of carbon dioxide emissions covered by the scheme. There was a carbon allowance gap of 188 million tonnes, of which 32.73 million tonnes were offset by CCER. Since the ETS officially started operating in July 2021, the reboot of CCER has been under discussion. Li Gao, director of the MEE’s climate change department said at a press briefing last October that China would strive to restart the CCER market as soon as possible, but an official date has not been disclosed since then. With the national ETS expanding to eventually cover all eight sectors responsible for the most emissions in China – power generation, oil refining, chemicals, steel, building materials, non-ferrous metals, paper, and aviation – by 2025, the demand for CCERs will be high enough to accelerate the reboot of the scheme, according to analysts. “The further expansion of the national ETS will widen the gap between issued carbon allowances and the enterprises’ actual emissions, which will speed up the restart of CCER,” Xu Qiang, an analyst at Hong Kong-based Guotai Junan Securities, wrote in a report on Tuesday.