Climate change: China signals reboot of suspended voluntary carbon market is near with release of draft guidelines, regulations

The guidelines provided examples of carbon reduction activities in 16 industries, and included use of renewable energy and carbon capture

New project registration has been suspended since 2017 due to low trading volume and a lack of standardisation in carbon audits

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China, the world’s largest greenhouse gas emitter, has made several environmental commitments ahead of the United Nations COP28 climate summit in Dubai. Photo: AP

Published: 12:00pm, 18 Nov 2023

China has published draft regulations and guidelines for its voluntary carbon market, the China Certified Emission Reduction (CCER) scheme, in the latest move suggesting the reboot of the suspended market is getting close.

The National Centre for Climate Change Strategy and International Cooperation (NCSC), the key think tank under the Ministry of Ecology and Environment (MEE), in charge of climate policies research, released proposed rules on registration procedures, and guidelines for the design and implementation of voluntary carbon offset projects under the CCER scheme on Thursday.

The guidelines provided examples of carbon reduction activities in 16 industries, and included the use of renewable energy, energy efficiency enhancement, forestation, and carbon capture and storage. It also included rules on emissions reduction and removal monitoring and credit accounting. The pilot regulation on registration procedures became effective immediately.

The release of the documents may signal that the CCER market, 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 – is ready for relaunch and accepting new project applications.

The CCER scheme, first launched in 2012, allows companies trading under the national ETS to offset up to 5 per cent of their emissions by purchasing credits from certain emission reduction projects such as forestation and renewable power generation. However, new project registration has been suspended since 2017 due to low trading volume and a lack of standardisation in carbon audits.

Last month the MEE released regulations on CCER trading for trial implementation, saying it will gradually expand the number of sectors covered by the scheme in order to support China’s goal of reaching peak emissions by 2030 and carbon neutrality by 2060.