China launches domestic offset market to align with national ETS goals
On 22 January 2024, the Chinese government announced the relaunch of the Certified Emissions Reduction scheme (CCER), after a six-year suspension and reform period. The launch of the new CCER allows project owners to apply for CCER projects and generate offset credits which can be used in the national ETS.
The formal announcement of the CCER launch by the Vice Premier of the People's Republic of China followed the publication of a series of documents relating to the scheme over the latter part of 2023. These documents set out eligible project types, as well as guidelines for project design and implementation, registry management, and project verification.
The scheme is expected to begin operating in 2024 and be open to offshore wind farms, solar thermal power plants, mangrove development, and forestry. Entities covered by the national ETS will be able to use CCERs to offset up to 5% of their verified emissions, up to a total of approximately 250 million tonnes across the scheme.
Verification agencies need to be accredited before the scheme can begin operating. On 19 January 2024, the Certification and Accreditation Administration (CNCA) issued a notice inviting applications from third-party verification agencies. Prospective agencies have until February 2024 to submit their applications, after which CNCA will accredit them, paving the way for project owners to commence their applications.
The previous CCER scheme was suspended in 2017, due to small trading volumes and lack of regulation for some projects. 80 million tons of CCER credits were issued over its six year operation between 2012 and 2017, which were used in China’s pilot ETS and national ETS.
The China national ETS was launched in July 2021. It primarily covers the power sector but is exploring the inclusion of other industries.