focusing| International dilemma and solution for China's green certificate

With the acceleration of global green energy transformation, Green Power Certificates (Green Certificates) have become a core tool for countries to promote the development of renewable energy and promote carbon emission reduction. China is not willing to lag behind in this process. Following the issuance by the National Development and Reform Commission, the Ministry of Finance, and the National Energy Administration of the "Notice on Achieving Full Coverage of Renewable Energy Green Power Certificates to Promote Renewable Energy Power Consumption"(Development and Reform Energy [2023] No. 1044), the National Energy Administration recently issued the "Rules for the Issuance and Trading of Green Power Certificates for Renewable Energy"(hereinafter referred to as the "Green Certificate Rules"), which clearly stipulates that China's green certificates should be used as domestic renewable energy The only proof of the environmental attributes of electricity regulates the issuance and trading of the domestic green certificate market. However, although this rule ensures the order of the domestic market, it faces many challenges in the international market. The path for international green certificates to enter the Chinese market has been blocked, and China's green certificates have not yet been widely recognized in the international market, which complicates and limits the participation of Chinese companies in global green energy transactions.

01 The domestic uniqueness of China's green certificate: protect the market or bind it?

The "Green Certificate Rules" clearly state that after domestic power generation companies or project owners that have established a card apply for a China Green Certificate in China, in principle, they cannot apply for similar international certification for the same amount of electricity. The intention of this move is to prevent the same electricity from being repeatedly certified and traded in different markets and avoid arbitrage and chaos in the market. However, this has also led to an embarrassing situation: although China's green certificate is the only proof of environmental attributes in China, it has not yet been widely recognized in the international market.

On the one hand, the uniqueness of China's green certificates ensures the unity and transparency of the domestic market and prevents disorderly competition caused by duplicate certifications. However, this policy also locks in the international circulation channels of China's green certificates, making it difficult for Chinese companies to use the same electricity in the international market to participate in international certification and transactions. The demand for green electricity in the international market is growing, and companies 'global green brand building and carbon emission reduction commitments are also urgently needed to be realized through international certification platforms. The current rule framework of China's green certificates has undoubtedly become a major obstacle for enterprises to expand in the international market.

02 The dilemma of international green certificates "unable to enter" and Chinese green certificates "unable to exit"

The current restrictions on China's green power certification are not only "the only one in China", but also reflect the deep gap between China and the international green power certification system. It is difficult for international green certificates to enter the Chinese market, while it is also difficult for Chinese green certificates to go international. This has created a two-way closure situation, bringing double difficulties to Chinese companies.

On the one hand, the lack of international markets. Many international markets have clear certification requirements for green power. If companies want to participate in cross-border power transactions, carbon trading or fulfill international carbon emission reduction commitments, they must obtain international green certificates. However, China's green certificates have not yet been widely accepted in the international market, resulting in serious restrictions on the ability of Chinese companies to participate in international transactions. Even if a company fulfills its responsibility for green power production domestically, without international certification, its environmental actions may not be recognized in the international market.

On the other hand, the closure of domestic policies. China's unique green certificate policy also limits the connection between Chinese companies and the international green certificate system. This means that the green electricity produced domestically by Chinese companies cannot be recognized and circulated globally through international certification. At present, although China's green certificate has strong policy support at home, its disconnect from the international market makes it difficult to effectively connect with other green power certificate systems around the world.

03 Challenges and opportunities in participating in the international market

Although the international recognition of China's green certificates has not yet reached the ideal level, Chinese companies have not completely lost the opportunity to participate in the international green energy market.

First, develop a dual-track certification mechanism

Chinese companies can apply for China Green Certificates in the domestic market by distinguishing the uses of different electricity, and at the same time apply for international certification for electricity in the international market. This means that companies can choose different certification systems at home and abroad based on factors such as the location of the project and the destination of energy exports. This "dual-track certification" mechanism can help companies maintain compliance in the international market while avoiding violations of the unique requirements of domestic green certificates.

Second, promote the international docking of China's green certificates

China should actively promote the docking and mutual recognition of the green certificate system and the international market. Through cooperation with international green energy certification bodies, China's green certificate may gradually gain international recognition, thus providing guarantees for the competitiveness of enterprises in the global green power market. For example, learn from the European Certificate of Origin (GoO) system or the United States 'Renewable Energy Certificate (RECS) system to form a standard connection with the international market and open up a path for China's green certificate to "go global".

Third, strengthen regional cooperation and promote international certification

The "Belt and Road" initiative provides an important opportunity for China's green certificate to enter the international market. Through energy cooperation with countries along the Belt and Road Initiative, China can explore the establishment of a regional green power certification mechanism and promote mutual recognition of certification among regions through cooperation. This will not only help promote the internationalization of China's green certificates, but also provide domestic companies with more opportunities to participate in the international green energy market.

Fourth, use blockchain and other technologies to enhance international recognition

Currently, blockchain technology is becoming more and more widely used in global green power certification. Through the introduction of blockchain technology, China can enhance the transparency and credibility of China's green certificates and enhance its recognition in the international market. By establishing an open, transparent and tamper-proof green certificate management system, China can provide more credible green power certification standards for the international market, and then gain trust and recognition from the international market.

04 From closure to openness, the international future of China's green certificate

The "Rules for Issuing and Trading Renewable Energy Green Power Certificates" provide a strong guarantee for the standardized development of China's domestic green power market, but it also shows its limitations in the internationalization process. If Chinese companies want to occupy a place in the global green power market, they must break through the closed situation of domestic green certificates and find effective ways to connect with the international green certificate system.

Promoting the internationalization of China's green certificates is not only an inevitable choice for market demand, but also an inevitable trend in global green energy cooperation. In this process, China needs to more actively participate in the formulation of international energy rules, promote mutual recognition and cooperation of green power certificates, and provide strong support for the green competitiveness of Chinese companies in the global market. By moving from closed to open, China's green certificate will not only be the "only proof" of the domestic market, but also become an important passport for green energy in the international market.