With 4582 registered companies in half a year, why has China's voluntary greenhouse gas emission reduction trading market attracted much attention?
"On January 22, 2024, since the launch of the National Greenhouse Gas Voluntary Emission Reduction Trading Market, various market entities have actively participated. As of now, a total of 4582 accounts have been opened in the registration system and trading system." Recently, at the 2024 China Carbon Market Conference, Wang Naixiang, chairman of the Beijing Green Exchange, said in an interview with this reporter.
The national carbon emissions trading market and the national voluntary greenhouse gas emission reduction trading market not only have their own focuses and operate independently, but are complementary and interconnected. Since the beginning of this year, what new changes have been brought to the national carbon market by the launch of the national voluntary greenhouse gas emission reduction trading market? What impact will it have on relevant emission companies?
Attract green and low-carbon investment and create more green market opportunities
Through voluntary emission reduction trading, companies can obtain economic returns and participate more proactively and consciously in the development and application of low-carbon technologies. The "Interim Regulations on the Administration of Carbon Emissions Trading" that came into effect on May 1 this year clarify that key emission units can purchase certified greenhouse gas emission reductions in accordance with relevant national regulations and use them to pay off their carbon emission quotas.
"On the one hand, high-emission companies can use the China Certified Voluntary Emission Reduction (CCER) registered in the National Greenhouse Gas Voluntary Emission Reduction Trading Market to offset part of their carbon emissions, providing flexibility for fulfilling mandatory carbon market emission reduction obligations. On the other hand, companies and institutions can purchase CCER to offset carbon emissions, achieve carbon neutrality, and better fulfill their low-carbon action commitments and fulfill their social responsibilities." Wang Naixiang said.
According to the "Carbon Emissions Trading Management Measures (Trial)" that will come into effect on February 1, 2021, CCER can be used to pay the annual offset carbon emission quotas of key emission units covered by the national carbon emissions trading market. The offset ratio shall not exceed 5% of the carbon emission quotas that should be paid.
"Judging from the overall trading situation, the current trading price of CCER has increased from around 10 yuan per ton in 2020 to 77.9 yuan per ton in July this year, and there is still room for increase in the future. In terms of cumulative transaction volume, it has reached 470 million tons as of July this year. The transaction volume is equivalent to the trading volume of carbon emission quotas, with a cumulative transaction amount exceeding 7 billion yuan." Xu Huaqing, chief scientist of the National Climate Strategy Center, used a set of figures to initially analyze the current trading situation of domestic voluntary emission reduction projects.
Previously, some industry organizations also predicted that the theoretical demand for CCER in the initial stage of the national carbon market will reach about 250 million tons per year. In the future, with the gradual improvement of the market and the release of methodologies, the CCER market is expected to release greater demand.
CCER market entities will be more diverse and the market scale will be further expanded
In the process of reviewing and implementing voluntary emission reduction projects, accounting for their emission reductions and providing a basis for verification are the top priority. In October 2023, the Ministry of Ecology and Environment successively issued the "Measures for the Management of Voluntary Greenhouse Gas Emission Reduction Trading (Trial)" and four methodologies, which clarified the project areas and accounting methods supported by the first batch of CCER systems, including afforestation carbon sinks, grid-connected solar thermal power generation, and mangrove forest construction.
Regarding the development and construction of the CCER market, Lu Shize, deputy director of the Climate Change Response Department of the Ministry of Ecology and Environment, said at the sub-forum of the 2024 China Carbon Market Conference "Building a Voluntary Emission Reduction Trading Market and Promoting the Participation of the Whole Society" that the Ministry of Ecology and Environment will be normalized in the future. Continue to carry out methodological selection work in a regular and institutionalized manner, publicly solicit methodological suggestions for voluntary greenhouse gas emission reduction projects, and implement high social expectations, clear emission reduction mechanisms, and guaranteed data quality, Based on the principles of both social and ecological benefits and effective supervision, we will screen methodological suggestions and organize modifications and improvements one by one.
"At the same time, the Ministry of Ecology and Environment will also establish a working mechanism for regular evaluation of methodologies, and in conjunction with the development of my country's dual-carbon process and related industries, timely update the application conditions of methodologies, emission reduction accounting methods and additionality demonstration methods to ensure the operation of the CCER market. Scientific and operable." Lu Shize said.
Which areas will be the first to enter the CCER market? Wang Naixiang revealed that the competent authorities are continuing to organize the evaluation, selection and formulation of methodologies. Based on the four methodologies released last year, in the future, renewable energy, ecosystem carbon sinks, methane emission reduction, energy conservation and efficiency improvement will be released in the field, etc., and market support areas will be continuously expanded.
Enhanced international attributes and conditions for international development are available
"There are currently considerable conditions for the international development of the voluntary carbon market." Wang Naixiang said that at the beginning of the design of my country's voluntary carbon market, relevant management requirements and technical specifications have been consistent with international common practices and the requirements of the global market mechanism of the Paris Agreement to the greatest extent possible, including the authenticity and uniqueness of emission reduction projects and emission reductions. Requirements for sex and additionality, as well as considerations of the impact on all aspects of sustainable development. Doing so helps create conditions for mutual recognition.
In addition, in terms of institutional arrangements and design in terms of unified management and information disclosure, unified technical specifications, unified registration and trading venues, my country has further strengthened its efforts to implement voluntary emission reduction projects and their requirements for timely and accurate information disclosure and disclosure in all aspects of emission reduction development to provide sufficient information for market and social supervision as much as possible.
High-quality and high-credit data is a prerequisite for international mutual trust and mutual recognition. During the 2024 China Carbon Market Conference, Xu Shaoshan, deputy director of the China Quality Certification Center, also put forward his own suggestions on data quality. He said that in the data collection stage, data storage and transmission stage, Internet of Things technology should be used as much as possible to avoid human processing of data and subsequent editing work, achieve data traceability, traceability, and accountability, and continuously improve the CCER market's recognition and influence in the international community.
