Revamped carbon credit trade system launched

China launched the China Certified Emission Reduction program on Monday in Beijing, allowing companies in certain industries to trade their carbon reduction numbers after voluntarily engaging in emission-cutting activities.

Vice-Premier Ding Xuexiang, also a member of the Standing Committee of the Political Bureau of the Communist Party of China Central Committee, attended the ceremony and announced the launch.

The CCER will complement the country's existing carbon credit trading market, which has been in operation since July 2021 and can only be participated in by enterprises of a designated emission quota. The CCER will better incentivize the development of some companies, especially those in the clean energy sector, to push for the nation's green transition, experts said.

During the initial phase, the CCER will consist of four sectors: forestation, solar thermal power, offshore wind power and mangrove vegetation creation.

Based on a series of calculation methods issued by the Ministry of Ecology and Environment in October, companies involved in these sectors may register their accredited carbon reduction numbers in the CCER system and await transactions.

Yang Pingjian, head of the environmental sociology bureau at the Chinese Research Academy of Environmental Sciences, told China Central Television that these sectors have been selected because their profitability is significantly dependent on the sale of carbon credits.

Offshore wind power generation, for example, takes place far from land or shallow waters, meaning they are more costly than their counterparts on land or shoals, he said. Therefore, the provisional earnings from the CCER may enlarge the prospect of profit.

At the moment, Yang said, the buyers would mainly be those high-emission enterprises that can't meet their quota and therefore have to buy extra to offset their emissions, as well as companies that wish to manifest their corporate social responsibility in contributing to building a greener world.

In the future when the program is more mature, he said, any individual may purchase the quota to offset their carbon footprint.

Compared to the carbon emissions trading market, the CCER program is, in principle, designed for anyone interested in cutting emissions, Yang said.

Initially introduced in 2012, the CCER program was de-facto suspended in 2017 due to its low trading volume and the need to standardize operation. While allowing the quota generated between 2012 and 2017 continually to be traded, the Ministry of Ecology and Environment prepared for the relaunch of the program following extensive research.