On March 18, China's National Development and Reform Commission (NDRC), National Energy Administration (NEA), Ministry of Industry and Information Technology (MIIT), Ministry of Commerce (MOFCOM), and National Data Bureau (NDB) jointly issued the "Opinions on Promoting the High-Quality Development of the Renewable Energy Green Electricity Certificate Market" (hereinafter referred to as the “Opinions”), which systematically puts forward 17 operable measures, and builds a full-life-cycle management system covering the issuance, trading, cancellation, and authentication, with the aim of vigorously fostering The purpose of the Opinions is to vigorously cultivate the green certificate market, stimulate the demand for green power consumption, guide the price of green certificates to reasonably reflect the environmental value of green power, and accelerate the formation of green production methods and lifestyles.

Due to the homogeneity of electricity, in addition to dedicated power supply (direct power supply) and self-generated self-consumption and other special circumstances, power online, from the grid side and the user side are unable to distinguish between power categories (i.e., unable to distinguish between coal power or green power), can only be differentiated from the side of the power generation through a special marking, the green certificate came into being.

Green certificate is the only proof of the environmental attributes of China's renewable energy power, 1 green certificate corresponds to 1,000 kilowatt hours of renewable energy power, the essence of which is to give an environmental premium to green power through the market-based mechanism.

In 2017, China formally established the green certificate system, and as of the end of December 2024, a total of 4.955 billion green certificates have been issued nationwide, of which 3.379 billion are tradable green certificates. Chen Tao, director of the Qualification Center of the National Energy Board, introduced that at present, China has established a closed-loop management mechanism for the whole life cycle of green certificate issuance, trading, application and write-off, and green certificates have basically achieved full coverage of the issuance of certificates, and the scale of trading and the number of users are rapidly expanding, and the level of green power consumption in the whole society has been steadily improving.

The Opinion clearly puts forward a two-stage goal:

By 2027, the green certificate market trading system is basically perfect, the combination of mandatory and voluntary consumption mechanism, the accounting and certification system is taking shape, and the international application of green certificates is steadily advancing;

By 2030, the green certificate market system is further improved, the price of green certificates reasonably reflects the environmental value, and supports the high-quality development of renewable energy.

In order to solve the current imbalance between supply and demand in the green certificate market, and insufficient reflection of environmental value, the document puts forward the following supply guarantee measures:

1. Automatic issuance mechanism: Relying on the national green certificate issuance and trading system, the renewable energy power generation projects are required to automatically issue green certificates in batches on a monthly basis after completing the establishment of the file to ensure that the issuance of green certificates corresponding to last month's electricity is completed in the same month.

2. Expanding the scale of green trading: steadily promoting wind power (including decentralized wind power and offshore wind power), solar power (including distributed photovoltaic power generation and photothermal power generation), as well as biomass power generation, geothermal power generation, ocean energy power generation and other renewable energy power generation projects to participate in green power trading, and enhancing the scale of the transaction and liquidity through market-based operation.

3. Write-off and full life-cycle management: Improve the green certificate write-off mechanism; for green certificates that have been declared to have completed green power consumption, they will be written off according to the green power consumption certification voucher; green certificates that have exceeded the validity period will be automatically written off to ensure that environmental attributes of the same amount of electricity are not double-counted.

4. Cross-provincial circulation support: Clearly each region shall not restrict the green certificate trading area in any form, and promote the green certificate to circulate reasonably throughout the country to achieve the optimal allocation of resources.

The Opinion adopts the dual mechanism of “mandatory constraints + voluntary incentives” in demand-side regulation:

1. Mandatory consumption requirements: for iron and steel, non-ferrous metals, building materials, petrochemicals, chemicals, data centers and other key high-energy-consuming industries, requiring that the proportion of green power consumption by 2030, in principle, is not less than the average level of the national renewable energy power consumption of the total amount of responsibility for the weight of the weights; at the same time, the proportion of green power consumption of national hub nodes of the newly-built data centers will be further enhanced on the basis of 80%, and some regions even strive to achieve 100% green power consumption. Realize 100% green power consumption. This initiative will help guide enterprises to shift from short-term passive “delivery” to long-term green transformation planning.

2. Voluntary consumption incentives: Encourage government departments, state-owned enterprises and leading enterprises in the industry to further increase the level of green power consumption in addition to the mandatory consumption ratio; through ESG information disclosure, green product certification and government procurement inclination and other policies, inspire the market to purchase green certificates on their own initiative, and form a new trend of green consumption in the whole society.

In order to enhance the international competitiveness and application value of green certificates, the Opinions put forward:

1. Internationalization of green card standards: Adhere to the combination of “bringing in” and “going out”, coordinate the preparation of international standards and domestic standards, and promote China's green power consumption standards to be recognized in the international green power accounting and certification.

2. Effective convergence of multiple mechanisms: Promote the in-depth integration of green certificates with renewable energy consumption responsibility, carbon emission accounting and carbon footprint certification, and build cross-sectoral, cross-regional and cross-annual accounting rules, so as to provide enterprises with “green passports” for participation in the international market.

Although the “Opinions” for the high-quality development of the green certificate market provides a clear direction and a number of support measures, but the development of the market is still facing many challenges:

- Imbalance between supply and demand: At this stage, the supply of green certificates in some regions is still difficult to meet the ever-expanding demand for green power consumption;

- Cross-regional trading barriers: there may be hidden barriers in the process of cross-provincial circulation of green certificates, and there is an urgent need to accelerate the landing of the provincial green certificate account system;

- Accounting convergence difficulties: how to ensure that environmental attributes are not double-counted while realizing the green certificate and carbon accounting, carbon footprint certification and other multi-system docking, still need to be further explored and improved.

As an important initiative to promote the green and low-carbon transformation of China's energy structure, the Opinions not only provide a policy basis for the construction of a nationally unified, standardized and efficient green certificate market, but also point out the direction for enterprises in various industries to realize green transformation and enhance international competitiveness.

In the future, relying on the full life cycle management system and the “mandatory + voluntary” dual-wheel drive mechanism, China's green certificate market will continue to release the potential to help realize the 2030 carbon peak and the strategic goal of comprehensive green economic and social transformation.

Author: Qinger