China relaunches the CCER credit scheme suspended in 2017. The national voluntary market is open

On 22 January 2024 China officially relaunched the Chinese Certified Emission Reduction (CCER) scheme, the national market for voluntary carbon credits. The scheme, launched in 2012, was suspended in 2017 because of weak participation and insufficient verification. The relaunch complements the nationwide ETS with an incentive mechanism for projects that reduce emissions outside the mandatory system.

How CCER works

A project that reduces greenhouse gas emissions — e.g. an offshore wind farm or afforestation — can obtain emission credits after verification in line with the official methodology. According to Caixin, entities covered by the national ETS can offset up to 5% of their emissions with CCER credits, which gives projects additional revenue. Clifford Chance points out that key emitters can surrender acquired CCER credits alongside ETS allowances.

Background: the system and the market

Caixin recalls that the national ETS was launched in 2021, and by May 2022 about 60 million t of CCER credits had been used in it. The first solar thermal project in the system, Delingha (CGN New Energy), was commissioned in October 2018. China's offshore wind capacity was 37.29 GW at the end of 2023, which explains why offshore wind farms were among the first project types.

The first projects

At launch the scheme covered four project types: offshore wind farms, solar thermal power plants, mangroves and forestry. For the biogas industry this means that methane and biogas installations were initially not covered by the scheme — further methodologies were still to be developed, and their scope should be followed.

Incinerators dropped out of the scheme

According to an analysis by Dialogue Earth (published in Eco-Business), revenue from selling CCER credits fell to zero once waste incineration ceased to qualify for them in 2024. The reason was a new methodology that reduced the emission reductions attributed to incinerators, together with concerns about pollution. This is an example of how changes to crediting rules affect the economics of waste installations.

What this means for Poland/Europe

European companies operating in China or buying carbon credits should watch CCER as a market separate from the EU ETS and international registries. Differences in methodologies and transparency may affect the credibility and price of credits.