China shortlists first set of 33 projects under domestic voluntary carbon market

China has shortlisted 33 projects under its domestic voluntary carbon market, called the China Certified Emissions Reductions market, and is seeking public feedback, according to data published on the Ministry of Ecology and Environment's official CCER platform Sept 2-3.

This is the first set of projects developed using the country’s new CCER methodologies, issued in late 2023. It has been keenly awaited, as the domestic voluntary market had been at a standstill for seven years due to the refining of regulatory frameworks.

The shortlist signals the first wave of projects that could pave the way for new CCER units to be issued. Details about the 33 projects were published over the last two days, with 19 offshore wind projects, four solar thermal projects, eight forestation projects and two mangrove projects.

The 33 projects translate into annual CCER supply of 9.67 million metric tons of CO2 equivalent, out of which 92.72% comes from offshore wind projects, 4.67% from solar thermal projects, 2.58% from forestation projects and 0.03% from mangrove projects, the data from MEE’s CCER platform showed.

All of the offshore wind and solar thermal projects shortlisted have crediting periods of 10 years, and the forestation and mangrove projects have crediting periods of 20 to 40 years, according to the CCER platform's data. The crediting period is the duration over which the projects will generate CCERs.

Most of the renewable CCER projects in the list are hosted by industrialized coastal provinces like Jiangsu, Guangdong Fujian and Shandong. Most nature-based CCER projects are hosted by provinces that either have abundant forest resources, such as Heilongjiang and Guizhou, or face urgent need of nature conservation, such as Qinghai and Shaanxi, the data showed.

Double-counting concerns

Under current regulations, offshore wind and solar thermal projects are eligible for both CCERs and domestic renewable energy certificates, called Green Electricity Certificates.

Hence, there exists a chance for one project to simultaneously obtain two environmental certificates, which can trigger integrity problems as their emission mitigations will be double counted.

The CCER mechanism is expected to be a pillar of China’s carbon policy framework to unlock private and public capital to scale up both clean energy technology deployment and nature-based projects, with analysts saying that the high risk of double-counting could negatively affect market confidence.

Currently, China’s carbon markets are regulated by MEE but the renewable energy sector, including the GEC market, is governed by National Energy Administration (NEA). MEE and NEA are expected to coordinate on the issue of double counting, but they have yet to come up with a solution.

Renewable CCER issuance volume of shortlisted projects

Nature-based CCER issuance volume of shortlisted projects

Source: Ministry of Ecology and Environment