INTERVIEW: China tightens green certificate rules, eyes hourly matching: EnergyTag

China's green electricity certificate market is evolving as prices recover and the market tests storage-linked and hourly-matched certificates, Annie Wong, APAC Manager of EnergyTag, an independent non-profit organization, said in an interview with Platts, part of S&P Global Energy, last week.

What is changing in China's use of green electricity certificates under the Renewable Portfolio Standard?

China is increasingly using green electricity certificates, or GECs, within the Renewable Portfolio Standard, or RPS, framework, Annie said. "More requirements are being introduced, but for most sectors compliance is still not fully mandatory," she said. "That has meant the market still faces oversupply, especially in the voluntary segment."

RPS obligations are mainly met through renewable power delivered via the grid, with GECs serving as a supplementary tool. Annual targets have risen, increasing the importance of certificates, she said.

Temporal matching is tightening, limiting buyers' use of older certificates for current-year compliance. "Authorities are moving toward stricter annual matching, so only certificates from the relevant compliance year can be used," Annie said.

Geographic matching is also tightening. Grid interconnection and provincial rules increasingly constrain cross-provincial GEC transactions, limiting buyers' ability to source certificates from certain provinces and within set limits. "That reduces flexibility and makes the compliance market more location-specific," she said.

How is this affecting GEC prices and market behavior?

Average monthly GEC prices in China have doubled from 2025 levels as policymakers intensified their use within the RPS framework, Annie said, after prices fell sharply in 2024-25 and remained low until tighter compliance rules supported a recovery. Spreads between certificate vintages also widened.

"The stricter temporal matching rules are making current-year certificates more valuable for compliance," Annie said. "Older vintages still have value in the voluntary market, but they are less useful for regulated buyers."

Most GEC buying comes from RPS-covered industries, with the remainder tied to voluntary demand. Voluntary buyers have more flexibility to use older vintages and face fewer restrictions, but expanding compliance demand could give voluntary procurement a larger role in price formation.

Why is aluminum the main sector to watch?

Aluminum is the only sector subject to a mandatory RPS-related requirement, Annie said, while other sectors generally face no strict penalties for noncompliance. That could change if carbon border adjustment mechanism-style measures expand.

"The policy is still more like an index or a direction of travel for many sectors," she said. "But aluminum is already facing a stronger obligation."

"If similar measures expand across steel, cement and fertilizers, those sectors would face stronger incentives to procure renewable power and comply more closely with RPS-related rules," Annie said..

How closely are GECs starting to reflect power market fundamentals?

Annie said GEC supply increasingly mirrors the power market, with storage likely to shape future market development.

"The next critical step is storage," she said. "Without storage, you still have a mismatch between renewable generation and the hours when power is most valuable."

Participants expect hourly matching to link GEC prices more closely to power conditions, with heavier issuance and lower prices during solar-heavy daytime hours and tighter supply and higher prices at night.

"Once hourly matching becomes mandatory, the price shape could look very similar to the duck curve seen in power markets," Annie said.

What role could storage-linked certificates play?

Storage-linked GECs could improve battery economics, align storage with policy goals and provide operators with additional revenue for shifting renewable electricity into evening hours, Annie said. Some markets still rely on feed-in tariff-type arrangements or mandated solar-plus-storage ratios, while policymakers explore storage-related certificates.

"That could help restore arbitrage economics for battery energy storage systems and improve bankability," Annie said. "It would also support grid integration and system balancing."

Such a mechanism could help operators monetize nighttime delivery rather than rely mainly on ancillary services or regulated arrangements.

Are granular and hourly certificates already being tested?

"Yes," Annie said. EnergyTag-style granular certificates are available in several markets, building on existing energy attribute certificate systems.

"Most markets already issue energy attribute certificates, so those can become the base layer," she said. "Then hourly certificates can be limited to accredited assets and specific use cases."

Exporters facing carbon border adjustment mechanism-related scrutiny are one expected user group. Pilot projects are underway, including one involving a Chinese chemical manufacturer that matched consumption and generation hourly using GECs. In Hong Kong, CLP China has introduced a 24/7 hourly-matching renewable electricity product, although corporate interest remains limited.

EnergyTag is working toward a five-year goal of moving compliance systems closer to hourly matching, with the next year focused on tracking developments among regulators, companies and certificate markets, Annie said.

What comes next for the market?

China's GEC market remains marked by tighter compliance requirements and persistent oversupply, but Annie said the policy direction is becoming clearer. Stricter temporal and geographic rules and broader industrial decarbonization pressure could bring more sectors into the market, while further development of these mechanisms could link certificate prices more closely to when and where renewable electricity is generated, stored and consumed.

"The market is moving away from a flat certificate concept," Annie said. "Over time, it is becoming more connected to the actual shape of the power system."