China starts consultations for 2 new CCER methodologies on coal mine gas, streetlights

China initiated consultations for two new carbon crediting methodologies under its domestic voluntary carbon market called China Certified Emission Reductions, or CCER, to issue credits to projects that utilize coal mine gas and adopt energy-efficient streetlights in highway tunnels, the Ministry of Ecology and Environment said in a statement late July 30.

China's CCER market was relaunched in January 2024 after a six-year pause to refine its regulatory framework. The country has already released four CCER methodologies, including forestation, mangrove cultivation, solar thermal power and grid-connected offshore wind power projects.

Since the relaunch, no new projects have been approved and no CCERs have been delivered to the market. In the longer term, the CCER regime is expected to become one of China's primary carbon policies to channel financial support for various decarbonization projects.

The carbon crediting period for the coal mine gas utilization project and the streetlight system improvement project should be within 10 years, according to the consultation document.

For both the project types, the CCERs will be issued based on emissions avoided, namely methane and CO2 emissions avoided by implementing coal mine gas collection and utilization systems, and CO2 emissions avoided by adopting energy-efficient streetlight systems, respectively.

The consultation will close Aug. 12, the ministry said.

Coal mine gas utilization

"Coal mine gas utilization is a crucial way to reduce methane emissions from coal mines and plays a positive role in achieving China's goal of carbon peaking [by 2030] and carbon neutrality [by 2060]," the ministry said.

Currently, methane emissions from coal mine gas flaring accounted for about 40% of the country's total methane emissions, and coal mine gas utilization is the key approach to cut these emissions, according to the consultation document.

Notably, projects eligible for CCER issuance should utilize coal mine gas that has volume concentration of methane within 8%. Project developers can either collect flaring coal mine gas or utilize gas drained through ventilation facilities.

Currently, coal mine gas with concentration of methane above 30% has been widely used for residential and industrial gas supplies, producing compressed natural gas or generating electricity. If the concentration of methane is between 8% and 30%, coal mine gas can also be utilized for power generation through internal combustion engines.

These projects have been economically viable and do not need additional financial support from the carbon market, the ministry said.

However, if the concentration of methane is below the 8% threshold, coal mine gas can only be destroyed using the flameless oxidation technology, and the oxidation heat generated during this process can be used to generate electricity.

The ministry said such projects are capital-intensive and not economically viable, which justifies the necessity of financial support from the CCER market. Currently, only several demonstration projects have been established, the ministry said without specifying a number.

Under the coal mine gas utilization CCER methodology, the existing projects that have potentials for CCER issuance can contribute about 4.5 million mtCO2e of greenhouse gas emission reductions each year. By 2030, the annual emission reductions can increase to about 20 million mtCO2e, the consultation document showed.

Energy efficient streetlights

Compared with coal mine gas projects, upgrading the lighting systems for highway tunnels contributes smaller emission reduction volumes. Projects under the streetlight system improvement CCER methodology are estimated to cut emissions of 300,000 mtCO2e annually, and the annual emission reduction volume is expected to reach 1 million mtCO2e by 2030.

CCER-eligible projects must use streetlights that have luminous efficacy of no less than 150 lm/W and install necessary devices that can monitor electricity consumption of the lighting systems, the ministry said.

Project developers are also encouraged to install smart controlling systems and motion sensors to optimize the use of these streetlights, according to the consultation document.

China's annual electricity consumption by highway tunnels was 10.67 billion kWh, of which 60%-80% was consumed by the lighting systems, the ministry said.

Streetlights with luminous efficacy above 150 lm/W are around 20% more expensive than commonly used streetlights with luminous efficacy of 120 lm/W. Besides, the operating costs of a tunnel will increase by 10%-30% if a smart controlling system and sensors are installed, the ministry said, justifying the role of the CCER market.