China's national voluntary carbon market starts trading Jan 22

China’s national voluntary carbon market, namely China Certified Emission Reduction, or CCER, kicked off trading in Beijing on Jan. 22, Ministry of Ecology and Environment, or MEE, said in a statement Jan. 22.

The registration of CCER projects has been paused since 2017 to refine the regulatory and methodological framework. In 2023, the Chinese government launched the refined regulations and announced four methodologies for CCER issuance, paving the way for the market’s reboot.

The four methodologies are forestation, mangrove cultivation, solar thermal power and grid-connected offshore wind power projects. The government will continuously review and enroll qualified new methodologies for credit issuance, state media China Central Television (CCTV) reported.

The opening ceremony was attended by the country's Vice Premier Ding Xuexiang, MEE said in the statement.

MEE added that a pledge for ensuring integrity in project development and trading was signed by four potential CCER market participants during the ceremony, including state-owned energy companies like China General Nuclear Power Group (CGN) and State Power Investment Corporation (SPIC), Saihanba Forest Farm in Hebei province, and Third Institute of Oceanography, a research institute under Ministry of Natural Resources.

Some companies have started to prepare projects for participation in the CCER market, CCTV reported.

Among them was the solar thermal project by CGN in Delingha, Qinghai, which is prepared to onboard the CCER market, with an annual emission reduction volume of approximately 80,000 mtCO2e and expected trading prices in the Yuan 40-60/mtCO2e ($5.56-$8.34/mtCO2e) range, CCTV reported, quoting CGN’s executive director Yang Tao.

As it takes time for CCER projects to be registered and for credits to be issued, the credits currently trading via the Beijing exchange are old credits issued from projects registered before 2017, analysts said.

Despite that, the reboot of the trading platform is still of great importance, CCTV reported, highlighting that the CCER market, together with China’s compliance carbon market launched in 2021, marked the completion of China’s domestic carbon market architecture.

The CCER trading platform is hosted by Beijing Green Exchange, while the CCER registry is directly managed by the National Center for Climate Change Strategy and International Cooperation, or NCSC, a government body under MEE.

On the opening day, the trade volume of CCERs totaled 375,315 mtCO2e, while the average trading price was Yuan 63.51/mtCO2e, Beijing Green Exchange said on its official social media account.

Currently, only domestic companies can participate in this market, the state media reported. It may be possible that individuals can participate in this market and obtain CCERs issued from end-consumer activities.

The registry will be upgraded in the future to enable international transactions, the NCSC said in an earlier statement.