The China Certified Emissions Reduction (CCER) market is part of China’s carbon trading system and represents a mechanism for generating carbon credits within the country. The CCER market is designed to support the national carbon market and allows participants to offset part of their carbon emissions by purchasing credits derived from certified emission reduction projects.
Here’s how it works:
1. Certified Projects: The CCER credits come from various emission reduction projects such as renewable energy, forestry carbon sequestration, and methane recovery. These projects undergo verification and certification to ensure their emission reductions are legitimate.
2. Market Mechanism: The credits can be bought and sold in China’s carbon emissions trading system (ETS), which is the largest in the world. Companies under the ETS with high emissions that exceed their allocated quotas can buy CCER credits to meet their compliance obligations.
3. Regulatory Framework: The CCER market was initially launched under the National Development and Reform Commission (NDRC), but regulatory oversight has transitioned to the Ministry of Ecology and Environment (MEE).
4. Use in Compliance: Companies participating in China’s ETS can use a certain percentage of CCERs (often capped at 5-10%) to meet their carbon reduction requirements, thus encouraging market-based flexibility for compliance.
The CCER program had been paused for a few years while China overhauled its national carbon market but is expected to play a key role as the ETS evolves.
The overall goal of the CCER market is to incentivize companies to reduce emissions by providing a cost-effective way to meet carbon caps while promoting the development of low-carbon technologies in China.
China’s voluntary carbon market, known as the China Certified Emission Reduction (CCER) program, is an important part of its strategy to reduce greenhouse gas emissions. The CCER market was initially paused in 2017 to refine regulatory frameworks and improve the methodologies for credit issuance. However, as of 2023, the market has been rebooted with new regulations, offering opportunities for companies to generate carbon credits from projects like forestation, mangrove cultivation, and renewable energy.
China also launched its national emissions trading scheme (ETS) in 2021, primarily covering large power sector emitters. This system is expected to expand in the coming years, potentially integrating more sectors like steel and cement.
