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Explainer | What is the China Certified Emission Reduction scheme and why is it important for Beijing’s carbon neutral goal?

  • CCER is expected to play a significant role in achieving emissions cost reductions and renewable energy goals
  • The scheme’s relaunch will continue to boost the demand for offsets, Refinitiv analyst says

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A coal-powered power station in Zhangjiakou, in China’s northern Hebei province. Photo: AFP
Yujie Xue

Beijing is expected to relaunch the China Certified Emission Reduction (CCER) scheme, its voluntary carbon credits plan, in 2022, nearly five years after it was terminated.

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The relaunch will come just as the national Emissions Trading Scheme (ETS), China’s new carbon trading market, completes its first compliance period. The ETS is expected to see a series of expansions.
As an important supplementary mechanism to the ETS, the CCER will play a significant role in achieving emissions cost reductions and renewable energy goals. The scheme’s relaunch is an important development to watch out for this year.

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Here is what you need to know about the CCER scheme and its expected relaunch.

What is CCER?

CCER refers to emissions reduction activities conducted by companies on a voluntary basis that are certified by the Chinese government. Such activities include renewable power generation and waste-to-energy projects, as well as forestry projects.

For firms taking part in the national ETS, CCER credits can be used to offset their China Emissions Allowances (CEAs) deficits, or credits that they can buy or trade under the scheme. This way, carbon emitters must pay CCER owners, such as renewable power generators, for the credits. The offset rate of CCER credits is capped at 5 per cent of emissions that exceed targets for the national ETS.

In 2012, the National Development and Reform Commission (NDRC), China’s central economic planner, published a set of interim measures to provide guidelines for the issuance of CCERs and to promote voluntary participation in carbon emissions reduction trading activities. According to the NDRC’s measures, domestic and foreign institutions, companies, communities and individuals are eligible to participate in transactions relating to voluntary emissions reductions of six types of greenhouse gases, including carbon dioxide, methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride.

Why was it suspended?

In March 2017, the NDRC issued a notice highlighting the fact that the CCER was witnessing a low trading volume and lack of standardisation in carbon audits. All CCER registrations were suspended at that time until further notice.

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