China’s voluntary carbon market, known as the China Certified Emission Reduction (CCER) scheme, relaunched on Monday 22 January.
The first transaction was made by China National Offshore Oil Corporation (CNOOC), which acquired 250,000 tonnes of credits to offset some of its emissions, CGTN reported.
The company has seven gas-fired power plants with combined carbon emissions of approximately 7 million tonnes per year, said Li Jie, deputy general manager of the power business department of CNOOC. (In 2022, the company directly emitted 9.8 million tons of CO2 equivalent, according to its own calculations.)
CCERs are expected to supplement China’s compulsory Emissions Trading Scheme (ETS) as part of the country’s broader strategy to achieve carbon neutrality before 2060.
Under the ETS, the government provides “free” emission allowances for major emitters in the power sector – with other sectors due to be included in the future. If a firm emits more than its quota, it must procure further allowances from the ETS or CCER market – with CCERs permitted to cover no more than 5% of the additional allowances.
The CCER scheme was established in 2012 but was suspended in 2017 due to the small volume of transactions and insufficient standardisation of projects.
Last October, the government revealed the methodologies for quantifying net emission reductions or removals from four types of projects: forestation, solar thermal power, offshore wind power generation, and mangrove restoration.
CNOOC’s transaction this week involved the purchase of CCER credits linked to forests, mainly around the Three-North Shelterbelt Project, also known as the Great Green Wall of China, according to Caixin.
There are, however, experts who are sceptical that forestry offsets will help reduce climate-warming emissions in the long term. For example, a Greenpeace report found that “credits from 15 forestry carbon sink projects in China, involving Shell, PetroChina, CNOOC and other companies, have already been banked, but 80% of the projects planted trees that are at medium- to high-risk of burning down,” Reuters reported.