How to buy green electricity and green certificates for enterprises to reduce pressure?
On April 24, the national carbon market price broke through the 100 yuan mark for the first time, and on May 7, the closing price was still 101.67 yuan/ton. This means that in the future, emission control enterprises will have a stronger tendency to buy green electricity and green certificates, which is conducive to moving towards "carbon neutrality". However, in practice, the cost pressure of purchasing green electricity and green certificates makes it difficult for enterprises to make decisions.
Two major problems stand out. First, there is a regional dislocation between supply and demand of green electricity trading.It is necessary to "send in" and "use"in order to meet the long-term and stable demand of enterprises for green electricity; Second, due to the lack of unique recognition of environmental rights and interests, China's green certificate is only conditionally recognized by RE100 (100% Renewable Electricity), the world's most influential renewable energy use initiative organization, which increases the cost of enterprises going overseas, and international mutual recognition needs to be strengthened urgently.
If the cost of carbon reduction is too high, it will be difficult for companies to afford the production cost premium. Therefore, in order to enable enterprises to take into account long-term green and immediate economic benefits, it is necessary to pay attention to the international mutual recognition of green certificates, formulate more detailed policies for the convergence of electricity and carbon markets, and fundamentally reduce the burden on enterprises.
International mutual recognition of green certificates needs to be strengthened
There is a lack of international recognition for China's green certificates. For example, the EU's Carbon Border Adjustment Mechanism (CBAM) does not recognize green certificates, only green power purchase agreements. This has led to a lack of buying motivation for export-oriented businesses.
At present, China's green certificates are only conditionally recognized by RE100, and enterprises need to bear the corresponding interpretation costs, mainly because the attribution of environmental attributes is not clear. RE100 believes that the environmental attributes of China's green certificates may be re-exploited, including excessive renewable energy consumption and double-counting in CCER.
Han Xue, associate researcher at the Institute of Resources and Environmental Policy, Development Research Center of the State CouncilthinkIn terms of voluntary procurement of green electricity, the main reasons why China's green certificates cannot achieve mutual recognition with international important low-carbon organizations and related initiatives include the imperfect traceability system of green certificates, the lack of third-party certification systems, and the lack of relevant standard systems.
Green certificates need to avoid double counting of environmental attributes. In this regard, relevant policies have been introduced at the national level. July 2023,Notice on Promoting Renewable Energy Electricity Consumption with Full Coverage of Renewable Energy Green Electricity CertificatesIt is clear that the green certificate is the only proof of the environmental attributes of China's renewable electricity, and the only certificate for determining the production and consumption of renewable electricity. The amount of electricity corresponding to the green certificate shall not be repeatedly applied for other certificates of the same attribute in the power field. In principle, China can only apply for the issuance of domestic green certificates for renewable energy electricity, and actively promote the convergence of green consumption and carbon emission reduction systems of international organizations with domestic green certificates without affecting the achievement of nationally determined contributions.
In addition, the granularity of green certificates also needs to be improved, and it is necessary to update and iterate the mechanism to deal with the carbon barriers of international trade. AIB (Association of issuing bodies), the issuer of the European Union's Guarantees of Origins (GO), is working on the issuance of hourly renewable energy certificates. Some experts pointed out that it is foreseeable that after such certificates are officially used in the European Union, it will be more difficult for Chinese green certificates to be internationally recognized at the granularity level.
There is a need for the electricity market and the carbon market to be cohesive
Enterprises need policies that can be refined when purchasing green electricity and green certificates.
If the application scenarios are broadened and green certificates are used as one of the ways to offset carbon emissions, the cost of carbon reduction for enterprises can also be reduced. January 2024,Notice on Strengthening the Convergence of Green Electricity Certificates and Energy Conservation and Carbon Reduction Policies to Vigorously Promote Non-Fossil Energy ConsumptionIt is mentioned that it is necessary to improve the management mechanism of green electricity consumption certification and energy conservation and carbon reduction, improve the connection mechanism between green certificates and carbon accounting and carbon market management, strengthen the support and guarantee of green certificates for product carbon footprint management, and promote the international mutual recognition of green certificates, so as to expand the application scenarios of green certificates.
The electricity market and the carbon market need to be more linked. Tang Baojun, a distinguished professor at Beijing Institute of Technology, proposed that it is necessary to promote good coordination in all aspects, including synergy in development stages, market goals, regional development and industry development, etc., and comprehensively consider the mutual recognition and connectivity mechanism between CCER, carbon emission quotas, green certificates and excess consumption, establish good accounting and transformation rules, and improve the measurement, certification and verification system on the underlying data to create an "electric carbon database".
In order to promote the coordinated development of the electricity-carbon market, many places have explored green electricity trading.
Tianjin, Beijing, and Shanghai are all local pilot carbon markets. In 2023, the ecological and environmental protection departments of the three places have successively issued relevant policies on green electricity trading and carbon emissions. Tianjin said that key emitting enterprises can apply for deduction of the amount of green electricity purchased from the grid when calculating the net purchase of electricity consumption; According to Beijing, the carbon emissions of green electricity purchased and used by key carbon emitting units through market-based means are calculated as zero; Shanghai has explicitly adjusted the emission factor of purchased green electricity to 0, that is, the carbon emission of purchased green electricity by recognized enterprises is zero.
Hubei is exploring the power market, carbon market and financial marketIntegrated developmentto reduce the operating costs of enterprises. In March 2022, Hubei began to explore the power trading market and carbon trading marketlinkageIn April of the same year, Hubei issued a green power trading certificate jointly certified by the Hubei Electric Power Trading Center and the Hubei Carbon Emission Trading Center. In 2023, Hubei proposed a green electricity trading service plan, under which enterprises can directly reduce carbon emission compliance expenses by purchasing green electricity, and financial institutions can use carbon emission rights as collateral to issue carbon emission rights pledge loans to enterprises to realize the value of carbon emission rights.
However, there is still no conclusion on how to connect the energy consumption of electricity and carbon in terms of green certificates. April 2024,Rules for the Issuance and Trading of Green Electricity Certificates for Renewable Energy (Draft for Comments)It is proposed that the National Energy Administration (Qualification Center) shall summarize and collect statistics on the issuance and trading of green certificates nationwide as required, and compile and publish reports on the issuance and trading of green certificates on a monthly basis. Support the effective connection between green certificates and the weight of responsibility for renewable electricity consumption, the "dual control" of energy consumption, and the carbon market, and the National Renewable Energy Information Management Center, together with power grid enterprises and power trading institutions, to timely calculate relevant green certificate transaction data。
China has gradually formed a parallel market trading pattern of green power, green certificates and carbon markets, but the three need to strengthen effective connection to promote the coordinated development of the electricity and carbon markets. Only by making the carbon reduction effect recognized in different application scenarios can enterprises better respond to market pressure and make choices towards "carbon neutrality".
