Restarting CCER, why did CNOOC buy 250,000 tons of emission reductions for the first time?

1 tonne of National Certified Voluntary Emission Reductions (CCER) can offset 1 tonne of CO2 emissions. After being suspended for many years, the national voluntary greenhouse gas emission reduction trading market has recently reopened for "trading". On the opening day, CNOOC Limited completed the country's first transaction on the Beijing Green Exchange, with a total trading volume of 250,000 tons of CCER. Why did CNOOC buy 250,000 tons of CCER and how did it plan to use it? The reporter interviewed Cao Baojiu, deputy manager of the monitoring center of CNOOC Development Safety and Environmental Protection Company, and others.

Behind the first transaction: effectively revitalize carbon assets

"CNOOC's CCER trading volume accounted for more than 60% of the total trading volume on the first day, which is the first transaction of CNOOC Limited after the launch of the national CCER market, which plays an important role in effectively revitalizing carbon assets. Cao Baojiu told a reporter from China Environment News.

The reporter learned that the 250,000 tons of CCER purchased by CNOOC will be used to offset greenhouse gas emissions in energy production. How to offset?

If you want to know what CCER is, you need to understand the corresponding "mandatory" concept - carbon emission allowance (CEA).

Carbon emission allowance (CEA) usually refers to the carbon emission allowance certificate and carrier issued by the government to emission control enterprises in accordance with certain accounting rules under the total carbon emission control.

Unlike the carbon emission allowance (CEA) allocated by the government to enterprises, the National Certified Emission Reduction (CCER) is a voluntary greenhouse gas emission reduction product, which aims to certify the greenhouse gas emission reduction effect of renewable energy, carbon sinks and other projects in China through quantitative verification.

"At present, the two basic products of China's carbon trading market are CEA and CCER. Cao Baojiu said.

"When the actual verified carbon emissions of emission control enterprises exceed the allowances, they can purchase additional emission allowances in the carbon market. When emissions fall below the amount of allowances obtained, the excess allowances can be sold to other companies in the carbon market, or they can 'save up' for a rainy day. These transactions are usually carried out on carbon emission exchanges. Cao Baojiu told reporters.

So, when can you buy CCER?

"After accounting, when it is cheaper to buy CCER than CEA, the company will give priority to purchasing CCER to complete the performance settlement. Cao Baojiu introduced, "afforestation carbon sink, mangrove planting, grid-connected offshore wind power, grid-connected solar thermal power and other projects with emission reduction effects, after the emission reduction is reviewed by a third-party agency and filed and issued by the national competent authority, it can be sold to relevant units to offset their emissions." ”

The use of CCER to offset part of carbon emissions provides flexibility for carbon emission compliance through market mechanisms, and also buys time for high-carbon industries to gradually plan and promote green and low-carbon transformation, so as to better demonstrate the determination and action of the whole society to participate in addressing climate change.

Since announcing the suspension of filings in March 2017, the CCER market has not been open for new project approvals for nearly seven years, and only CCERs that have already been filed and issued are circulating in the market. In the past 2023, the state has further accelerated the construction of the CCER market.

Following the opening of the national carbon emission trading market in July 2021, the official announcement of the reopening of the CCER market will become an important "puzzle" to fill the missing "puzzle" of China's carbon emission trading system.

Why buy 250,000 tons of CCER?

As China's largest offshore oil and gas production operator, CNOOC Limited is committed to accelerating the green energy transition.

"At present, CNOOC Limited has seven controlling companies operating gas-fired power plants, which emit about 7 million tons of carbon emissions per year. According to the advanced operation of gas-fired power plants, some old units will have about 300,000 tons of emission reduction demand a year, and the 250,000 tons of voluntary emission reductions traded can offset 5% of carbon emissions. Zhang Jingqi, manager of the low-carbon monitoring and evaluation department of the monitoring center, introduced.

The reporter learned that the two parties who reached the first transaction were CNOOC Development and Gas Power Group, a subsidiary of CNOOC, and the two sides took the emission reduction of the cogeneration project of waste heat utilization of CNOOC after calcining coke project as the subject matter of the transaction. Zhang Jingqi said, "Before the launch of the national voluntary greenhouse gas emission reduction trading market, CNOOC Development, Gas and Power Group, and China Shipping Trust actively carried out relevant work on the revitalization of carbon assets. In 2021, CNOOC Development and China Shipping Trust jointly issued the country's first carbon neutrality service trust based on CCER as the underlying asset - 'China Shipping Blue CCER Carbon Neutral Service Trust', from which the 250,000 tons of CCER in this transaction came from. After the completion of the transaction, CNOOC Development will receive value-added income from carbon assets. The CCER purchased by the gas and power group will be used for the carbon emission compliance of its power plants in the third cycle of the national carbon emission trading market. ”

Sun Wanling, Secretary of the Party Committee and General Manager of CNOOC Development Safety and Environmental Protection Company, said, "As a carbon trading support institution of CNOOC Corporation, on the basis of fulfilling the functions of the carbon trading support agency entrusted by the group, CNOOC Development will continue to do a good job in the development of carbon assets under the voluntary emission reduction mechanism at home and abroad for key enterprises, and provide carbon trading technical consulting services in the national and local carbon markets, so as to help the high-quality development of CNOOC's carbon asset management business." ”

"The list of emission control companies and the amount of allowances are different for each cycle, and the current emission control enterprises in the national carbon market are limited to the power sector. Zhang Jingqi said frankly that in the future, more high-carbon emission industries and enterprises will be included in the control list, and the overall trend is that the number of emission control enterprises is increasing, and the quota is becoming more and more tight.

"Using the mechanism of national certified voluntary emission reductions, through the purchase of certain emission reductions, is used to offset the carbon emissions in our production process, which is not only conducive to reducing our performance costs, but also fulfilling the social responsibility of central enterprises. Zhang Jingqi said.

CNOOC Limited reached the country's first transaction on the Beijing Green Exchange, marking the improvement of China's carbon market construction, and the diversified carbon market system will further enhance the level of green and low-carbon development in China.

"The voluntary greenhouse gas emission reduction mechanism is a carbon offset mechanism, which is an important supplement to the national carbon emission trading market, through the market mechanism to guide enterprises to reduce carbon emissions, promote the construction of voluntary emission reduction trading market, and constitute a complete carbon trading system in China. Zhang Jingqi said frankly that this is conducive to supporting the development of carbon sinks, renewable energy and other projects, and encouraging a wider range of industries and enterprises to participate in greenhouse gas emission reduction actions.

According to CCTV News, on the first day of trading, Sinopec Carbon Technology Company and other institutions also participated in the first batch of transactions.

In addition, at the launching ceremony of the National Greenhouse Gas Voluntary Emission Reduction Trading Market held on January 22, the heads of four project development units, including Hebei Saihanba Machinery Forest Farm, China General Nuclear Power Corporation Limited, State Power Investment Corporation and the Third Institute of Oceanography of the Ministry of Natural Resources, signed the Voluntary Emission Reduction Project Development and Emission Reduction Trading Compliance Initiative.

The Beijing Green Exchange predicts that if we compare the scale of the EU carbon market, after the financialization of China's carbon market in the future, it is expected that the annual carbon trading volume may exceed 10 billion tons, and the transaction volume is expected to exceed 1 trillion yuan.