The National Greenhouse Gas Voluntary Emission Reduction Trading Market was launched, and the Beijing Green Exchange explained in detail——

On January 22, the National Greenhouse Gas Voluntary Emission Reduction Trading Market was launched in Beijing. The construction of a national voluntary greenhouse gas emission reduction trading market is an institutional innovation to mobilize the whole society to participate in greenhouse gas emission reduction actions, which is conducive to promoting the formation of a national carbon market system in which the mandatory carbon market and the voluntary carbon market are complementary and interconnected, which is another milestone in the construction of China's carbon market.

What is Certified Voluntary Emission Reduction (CCER)? Why is CCER trading launched? What is the significance of CCER to green development and the "dual carbon" goal, and what does it have to do with every ordinary person? The reporter interviewed the Beijing Green Exchange, the operator and manager of the national greenhouse gas voluntary emission reduction trading system.

Support all kinds of market players to save energy and reduce carbon emissions

In recent years, extreme weather such as heavy rainfall and typhoons have become more frequent, and it has become more and more urgent to solve the problem of climate change caused by greenhouse gas emissions. A more perfect market-based carbon reduction mechanism is a problem-solving move.

At present, there are two main types of carbon trading products: one is carbon allowance, which is the carbon emission quota allocated by the government to key emitting enterprises within the specified period, that is, carbon emission rights.

In the carbon emission trading market, if the actual carbon emissions of key emitting enterprises are lower than the total amount of allowances allocated by the government, then the surplus allowances can be sold and the corresponding income can be obtained from market transactions; Key emitting enterprises that fail to pay or fail to pay their carbon allowances in full will face penalties.

Another product of carbon trading is certified voluntary emission reductions. For entities other than key emitting entities, the government encourages them to voluntarily develop and implement emission reduction projects in accordance with the methods prescribed by the state, and promote the development of renewable energy, forestry carbon sinks, methane emission reduction, energy conservation and efficiency improvement, etc., so as to reduce greenhouse gas emissions and increase carbon sinks. The emission reductions generated by these voluntary emission reduction projects are registered as certified voluntary emission reductions, or CCER, after verification and verification by a nationally recognized third-party organization. CCER can be traded on the market.

Wang Naixiang, chairman of the Beijing Green Exchange, said that the national voluntary greenhouse gas emission reduction trading market can provide support for various market players to save energy and reduce carbon emissions. Owners of emission reduction projects can obtain economic returns through the sale of CCER, and more actively participate in the development and application of low-carbon technologies, high-emission enterprises can use CCER to fulfill carbon emission reduction obligations, and enterprises and institutions can purchase CCER to offset carbon emissions, achieve carbon neutrality in products and major activities, and fulfill low-carbon commitments and social responsibilities.

The two major carbon markets are compulsorily linked to each other

Unlike traditional trading markets such as stocks, commodities, foreign exchange, and gold, which are driven from the bottom up by the actual needs of participants, the carbon market is a top-down artificially created market by the government to solve problems such as the climate crisis and greenhouse gas emissions.

Carbon allowances and CCER, the former is mandatory, the latter is voluntary, thus forming two interrelated trading markets: the national carbon emission trading market and the national greenhouse gas voluntary emission reduction trading market. In July 2021, the national carbon emission trading market was launched. Now, the national voluntary greenhouse gas emission reduction trading market has also been officially launched.

"The mandatory carbon market and the voluntary carbon market are complementary and interconnected, and together constitute the national carbon market system. This is of great significance to achieve the dual carbon goal and build a beautiful China through market mechanisms. Wang Naixiang said.

According to the Measures for the Administration of Carbon Emission Trading (for Trial Implementation), key emitting entities can use certified voluntary emission reductions to offset the payment of carbon allowances every year, and the offset ratio shall not exceed 5% of the carbon allowances to be paid. Since CCER usually has a price advantage over mandatory carbon allowances, key emitters can choose to purchase CCER to achieve low-cost settlement and compliance.

As a first-day trading company, the CCER project in which Jingneng Group participated in the transaction was a forestry carbon sequestration project. Jin Shengxiang, safety director and director of the safety and environmental protection supervision department of Jingneng Group, said that the project can encourage farmers to absorb excess greenhouse gases emitted into the atmosphere through afforestation and reforestation technologies. Enterprises purchase forestry carbon sink CCER for carbon emission quota fulfillment or carbon neutrality, and the project income can feed back to farmers, increase farmers' income, broaden the financing channels of forest farmers, and further increase the willingness of afforestation and management of afforestation, thereby increasing carbon sinks and realizing the function of forest carbon sequestration.

Ordinary people will also be able to participate in CCER in the future

According to the Administrative Measures for Voluntary Greenhouse Gas Emission Reduction Trading (for Trial Implementation), legal persons, other organizations and natural persons that meet the relevant national regulations can participate in voluntary emission reduction trading. Therefore, the market entities involved in CCER transactions can be enterprises, institutions, financial institutions, etc., as well as natural persons.

In other words, ordinary people can also participate in voluntary emission reduction trading, and offset their own carbon emissions by purchasing CCER, fulfilling their social responsibilities. For example, if a person travels from Beijing to other places on business, whether it is by train, car or plane, it will produce a certain amount of carbon emissions and form a carbon footprint. Then, in the future, he can offset this part of carbon emissions by buying CCER in the market and contribute to green development.

However, the construction and improvement of the CCER market is also a gradual process. In the initial stage of the market, the main participants were enterprises and institutions. In the future, with the in-depth promotion of voluntary emission reduction trading, natural persons will also have the opportunity to participate in it, and the specific timing will require the gradual improvement of the construction of the voluntary emission reduction trading market and the further clarification of relevant policy requirements by the competent authorities.