What you need to know about China’s green energy certificate regime

One unit is equal to 1,000 KWH of clean power.

Following China’s release of guidelines for the promotion of GEC, here is what companies should know if they plan to enter the trading market.

Citing GEC rules, global law firm Norton Rose Fulbright noted that these certificates serve proof of the environmental attributes of green energy electricity. One GEC unit corresponds to 1,000 kilowatt-hours of green energy power, with a validity period of 24 months.

These certificates are being issued by the Qualification Management Center for Electricity Business of the National Energy Administration.

“A renewable energy project is required to open a real name account (a GEC Account) via the National Green Electricity Certificate Issuance and Trading System to obtain the GECs,” the law firm said.

The tradeable certificates are issued to each renewable energy project monthly based on the amount of electricity generated and dispatched into the grid.

“The information of the GEC Account registered with the above National Green Electricity Certificate Issuance and Trading System will be synchronised with the GEC Trading Platforms, and the renewable energy project (being the GEC generator) may thereafter participate in the trading of the GECs by using such GEC Account,” Norton Rose Fulbright explained.

The law firm said that GECs can be traded independently, known as unbundled trade, or together with green electricity.

Only companies incorporated in China are qualified to purchase GECs. It is also not a mandatory requirement for an entity to purchase and consume such certificates.

Norton Rose Fulbright noted that the “Opinions provide that PRC authorities will gradually promote the mandatory purchase and consumption of GECs, and accelerate to increase green electricity consumption ratio… All these actually aim to achieve China’s commitment on carbon neutrality.”