context: With carbon set to be a major factor in global trade, ensuring international recognition of carbon emissions accounting has become increasingly important. The 2024 Government Work Report reiterated the importance of improving carbon accounting capabilities and launching extensive carbon footprint management. More regulations are expected as key export industries face pressure from the EU and US.
Representatives at this year’s Two Sessions emphasised the importance of improving data quality in the national carbon market, establishing continuous carbon monitoring and improving the product carbon footprint system.
Wen Shangang 温枢刚 China Huaneng Group chairman outlined key issues
- PRC carbon measurement, standard and certification systems are relatively weak
- the US and EU have already successfully implemented ‘carbon tariffs’ and access threshold policies
- indirect emissions from electricity account for a high proportion of the carbon footprint of PRC products
- accounting requires detailed grid emission factor data, yet national average emission factors do not account for regional differences
- 32 certification agencies recognised by the EU are all European or US companies
- increased certification costs and wait times for export products such as batteries, photovoltaics and NEVs (new energy vehicles)
- indirect accounting methods are used for key industries
- lack of real-time traceability and potential for human interference
- carbon footprint database not yet established
- calculations generally use EU databases which deviate from China’s actual carbon emissions
In addition to improving data quality and reporting efficiency, Wen suggested
- expanding coverage of carbon monitoring pilot industries and increasing participating firms
- improving monitoring data quality control and evaluation system
- accelerating construction of continuous carbon emissions monitoring and incorporating it into the carbon market emissions accounting system
Xue Jiping 薛继平 Zhongtian Technology chair noted that there are very few domestic third-party certification agencies with international recognition. The PRC should standardise development of relevant Chinese institutions and form a group of institutional brands with international influence and authority so that domestic companies can carry out carbon footprint certification nearby, Xue argued.
Cao Renxian 曹仁贤 Sungrow chair made several suggestions to promote sustainable development of the national carbon market and reduce the ‘carbon tax’ risk of export enterprises, including
- expanding carbon market coverage beyond the power industry
- increasing CCER (China certified emissions reduction) scheme supply through release of additional project methodologies, such as
- grassland carbon sequestration
- charging pile green electricity
- optical storage and charging
- green hydrogen
- encouraging private market entities to participate in the voluntary emission reduction trading market