GECs seen as key to boosting green progress

China is making efforts to enhance the mutual recognition of green electricity certificates (GEC) with the global community in order to bolster economic and trade interactions, amid growing calls for carbon footprint proof of progress from businesses as more economies adopt carbon pricing mechanisms for imports, said officials and experts.

GECs function as digital identification for transactions involving green energy. Given the uniformity of electricity, once it enters the grid for distribution, its specific attributes cannot be discerned by the grid or end users. These certificates serve as proof of green energy usage for holders, with each GEC representing 1,000 kilowatt-hours of green energy generated from renewable sources.

The National Energy Administration said that as of January, a total of 5.186 billion GECs had been issued nationwide, with 3.529 billion of them being tradeable.

According to the China Renewable Energy Engineering Institute, manufacturing sectors such as telecommunications and automotive accounted for 70 percent of green electricity certificate purchases.

However, global recognition of GECs faces challenges. For instance, the European Union's Carbon Border Adjustment Mechanism explicitly does not recognize any form of green certificates, acknowledging only direct green power transmission between generators and users.

Zheng Ying, department director at energy service provider Beijing PowerChain Technology, said: "China stands out as a nation for being the largest producer of green products globally and simultaneously leading in consumption in key sectors like new energy vehicles and photovoltaics. For us, globalization means more than just exporting our goods. It involves creating a market within our own borders that can expand internationally, while aligning with global standards. The mechanism of green electricity certificates aims to cultivate a market for green power consumption domestically and facilitate the dissemination of these principles abroad through our businesses venturing abroad and foreign enterprises."

Li Chuangjun, head of the new energy department at the NEA, said the administration is in talks with key trading partners to boost global acceptance of green certificates. They are enhancing dialogue with the EU to expedite the signing of a mutual recognition agreement between China and the EU for GECs, aiming to enhance the effectiveness of the certificates in carbon-related trade regulations. Additionally, some departments are actively engaging with RE100, a global corporate renewable energy initiative, to ensure the unconditional recognition of Chinese GECs.

"Currently, green trade has emerged as a global trend, with many multinational corporations setting targets for green electricity consumption and imposing requirements on their industrial supply chains for green energy use. As the world's largest producer and consumer of green electricity, China actively participates in global green efforts. Green electricity certificates have become an important topic in international energy cooperation, providing strong support for global energy transition," Li said.