Recently, the National Development and Reform Commission, the Ministry of Finance and the National Energy Administration jointly released the "Guidelines for Developing Renewable Energy Green Power Certificate Notice on Promoting Renewable Energy Power Consumption through Full Coverage ", proposing to study and promote the connection and coordination between green certificate and national carbon emission trading mechanism. This is the first time for China to clarify the market connection with green certificate after it proposed to study the feasibility of reducing green power related carbon emissions in carbon emissions accounting. From March this year, Tianjin, Beijing and Shanghai Carbon market Green power is allowed to be accounted for as zero emission in succession. The difference is that Tianjin green electricity and green electricity certificate are within the scope of deduction, Beijing only allows green electricity deduction, and Shanghai only allows green electricity transaction between provinces. At present, the difference of local carbon market deduction rules has the consideration of localization needs. After the Notice clearly proposed that green certificates should be fully covered and green certificates should be the only certificate for renewable energy power production and consumption, it needs to further improve the design of relevant mechanisms for the connection between green certificates and the carbon market.
Green card and carbon market convergence model
In this mode Power users The purchased green certificate is used as the basis for carbon emission deduction through the conversion of electricity corresponding to the green certificate. The green certificates that can be used for deduction include the green certificates obtained by participating in green power transactions (the combination of securities and electricity), and the green certificates purchased separately by directly participating in green power transactions (the separation of securities and electricity).
The internal mechanism of the connection between the green certificate and the carbon market: first, take the green certificate as the only evidence of the environmental externality value of green power, and then realize this part of value through the economic means to solve the externality of carbon emissions (namely, the carbon market). The green certificate deduction carbon emission system can, on the one hand, encourage market entities to purchase green certificates and pay for the environmental externalities of green power, thus providing financial support for the sustainable development of green power; On the other hand, this part of carbon emission reduction costs will be further transmitted to other emission control subjects in the carbon market, that is, those who do not purchase green power or high emissions pay for the environment, so as to achieve the goal of "who emits, who pays".
The mode of green card connection has caused some doubts in the industry, the most important of which is the additionality of green card. Some scholars have pointed out that because the supply of green certificates in the market is far greater than the demand for green certificates in the carbon market, the existence of existing green certificates will dilute the consumption demand for new green certificates. The green certificate deduction model cannot actually promote the replacement of high carbon units with renewable energy for incremental power generation, and there is no additionality in carbon emission reduction. At the same time, the green card has been able to provide necessary compensation for new energy units, and there is no economic additionality. These two points contradict the starting point of the carbon offset mechanism.
For the above problems, the essence lies in whether the theoretical basis of the connection between green certificates and carbon markets is the same as the carbon offset mechanism of carbon emission reduction credit products such as CCER. From the perspective of deduction mechanism, the former is optimized on the accounting rules of indirect carbon emissions of power, that is, the unified emission factor is unreasonable, and the emission factor of green power should be zero; The latter is a supplementary incentive mechanism, and the deduction scope does not distinguish between direct emissions or indirect emissions. Therefore, the nature of green card deduction and carbon offset mechanism is different, and additionality should not be a necessary condition for green card deduction. In addition, if the problem of additionality must be considered, the additionality of emission reduction can be achieved by limiting the scope of green certificates used for deduction. For example, the Notice has specified that green power consumption certification should be carried out through green certificates within two years; For economic additionality, the green card deduction mode only changes the main body of environmental payment, and does not change its economic additionality at this stage. Therefore, promoting the connection between green certificate and carbon market can effectively play the synergistic role of green power consumption and carbon market in promoting low-carbon energy transformation.
Issues needing attention in the future
The problem of deduction standard
At present, the local carbon markets that have allowed green electricity consumption to offset carbon emissions generally adopt the direct electricity deduction model, which is equivalent to calculating emissions reductions based on the emission factors of the carbon market where the main body is located. Under the condition that offsite green card deduction is allowed, there may be differences between the emissions reductions and those marked by the green card, which has caused some disputes. There is a problem about how to set the deduction standard.
The standard setting of green card carbon emissions deduction is closely related to the policy goal orientation. If only from the perspective of stimulating green electricity consumption and improving the total volume of green card transactions, it can be converted according to a unified emission factor (such as the emission factor adopted by the carbon market where the subject is located); If regional differences of green certificate are considered to further guide the development of new energy in high emission areas, differentiated emission factors can be adopted to tilt the green certificate deduction to regions with low proportion of renewable energy.
Multi claims on environmental rights and interests
With the future consumption weight implemented to power users, green certificates can be used for both the performance of renewable energy power consumption responsibilities and carbon emissions deduction, which will lead to the question of whether to allow green certificates that have been used for performance to redeem their rights in the carbon market again.
In terms of the above two policy systems, whether to allow the environmental rights reflected in the green card to be realized twice is mainly related to their positioning in promoting the transformation of power supply structure. Allowing for twice fulfillment means that the policy tool to promote the development goal of renewable energy is the consumption guarantee mechanism, and the carbon market is the carrier of emission reduction costs. In this case, the green card has different functions in the two policy systems. The former represents mandatory responsibility, while the latter reflects emission reduction compensation. Either mandatory green certificate or voluntary green certificate can be realized through the carbon market. It is not allowed to realize twice, which means that both the consumption guarantee mechanism and the carbon emission trading mechanism are policy tools to promote the development goal of renewable energy. In this case, the carbon market has the supplementary mechanism attribute of renewable energy consumption guarantee, and promotes the development of renewable energy by encouraging voluntary green card consumption. At this time, the environmental rights and interests reflected in the same green certificate should not be reused. It is necessary to ensure the uniqueness of the environmental rights and interests of the same green power product through the technical support of traceability, tracking and certification.
The scope of deductible green syndrome
The Notice clearly proposes the scope of green certificate issuance, including wind power, solar power, conventional hydropower, biomass power and other renewable energy power generation projects. Among them, tradable green certificates are not issued for conventional hydropower in stock, and tradable green certificates can be issued for new market-oriented conventional hydropower that will be put into operation after 2023. Since there are many green certificates in the market, it is necessary to clarify the scope of green certificates that can be deducted in the work of promoting the connection between green certificates and carbon market.
To sum up, the essence of promoting green card deduction in the carbon market is to transmit the emission reduction costs paid by relevant market entities in the carbon market. For tradable green certificates, no matter what type of power source produces green certificates, market entities have paid additional environmental costs, so the costs of this type of green certificates should be allowed to be transmitted; For the green certificate issued free of charge, the market entity did not pay the cost of emission reduction, and therefore did not meet the basic conditions for deduction.
Relevant suggestions
First, improve the accounting rules of the carbon market and strengthen the construction of relevant standards and systems for green card deduction. Promote the carbon market included in the power industry to improve the quota allocation and emission accounting rules. Based on the principle of "who emits, who pays", take the green certificate as the evidence of the environmental externalities of green power, and connect with the carbon market in the way of green certificate deduction. Strengthen the construction of standard system related to green card deduction, optimize the calculation method of carbon emission factors, clarify the scope and method of green card deduction, and make a good connection with the transformation of carbon emission "dual control" policy.
The second is to promote the implementation of the responsibility weight of renewable energy consumption to power users, take the green certificate as the only performance certificate and clarify its scope of use. Further promote all regions to implement the responsibility weight index of renewable energy consumption to power users and other entities, and take the green certificate as the only evidence of performance. Considering the matching of policy tools and policy objectives, the cost of policy implementation and other factors as a whole, the same green certificate can be considered as a voucher to complete the weight of consumption responsibility and offset carbon emissions as appropriate, to meet the relevant needs of market entities to claim their environmental rights and interests in green electricity, and to provide technical support for the traceability, circulation, right confirmation and other links of green certificates.
The third is to expand the scale of new energy market-oriented transactions and constantly improve the independent formation mechanism of green card prices. We will continue to promote new energy to participate in power market transactions, improve the enthusiasm of green power green card transactions, and gradually establish an independent green card pricing mechanism by stripping green card prices from green power transactions, carrying out green card transactions separately, and appropriately combining the construction of the carbon market. When conditions are ripe, green card transactions are allowed for many times.
This article is published in the August 2023 issue of China Electric Power Enterprise Management. The author is China Southern Power Grid Energy Development Research Institute Co., Ltd
