China’s Move Away from Voluntary Green Certificates: Implications for Corporate Renewable Procurement

This briefing by RMI analyzes a draft policy released by China's National Energy Administration (NEA) on March 23, 2018, which proposes a Renewable Portfolio Standard (RPS) and a corresponding renewable energy certificate (REC) system to track compliance and reduce renewable energy curtailment.

• The draft policy introduces a mandatory Renewable Portfolio Standard (RPS) requiring a minimum amount of renewable energy purchase across all provinces, supported by a new REC system to track generation. This system is designed to reduce the curtailment of existing renewable energy facilities by basing the RPS formula on existing and planned capacity, including interprovincial transmission capacity.
• The RPS requirements apply to several entities, including provincial grid companies, distribution and retail electricity companies, industrial users with captive power plants, and corporate and industrial users engaged in bilateral electricity trading. Non-compliance for commercial and industrial (C&I) users can result in the NEA reducing the amount of electricity they can procure from the market or removing their qualification to participate in the market, forcing them to buy electricity from the grid at a higher fixed price.
• The proposed REC system differs from the existing Green Electricity Certificate (GEC) system in its relationship with government subsidies. While selling GECs replaces government subsidy payments for renewable developers, the REC system tracks retirements for compliance without interfering with those government payments.
• C&I buyers can use replacement certificates to cover RPS shortfalls. These certificates are issued by provincial grid companies, which also set the price; this price is expected to act as a cap on REC prices. Unlike RECs, replacement certificates are not linked to actual renewable projects but serve as an enforcement mechanism.
• Several uncertainties remain in the draft policy, including whether RECs will be bundled or unbundled from electricity, whether the interprovincial market will be open to C&I users or limited to grid companies, and the specific pricing mechanisms and use of revenues for replacement certificates.

APA

RMI (2018). China’s Move Away from Voluntary Green Certificates: Implications for Corporate Renewable Procurement. https://rmi.org/resources/chinas-move-away-from-voluntary-green-certificates-implications-for-corporate-renewable-procurement/

Chicago

RMI. China’s Move Away from Voluntary Green Certificates: Implications for Corporate Renewable Procurement. 2018. https://rmi.org/resources/chinas-move-away-from-voluntary-green-certificates-implications-for-corporate-renewable-procurement/.

Wikipedia

{{cite report |author=RMI |title=China’s Move Away from Voluntary Green Certificates: Implications for Corporate Renewable Procurement |date=7 May 2018 |url=https://rmi.org/resources/chinas-move-away-from-voluntary-green-certificates-implications-for-corporate-renewable-procurement/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2018chinas, author = {{RMI}}, title = {{China’s Move Away from Voluntary Green Certificates: Implications for Corporate Renewable Procurement}}, institution = {RMI}, year = {2018}, month = may, url = {https://rmi.org/resources/chinas-move-away-from-voluntary-green-certificates-implications-for-corporate-renewable-procurement/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }