The National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) have released a new paper titled “Opinions on the High-Quality Development of the Green Electricity Certificate Market.” This paper offers significant opportunities for investors interested in sustainable development and green energy. The key aspects that make this market attractive for investment are listed below.

Growth of the Green Certificate Market

In 2024, the volume of green certificates issued in China will reach 4.73 billion, up 28.4 times from 2023. This shows the rapid development of the market and the increasing demand for renewable energy. The paper aims to further expand the market, creating favorable conditions for investment in green energy and related technologies.

Mandatory quotas for renewable energy consumption

For energy-intensive industries such as data centers, metallurgy, construction materials, petrochemicals and others, mandatory quotas for renewable energy consumption are introduced. By 2030, the level of renewable energy consumption in these industries should be no lower than the national average, and for new data centers – 80%.

This creates a stable demand for green certificates and stimulates the development of renewable energy projects.

Stimulating demand and expanding application

The document provides for measures to stimulate demand for green certificates, including the automation of their issuance and improvement of trading mechanisms. State-owned enterprises, government departments and public institutions will play a key role in increasing green energy consumption, which ensures stable demand in the market.

Green certificates will also receive international recognition, which opens up opportunities for export and the integration of Chinese standards into the global sustainable development system.

ESG reporting and transparency

Listed companies are required to report green energy consumption data in their ESG reports. This increases the transparency and attractiveness of renewable energy companies for investors focused on sustainable development.

Investing in such companies can become part of an ESG investment strategy, which is especially relevant in the context of growing interest in responsible investments.

Regional opportunities

Regions with favorable conditions for the development of renewable energy will create enterprises with a 100% share of renewable energy in energy consumption and zero carbon emissions. This opens up opportunities for investment in regional projects, especially in the field of solar, wind and hydropower.

Long-term prospects

The document is part of China’s strategy to achieve carbon neutrality by 2060. This means that the green certificates market will develop in the long term, providing investors with stable growth opportunities. Mandatory quotas and government support create a predictable environment for investment.

Conclusion

The green certificate market in China is experiencing unprecedented growth and offers significant investment opportunities. Government support, mandatory quotas for renewable energy consumption, expanding the scope of certificate application, and integration with ESG standards make this market attractive for both short-term and long-term investment. Investors should pay attention to companies operating in the field of renewable energy, as well as projects related to automation and trading of green certificates.