China on Tuesday published the names of 49 recently approved offset projects designed to generate over 7 million CCERs a year, though less than half are eligible for use in the country’s pilot markets.
The project approvals, published on an NDRC website, were all made on Nov. 27 and take the total number of projects eligible to generate CCERs to 405.
It is possible that a further 19 schemes might also be listed soon, which would then tally with a notice NDRC issued on Dec. 11 asking owners of 68 projects to collect approval papers.
42 of the 49 newly approved projects fell under Category 1. A further 4 were in Category 2 and 3 in Category 3.
Two of the approved projects, capable of generating 3.7 million CCERs between them, were large hydro schemes that are ineligible as an offset source in six of the seven pilot carbon markets, Shanghai being the exception.
In addition, the 640,000 offsets per year from the Category 3 projects are also banned in the pilots, leaving potential pilot supply of about 2.7 million each year.
The NDRC has yet to rule out any project types for use in the national ETS but it is likely to take a lead from restrictions already applied in the pilots.
Among the major winners in this batch was Hanergy Carbon Asset Management, which won approval for 17 rural biogas projects in Hubei province expected to yield around 600,000 CCERs annually.
Among the biogas projects was one in Hong’an County that was the first carbon project in China to be part-funded using a crowdfunding website.
Hanergy raised 200,000 yuan ($30,000) for the projects by offering private investors small shares in the CCER revenue and the opportunity to win Hong’an County souvenirs and guided tours through a lottery.
- Category 1 covers new projects and are eligible in all seven pilot markets, with only minor restrictions.
- Category 2 projects have been given a CDM Letter of Approval by the Chinese government but never registered with the UN. They are eligible in most of the seven pilot markets and most likely also in the national ETS from 2017
- Category 3 are so-called pre-CDM projects that are not useable in the pilot markets and deemed less likely to be eligible in the national market.
- Analysts have warned that many of NDRC-approved projects might eventually end up being stranded as they take place in sectors that will be covered by the national ETS.
By Stian Reklev – email@example.com