China Guodian to miss out on 8 million CCERs as govt turns screw on project approvals

Published 04:05 on April 14, 2015  /  Last updated at 07:55 on April 14, 2015  /  China, China's Offset Market  /  No Comments

A project owned by major SOE China Guodian that could have generated over 8 million CCERs a year was among the offset projects recently rejected by the Chinese carbon market regulator, data showed.

A project owned by major SOE China Guodian that could have generated over 8 million CCERs a year was among the offset projects recently rejected by the Chinese carbon market regulator, data showed.

The NDRC on Apr. 3 published a list of 21 projects approved at two meetings in January and February, meaning 33 projects were rejected as the market regulator is tightening additionality rules.

The rejected projects would have generated some 30% of the roughly 110 million CCERs emitters covered by China’s seven pilot carbon markets are allowed to use each year, data on the regulator website showed.

Among the project blueprints turned down by the NDRC was a hydro power station in Sichuan province owned by China Guodian Corporation, one of China’s five biggest state-owned power companies.

The Guodian project, listed as a Category Two project because it received an LoA under the CDM but was never registered by the UN, was estimated to generate more than 8.1 million CCERs annually.

Beijing Jingneng Clean Energy Co., a sino-foreign joint venture owned amongst others by the Beijing municipal government and Barclays Bank, had five projects rejected with a total annual emission reduction potential of nearly 5.6 million tonnes of CO2e.

The biggest of Beijing Jingneng’s projects, a wind farm in Inner Mongolia, would have generated 4.4 million CCERs a year. Given that it is a new project, it would not have been subject to restrictions implemented in some of the pilot markets.

Another project approval meeting was held on Apr. 2, but the results have not yet been published.

Market reactions to the project registrations have been mixed.

While most traders welcomed the government’s move to ensure the market isn’t flooded by offsets from dubious projects, it brought concerns to some ETS participants who said the unexpected delay in project approvals would limit offset supply available in time for this year’s compliance deadline, which is in May and June for the pilot schemes.

On Monday the NDRC announced it would hold a meeting on Apr. 29, where it will decide on CCER issuance applications from 27 projects, which is likely to bring some fresh supply to market.

By Stian Reklev – stian@carbon-pulse.com