Summary of Key Points
Five national departments have issued the "Guidelines for the Accounting of Non-Fossil Energy Electricity Consumption (Trial)," which represents the first unified system for calculating non-fossil energy electricity consumption in China. This initiative addresses the previous issue of inconsistent accounting standards across different provinces and policy mechanisms. The guidelines establish three methods for identifying non-fossil energy electricity (physical, transactional, and allocated) and define three levels of accounting entities (provinces, cities, and users). They also clarify the role of green certificates in ensuring accurate calculations and set limits to prevent double counting or overcounting of emissions. This will provide a consistent basis for carbon emission control assessments starting from 2026 and beyond, thereby promoting the development of green electricity trading and a national green certificate market.
Why Were the Guidelines Needed? —— Previous Accounting Methods Were Too Disorganized
In the past, there was a wide variety of methods for calculating non-fossil energy electricity consumption:
- Regional Level: Accounts were only compiled at the provincial level, leaving cities and enterprises unsure how to calculate their own consumption.
- Policy Level: Rules for electricity trading, green certificate trading, and carbon emission accounting were not standardized, leading to potential double counting of the same amount of green electricity by different entities.
- Practical Needs: The country is transitioning from a focus on "energy consumption control" to "carbon emission control," with non-fossil energy consumption becoming a key indicator affecting local governments' performance evaluations. Without unified standards, fair assessments would be impossible.
How Do the Guidelines Address the Disorganization in Accounting? —— Three Identification Methods + Three Levels of Accounting to Prevent Duplication
The guidelines introduce a new system that ensures "whoever uses the green electricity is responsible for its accounting," with the core principle being to avoid duplication and omissions:
1. Physical Identification: Green electricity generated and used by the same entity (e.g., a company installing solar panels or using directly connected renewable energy projects) is counted directly towards that entity.
2. Transactional Identification: Green electricity obtained through purchasing renewable energy power or green certificates (the "identity documents" for green electricity) is credited to the purchaser.
3. Allocated Identification: Any green electricity not identified by the first two methods in the public grid is allocated proportionally among provinces, cities, and users (for example, if your household uses electricity from the grid and a portion of it is green electricity, it will be allocated according to the guidelines).
Additionally, the guidelines specify that accounting must be conducted at all three levels (provinces, cities, and users), with each unit of green electricity only being counted once (using one method per level to prevent overlapping calculations).
Green Certificates Become a Critical Tool
Green certificates have been elevated in their importance within these guidelines:
- Filling the Gap in the Spot Market: Previously, provincial accounting primarily relied on electricity transactions, but it was difficult to determine whether the electricity in the spot market was green. Now, green certificates are used to identify such ambiguous amounts.
- Cross-Provincial Trading: Provinces with abundant renewable energy resources (e.g., those in the northwest with wind and solar power) can sell their green certificates, while provinces with high energy demands (e.g., industrial areas in the east) can purchase them. This allows for the optimal use of local resources and coordinated transformation.
- Rising Demand: Green certificate trading increased significantly last year, doubling from 930 million units in 2023 to 1.86 billion units in 2025, indicating growing demand from both businesses and governments.
How Are Fraudulent Practices Prevented? —— Strict Limits to Ensure Accurate Assessments
To prevent localities or enterprises from relying excessively on green certificates to meet emission targets, the guidelines have established two safeguards:
- User/City Limits: The number of green certificates purchased cannot exceed a user's total electricity consumption.
- Provincial Limits: The amount of green certificates purchased across provinces cannot exceed the difference between the electricity imported and the fossil energy generated locally. This prevents a province from replacing all its imported fossil energy with green certificates, ensuring the authenticity of the emission data.
How Will the Guidelines Be Implemented? —— Gradual Progress with Clear Responsibilities
The guidelines specify who is responsible for accounting at each level (national development and reform commissions, provincial energy departments, and local governments) and outline a phased implementation plan:
- Accounting Period: Initially, calculations will be done annually, with potential future adjustments to more frequent intervals (e.g., quarterly) for more timely assessments.
- Trial Period: The guidelines will be officially implemented starting in 2026, with pilot programs in place first to ensure a smooth rollout.
Implications for Ordinary People
Although the guidelines are primarily aimed at governments and enterprises, they also have indirect impacts on individuals:
- Businesses may purchase more green electricity to meet emissions targets, which could drive down prices.
- Local governments will be encouraged to invest more in renewable energy sources, increasing the proportion of green electricity used in our daily lives and contributing to a more environmentally friendly lifestyle.
In summary, these guidelines establish clear rules for carbon emission control, making the calculation of non-fossil energy consumption more transparent and fair. They aim to guide everyone towards achieving zero-carbon goals together.