China approves two wind farms to be the first clean energy projects to supply offset credits
China has approved two wind farms to be the first clean energy projects to supply offset credits to its fledgling carbon markets, providing low-cost emission reduction options to big polluters. In total, they are expected collectively to generate around 1 million offsets annually and they could start generating credits within two months.
The two projects were approved by carbon market regulator the National Development and Reform Commission (NDRC). China wants to cut emissions per unit of GDP to 40-45 percent below 2005 levels by 2020.
In order to get that target, hundreds of companies regulated by the markets are able to use offsets generated by carbon-cutting projects to cover for 5 to 10 percent of their emissions as a way of limiting abatement costs.
State-owned PetroChina late last year said it had signed a contract to buy 10,000 Chinese offsets, known as Chinese Certified Emissions Reductions (CCERs), for 16 yuan ($2.58) each from one of the approved projects owned by power generator Longyuan. The other wind project is owned by the Beijing Energy Investment Company.
A new batch of projects is likely to be reviewed in mid-April.The approvals could eventually help ease pressure and lift prices in the international offset market, which is supplied mainly by the U.N.-run Clean Development Mechanism (CDM).
Reluctance by rich western governments to use the CDM to help meet more ambitious greenhouse gas targets has led to a massive glut of offsets, pushing prices down to as low as 10 euro cents.