Hu Yucheng, Partner at Fresh Capital
From a long-term perspective, restarting the China Certified Emission Reductions (CCER) scheme is a positive development. CCER represents a significant incremental market: it raises emission costs of high-emission enterprises on one side, while providing additional income for new energy and low-carbon assets on the other, thus creating a positive cash flow.
As the CCER market becomes more standardized, it leaves no room for previous speculative projects. For example, forest carbon sinks are expected to be one of the main CCER projects. The types of forestry resources and their property rights will have clear requirements in the new methodology. However, not all forestry resources can effectively function as carbon sinks, and there have been irregularities in the market previously. Such speculative projects will not be recognized by the CCER scheme.