China's Green Electricity Certificates (GECs): Market Growth, Policy Drivers, and International Outlook (2025 Analysis)

Publication Date: September 2025
Focus: Renewable Energy, Carbon Policy, ESG, Asian Markets

1. Market Size and Trading Activity

Issuance and Trading Volume

The scale of China's GEC market has expanded dramatically. In 2024 alone, the National Energy Administration (NEA) issued 473.4 million certificates, covering 473.4 TWh of renewable electricity and accounting for 13.7% of the country's total renewable generation 📖¹. The cumulative issuance by the end of 2024 reached 495.5 million certificates 📖².

This growth accelerated in 2025. NEA data from January to July 2025 shows a staggering 1.607 billion certificates were issued, of which 1.125 billion were made available for trading 📖³. Monthly issuance remained robust, with 216 million certificates in April and 236 million in July 📖⁴.

While trading volume is growing rapidly—44.6 million certificates traded in 2024 (approx. 8.1% of issuance) and 41.6 million in the first seven months of 2025—it still represents a small fraction of the total supply 📖^3,5. Participation is widening, with approximately 59,000 electricity consumers purchasing certificates by the end of 2024, 70% of which were from the manufacturing sector 📖². Over half of the national trading volume occurs in economically dynamic regions like the Beijing-Tianjin-Hebei cluster, the Yangtze River Delta, and the Greater Bay Area 📖².

Regional Disparities and Cross-Provincial Trading

A significant feature of the market is its regional imbalance. Northwest provinces (e.g., Inner Mongolia, Gansu), rich in wind and solar resources, have a surplus of certificates. Limited grid infrastructure and high transaction costs have suppressed prices here, often keeping them below 3 yuan/certificate, sometimes even resulting in "zero premium" sales 📖⁷.

Conversely, high demand from export-oriented manufacturers in southeastern coastal regions, who are responding to EU CBAM regulations, has pushed prices significantly higher 📖⁸. Cross-provincial trading is more advanced in the Southern Grid region, facilitated by the "West-to-East Power Transmission" framework, accounting for over 30% of its transactions in 2024. This remains a challenge in the northern grid areas, limiting overall market liquidity 📖⁹.

Market Outlook

Future demand is projected to be massive. Compulsory consumption policies for high-energy-consuming industries (steel, non-ferrous metals, building materials, chemicals) and data centers are key drivers. BloombergNEF forecasts that by 2035, data centers will require 320 million GECs annually, while traditional heavy industries will need around 900 million, creating a combined annual demand of 1.22 billion certificates 📖¹⁰. The market is expected to reach a supply-demand balance by 2027, potentially paving the way for financial derivatives like GEC futures 📖¹¹.

2. Key Market Participants

The GEC ecosystem involves a diverse range of actors:

• Government & Regulators: The National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) are the primary policy setters 📖¹³. The NEA's New Energy and Renewable Energy Department is responsible for issuance, registration, and data publication 📖³.
• Grids & Trading Platforms: State Grid Corporation of China (SGCC) and China Southern Grid (CSG) operate the physical infrastructure and trading platforms. The Beijing and Guangzhou Power Exchange Centers are the main hubs for centralized GEC trading 📖¹⁶.
• Suppliers (Sellers): Central state-owned power generators (e.g., China Three Gorges, State Energy Group, Huaneng) are the largest suppliers. Local energy companies and independent power producers (IPPs) also participate 📖^{Source in file}.
• Buyers (Demand Side): High-energy-consuming industries and export-focused manufacturers are the primary drivers of demand, spurred by compliance mandates and international supply chain pressures 📖^2,6. Multinational corporations (e.g., BASF, Covestro) and domestic tech giants (e.g., Tencent) are also active buyers, often engaging in cross-regional transactions 📖^{Source in file}.
• Intermediaries & Service Providers: Trading agencies, retail electricity companies, and information services like the Zhejiang International Oil and Gas Exchange Center (which published China's first GEC price index) play crucial roles in facilitating transactions and enhancing market transparency 📖¹⁴.

3. Historical Evolution and Key Policies

The development of the GEC system has been defined by pivotal policy milestones:

Time	Milestone/Policy	Key Impact
Feb 2017	GEC Pilot Launch	Limited to large wind and PV projects; voluntary trading; low market response (annual trades <30k, 2017-2020) 📖17.
May 2019	Renewable Energy Consumption Guarantee Mechanism	Introduced provincial consumption responsibility targets; allowed use of GECs for compliance 📖18.
July 2023	NEA Document #1044	Expanded GEC coverage to all renewables (wind, solar, hydro, biomass, etc.); defined GECs as the sole legal attribute certificate 📖13.
Aug 2024	GEC Issuance and Trading Rules	Defined 2-year validity; automatic monthly issuance; one-time trade followed by cancellation; allowed agency trading 📖14.
Mar 6, 2025	Five Ministries' "Opinions"	Mandated compulsory renewable consumption for high-energy-consuming industries, requiring them to meet or exceed the national average by 2030 📖6.
Mar 2025	I-REC Standard Exits China	I-REC withdrawn from the Chinese market, cementing GECs as the only valid green attribute certificate for domestic renewable energy 📖20.

4. Price Trends and Influencing Factors

GEC prices have been on a rollercoaster, reflecting the market's maturation:

• 2017-2020: High prices (~20 yuan/certificate) but extremely low liquidity 📖¹⁷.
• 2022-2024: Prices fell sharply from ~28.1 yuan/certificate (2022) to 9.6 yuan/certificate (2024) as issuance volumes exploded 📖²³. Oversupply in the Northwest led to trades as low as 0.15 yuan 📖¹⁵.
• 2025: Policy-Driven Rebound. The announcement of compulsory consumption rules triggered a rapid price increase.
  • April 2025: Average price rose to 2.31 yuan/cert, up 63% MoM. A clear "vintage effect" emerged: 2025 certificates averaged 4.12 yuan, while pre-2024 certificates traded for just 0.63 yuan 📖⁴.
  • July 2025: Average price jumped to 4.61 yuan/cert (+35% MoM). 2025 certificates averaged 6.88 yuan, further widening the gap with older vintages 📖³.

Key factors influencing price include policy mandates, regional supply-demand imbalances, the two-year validity period (creating vintage effects), and international carbon policies (e.g., EU CBAM) driving corporate ESG procurement 📖^6,8.

5. Certificate System and Trading Mechanics

• Attribute: One GEC represents 1 MWh of electricity generated from renewable sources and is the sole legal proof of its green attributes in China 📖¹³.
• Issuance: Certificates are issued automatically by the NEA on a monthly basis based on metered generation. They feature unified numbering and encryption, have a two-year validity, and can be traded only once before being cancelled 📖¹⁴.
• Trading: GECs can be traded bundled with physical electricity or unbundled. Trading occurs on designated platforms like the National Green Electricity Certificate Trading Platform and the regional power exchanges 📖¹⁶.
• Compliance: GECs are the primary tool for fulfilling provincial renewable consumption responsibility targets 📖¹⁸. Their role is being clearly differentiated from carbon credits (CCER) to avoid double-counting 📖²⁷.

A significant challenge is cross-provincial trading, which is constrained by physical grid connections and policy barriers, though progress is more evident in the Southern Grid region 📖²⁶.

6. International Context and Comparison

China's GEC system operates alongside other major international certificate systems:

• EU Guarantees of Origin (GO): EU GOs trade across 27 countries in a mature market, with prices typically between €4-10—significantly higher than Chinese GECs. A key hurdle is the lack of mutual recognition; the EU does not yet accept GECs for compliance under its Renewable Energy Directive due to differences in verification and tracking 📖¹⁵.
• I-REC Standard: I-REC was widely used by multinational companies in China before 2025. Its exit from the market in March 2025 consolidated the GEC's position as the domestic standard, eliminating confusion for companies 📖²⁰.
• US RECs: The US REC market is fragmented and state-led (RPS programs), contrasting with China's nationally unified system. No mutual recognition exists between the US and China 📖²⁵.

China is actively pursuing mutual recognition with neighboring countries under the Shanghai Cooperation Organisation (SCO) framework and scored a symbolic victory with the China-Laos railway project, which mandates the use of GEC-backed renewable power 📖^29,30. For now, Chinese exporters facing EU compliance often must still purchase EU GOs or sign European PPAs.

7. Overall Assessment and Future Outlook