Peak Carbon Emissions and Carbon Neutrality Standards Systems are a vital pillar supporting the efficient use of resources, the development of green, low-carbon resources, the comprehensive overhaul of the manufacturing industry, the green lifestyle and production revolution, and the comprehensive green transformation of economic and social development.
In October 2021, the State Council of the Communist Party of China released various policy documents focusing on Carbon Neutrality and Peak Carbon Emissions standards, including the Outline of National Standardization Development, the Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality in Full and Faithful Implementation of the New Development Philosophy, and the Action Plan for Carbon Dioxide Peaking Before 2030. These policy documents set forth requirements to establish a series of frameworks and systems via demands to ‘establish and improve standard measurement systems for Peak Carbon Emissions and Carbon Neutrality,’ ‘accelerate the updating of energy conservation standards, the revision of the first batch of energy consumption limits, and mandatory national energy efficiency standards and engineering standards for products and equipment,’ ‘accelerate the improvement of carbon emissions auditing and accounting standards for regions, industries, businesses, products, etc.’ and ‘strengthen international harmonization of standards’.
Over 1,800 National Standards directly support China’s Carbon Neutrality and Peak Carbon Emissions work, according to the relevant supervisors of the Standards and Technology Division at the State Administration for Market Regulation. A further 2,300 industrial standards cover aspects such as carbon emissions auditing and accounting, energy conservation, non-fossil fuel resources, new electricity systems, the clean use of fossil fuels, the cyclical use of resources, and carbon sinks, providing significant support for policies on eliminating outdated production capacity, energy conservation reviews, differential power pricing, carbon trading, and more. However, current Dual-Carbon standardization work covers only limited fields and scopes, and the standards themselves suffer from inconsistent quality and lack the necessary coordination to promote change.
The Implementation Plan for Establishing Standardized Carbon Peaking and Carbon Neutrality Measurement Systems was jointly issued in October 2022 by the State Administration for Market Regulation, NDRC and Ministry of Industry and Information Technology, together with six other departments to address the existing issues facing China’s current carbon neutrality and carbon peaking standardization work.
April 2023 then saw the joint release of the Guidelines for the Establishment of Carbon Peaking and Carbon Neutrality Standards Systems by the Standardization Administration of China, NDRC, Ministry of Industry and Information Technology, and eight other departments. The Implementation Plan lays out an initial framework for a multi-dimensional, multi-field, and multi-level carbon peaking and carbon neutrality standards system, covering standards in the four categories of general foundation carbon emissions standards, carbon emission reduction standards, decarbonization standards, and carbon market standards. The Guidelines further refine carbon peaking and carbon neutrality standards systems by clarifying key tasks for carbon peaking and carbon neutrality standardization work.
Major Carbon Neutrality and Carbon Peaking Standards Systems Policies in China
The major Carbon Neutrality and Carbon Peaking Standards Systems Policies in China are listed below：
Table 1 Carbon Neutrality and Carbon Peaking Standards Systems Policies in China
|Document Name||Issue Date||Issuing Authority|
|Guidelines for the Establishment of Industrial Carbon Peaking and Carbon Neutrality Standards Systems (2023) (Consultation Paper)||05/22/2023||
|Guidelines for the Establishment of Carbon Peaking and Carbon Neutrality Standards Systems||04/01/2023||
…and eight more
|Implementation Plan for Establishing Standardized Carbon Peaking and Carbon Neutrality Measurement Systems||10/18/2022||
…and six more
Establishing Carbon Neutrality and Carbon Peaking Standards Systems: Major Targets
The Guidelines for the Establishment of Carbon Peaking and Carbon Neutrality Standards Systems were issued on April 1, 2023 by the Standardization Administration of China, NDRC, Ministry of Industry and Information Technology, and eight other departments. The Guidelines extrapolates from the requirements set forth in the Implementation Plan for Establishing Standardized Carbon Peaking and Carbon Neutrality Measurement Systems and describes the major construction targets to be met by 2025, with a focus on accelerating the establishment of carbon peaking and carbon neutrality systems with logical structures and clear delineations which will be useful for high-quality economic and social development.
Standardization Administration of China, NDRC, Ministry of Industry and Information Technology, and eight other departments:
Guidelines for the Establishment of Carbon Peaking and Carbon Neutrality Standards Systems (April 2023)
- Major Targets
- Establish the groundwork for a carbon peaking and carbon neutrality standards system based on fundamental, common-use standards and development demands for carbon emission reduction, decarbonization, carbon markets, etc.
- Revise no less than 1,000 national and industrial standards (including foreign language versions) by 2025 and significantly improve their consistency with international standards.
- Expand standards to fully cover carbon auditing and accounting in major industries, and steadily improve energy consumption and efficiency standards indicators for key industries and products.
- Actively participate in at least 30 international environmentally-friendly, low-carbon standards and significantly improve the level of such.
Carbon peaking and carbon neutrality systems are comprised of fundamental, common-use standards subsystems, carbon emission reduction standards subsystems, decarbonization standards subsystems, and marketization mechanism standards subsystems. These four primary subsystems can be further divided into 15 secondary subsystems and 63 tertiary subsystems. The carbon peaking and carbon neutrality work under these systems cover key industries and fields such as energy resources, manufacturing, transport and logistics, urban and rural construction, water resources, agriculture and rural affairs, forestry and grasslands, finance, public institutions, and residential life, and are applicable in scenarios at the regional, industry, park, organization, and other levels. These standards systems must be dynamically adjusted as development demands.
Table 2 Carbon Peaking and Carbon Neutrality Standards Systems Framework
|0. Fundamental common-use||0.1 Terminology Categories and Carbon Information Disclosure||0.1.1 Terminology and Symbols|
|0.1.2 Categories and Coding|
|0.1.3 Data and Information|
|0.2 Carbon Monitoring Auditing and Accounting||0.2.1 Greenhouse Gas Monitoring|
|0.2.2 Zoned Carbon Emissions Accounting and Reporting|
|0.2.3 Industry & Business Carbon Emissions Accounting and Reporting|
|0.2.4 Project Carbon Emission Reduction Volume Estimation|
|0.2.5 Product Carbon Footprints|
|0.2.6 Carbon Emissions Auditing|
|0.3 Low-carbon Management and Evaluation||0.3.1 Environmentally-friendly Low-carbon Evaluation|
|0.3.2 Carbon Neutrality Evaluation|
|0.3.3 Carbon Emissions Management|
|1. Carbon Emission Reduction||1.1 Energy Conservation||1.1.1 Mandatory Energy Consumption Limits|
|1.1.2 Mandatory Energy Efficiency|
|1.1.3 Energy Conservation Fundamentals|
|1.1.4 Common Energy Conservation Technology|
|1.2 Non-Fossil Fuels||1.2.1 Hydropower|
|1.2.2 Wind Power|
|1.2.3 Solar Power|
|1.2.4 Nuclear Power|
|1.2.6 Hydrogen Energy|
|1.2.7 Marine Energy|
|1.2.8 Geothermal Energy|
|1.3 New Power Systems||1.3.1 New Power Systems — Power Grid|
|1.3.2 New Power Systems — Electricity Source|
|1.3.3 New Power Systems — Loading|
|1.3.4 New Power Systems — Energy Storage|
|1.4 Clean Use of Fossil Fuels||1.4.1 Green Mining of Fossil Fuels|
|1.4.2 Clean and Efficient Use of Fossil Fuels|
|1.5 Reducing Emissions in Manufacturing and Service Processes||1.5.1 Reducing Emissions in Industrial Manufacturing Processes|
|1.5.2 Environmentally-friendly Low-carbon Transport and Logistics|
|1.5.3 Reducing Emissions in Infrastructure Construction and Operations|
|1.5.4 Reducing Emissions in Agricultural Manufacturing|
|1.5.5. Public Institution Energy Conservation and Carbon Reduction|
|1.6 Cyclic Utilization of Resources||1.6.1 Circular Economy|
|1.6.2 Comprehensive Utilization of Resources|
|1.6.3 Clean Manufacturing|
|2. Decarbonization||2.1 Ecosystem Carbon Sequestration and Increased Sinks||2.1.1 Ecosystem Carbon Sinks|
|2.1.2 Soil and Water Conservation, Ecosystem Restoration, and Carbon Sink Operation|
|2.1.3 Biochar Carbon Removal and Utilization|
|2.2 Carbon Capture, Utilization and Storage (CCUS)||2.2.1 CCUS Fundamentals|
|2.2.2 CCUS — Capture|
|2.2.3 CCUS — Transport|
|2.2.4 CCUS — Utilization|
|2.2.5 CCUS — Sealed Storage|
|2.3 Direct Air Carbon Capture and Storage (DACS)||2.3.1 DACS Technology|
|3. Marketization Mechanisms||3.1 Green Finance||3.1.1 Green Finance — Common Fundamentals|
|3.1.2 Green Finance — Products and Services|
|3.1.3 Green Finance — Level Assessments|
|3.1.4 Green Finance — Information Disclosure|
|3.1.5 Green Finance — Statistics|
|3.1.6 Green Finance — Risk Management and Guarantees|
|3.2 Carbon Emissions Trading||3.2.1 Carbon Emissions Rights Trading|
|3.2.2 Greenhouse Gases — Voluntary Emission Reductions Trading|
|3.2.3 Energy Utilization Rights Trading|
|3.2.4 Green Energy Consumption|
|3.2.5 Environmentally-friendly Low-carbon Services|
|3.2.6 Carbon Asset Management|
|3.3 Eco-Product Pricing||3.3.1 Eco-Product Monitoring|
|3.3.2 Eco-Product Accounting|
|3.3.3 Eco-Product Valuation Estimation|
|3.3.4 Eco-Product Business Development|
Requirements for Establishing Carbon Peaking and Carbon Neutrality Standards Systems in Key Areas in China
In line with the details put forth in the Implementation Plan for Establishing Standardized Carbon Peaking and Carbon Neutrality Measurement Systems, the Guidelines for the Establishment of Carbon Peaking and Carbon Neutrality Standards Systems, and the Guidelines for the Establishment of Industrial Carbon Peaking and Carbon Neutrality Standards Systems (2023) (Consultation Paper), current business systems for carbon peaking and carbon neutrality standards systems in China are divided into three major parts: carbon emission reduction, decarbonization, and marketization mechanisms.
Requirements for Establishing Carbon Emission Reduction Carbon Neutrality Standards Systems in Key Areas
Carbon emission reduction standards system construction is focused on energy resources, industry, transport and logistics, urban and rural construction, agriculture and rural affairs and other similar key areas. Other areas of focus are: energy conservation and carbon reduction, expanded use of non-fossil fuels, clean and low-carbon use of fossil fuels, and the reduction of GHG emissions and circular use of resources in manufacturing and service processes.
Energy Conservation Standards:
Policies require faster formulation of mandatory consumption restriction standards for key industries such as thermal power, steel, construction materials, chemical engineering, non-ferrous metals, coal, mining, light industry, mechanics, transport and logistics, etc. to promote actual energy consumption reduction indicators and adjust carbon emissions intensity indicators.
Non-fossil Fuel Standards:
Primarily focus on formulating whole-process standards for equipment production, installation, operation, maintenance, monitoring, and assessment etc. for hydropower, wind power, photovoltaic power, photothermal utilization, nuclear power, biomass energy (domestic waste incineration power generation, agricultural and forestry biomass thermal power, biomass clean heating, biological natural gas (biogas), biomass pyrolysis gasification, biomass liquid fuel, biomass briquette fuel, etc.), hydrogen energy, marine energy, geothermal energy, etc.
Clean Fossil Fuel Use Standards:
Emphasize formulating and revising technology standards covering exploration, environmental surveys, energy technology, energy quality, etc. for coal, oil, and natural gas.
Production and Service Process Emissions Reduction Standards:
Center around low-carbon industrial manufacturing processes, environmentally-friendly low-carbon transport and logistics, carbon reduction in infrastructure construction and operation, and energy conservation for public institutions.
Industrial Production Process Carbon Reduction Standards:
Focus on formulating and revising key technical standards and applicable standard samples covering low-carbon carbon sequestration technology, processes and equipment, non-dioxide GHG emission reduction technology, raw fuel substitution technology, low-carbon testing technology, low-carbon measurement and analysis technology, green production, and water conservation etc. for industries such as the steel, chemical engineering, non-ferrous metals, construction material, machinery, paper production, textile, automobile, and food processing industries.
Environmentally-friendly Low-carbon Transport and Logistics Standards:
Focus on formulating and revising infrastructure and equipment energy efficiency standards for railways, roads, waterways, civil aviation, postal services, and similar fields, as well as standards covering environmentally-friendly logistics infrastructure, efficient shipping organizations, environmentally-friendly travel, low-carbon diversified power application across modes of transport, environmentally-friendly transportation stations, energy integration, and pollution and carbon reduction etc.
Circular Use of Resources Standards:
- Focus on formulating and revising standards covering circular economy management, performance evaluations, etc.
- Promote the formulation and revision of common clean production evaluation standards, and comprehensive utilization standards for bulk solid wastes such as phosphogypsum, bauxite residue, smelting waste, etc.
- Promote the formulation and revision of resource reclamation and recycling standards for waste metals, waste textiles, waste plastics, waste power batteries, etc.
- Accelerate the improvement of water recycling standards.
- Formulate and revise remanufacturing standards for automobile parts, internal combustion engines, machine tools, etc.
- Formulate and revise circular use of resource standards for the forestry and grassland industry.
Requirements for Establishing Decarbonization Standards Systems in Key Areas
Decarbonization standards provide support for carbon sequestration, carbon sinking, carbon sink capture and sealed storage etc. Accelerate the development of decarbonization technology standards for ecosystem carbon sequestration and carbon sinks (forests, grasslands, wetlands, deserts, mines, oceans, etc.), carbon capture and sealed storage (inc. technology for industrial separation and fossil fuel pre-combustion and post-combustion capture etc.), DAC, etc.
Requirements for Establishing Marketization Mechanism Standards Systems in Key Areas
Marketization mechanism standards offer key guarantees for green finance, carbon emissions trading, eco-product valuation, etc.
Green Finance Standards:
- Focus on formulating and revising fundamental common standards covering green finance terminology, carbon accounting for financial institutions, carbon account management for banking enterprises and individuals, climate investment and financing, transformative finance cataloguing, etc. as well as green finance products and services standards covering green loans, green securities, green insurance, carbon financial derivatives trading, etc.
- Promote the formulation and revision of green finance evaluation standards for green securities credit ratings etc.
- Improve standards for information disclosure in financial institutions and financial business environments etc.
Carbon Emissions Trading Standards:
- Regulate the formulation and revision of carbon emissions quota allocations, adjustments, settlements, collateral, etc.
- Promote the formulation and revision of standards regulating key area or voluntary emissions reduction projects and emission reduction accounting methods etc.
- Improve green energy sources consumption standards covering statistical consumption accounting, monitoring, evaluation and green power trading etc. for renewable energy sources.
- Improve standards for environmentally-friendly low-carbon technology evaluation services, contract energy source management, carbon asset management, etc.
Eco-Product Valuation Standards:
- Focus on formulating and revising standards for natural resource rights confirmation, eco-product information surveys, dynamic monitoring of eco-products, etc.
- Improve standards for eco-products, eco-assets, eco-system service functions, gross eco-system production values, etc.
Measures rooted in the policy system of China enacted in the three years since China declared its “Dual-Carbon” targets of achieving peak carbon emissions by 2030 and carbon neutrality by 2060 have already begun producing preliminary results, and future focus will be placed on further refining this policy system. At the same time, China will be actively promoting the construction of carbon marketization mechanisms and driving activity in the carbon market.
(1) Steady Gains based on Stable Systematic Distribution and Key Points
China has already strengthened the top-level design of carbon peaking and carbon neutrality standards systems with the release of the Guidelines for the Establishment of Carbon Peaking and Carbon Neutrality Standards Systems. The Guidelines aim to direct an optimized, two-dimensional structure comprising government-promulgated standards and independent market-formulated standards, strengthening cross-industry and cross-field standards collaboration to increase the applicability and efficiency of standards with proper communication and linking at the various levels. At the same time, China has established an umbrella group for carbon peaking and carbon neutrality standardization to implement the increased action levels from the 100 energy conservation and carbon reduction standards of the 14th Five-Year Plan and incorporate a formal statistical accounting mechanism for carbon emissions into the National Statistical Survey System.
(2) Actively Carbon Marketization Mechanisms and Drive Carbon Market Activity
The National Emissions Trading Scheme uses market mechanisms to control and reduce GHG emissions and is a way of promoting environmentally-friendly, low-carbon development. It is also one of the core policy tools used to achieve the Dual-Carbon targets. Use a range of measures to actively drive carbon marketization and strengthen the self-vitality of the carbon market by optimizing and improving carbon trading market mechanisms, consolidating key industry carbon emissions data quality to prepare for expanding the range of industries covered by the carbon trading market, facilitating the integration of green technology standards definitions and green finance standards used by different industries, improving eco-product valuation standards, etc.