Unified National Accounting for Non-Fossil Energy Power Consumption in China

Supporting detailed rules for the rollout of China’s carbon peaking and carbon neutrality (dual carbon) assessment system are being refined on an ongoing basis.

The General Offices of the CPC Central Committee and the State Council have issued the Measures for Comprehensive Evaluation and Assessment of Carbon Peaking and Carbon Neutrality, which incorporates the share of non-fossil energy consumption as a core assessment indicator. Following this, five authorities including the National Development and Reform Commission (NDRC) and the National Energy Administration (NEA) jointly formulated the Pilot Guidelines on the Accounting of Non-Fossil Energy Power Consumption (hereinafter referred to as the Guidelines), which were officially released to the public on June 1.

At present, 95% of China’s non-fossil energy consumption comes from the power sector. Scientific accounting and precise statistical tracking constitute a critical prerequisite for implementing the dual carbon control system. For a long time, China only conducted statistical accounting of non-fossil energy power consumption at the provincial level, lacking unified standards for prefectural and municipal authorities as well as end-users. Poor alignment between various power trading and carbon accounting rules created institutional gaps that hindered assessment implementation.

For the first time, the Guidelines establish a nationwide unified accounting system covering three tiers: provincial, prefectural/municipal, and power users. It defines three core identification approaches – physical identification, transaction-based identification, and allocation-based identification – filling gaps in statistics on non-fossil energy power consumption and enabling quantifiable, verifiable dual carbon assessments. Industry insiders note that the issuance of the Guidelines marks a new phase of refined and standardized governance over non-fossil energy power consumption in China.

Tiered Accounting with Classified Identification: Unified Rules Bridge Institutional Gaps

A relevant official from the National Energy Administration stated in a press briefing that China has long relied solely on provincial-level statistical accounting for non-fossil energy power consumption, with no established methodologies for prefectural/municipal governments and end-users. Meanwhile, inconsistent criteria for identifying non-fossil power consumption exist across policy mechanisms including electricity trading, green electricity certificate (GEC) trading, and carbon emission accounting.

To address these issues, the Guidelines explicitly aim to “improve the carbon emission statistical accounting system”, “support accounting of indirect carbon emissions from power consumption”, and “facilitate effective coordination among policy mechanisms such as electricity trading, GEC trading, and carbon emission accounting”.

Guided by three principles – coordinated alignment, steady and orderly progress, and scientific rationality – the Guidelines build a complete institutional framework featuring classified identification and tiered accounting.

Three Complementary Identification Mechanisms

Physical identification: Covers self-consumption of power generated from non-fossil energy, on-site power consumption from new business models such as direct green power connections, and power consumed by non-fossil power generation projects themselves.

Transaction-based identification: Encompasses physical electricity trading (conventional non-fossil power trading, green power trading, etc.) and GEC trading (including GEC transfers).

Allocation-based identification: As a fallback to ensure complete accounting for non-fossil power volumes not captured via physical or transaction identification, inter-provincial and intra-provincial allocation mechanisms are applied.

Tiered Accounting Methodology

For the first time, differentiated accounting formulas are introduced for provincial, prefectural/municipal, and power user tiers:

Provincial non-fossil power consumption is calculated based on local non-fossil power generation, inter-provincial transaction-identified volumes, and inter-provincially allocated volumes.

Prefectural/municipal consumption is computed using physical identification volumes, transaction-identified volumes, intra-provincially allocated volumes of local users, plus power consumption of local non-fossil generation projects.

Individual power user consumption is derived from their own physical identification volumes, transaction-identified volumes, and intra-provincially allocated volumes.

Senior NEA officials emphasized a core rule embedded in the Guidelines: one kilowatt-hour of non-fossil power shall only be recognized through one identification method and assigned to a single entity, institutionally eliminating duplicate accounting.

Green Power and GECs Integrated into Accounting: Activating the Market with Standardized Constraints

“The Guidelines mark the first inclusion of green electricity certificates in national-level carbon emission accounting,” said Jin Yanming, Senior Expert at State Grid Energy Research Institute. “This directly addresses the market’s core concern over whether GECs can play a role in carbon accounting. It creates policy synergy with the development of a unified national power market and the dual carbon control system, further regulating and advancing the green power and GEC market.”

Upon implementation of the Guidelines, energy consumers gain expanded channels to claim non-fossil power consumption. Zhang Nan, Deputy Director of the New Energy Trading Department at Beijing Power Exchange Center, explained that physical power consumption, green power, and GECs serve complementary purposes. Enterprises can flexibly combine different approaches based on their energy scale, cost budgets, resource access, and formal recognition requirements.

Meanwhile, the application scenarios for GECs will expand significantly. Liu Jiandong, Chief Engineer at the Energy Information Center of the Power Planning & Engineering Institute, noted that while the Guidelines set GEC identification requirements for enterprises subject to mandatory non-fossil power consumption accounting, there are no such restrictions for voluntary green consumption disclosures – overall broadening the scope of GEC utilization.

Liu Jintao, Deputy Director of the Green Power Development Center at Guangzhou Power Exchange Center, analyzed that China’s green power and GEC consumption exceeded 900 billion kWh in 2025, accounting for nearly 10% of total national electricity use. With the Guidelines taking effect and unleashing further market demand, annual national green power and GEC consumption is expected to surpass 1 trillion kWh.

To avoid double-counting environmental attributes and over-recognition, the Guidelines introduce transaction volume caps for the first time:

Provincial transaction-recognized volumes may not exceed total incoming/outgoing power volumes minus cross-provincial fossil-fuel power transaction volumes.

Prefectural/municipal volumes shall not exceed total power delivered to the local grid.

Individual user volumes shall not exceed their own grid power draw.

Zhang Nan commented that this mechanism aligns GEC tracking with physical power flows, enabling GECs to function as authentic credentials for renewable energy consumption and eliminating duplicate statistical counting. It guarantees traceability and accuracy in non-fossil power accounting. The Guidelines also encourage real-time purchasing and liquidation of GECs, guiding enterprises to rationally plan procurement cycles and independently manage the full lifecycle of their GEC holdings.

Jin Yanming further pointed out that the policy will unlock market premiums for new energy operators, gradually replacing government feed-in tariff subsidies and laying an institutional foundation for coordinated power and carbon governance. Driven by rising market demand, GEC prices are projected to trend upward moderately, yet constrained by aggregate volume caps and the rule that certificates issued in a given year must be retired within that year, market volatility will remain reasonable.

Enforcing User Accountability to Drive Refined Corporate Carbon Management

For the first time, the Guidelines extend statistical accounting accountability for non-fossil energy consumption down to individual power users, exerting differentiated impacts on carbon management across industries and enterprises.

Released alongside the Guidelines, the explanatory document 20 Frequently Asked Questions on Accounting Non-Fossil Energy Power Consumption clarifies two calculation approaches for enterprises’ indirect carbon emissions from electricity use: multiplying total power consumption by the national average grid carbon emission factor; or segregating power types under the Guidelines, whereby non-fossil power carries zero emissions and fossil power is multiplied by the fossil energy power emission factor.

Zhang Nan argued this reform will reshape corporate indirect carbon accounting practices, pushing businesses to shift from extensive to refined energy and carbon management.

Industry experts put forward four key recommendations for enterprises:

1. Establish detailed ledgers tracking all non-fossil power consumption data, including on-site self-generation, direct green power connections, green power trades, and GEC transactions.

2. Calculate annual green power and GEC demand based on total grid draw volumes and dual carbon targets, and rationally schedule procurement by referencing historical intra-provincial allocation coefficients.

3. Prioritize green power trades to meet mandatory accounting quotas, supplemented by GEC purchases to optimize overall energy costs.

4. When participating in cross-provincial GEC trading, verify that transaction volumes stay within recognition caps to ensure eligibility for carbon accounting.

As a pilot document, relevant authorities will expand its scope of application over time to build integrated policy synergy and deliver clearer, more streamlined institutional conditions for enterprises.