Rising costs stir speculation about the future of China's green energy credits.

In a significant move towards promoting green energy, China has seen a surge in the price of Green Electricity Certificates (GECs) nationwide. In April 2025, the average price of a GEC reached CNY 2.31, marking a 63% month-on-month increase[1][2]. This price hike is primarily attributed to a strong policy push aimed at transforming GECs into tradable assets that represent environmental value.

The policy, announced in March 2025, mandates businesses in energy-intensive sectors to purchase GECs. This move is part of China's strategy to develop a robust market ecosystem for green power certificates, encouraging renewable energy production and consumption through market mechanisms[1].

One of the key developments in this regard is the Guangzhou Power Exchange Centre's plan to establish an international electricity-trading mechanism, where GEC trades will play a crucial role. This initiative is expected to further support demand and price elevation[1]. However, the policy landscape still awaits concrete details on mandatory GEC usage requirements and cross-provincial allocation rules, contributing to some short- to mid-term price instability as market participants adjust[1].

For large electricity users in Guangdong, this policy-driven price surge means that acquiring sufficient GECs to meet compliance or sustainability goals may become more costly in the short term. These users are likely required or incentivized to purchase GECs to offset their environmental impact or comply with provincial/national mandates. The increasing GEC prices pressure these users to either pay premium prices for certificates or accelerate adoption of onsite renewable energy and energy efficiency measures to reduce their dependency on procuring GECs from the market[1].

Looking ahead, the expectation is that after the compulsory purchase system fully launches and the GEC market stabilizes—likely by 2027—GEC prices will even out as supply and demand balance. Subsequently, the focus may shift to developing derivative financial products based on GECs and integrating technological innovations like blockchain for improved market transparency and efficiency[1]. This maturation will ultimately benefit large electricity users by providing clearer price signals and more stable costs for green electricity compliance.

In summary, the price surge in GECs in China is a strategic effort by authorities to embed green electricity consumption into market mechanisms, supporting national emission reduction targets and renewable energy scaling. As the market matures, it is expected to bring about more stability and sophisticated financial products, benefiting both the environment and the economy.

References: [1] China Dialogue. (2025). China's Green Electricity Certificate (GEC) Market: A Price Surge and the Road Ahead. Retrieved from https://www.chinadialogue.net/business-economy/energy/green-electricity-certificates-gecs-in-china-a-price-surge-and-the-road-ahead [2] South China Morning Post. (2025). China's Green Electricity Certificate (GEC) Market: A Price Surge and the Road Ahead. Retrieved from https://www.scmp.com/business/energy/article/3158833/chinas-green-electricity-certificate-gec-market-price-surge-and-the

The surge in Green Electricity Certificates (GECs) prices in China is a significant step towards energy transition, driven by the government's push for clean energy and carbon markets.
Businesses in energy-intensive sectors are now mandated to purchase GECs, contributing to the development of a robust market ecosystem for green power certificates.
The strategy aims to encourage renewable energy production and consumption, aligning with the Sustainable Development Goals (SDG) and addressing climate-change concerns.
The environmental-science community and finance sectors both stand to benefit from the maturation of the GEC market, as it promises to integrate technological innovations and develop derivative financial products.
Industries will likely face increased costs in the short term due to the policy-driven price surge, but this pressure may incentivize them to adopt onsite renewable energy and energy efficiency measures.
As the GEC market stabilizes, it is expected to support national emission reduction targets, bringing about more stability and fostering a healthier environment and economy.