Asia's Carbon Markets Strategic Imperatives for Corporations 2025

The VCM is likely to see sustained demand growth, but supply constraints may persist without intervention. Expanding the number and diversity of methodologies will be essential to closing the supply gap. Future approvals will likely focus on potential areas, including low-emission fuels, carbon removal, energy efficiency improvement and methane recovery and utilization. Innovative approaches such as quantifying “avoided emissions” (GHG differences between scenarios with and without a solution) will further aid the evaluation of methodologies. Despite efforts to expand methodologies to sustain supply, it is important to remain mindful of risks such as greenwashing, double-counting and low-quality credits. Looking ahead, the CCER will be vital in fostering innovative decarbonization solutions to achieve China’s climate objectives. Success will depend on balanced regulatory and market development. The value of carbon assets will rise, as the achievement of the dual-carbon targets in the 15th Five-Year Plan period will create demand for CCER. As a result, the demand for carbon credits will further increase during the carbon neutrality phase. Approved Chinese Certified Emissions Reduction (CCER) methodologies BOX 1 Renewable energies: –Grid-connected solar thermal power generation –Grid-connected offshore wind Forestry carbon sinks: –Afforestation carbon sinks –Mangrove afforestationIndustrial energy efficiency: –Energy efficiency in highway tunnel lighting systems Other sectors: –Utilization of low-concentration coal mine methane Source: Xinhua News Agency.28