China Certified Emission Reduction Projects: Historical and Current Status, Development, and Future Prospects—Taking Forestry Projects as an Example

Abstract

China has developed its own “CDM”, i.e., the China Certified Emission Reduction (CCER) scheme. International carbon organizations and individuals are interested in the CCER mechanism. We searched “CCER” in the web of science and, unfortunately, found no previously published studies that provide a detailed description of CCER, especially CCER forestry projects. This paper reviews the history, development, and current status of the CCER forestry projects. We introduced the components of the CCER program, including the CCER methodology system, the CCER registration system, the CCER trading system, and DOEs. In addition, we further introduced the development process, including project design, project validation and registration, project implementation, project monitoring, emission reduction accounting, emission reduction verification, and registration. Recommendations are proposed, including expanding methodologies, incorporating advanced technologies, optimizing monitoring frameworks, and pursuing international collaboration. This study provides policy and technical guidance for the sustainable development of China’s forest carbon market.

1. Introduction

In 1990, the Intergovernmental Panel on Climate Change (IPCC) reported that the global average temperature would rise by approximately 1.5–4.5 °C by the mid-21st century due to human activities, causing irreversible disasters, such as sea-level rise, biodiversity loss, and wildfires [1,2,3,4]. This report attracted worldwide attention, and many countries signed the United Nations Framework Convention on Climate Change (UNFCCC) in 1992 to combat climate change [5,6,7]. The Kyoto Protocol was subsequently established in 1997, setting targets for countries and regions to reduce GHG emissions by 5% from 1990 levels during 2008–2012 [8,9,10,11]. Based on lessons learned from the UNFCCC and the Kyoto Protocol, the Paris Agreement was established in 2005, aiming to keep the global average temperature increase below 1.5–2 °C above pre-industrial levels [12,13,14]. The Paris Agreement requires all signatory countries to conduct a comprehensive assessment of climate change every five years starting in 2023 and report their nationally determined contributions [12,15,16].

As a responsible major power, China participates in international efforts to combat global climate change as a member of the UNFCCC, the Kyoto Protocol, and the Paris Agreement. It proactively proposed in 2009 to achieve a significant reduction in CO₂ emissions per unit of GDP by 2020 compared to 2005 [5,11,12,17,18,19]. This goal was subsequently incorporated into the Chinese National Development Plans in 2009 and has been successfully achieved [20,21,22,23]. In 2020, Chinese President Xi Jinping solemnly pledged at the General Debate of the 75th Session of The United Nations General Assembly that China would aim to peak its CO₂ emissions before 2030 and achieve carbon neutrality before 2060, known as the dual carbon goals [24,25,26]. In December of the same year, President Xi detailed China’s dual carbon goals at the Climate Ambition Summit, stating that China’s CO₂ emissions per unit of GDP would be 65% lower in and China’s forest stock volume would be 6 billion cubic meters higher in 2030 than in 2005 [27,28,29]. Correspondingly, the Chinese government has introduced policies, such as the “Opinions of the Central Committee of the Communist Party of China and the State Council on Fully and Accurately Implementing the New Development Concept to Achieve Carbon Peak and Carbon Neutrality” and the “Action Plan for Carbon Peaking before 2030”, establishing the “1+N” policy framework for carbon peaking and carbon neutrality [30,31,32].

Article 4 of the UNFCCC, Article 3 of the Kyoto Protocol, and Article 4 of the Paris Agreement indicate that reducing carbon emissions and increasing carbon sinks are the two primary measures to mitigate climate change [5,12,33]. Emission reduction measures often entail high costs, whereas carbon sink enhancement measures, especially vegetation carbon sequestration, are often less expensive and more environmentally friendly [34,35,36]. For example, Sha et al. (2022) [37] demonstrated that terrestrial vegetation sequesters 112–169 Pg C annually. Other studies found that vegetation carbon sequestration is crucial to increasing carbon sinks [38,39]. Plants use photosynthesis to absorb CO₂ from the atmosphere and store it in their tissues and the soil [40,41,42,43,44]. Forest ecosystems are the largest terrestrial vegetation ecosystem. It has been estimated that global forests contain 662 billion tons of carbon and sequester 1.14 billion tons of CO₂ annually, equivalent to 29% of the annual anthropogenic CO₂ emissions from 2011 to 2020 [45,46]. Studies have shown that global forest carbon sinks are nearly equivalent to half of fossil fuel emissions [47]. Article 3 of the Kyoto Protocol and Article 5 of the Paris Agreement explicitly highlight the critical role of forests in addressing climate change [12,33].

China has abundant forest resources, with an area of 231 million hectares, a stock volume of 19.49 billion cubic meters, a forest cover rate of 24.02%, and an estimated carbon stock of approximately 10.72 billion tons, demonstrating strong carbon sequestration capacity and potential [48]. Notably, China ranks first in forest plantation globally, with an area of 80.03 million hectares [49,50]. Yu et al. (2022) [51] reported that an increase in China’s forest area in the last 40 years has resulted in forest areas comprising nearly 44% of the national terrestrial carbon sink. Many authors have estimated that China’s forest areas will sequester an average of 161–358 million tons of carbon per year, absorbing 22.14% of CO₂ emissions from fossil fuel combustion and offsetting 14.1% of China’s anthropogenic carbon emissions [52,53].

Forest carbon sequestration projects are vital in achieving Chinese dual carbon goals and combating climate change [54,55]. Forest carbon sequestration is defined as the storage of carbon in forests. These projects include afforestation and appropriate forest management that enables the absorption and storage of atmospheric CO₂ [56,57]. International forest carbon sequestration projects generally follow the clean development mechanism (CDM), verified carbon standard (VCS), gold standard (GS), and other standards [58,59,60]. Guided by emission reduction commitments and the dual carbon goals, China has established the Chinese national carbon emissions trading scheme and voluntary GHG emission reduction trading market (China’s certified emission reduction (CCER) trading market) [61,62]. Forest carbon sequestration projects are crucial to China’s voluntary GHG emission reduction projects (CCER projects) [63]. Many CCER forest projects have been developed, and China’s carbon emission trading system has been established [64,65].

This study systematically reviews the historical development of CCER forestry projects. It provides a detailed overview of the current status of CCER forest projects, including policies, guiding documents (methodologies and other documents), supporting entities (registration systems, third-party designated operational entities), and development steps. It analyzes problems of the CCER forestry projects, such as incomplete methodologies. A framework and recommendations are proposed for the future development of CCER forestry projects to support the efficient, regulated, and sustainable growth of China’s forest carbon market.

2. Development History of CCER Forestry Projects

2.1. Establishment of the CCER Projects

A typical carbon trading market consists of two transactions: carbon allowances and carbon credits [66]. Carbon allowances refer to the total amount of GHGs an enterprise can emit within a specific period, as authorized by government authorities [67]. In contrast, a carbon credit is a certificate representing a reduction in carbon dioxide emission. Carbon credits are confirmed by international organizations, third-party entities, or governments. Measures to obtain carbon credits include improving energy efficiency and forest carbon sequestration [68]. In the Kyoto Protocol framework, carbon allowances are referred to as assigned amount units (AAUs), whereas carbon credits consist of certified emission reductions (CERs) generated by CDM projects [10]. In the VCS program, carbon credits are referred to as verified carbon units (VCUs) [69]. China participates in CDM and VCS projects in international voluntary GHG emission reduction projects [70]. China has registered 3807 CDM projects, of which 1673 projects were emission reductions, with 1,195,635,746 tons of CERs issued, including 5 forest carbon sequestration projects with 914,935 tons of CERs [71]. Additionally, 464 VCS projects have been implemented, generating 183,215,809 tons of VCUs, including 41 forest carbon sequestration projects with 12,442,741 tons of VCUs [72]. However, China did not establish a voluntary carbon market until 2012. The development history and document release timeline of China’s CCER are shown in Figure 1.

In March 2011, the National Development and Reform Commission (NDRC) issued the “12th Five-Year Plan for National Economic and Social Development”. It proposed to establish a statistics and accounting system for GHG emissions by 2015 and develop a carbon trading market [73,74,75,76]. This was the first document in China to propose the establishment of a carbon emissions trading market. In October of the same year, the NDRC issued the “Notice on the Pilot Project of Carbon Emission Trading”, approving the establishment of carbon emission rights trading pilots in seven cities, including Beijing, Tianjin, Shanghai, Chongqing, Guangdong, Hubei, and Shenzhen [77,78]. In December of the same year, the State Council issued the “Work Plan for Controlling Greenhouse Gas Emissions during the 12th Five-Year Plan Period”, which reiterated the need to establish a statistics and accounting system for GHG emission, establish carbon trading markets, and support the creation of voluntary reduction mechanisms and carbon trading pilots [79]. In October 2012, the NDRC issued the “Interim Measures for the Administration of Voluntary Greenhouse Gas Emission Reduction Trading” (“2012 Trading Management Measures”). It defined the participants and operational standards for China’s voluntary GHG emission reduction trading market (CCER trading market), marking the official beginning of the CCER project system [80,81,82]. In January 2015, the NDRC Climate Change Department issued the “Announcement on the Operation and Account Opening of China’s Voluntary GHG Emission Reduction Trading Registration System”, marking the launch of the CCER trading market [83].

After the establishment of the CCER project system, the two types of tradable instruments in China’s carbon emissions trading scheme, carbon emission allowances (CEAs) and CCER, have functioned as complementary mechanisms [84]. The CCER refers to the quantified and verified GHG emission reductions from projects in China, such as renewable energy, forest carbon sequestration, and methane utilization. The projects are registered in China’s voluntary GHG emission reduction registration system [85]. When an enterprise’s carbon emissions exceed its CEA, it can obtain additional CEAs by trading with other enterprises or purchasing CCER credits to meet its emission reduction target [85].

2.2. The First Phase of CCER Forestry Projects Development (2012–2017)

The “2012 Trading Management Measures” proposed adopting CDM methodologies suited to China’s national conditions and allowed the registration of new methodologies after evaluation and review [80]. The NDRC approved 200 methodologies from 2013 to 2017 and registered 12 validation and verification agencies (designated operational entities (DOEs)), establishing a solid foundation for the CCER trading market. Among the 200 methodologies, 5 apply to forest carbon sequestration projects, i.e., “Afforestation Carbon Sequestration Project Methodology”, “Bamboo Afforestation Carbon Sequestration Project Methodology”, “Bamboo Forest Management Carbon Sequestration Project Methodology”, “Forest Management Carbon Sequestration Project Methodology”, and “Sustainable Grassland Management Greenhouse Gas Emission Reduction Measurement and Monitoring Methodology” [86].

To facilitate the development of CCER projects, “Version 1.1 of the Greenhouse Gas Voluntary Emission Reduction Project Design Document Template (F-CCER-PDD)”and “Version 1.0 of the Greenhouse Gas Voluntary Emission Reduction Project Monitoring Report Template (F-CCER-MR)” were issued in 2014 to standardize project design and monitoring [87]. During the same period, CCER projects were filed and reviewed [88]. China’s voluntary GHG emission reduction registration system was established in 2015. The CCER trading market was formally launched, and trading began [83].

In this stage, 97 CCER forestry projects were announced; 13 forestry projects were registered, and only 3 CCER forestry projects were approved [86].

In March 2017, the NDRC issued a notice stating that since the implementation of the “2012 Trading Management Measures”, CCER projects had successfully reduced GHGs but had problems, such as low trading volumes and a lack of standardization in some projects [89,90]. The development of new projects and the issuance of emission reductions were temporarily suspended to improve the CCER projects; however, registered CCER projects could continue trading [89,90]. This marked the end of the first phase of the CCER trading market.

2.3. The Second Phase of CCER Forestry Projects Development (2023–Present)

The CCER trading market resumed, guided by China’s dual carbon goals. In March and April 2023, the Ministry of Ecology and Environment of the People’s Republic of China (MEE) successively issued the “Letter on Publicly Soliciting Suggestions for Methodologies of Voluntary Greenhouse Gas Emission Reduction Projects” and the “Public Solicitation of Methodology Suggestions for Voluntary Greenhouse Gas Emission Reduction Projects”, indicating the resumption of CCER projects [91,92]. On 19 October of the same year, the MEE issued the “Interim Measures for the Administration of Voluntary Greenhouse Gas Emission Reduction Trading” (“2023 Trading Management Measures”), officially resuming CCER projects that had been suspended since 2017 [80]. On 24 October of the same year, the MEE issued the “Notice on Issuing Four Methodologies for Voluntary Greenhouse Gas Emission Reduction Projects: Afforestation Carbon Sink (CCER-14-001-V01)” (“Methodology Issuance Notice”), providing technical guidelines for project development [93].

In November 2023, the National Center for Climate Change Strategy and International Cooperation (NCSC) issued the “Voluntary Greenhouse Gas Emission Reduction Registration Rules (Trial)” (“Registration Rules”) and the “Guidelines for the Design and Implementation of Voluntary Greenhouse Gas Emission Reduction Projects” (“Design and Implementation Guidelines”), describing project registration rules and specifying the details of project design and implementation [94]. Around the same time, the Beijing Green Exchange Co., Ltd. (BGEX) released the “Voluntary Greenhouse Gas Emission Reduction Trading and Settlement Rules (Trial)” (“Trading and Settlement Rules”) [95]. In December of the same year, the State Administration for Market Regulation announced the release of the “Rules for the Validation and Verification of Voluntary Greenhouse Gas Emission Reduction Projects” (“Validation and Verification Rules”) [96]. On 22 January 2024, the China’s Voluntary GHG Emission Reduction Trading System (CCER trading system) commenced trading [61]. On 23 August of the same year, the NCSC issued the “Announcement on Accepting Applications for Voluntary Emission Reduction Projects and Emission Reduction”, officially launching the online account and project registration applications for China’s Voluntary GHG Emission Reduction Registration System (CCER registration system) [97]. From June to November 2024, the State Administration for Market Regulation and the China Certification and Accreditation Association completed the qualification certification for the first batch of DOEs and verifiers, marking a final significant step for project development [98,99,100]. At this point, the main institutional and technical support systems for the CCER trading market, including project development, validation, verification, registration, and trading, had been established, marking the resumption of the CCER trading market.

3. Current Status of CCER Forestry Projects

3.1. Policy for CCER Forestry Projects

The “2023 Trading Management Measures” focuses on market-based trading and supervision of GHGs, providing a legal and technical framework to regulate CCER projects and trading practices [80]. The document systematically describes procedures for CCER project application, validation, emission reduction verification, registration, trading, and supervision. The document explicitly requires the establishment of a unified national registration and trading system, clarifying the qualifications and responsibilities of trading entities and DOEs. Additionally, the document introduces various regulatory measures and penalty mechanisms, specifying how to address violations and providing institutional guidance for the healthy operation of the CCER market.

The “Methodology Issuance Notice” contains four methodologies, covering afforestation carbon sequestration, grid-connected solar thermal power generation, grid-connected offshore wind power generation, and mangrove forest plantations. The forest carbon sequestration methodologies include “Voluntary Greenhouse Gas Emission Reduction Project Methodology: Afforestation Carbon Sequestration (CCER-14-001-V01)” (afforestation methodology) and “Voluntary Greenhouse Gas Emission Reduction Project Methodology: Mangrove Creation (CCER-14-002-V01)” [93]. The methodologies provide standards for the design, implementation, validation, emission reduction calculation, and verification of forest carbon sequestration projects (see details in 4. Project Development Procedure).

The “Registration Rules” describe operational requirements for account management, information updates, emission reduction transfer, and judicial cooperation. They clarify the roles and responsibilities of DOEs, ecological and environment departments, and participating entities by establishing multiple protection measures for account security, data management, and market order [94]. The “Design and Implementation Guidelines” provide detailed specifications covering the project’s lifetime from design to deregistration. The document also includes templates for the project design document (PDD) of CCER forestry projects, the project emission reduction calculation report (MR), and a tool for demonstrating project additionality [94].

The “Validation and Verification Rules” specify the responsibilities of project owners, as well as the roles and procedures for DOEs, to ensure the scientific accuracy and transparency of project applications, data verification, and result reporting [96]. The “Announcement on the Approval Decision for the First Batch of Qualified Agencies for Validation and Emission Reduction Verification of Voluntary Greenhouse Gas Emission Reduction Projects” released the list of the first five approved CCER project DOEs [98]. The “Registration Criteria for Verifiers of Voluntary Greenhouse Gas Emission Reduction Projects (First Edition, Trial)” describes the registration requirements for CCER project verifiers, as well as knowledge- and competency-based evaluation methods to ensure the quality of validation and verification of CCER projects [99]. The China Certification and Accreditation Association has released a list of 59 verifiers and trainee verifiers for CCER projects across seven announcements [100].

These policy documents standardize the key stages of developing CCER projects, i.e., project design, implementation, validation, and verification. The basis for project design, design details, and technical specifications for implementation are clearly defined. Additionally, the “Validation and Verification Rules” for CCER projects, as well as the qualifications of DOEs and verifiers, have been established. Moreover, the CCER registration system is now open, enabling project registration, information management, and compliance review. The CCER trading system is also operational, ensuring the smooth transaction and market-based operation of CCER forestry projects.

3.2. CCER Projects DOEs

According to the requirements of the “2023 Trading Management Measures”, the “Validation and Verification Implementation Rules”, and the “Design and Implementation Guidelines”, DOEs are primarily responsible for validating the PDD and verifying emission reductions during the CCER project application [80,94,96]. After project implementation and monitoring are completed, DOEs must verify the accuracy of emission reductions by conducting on-site evaluations and document reviews to ensure the completeness and consistency of the monitoring data. Ultimately, the agencies issue validation and verification reports, enabling the registration of the CCER project and the confirmation of emission reductions, respectively.

The DOEs must be approved by the State Administration for Market Regulation to obtain qualifications for CCER project validation and verification. Approved CCER project DOEs include the China Quality Certification Center Co., Ltd. (CQC), China Classification Society Certification Company (CCSC), Guangzhou Ceprei Certification Body Services Co., Ltd., China Environmental United Certification Center Co., Ltd. (CEC), and the Institute of Forestry Science and Technology Information of the Chinese Academy of Forestry (

Table 1. CCER project DOEs.

Serial Number	Institution Name	Affiliation	Industry	Institutional Approval Number
1	China Quality Certification Centre Co., Ltd.	State-owned Asset Supervision and Administration Commission of the State Council	Energy industry (renewable/non-renewable), forestry and other carbon sink types	CNCA-R-2002-001
2	China Classification Society Quality Certification Co., Ltd.	Ministry of Transport of the People’s Republic of China		CNCA-R-2002-005
3	Guangzhou Ceprei Certification Body Services Co., Ltd.	-		CNCA-R-2002-012
4	China Environmental United Certification Center Co., Ltd.	Former Ministry of Environmental Protection of the People’s Republic of China		CNCA-R-2002-105
5	Institute of Forestry Science and Technology Information of the Chinese Academy of Forestry	State Forestry and Grassland Administration	Forestry and other carbon sink types	CNCA-R-2024-1364

) [98].

3.3. Beijing Green Exchange, CCER Registration System, and CCER Trading System

3.3.1. Beijing Green Exchange

The BGEX was established in 2008. It was originally known as the Beijing Environmental Exchange and served the environmental rights trading sector [101]. After the release of the “Notice on Carrying Out Pilot Work on Carbon Emission Rights Trading” in 2011, Beijing and six other provinces or directly controlled municipalities were designated as pilot regions for carbon emission trading [77,78]. Starting in June 2013, China’s carbon emission trading pilots were launched successively. The BGEX, which has been part of this pilot since 2013, began carbon trading, marking its formal role as a key platform in promoting market-based carbon trading and green financial innovation [102,103].

The BGEX has been entrusted with the important task of developing the CCER trading market and has been upgraded into a national green exchange with global influence [104,105,106]. The policy documents describe the development of the BGEX from top-level design to implementation details, clarifying its core position in the national carbon trading system and its direction of international development. These policies will promote the standardized and unified management of China’s carbon trading market [95].

In 2023, the BGEX finalized the CCER registration system and the CCER trading system. Both passed initial inspections, indicating that the voluntary emission reduction market has entered the operation stage [107]. In August of the same year, the BGEX announced the launch of the account opening of the CCER trading system, providing clear guidelines on trading and account management for market participants [108,109].

3.3.2. CCER Registration System

According to the “2023 Trading Management Measures”, the CCER registration system is primarily responsible for accepting registration applications for the CCER project, as well as the registration and cancellation of voluntary GHG emission reductions. Additionally, the system records information on CCER projects and the registration, ownership, alteration, and cancellation of CCER projects [80].

The “2023 Trading Management Measures” states that information recorded in the CCER registration system is the final basis for determining the ownership and the status of CERs [92]. The CCER registration system manages CCER projects primarily based on the “Interim Registration Rules for Voluntary Greenhouse Gas Emission Reductions” (“Registration Rules”) [94].

According to the “Notice on the Arrangements for Matters Related to the National Voluntary Greenhouse Gas Emission Reduction Trading Market”, the NCSC under the MEE is responsible for the registration and cancellation of CCER projects and emission reductions, as well as the operation and management of the CCER registration system [110,111].

3.3.3. CCER Trading System

According to the “2023 Trading Management Measures”, the CCER trading system is responsible for the centralized and unified trading and settlement of CCER. It also has the following responsibilities: (1) trade management—providing a centralized trading platform for CCER, such as listing, negotiated transfers, and auction trading; (2) settlement and clearing services—responsible for the settlement and clearing of trades; (3) risk control—using system monitoring and data analysis to prevent excessive market speculation; (4) data sharing and regulatory support—integrating information with the CCER registration system to provide regulatory bodies with trading information, supporting market regulation and policy development [94]. According to the “Notice on Arrangements for the National Voluntary Greenhouse Gas Emission Reduction Trading Market”, the BGEX provides centralized trading and settlement services for CCER and is responsible for the operation and management of the CCER trading system [110].

4. Project Development Procedure

The development of CCER afforestation carbon sequestration projects is based on guiding documents issued by the MEE, including the “2023 Trading Management Measures”, the “Design and Implementation Guidelines”, the “Trading and Settlement Rules”, the “Validation and Verification Implementation Rules”, and the “Registration Rules”. Additionally, the development of afforestation carbon sequestration projects must strictly adhere to the methodologies.

According to the “Design and Implementation Guidelines”, the design and implementation of CCER afforestation carbon sequestration projects must follow several steps, including project design, project announcement, project validation, project registration, project implementation, monitoring and emission reduction calculation, emission reduction announcement, emission reduction verification, and emission reduction registration [92]. The development procedures are shown in Figure 2.

4.1. Project Design and Public Announcement

The design of CCER afforestation carbon sequestration projects must strictly follow the “Design and Implementation Guidelines” [94]. Additionally, project design must be adjusted according to the requirements outlined in the “2023 Trading Management Measures”.

The design procedure for CCER afforestation carbon sequestration projects includes project type and sector identification, project description, methodology selection and application (such as boundary definition, baseline scenario, additionality demonstration, emission reduction calculation, and monitoring plan), setting the start date, crediting period, and lifespan, as well as environmental impact and sustainability assessments [94].

4.1.1. Applicable Conditions

In the early design phase, appropriate methodologies should be selected based on the project type. The afforestation carbon sink methodology is applicable to tree, bamboo, and shrub afforestation projects, covering protective, special-use, and timber forests. It is not applicable to economic forests, greening of corridors on non-forest land, or greening of urban, village, or industrial areas.

The eligibility criteria require that the project land has not been classified as forest for at least three years prior to the afforestation. The definition of forest in China includes a canopy cover greater than 0.2 and an area larger than 667 m² [112].

In addition, the eligibility criteria for the afforestation methodology specify requirements for land ownership, which must be proven using property title certificates, land lease or transfer contracts, land certificates, or forest rights certificates. The plot area cannot be smaller than 400 m² (or 667 m² for projects initiated before 2019). The project land cannot be classified as wetland, and soil disturbance is limited to land preparation and afforestation at the project start. No burning is allowed except for necessary burning of diseased or pest-infested wood. Agricultural activities cannot be affected. The project must comply with legal and regulatory requirements. Furthermore, the “2023 Transaction Management Measures” stipulate that all projects must start after 8 November 2012.

4.1.2. Key Project Milestones

The afforestation methodology, the “Design and Implementation Guidelines”, and the “2023 Transaction Management Measures” define the project timeline, which includes four periods: the project crediting period, the project’s lifetime, the start date, and the ownership period.

The ownership period refers to the valid duration of land or forest ownership or usage rights within the project boundary. The project lifetime begins on the start date, i.e., the afforestation date of the project, and is subject to the ownership period. The project crediting period begins after the project owner applies for registration. It must start after 22 September 2020. Its duration should be 20 to 40 years and must fall within the project’s lifetime. The start date of the project’s crediting period must be the same for projects implemented in phases.

The relationship between these periods can be summarized as follows. The ownership period encompasses the project’s lifetime, and the project lifetime encompasses the project’s crediting period and the start of the lifetime. Although afforestation projects typically have longer lifetimes, the project’s lifetime is limited by the ownership period.

4.1.3. Additionality Demonstration

Additionality demonstration is a core step in designing CCER afforestation carbon sequestration projects. The “Design and Implementation Guidelines” define the exemption from additionality demonstration that applies to three types of afforestation projects: those in areas with an annual rainfall of ≤400 mm, national key ecological function areas, and ecological public welfare forests.

A general additionality demonstration must be conducted for afforestation projects that do not meet the exemption conditions. It uses the “Additionality Demonstration Tool for Voluntary Greenhouse Gas Emission Reduction Projects” provided in the “Design and Implementation Guidelines”. This demonstration tool includes five steps: (1) determine if it is the first project of its kind, (2) identify feasible alternative options for the project, (3) conduct an investment analysis, (4) perform a barrier analysis, and (5) carry out a common practice analysis.

4.1.4. Project Emission Reduction Estimation

The calculation of emissions reductions for CCER afforestation carbon sequestration projects include four key components: baseline removals, project removals, leakage, and non-permanence risk deductions. In afforestation carbon sequestration projects, the changes in biomass carbon stock of existing vegetation under the baseline scenario are calculated as part of the project removals. Thus, the baseline removal is 0. Additionally, the eligibility conditions prevent the possibility of leakage; therefore, the leakage is 0. The afforestation methodology designates the non-permanence risk deduction rate at 10% to account for carbon release due to natural factors (such as fire, pests, and extreme weather) or human disturbances (such as illegal logging). Project removals include carbon stock changes in different biomass types, dead organic matter, soil organic matter, and existing vegetation, and they require the calculation of GHG emissions from fire-induced releases.

Calculating changes in biomass carbon stocks is performed as follows. The biomass of the forest (including tree, bamboo, and shrub forests) is calculated. A carbon conversion factor is used to convert the biomass into biomass carbon stocks. The stock change is calculated to determine the change in forest biomass carbon stocks. The biomass of tree forests can be estimated using two approaches. One uses the forest’s total (or above-ground) biomass and equations for per-unit-area volume. The other uses biomass conversion and expansion factors. Regardless of the method, the per area stocking rate must be calculated using growth equations that change with forest age. The biomass of bamboo forests is calculated in the mature and stable stages. The biomass is determined using the afforestation methodology, and an age ratio is used to calculate the biomass in other stages. Biomass equations and the default values are used to calculate shrub forest biomass. Biomass equations for different shrubs are used, and the number of shrubs per unit area is determined to calculate the total biomass per unit area of the forest.

Calculating changes in dead organic matter carbon stocks includes two components: litter mass and dead organic matter mass. Both components are calculated using the above-ground biomass in each carbon horizon and the conversion ratio. The change in soil organic matter carbon stocks is calculated using the project area and the average annual change rate of soil organic carbon density for different years. Fire is not considered during the design phase; thus, the GHG emissions from fire are 0. Since the afforestation methodology prevents the removal of existing scattered trees (or bamboo), the change in biomass carbon stocks of existing vegetation is ignored.

4.1.5. Monitoring Plan

The monitoring plan should include monitoring of afforestation parameters during the implementation phase, sampling design, plot design, and estimation design. In this procedure, the sampling design is related to the accuracy of the emission reduction calculation. According to the afforestation methodology, if the sampling survey does not meet the 90% reliability level and 90% precision requirement, the project owner must increase the number of sample plots and remeasure the area or reduce the proportion of removals for precision correction.

Stratified sampling is employed, using carbon horizon as strata. The sampling design requires calculating the number of sample plots needed for monitoring. Neyman allocation is used to determine the sample size for each carbon horizon. Systematic sampling with a predefined sample size is performed to determine the location of sample points. The plot design is performed as follows. Positioning tools, such as real-time kinematic (RTK) GPS, are used to locate the geographic position of the sample plot’s center point. A permanent marker must be placed at the center point in the first monitoring period. The sample plot area should be 0.04 to 0.06 hectares, and the plot should be rectangular or circular. Slope correction is required, and the closure error for rectangular plots should be less than 0.5%.

Every tree in the sample plot must be marked during monitoring. The diameter at breast height (DBH) of living trees must be measured in the sample plot, and tree height is selectively measured for trees with a minimum DBH of 2 cm. In shrublands, monitoring can be limited to shrub count, basal diameter, shrub height, and canopy spread in the sample plot or the canopy cover of shrubs in the plot. The geographic coordinates of the sample plot (expressed in degrees with at least six decimal places), location, plot name/number, shape, area, tree species, and afforestation time must be recorded.

4.1.6. Project Disclosure

After the project owner completes the PDD, they must publicly disclose the PDD and the verification agencies selected through the CCER registration system before applying for registration. The disclosure period is 20 working days; if feedback is received, the project owner must address it.

4.2. Project Validation and Registration

4.2.1. Validation and Registration Procedure

According to the “Design and Implementation Guidelines” and the “2023 Transaction Management Measures”, CCER afforestation carbon sequestration projects must undergo independent validation by qualified DOEs. The project validation procedure consists of six steps: submitting a validation and signing a contract, planning the validation, conducting an on-site review, drafting and reviewing the validation report, recording, and archiving [95]. The project owner must submit the PDD, supporting documents, and certifications to the DOEs and assist the DOE in completing the validation according to the “Validation and Verification Implementation Rules”, the validation and verification points specified in the afforestation methodology, and the requirements of the “2023 Transaction Management Measures”.

After the DOE issues the project validation report, the project owner may apply for project registration in accordance with the “2023 Transaction Management Measures” and the “Registration Rules”. When applying for registration, the project owner should submit the project application form via the CCER registration system. The DOE should upload the PDD and validation report, accompanied by a letter of commitment, ensuring the uniqueness of the project and the authenticity, completeness, and validity of the provided materials. The validation report uploaded by DOE must include a positive or negative validation conclusion and specify how the project owner handled public comments received during the public disclosure period.

Once the registration and certification body has completed the review of the PDD, validation report, and other application materials, the project can be registered.

4.2.2. Key Factors for Project Validation

According to the afforestation methodology and the “Validation and Verification Implementation Rules”, the project validation focuses on the key aspects of Section 4.1.1, Section 4.1.2, Section 4.1.3, Section 4.1.4 and Section 4.1.5 in the project design. The validation includes confirming the authenticity, completeness, and accuracy of the project description and related information, checking the accuracy of the emission reduction calculations, and evaluating the feasibility and operability of the monitoring plan [93]. The key points of project validation include (1) project eligibility conditions, (2) project boundaries, (3) emissions reductions, and (4) plot monitoring and parameter validation.

The validation of project eligibility conditions includes three aspects: (a) verifying that the project complies with legal and regulatory requirements and industry development policies, (b) confirming the suitability of the project plot, and (c) verifying land ownership within the project boundary. The following steps should be conducted to facilitate the validation of project eligibility conditions. It is necessary to use geospatial data (such as satellite images and aerial photos), the Third National Land Survey Forest Land Map or forest and grassland resource maps, forest resource planning data, and afforestation operation design documents to confirm whether the project plot meets the eligibility conditions. The project owner must provide proof of land ownership, such as valid certificates, land lease or transfer contracts, and other related documents.

Additionally, the project boundary must be validated using remote sensing images or field visits to confirm whether the project boundary includes land types that do not meet the eligibility conditions, such as roads, ditches, ponds, or rivers with widths greater than 3 m.

The emissions reduction validation checks whether the calculation procedure complies with the methodological requirements. The plot monitoring validation requires confirming whether the carbon horizons are stratified division and the monitoring plan are complete.

4.3. Project Implementation, Monitoring, Emission Reduction Accounting, and Disclosure

4.3.1. Project Implementation, Monitoring, and Emission Reduction Accounting

The project owner should strictly implement the afforestation project according to the contents of the PDD and perform monitoring in accordance with the monitoring plan. According to the “Design and Implementation Guidelines”, CCER projects must conduct monitoring at least once every five years and prepare an independent MR for each accounting period.

After the project implementation, plot-based tree measurements should be obtained based on the monitoring plan. The emissions reductions generated during the monitoring period should be calculated in accordance with the afforestation methodology, comprising the MR. Notably, an additional 10% must be deducted from the emissions reduction calculation to account for non-permanence risks [93].

It should be noted that the “Design and Implementation Guidelines” provide requirements for writing the MR and a template for its preparation. The MR should include (1) the project description, (2) project implementation status, (3) project monitoring system description, (4) parameter determination, and (5) emission reduction calculation results.

In the project description, the MR should provide detailed information on the project goals, emissions reduction measures, technical facilities, and key implementation milestones, including construction, commissioning, and operational phases. This section should also specify the geographic location of the project, accompanied by maps or coordinates to ensure the uniqueness of the project. In the project implementation section, the technologies used in the project and specific implementation and operational details should be thoroughly documented, including key project dates.

In the monitoring system description, the implementation status of each site, the components of the monitoring system, data collection procedures, monitoring point schematic diagram, and emergency response procedures should be described. All data are stored electronically and retained for at least 10 years.

In the parameter calculation section, the methods for determining all parameters used to calculate baseline emissions, project emissions, and leakage should be explained, with information on the names, units, values, and assurance procedures for each parameter.

In the accounting section, the calculation procedure for emission reductions should be detailed according to the methodological requirements, with an explanation of the methods, steps, formulas, and results for each component of the emission reduction.

4.3.2. Emission Reduction Disclosure

According to the “2023 Transaction Management Measures”, the project owner must disclose the emission reduction accounting report through the CCER registration system before applying for emission reduction registration. The owner is responsible for the authenticity, completeness, and validity of the disclosed materials. During disclosure, the name of the commissioned DOEs must be disclosed, and the disclosure period is 20 working days. If feedback is received during this period, the project owner must address the comments.

4.4. Emission Reduction Verification and Registration

4.4.1. Emission Reduction Verification

According to the “2023 Transaction Management Measures”, the project owner must appoint qualified DOEs, which is not the same one as in the project validation, to verify the project’s emissions reductions independently. The emission reduction verification includes the following steps: submitting the verification commission, signing a contract, developing a verification plan, conducting document and on-site reviews, preparing the verification report, decision review, issuing the verification report, and keeping relevant records. The project owner must submit the MR and evidence to the DOEs and assist them in completing the verification according to the afforestation methodology and the “Validation and Verification Implementation Rules”.

According to the afforestation methodology, the key points for emission reduction verification include (1) project eligibility conditions, (2) project starting time, (3) project boundary, (4) emission reductions, (5) plot monitoring, and parameter verification.

The project eligibility conditions require the verification of the impact of afforestation on the project site, including the proportion of vegetation removed, the degree of soil disturbance, the clearing method, and the afforestation model. The project starting time must be verified through satellite remote sensing images, field visits, and other methods. Project boundary verification requires the verifier to measure on-site whether the error in the corner coordinates of the plot exceeds ±5 m, whether the area error exceeds ±5%, whether there is any deviation between the implemented boundary and the designed boundary, and whether the land-use type within the boundary has changed. The emission reduction calculation must be verified to ensure that the calculation procedure complies with the afforestation methodology requirements and is conservative. Additionally, the authenticity and conservativeness of the parameters selected by the project owner must be verified.

The verification of plot monitoring should confirm the consistency of carbon horizon adjustments with the heterogeneity of biomass carbon stock changes in the plot. The accuracy of the monitored plots should be verified on-site. The on-site verification of the project must be conducted within six months of completing the monitoring. The DOEs should randomly select at least ten plots and ensure that at least one plot is selected from each carbon horizon. The afforestation and management measures of the plot should be verified to ensure consistency with the PDD. Specific measurements should be made in the plot, including plot location, plot area, the number of trees, breast (ground) diameter, tree height, and shrub cover. These data should be compared with the data provided by the project owner.

The verification requirements are as follows. The positioning error of the plot’s center point should not exceed ±5 m, and the plot area should be consistent with the area described in the validation report. The measurement error of the number of trees for breast (ground) diameter ≥ 2 cm should not exceed ±5%, with a maximum of ±3 trees. The average tree DBH measurement error should not exceed ±5%. The average shrub cover error should not exceed ±10%. The project owner’s data can be used if they fall within the allowable error range. If the error exceeds the allowable range, the project owner has to obtain new measurements.

4.4.2. Emission Reduction Registration Application

After the DOE issues the emission reduction verification report, the project owner may apply for emission reduction registration via the CCER registration system and upload the emission reduction accounting report. The DOE uploads a verification report to ensure there are no disputes over the ownership of the emission reduction. Additionally, a declaration must be included to confirm responsibility for the authenticity, completeness, and validity of the emission reduction accounting report.

The registration and certification body should review the completeness and compliance of the materials submitted by the project owner. Within fifteen working days of receiving the application materials, it should register the approved emission reductions and publicly disclose the registration information and all materials submitted by the project owner. If the application materials are incomplete or non-compliant, registration will be denied, and the project owner will be notified.

4.5. Project Trading Procedure

CCER trading must follow the requirements of the “Trading and Settlement Rules” and relies on two systems: the CCER registration system and the CCER trading system. As the CCER registration body, the NCSC is responsible for the registration, modification, and cancellation of projects and emission reductions through the CCER registration system, which serves as the final basis for CCER ownership. As the CCER trading institution, the BGEX provides centralized and unified trading and settlement services for trading entities through the CCER trading system. Trading entities must meet qualification requirements and complete real-name registration before opening an account and participating in trading within the trading system. The trading target is CCER, and the unit of value is the per ton of CO2 equivalent. The minimum trading unit is one ton, and the minimum price fluctuation is 0.01 RMB.

Three types of CCER trading methods exist: listing agreement, bulk agreement, and one-way bidding. The listing agreement is a real-time delisting transaction with a price fluctuation limit of ±10%. The bulk agreement is negotiated between both trading parties, with a price fluctuation limit of ±30%. One-way bidding is divided into bid buying and bid selling, and transactions follow the quoting party’s rules. The trading benchmark price is based on the weighted average price of the previous day’s transactions under the listing agreement; if there was no transaction on the previous day, the last benchmark price is used. The initial price of the first trading target is determined by the entity that first submits it to the trading system.

5. Development Suggestions for CCER Afforestation Carbon Sequestration Projects and Future Prospects

Our research indicates that the CCER afforestation carbon sequestration project system has made progress in terms of policy support, standardized development procedures, strict validation and verification procedures, and the construction of registration and trading systems. However, some urgent issues must be addressed, such as the incomplete methodological system, relatively outdated development technologies, insufficient construction of the national carbon market and CCER trading market, and the low competitiveness of CCER afforestation carbon sequestration projects in the global market. Therefore, it is necessary to improve the methodologies, introduce advanced technologies, promote the construction of carbon markets, and enhance international competitiveness to ensure the sustainable development of CCER afforestation carbon sequestration projects.

5.1. Improve Methodologies to Strengthen the CCER System

Due to limited land suitable for afforestation projects, few additional CCER afforestation carbon sequestration projects can be developed. In comparison, China possesses 80.03 million hectares of planted forests, ranking first in plantation areas in the world, suggesting a significant potential for developing forest management carbon sequestration projects [49,50]. China’s natural forests are critical, covering 64% of the total forest area and accounting for 83% of the total forest stock [113]. Studies have shown that China’s natural forests currently store 9.40 ± 1.45 Pg C of carbon. After natural regeneration, natural forests could sequester an additional 8.67 ± 6.93 Pg C over the next two centuries, accounting for 48% of the carbon-carrying capacity of China’s natural forest ecosystems [114]. Therefore, carbon sequestration methodologies suitable for forest management should be developed as soon as possible to enable additional CCER forestry projects, unlocking the emission reduction potential of forest carbon sequestration, and providing strong support for achieving China’s carbon neutrality goals.

5.2. Use Advanced Technology to Improve CCER Development and Implementation Efficiency

Advanced technologies, such as drone remote sensing, artificial intelligence (AI), and LiDAR, can provide more precise and efficient support for the monitoring, reporting, and verification of forest carbon sequestration projects [115,116,117]. Drone remote sensing technology can track forest dynamics in real-time using high-resolution imagery. AI can automatically identify tree species, assess health status, and predict carbon stock changes based on big data. LiDAR provides precise canopy and biomass data through three-dimensional measurements [118,119,120]. The combination of these technologies enables the automated processing of data, accurate carbon sequestration assessments, and dynamic management of forest carbon projects, laying a foundation for enhancing competitiveness in the carbon credit market and providing technical support for achieving national carbon neutrality goals.

5.3. CCER Trading Strategy, the Development of China’s Carbon Market, and Participation in International Trading

The establishment of China’s national carbon emissions trading market and the CCER trading market marks an important advancement in the carbon trading system. However, challenges remain in practical operations. First, the market depth and liquidity are insufficient, particularly in the CCER market, where activity levels are low, and trading volumes have not reached the expected scale. Second, the national carbon market is mainly concentrated in the power sector, and other high-emission industries (such as steel and cement) have not been sufficiently included, limiting the demand base for the CCER market [121]. In addition, the market experiences high price volatility and is significantly affected by policy regulation, lacking a stable pricing mechanism [122,123]. Differences in policy enforcement exist in different regions, with inconsistent support measures from local governments, which may affect the stability and uniformity of CCER trading [78].

Future optimization directions to address these challenges include the following. First, expand the coverage of the carbon market to include high-emission industries, such as steel and fertilizers, to increase CCER demand and boost market trading volume. Second, improve the CCER pricing mechanism by promoting market-based pricing to improve price stability and reduce the impact of policy fluctuations. In addition, the interconnection of carbon markets across regions should be strengthened to improve market liquidity and stability. Finally, the transparency and predictability of policies should be improved. The government should establish a clearer policy framework to reduce market participants’ uncertainty regarding policy changes.

While promoting the establishment of a multi-level, diversified forest carbon sequestration market, it is necessary to strengthen coordination and linkage between different carbon markets to improve the liquidity of forest carbon sequestration resources across markets, unlocking the market’s potential value. Additionally, active participation in the development and cooperation of international forest carbon sequestration is essential, drawing on the successful experiences of international carbon sequestration markets and fully integrating domestic and international market resources to support the development of China’s forest carbon sequestration projects. This strategy will help enhance the competitiveness of China’s forest carbon sequestration projects, strengthen their position in the global carbon market, promote the sustainable development of forest carbon sequestration projects, and contribute to achieving the national carbon neutrality goal.