Guotai Haitong: The green certificate system is shifting from voluntary consumption to rigid constraints, and the certainty of demand growth is gradually strengthening.

Guotai Haitong published a research report stating that green certificates are transitioning from voluntarily purchased environmental rights certificates to compliance tools that are measurable, quantifiable, and assessable for key energy-consuming industries. The bank expects that after 2028, the green certificate market will gradually shift from a clearly loose state to a tight balance. If the industry continues to expand or the proportion of green electricity consumption in key industries accelerates, the turning point for the industry may arrive earlier. The main points from Guotai Haitong are as follows: The green certificate system is moving from voluntary consumption to mandatory constraints, with the certainty of demand growth gradually strengthening. Since 2017, Chinas green certificate system has undergone stages including voluntary subscription, green electricity trading, comprehensive issuance, and the establishment of a mandatory consumption mechanism. The implementation of Order No. 42 in 2026 further clarifies that the minimum percentage of renewable energy electricity consumption for key energy-consuming industries will be assessed based on the green certificate accounting for the corresponding production volumes in the assessment year. Enterprises that fail to meet the targets will be required to make supplementary purchases. Green certificates are shifting from being optional brands and carbon reduction tools for enterprises to basic certificates for key industries fulfilling their responsibilities in green electricity consumption. The core of supply analysis is not the total issuance volume, but the effective supply of independent green certificates. The issuance volume of green certificates in 2024 includes a large amount of historical electricity compensation and does not represent the normalized annual supply. In 2025, the nationwide issuance of green certificates was 2.947 billion, of which 1.893 billion were tradable. After deducting 250 million green certificates transferred along with green electricity transactions, the effective supply of independent green certificates was about 1.640 billion. Considering the issuance increment brought about by new wind and solar projects, as well as the continuous increase in mechanism electricity, non-tradable green certificates, and green electricity transactions, it is estimated that the effective supply of independent green certificates will reach approximately 1.98 billion at a peak in 2029, slightly decreasing to 1.96 billion in 2030. The expansion of mandatory consumption industries constitutes the main driving force for demand growth. Currently, the demand for green certificates mainly comes from key energy-consuming industries, provincial consumption responsibility gaps, voluntary consumption, and export supply chains. Based on calculations of electricity consumption and the proportion of green electricity consumption in electrolytic aluminum, steel, cement, polysilicon, and data centers, it is estimated that the demand for independent green certificates from 2026 to 2030 will be 910 million, 1.14 billion, 1.36 billion, 1.55 billion, and 1.77 billion, respectively. Among them, the demand growth from 2026 to 2027 will primarily be driven by the alignment of assessments in key industries and the expansion of the scope, while after 2028, it will mainly stem from the continuous increase in the proportion of green electricity consumption. In the baseline scenario, supply and demand will gradually converge, and a price elasticity release window may open in 20292030. It is expected that the ratio of independent green certificate demand to effective supply will rise from 0.41 in 2025 to 0.70 in 2028 and 0.90 in 2030, as the market gradually transitions from a clearly loose state to a tight balance. If the proportion of green electricity consumption in key industries increases by 5 percentage points each year, the supply-demand ratio will reach 0.98 in 2030; if it increases by 8 percentage points annually, the supply-demand ratio will rise to 1.07 in 2030, potentially leading to a supply shortage and significantly increasing the upward pressure on green certificate prices. Further expansion of the industry could be a key catalyst for early price increases. The current model does not yet include potential new industries such as flat glass, refining, ethylene, synthetic ammonia, methanol, other nonferrous metals, lithium-ion batteries, 5G base stations, and charging infrastructure. If these industries gradually become subject to assessments of green electricity consumption, demand growth could significantly outpace baseline predictions, driving the supply-demand turning point forward. Risk warning: Expansion of key industries and improvement in the proportion of green electricity consumption may fall short of expectations; new energy installations and tradable green certificate supplies may surpass expectations; changes in policies for green certificates, green electricity, and carbon accounting.