Context
Since the introduction of its carbon peaking and carbon neutrality goals, China has gradually built up a policy framework for carbon footprint management. On 13 November 2023, China’s National Development and Reform Commission (NDRC) and other departments issued the Opinions on Accelerating the Establishment of a Product Carbon Footprint Management System, which put forward five key tasks, including formulating standards for Product Carbon Footprint (PCF) accounting, strengthening the construction of a database, and establishing a labelling and certification system. A PCF generally refers to the sum of all GHG emissions from raw material processing, transportation and production to sales of a product. They are important indicators for assessing the extent of decarbonisation of enterprises and their products. On 4 June 2024, the Ministry of Ecology and Environment (MEE), together with the NDRC and other ministries and commissions, issued the Implementation Plan on Establishing a Carbon Footprint Management System.
Recently, China has issued three policies related to its PCF framework. The policies aim to enhance the level of carbon footprint management for key products of the Chinese economy and contribute to the country’s carbon peaking and carbon neutrality goals.
Product Carbon Footprint Labelling and Certification
The establishment of a unified PCF labelling and certification system aims to enhance China’s carbon emission accounting system and to provide clear guidance for the operationalisation and use of PCF across different industries. On 9 September 2024, the State Administration for Market Regulation (SAMR) and other departments jointly issued a Notice on the Pilot Work of Product Carbon Footprint Labelling and Certification. The aim is to conduct PCF labelling and certification pilot projects in cities or districts featuring mature industries with the necessary data availabilty and capacity for implementation. The pilots shall guide government, industry, enterprises and other stakeholders to participate in the labelling and certification work, accelerate the establishment of a unified labelling and certification system, form typical experience and best practices that can be replicated, and promote the construction of a PCF management system. The key content of the Notice is:
- Pilot products and industries: Priority will be given to eleven categories of products with high foreign trade dependence and high emission reduction potential, such as lithium batteries, photovoltaic products, steel, textiles and cement.
- Pilot conditions: The pilot region needs to feature a high degree of industrial value creation (covering more than 85% of the whole industrial chain); the pilot region has large emission reduction potential; and the participating pilot units have a good foundation for quality certification.
- Pilot tasks: The pilot period is three years, including eight tasks, such as establishing working systems, improving data quality, guaranteeing data security, strengthening quality control, innovating policy mechanisms, and enriching application scenarios.
- Implementation of the pilot projects: Application (before 30 September 2024) → Evaluation and announcement of the list → 3-year pilot implementation (executed by the designated certification body) → Acceptance and national promotion of typical cases.
Guidelines for the Preparation of PCF Accounting Standards
The development of PCF accounting standards is crucial to the establishment of a GHG accounting and management system in China. On 2 January 2025, the MEE, together with other relevant ministries, issued the Guidelines for the Preparation of Product Carbon Footprint Accounting Standards (hereinafter referred to as ‘the Guidelines’). The purpose of the Guidelines is to clarify the objectives for the preparation of accounting standards, to accelerate the establishment of a unified and standardised accounting system, to promote the convergence and mutual recognition of domestic and international standards, and to support the green and low-carbon transformation of the industrial chain and supply chain.
The Guidelines set out the objectives and requirements for the preparation of carbon footprint accounting standards by clarifying the methodology and technical requirements, coordinating between local and industry standards, promoting the integration and utilisation of the standards in industry, and strengthening international cooperation.
- Overall objective: Develop 100 PCF accounting standards by 2027 and 200 by 2030.
- Priority areas: Focus on primary and end-user products at the same time giving priority to basic energy, raw materials, transport and key foreign trade products.
- Technical requirements: Harmonize carbon footprint standards, accounting frameworks and boundaries, data acquisition and quality requirements, and strengthen the quality control of carbon footprint accounting data.
- Synergistic efforts: Clarify and align industry and local standards, and explore the development of industry group standards in emerging fields.
- Convergence: Improve stakeholder coordination, strengthen cross-sectoral coordination of industry standards, and improve the evaluation and acceptance mechanism of group standards.
- International cooperation: Strengthen the coordination of PCF standards domestically and abroad, actively participate in the development of international standards, and promote international exchanges and cooperation on carbon footprint standards.
Database of National Greenhouse Gas Emission Factor (1.0)
In October 2024, the NDRC, the MEE, the National Bureau of Statistics (NBS) and other departments jointly issued the Work Plan to Strengthen the Carbon Emission Statistical Accounting System, which explicitly proposed that MEE and NBS take the lead in setting up a national database of GHG emission factors. GHG emission factors are an important parameter in carbon accounting frameworks. A comprehensive, up-to-date, accurate and transparent database of national GHG emission factors is the foundation for the establishment of a unified and standardised carbon emission accounting system.
On 10 January 2025, the Database of National Greenhouse Gas Emission Factor (1.0), whose construction was jointly led by MEE and NBS, was officially launched. It aims to solve the problems of scattered, inaccurate and outdated emission factor data and thus improve China’s carbon emission accounting system by providing unified and authoritative GHG emission factors. Thereby, reducing the cost of carbon emission accounting, and helping enterprises, industries and the government formulate fact-based emission reduction strategies. enterprises, industries and the government formulate fact-based emission reduction strategies.
- Coverage: The database covers nationwide GHG emission factors, including direct emission factors (e.g., fuel combustion, industrial production, etc.) and indirect emission factors (e.g., net purchased electricity), and involves multiple categories of GHGs such as carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), and fluorine gases.
- Priority: Priority will be given to GHG emission factors that are in urgent demand by society.
- Updating Mechanism: The database shall be updated annuallyencouraging the participation of various stakeholders in this process to improve its accuracy and practicability.
Future Outlook
These policies have enhanced China’s PFC management system in three aspects: PCF labelling and certification, accounting rules and standards, and provision of an emission factor database. Future policy development will focus on balancing data openness with security, encouraging the participation of small and medium-sized enterprises, and strengthening international cooperation.
Further Reading
Guidelines for the Preparation of Product Carbon Footprint Accounting Standards
Website of ‘Database of National Greenhouse Gas Emission Factor’(1.0)
