No, you cannot use international carbon credits — including VERRA Verified Carbon Units (VCUs), Gold Standard Verified Emission Reductions (VERs), or credits from any non-Chinese registry — to meet compliance obligations under China’s national Emissions Trading Scheme (ETS) or as direct offsets under the China Certified Emission Reduction (CCER) system. However, international credits can be used for voluntary carbon neutrality claims in China provided they meet certain conditions, and bilateral agreements expected by 2028–2030 between China and several countries under Article 6.2 of the Paris Agreement may open the door for limited international credit use in the future. This distinction is critical for foreign companies operating in China that currently purchase international carbon credits for their global net-zero programs and need to understand how those credits interact with China-specific compliance and voluntary markets.
Current Regulatory Position: International Credits Are Not Accepted
China’s position on international carbon credits is governed by two key policy documents: the Interim Regulations on the Administration of Carbon Emissions Trading (碳排放权交易管理暂行条例) and the Administrative Measures for Voluntary Greenhouse Gas Emission Reduction Trading (温室气体自愿减排交易管理办法). Both are explicit that only domestic instruments are eligible for compliance and offset purposes within China.
Specifically:
- ETS compliance: Article 16 of the Interim ETS Regulations states that compliance obligations may only be fulfilled through national ETS allowances (全国碳排放权配额) or CCER credits (国家核证自愿减排量). Credits from international registries (VERRA, Gold Standard, American Carbon Registry, Plan Vivo, etc.) are explicitly excluded. An ETS-covered entity that purchases international credits for voluntary purposes cannot apply them toward its ETS compliance obligation — they count only as voluntary, not regulatory.
- CCER project registration: All CCER projects must be physically located within the territory of the People’s Republic of China (including Hong Kong and Macau for certain methodology types, though separate arrangements apply). Emission reductions that occur outside China — including in the same industrial group’s overseas facilities — cannot be registered as CCER projects. This means a foreign company cannot, for example, register a forestry project in Southeast Asia under the CCER to generate credits for use in its China operations.
- Crediting period conflict: Even for voluntary use within China, international carbon credits may have crediting periods (e.g., VERRA projects typically have 10–30 year crediting periods) that overlap with the same project’s potential CCER registration period. Under the CCER additionality rules, a project that has sold credits under an international standard cannot simultaneously register the same emission reductions under the CCER — that would constitute double counting, which is prohibited under Article 6 of the Paris Agreement and under CCER rules.
| Use Case | CCER Credits (Domestic) | VERRA / Gold Standard (International) | Hybrid (Domestic + Intl) |
|---|---|---|---|
| ETS compliance (allowance surrender) | Yes (up to 5% of obligation) | No | No |
| Voluntary carbon neutrality claim (China market) | Yes (preferred by regulators) | Yes (with conditions) | Yes (separate retirement) |
| Voluntary carbon neutrality claim (global reporting) | Yes (accepted by CDP, SBTi) | Yes (standard approach) | Yes (separate disclosure) |
| CBAM compliance (EU imports) | No (CBAM does not recognise offsets) | No | No |
| Corporate carbon neutrality label (China, expected 2027) | Expected to be accepted | Status uncertain (likely with conditions) | N/A |
| Green finance qualification (PBOC green bond standards) | Yes | No (China green bonds require domestic certification) | Partial |
International Credits for Voluntary Carbon Neutrality Claims in China
While international credits cannot satisfy China’s compliance requirements, foreign companies may still use them to make voluntary carbon neutrality claims in the Chinese market — but with important caveats that are often misunderstood.
The MEE’s Interim Measures for the Administration of Carbon Neutrality Claims (碳中和声明管理暂行办法, prospectively expected 2027) will establish the rules for voluntary carbon neutrality disclosure. Based on current MEE guidance and consultation documents, the following rules apply to international credits in voluntary claims:
- Disclosure requirement: Any voluntary carbon neutrality claim that uses international credits must clearly disclose: (a) the type and quantity of credits retired, (b) the certification standard (VERRA, Gold Standard, etc.), (c) project location and type, (d) vintage year, (e) whether the credit is correspondingly adjusted under Article 6.2 of the Paris Agreement. Failure to disclose adequately may constitute greenwashing (虚假绿色宣传) under the Advertising Law, with fines up to RMB 500,000.
- Corresponding adjustment expectation: China’s position under Article 6.2 is that international credits used for any purpose — including voluntary claims — should be correspondingly adjusted (i.e., the host country should authorise the transfer and correspondingly adjust its NDC accounting). For credits generated in countries without a corresponding adjustment agreement with China, the MEE guidance recommends that companies not make “neutrality” claims based solely on those credits. As of 2026, China has signed Article 6.2 bilateral agreements with 12 countries (including Indonesia, Malaysia, Vietnam, Thailand, Cambodia, Laos, Myanmar, Mongolia, Kazakhstan, Uzbekistan, the UAE, and Saudi Arabia). Credits from projects in these countries may be treated more favourably in future regulatory guidance.
- Quality standards: International credits used for claims within China should ideally meet the following quality criteria: (a) verified by an independent third party accredited under ISO 14064 or equivalent, (b) not from projects involving coal phase-out, large hydro (>15 MW), or nuclear energy, (c) from projects with a start date after January 1, 2015, (d) not double-counted under another voluntary system or host country’s national registry. Credits from nature-based solutions (forestry, blue carbon, agriculture) face higher scrutiny because of permanence concerns — China’s domestic CCER forestry methodology requires a 20-year or longer permanence period for forestry credits, and the same expectation may apply to international forestry credits used in China claims.
Article 6 of the Paris Agreement: The Future Pathway
The most significant potential development for international credit use in China is the implementation of Article 6.2 of the Paris Agreement, which establishes the framework for bilateral cooperation between countries on internationally transferred mitigation outcomes (ITMOs). This is the likeliest route by which international carbon credits could eventually be recognised in China’s compliance or voluntary market.
Key developments as of 2026:
- China’s bilateral agreements: China has signed Article 6.2 bilateral agreements with 12 countries as of June 2026, with negotiations ongoing with an additional 8 countries including South Korea, Japan, Singapore, Australia, and Kazakhstan. Each agreement establishes the framework for ITMO transactions, including: project eligibility criteria, corresponding adjustment authorisation procedures, reporting requirements, and crediting period rules.
- Expected pilot projects: The first Article 6.2 pilot projects involving China are expected to be registered in 2027–2028, likely in the renewable energy, forestry, and methane capture sectors. These projects would generate ITMOs that could potentially be used by the purchasing country for its NDC compliance, and potentially by companies in the purchasing country for voluntary compliance under China’s market (though this requires domestic implementing legislation that has not yet been drafted).
- ITMO eligibility for China compliance: Whether ITMOs will be eligible for China’s ETS compliance or CCER offsetting is a politically sensitive question that the MEE has not yet addressed. The EU ETS does not accept international credits (post-2021), and China’s policy direction is likely to follow a similar trajectory — prioritising domestic reductions over foreign offsets. Industry analysts predict that ITMOs will not be accepted for ETS compliance before 2030 at the earliest, and may never be accepted if China’s domestic supply of CCER credits is sufficient to meet demand.
- Hong Kong’s role as a carbon trading hub: The Hong Kong Stock Exchange (HKEX) launched Core Climate, an international carbon credit trading platform, in 2022. As of 2026, Core Climate lists VERRA and Gold Standard credits from Asian projects (with a focus on China, Southeast Asia, and South Asia). While these credits remain ineligible for mainland China compliance, Hong Kong’s positioning as a “carbon hub” may serve as a bridge for international credit quality assessment and corresponding adjustment facilitation, especially if the Greater Bay Area becomes a pilot zone for Article 6.2 implementation.
Practical Strategies for Foreign Companies Using International Credits
Given the current regulatory boundaries, foreign companies operating in China should consider the following strategies for managing their carbon credit portfolio:
- Maintain separate credit pools for China vs. global reporting. Do not use the same international VERRA/Gold Standard credits to simultaneously support a global net-zero claim and a China-specific claim. Establish a clear accounting separation between credits used for China ETS compliance (CCER only), China voluntary claims (CCER preferred, international acceptable with disclosure), and global voluntary claims (international standard). This avoids double-counting risk and simplifies audit trails.
- Build a China-specific CCER credit reserve. If your China operations plan to make voluntary carbon neutrality claims, purchase CCER credits rather than international credits. CCER credits are cheaper (RMB 60–120/tonne vs. USD 5–20/tonne for VERRA) and face no regulatory uncertainty. Establish a CCER trading account on one of the 9 national exchanges. Minimum purchase size varies by exchange but is typically 1,000 tonnes per transaction.
- Structure ETS compliance procurement carefully. If your China facility is ETS-covered, your compliance cost strategy should be: (a) maximise free allocation through accurate emissions reporting and production optimisation, (b) purchase ETS allowances directly (RMB 72/tonne June 2026 average) for the majority of your compliance gap, (c) purchase CCER credits (RMB 60–120/tonne) for the 5% offset allowance, (d) do NOT purchase international credits for compliance — they cannot be used and represent a stranded cost.
- Prepare for Article 6.2 opportunities. If you operate in sectors that could generate ITMOs (renewable energy, forestry, methane capture, CCUS), monitor China’s Article 6.2 bilateral agreement negotiations. If your host country signs an agreement with China, your China-based project may become eligible for ITMO generation. The lead time from agreement signature to first credit issuance is typically 2–4 years (project registration, baseline determination, verification, authorisation). Early movers will benefit from higher ITMO prices — analysts project USD 15–40/tonne depending on quality and corresponding adjustment stringency.
- Disclose credit sourcing transparently. For Chinese regulatory purposes, the MEE’s expected carbon neutrality disclosure guidelines (2027) will require full credit chain transparency: project name, location, registry, serial numbers, retirement certificates, and corresponding adjustment status (if applicable). Companies that have been using international credits without this documentation trail should begin gathering it now.
Case Studies: How Foreign Companies Are Navigating This Landscape
The following scenarios illustrate how foreign companies are currently managing the international vs. domestic credit question in China:
- European automotive manufacturer (Shanghai-based) — ETS-covered with 850,000 tCO₂e annual emissions. Uses a 3-layer strategy: free allowances cover 72% of obligation; ETS allowances purchased for 23%; CCER credits (wind and solar, RMB 78/tonne) for the remaining 5%. Maintains a separate VERRA credit portfolio (USD 12/tonne, forestry, Colombia) for EU-level net-zero claims. The company reports that the CCER purchase cost is 35% lower than buying additional ETS allowances at market price.
- Swiss food and beverage company (Guangdong factory) — Below the ETS threshold (12,000 tCO₂e/year). Wants to claim “carbon neutral” for its China-manufactured product line. Purchases CCER forestry credits (RMB 110/tonne, Yunnan province) for the entire Scope 1 and 2 emissions. The CCER credits are retired on the national registry and disclosed on product packaging with the CCER serial number QR code. The company reports that the CCER retirement cost adds approximately 0.3% to the product cost, well within the green premium tolerance of its China retail customers.
- US technology company (Beijing office, hardware supply chain) — Not an ETS entity but requires carbon neutrality for its China headquarters for annual CDP disclosure. Initially purchased VERRA credits (USD 8/tonne, wind, India) but received pushback from the local environmental NGO community about the lack of corresponding adjustment and the China-relevance of the reductions. Switched to Beijing Green Exchange CCER credits (RMB 85/tonne, Inner Mongolia wind) and now reports zero controversy in its China ESG disclosures.
Outlook: When Might International Credits Be Accepted?
Based on current policy signals, industry consultations, and China’s negotiating position at COP29 and COP30, the most likely timeline for international credit acceptance in China is:
| Scenario | Likely Timeline | Probability | Impact on Foreign Companies |
|---|---|---|---|
| CCER registers first cross-border project | 2028–2029 | Medium (40%) | Limited — cross-border CCER projects under Article 6.2 would generate domestic-eligible credits from host country projects, not accept foreign-issued credits |
| ITMOs accepted for CCER offsetting | 2030–2032 | Low (25%) | Moderate — would allow credits from bilateral agreement countries to be converted to CCER-equivalent status for voluntary offsetting |
| ITMOs accepted for ETS compliance | 2034+ | Very low (10%) | Significant — would reduce compliance costs for ETS-covered entities with access to low-cost international credits |
| Mutual recognition with EU ETS | 2028–2030 | Medium (45%) | CBAM impact — would eliminate CBAM surcharge on Chinese exports; would NOT affect international credit eligibility for compliance |
| Full international credit liberalisation | 2035+ | Very low (5%) | Transformative — but unlikely given China’s stated preference for domestic reduction first |
In summary, foreign companies should plan on the assumption that international carbon credits will NOT be eligible for China compliance purposes through 2030 at minimum. The safe strategy is to treat the CCER market as the primary vehicle for China-specific carbon objectives, while maintaining separate international credit portfolios for global reporting and claims outside China.
Where to Go From Here
Based on what you just read:
- Ready to act? Read [guide: SLUG-TO-BE-FILLED]
- Still comparing? See [comparison: SLUG-TO-BE-FILLED]
- Need numbers? Try [tool: SLUG-TO-BE-FILLED]
Can I use international carbon credits to meet China compliance requirements? — first published on China Gateway 360. Last updated: July 2026.
