Kaiyuan Securities research indicates that renewable energy consumption responsibility mechanisms now integrate 136 mechanism electricity volumes, broadening compliance requirements to encompass key sectors like steel. Green certificate supply contraction in 2025 will narrow the supply-demand gap. Calculated projections show that at a green certificate price of 5 yuan per unit, every 20% increase in environmental value coverage (traded certificates/issued certificates) lifts operators' environmental revenue per MWh by 1.0 yuan.

Looking toward 2026, the green certificate supply shock will subside just as steel, cement, polysilicon, and new hub data centers face mandatory green power consumption ratio assessments. This dual catalyst is expected to invigorate market dynamics significantly.

Key policy developments emerged in July 2025 when the National Development and Reform Commission issued renewable energy consumption responsibility weight targets for 2025-2026. The mandate specifically expanded beyond electrolytic aluminum to include steel, polysilicon, cement, and new data centers at transportation hubs. Compliance verification will primarily rely on green certificates, with electrolytic aluminum facing assessment in 2025 while other sectors commence evaluations in 2026.

Six provinces—Liaoning, Shandong, Jiangsu, Zhejiang, Anhui, and Hainan—will enforce stricter total consumption responsibility weights, exceeding provincial renewable consumption benchmarks by 1% for targeted industries. Year-on-year comparisons reveal substantial tightening: average total consumption weights rose 2.7 percentage points in 2025 while non-hydro consumption weights climbed 3.63 percentage points.

Market indicators reflect improving conditions. After supply disruptions from 2024’s certificate reissuance subsided, 2025 witnessed contracting supply and narrowing imbalances. Traded certificates represented 14.1% of available supply in 2024 but surged to 37.7% during January-May 2025. With certificates retaining two-year validity from generation month, pre-2024 inventories face bulk expiration by December 2025, accelerating market clearing. Price momentum strengthened recently—April’s average certificate price of 2.31 yuan marked a 63.24% monthly gain, followed by an 18.12% May increase to 2.73 yuan.

For operators, the mechanics are clear: maintaining 50% environmental value coverage would translate each 10-yuan green certificate price increase into a 0.004 yuan/kWh profit lift for wind and solar generators, as demonstrated by China Longyuan (00916). This represents a 4.5% earnings enhancement.

Investors should prioritize A/H-share renewable operators with robust asset quality and stable profitability. Key beneficiaries include China Longyuan (00916), China Suntien (00956), Datang Renew (01798), China Power (02380), CGN New Energy (01811), Zhejiang Xinneng (600032.SH), Jiaze Xinneng (601619.SH), Jieneng Fengdian (601016.SH), Sanxia Nengyuan (600905.SH), Zhongmin Nengyuan (600163.SH), and Jiangsu Xinneng (603693.SH).

Risks involve potential shortfalls in green certificate volume/pricing, delayed grid/flexibility infrastructure, electricity price volatility, manufacturing cost fluctuations, and renewable subsidy repayment uncertainties.