Green Certification (or Eco-labelling) is a voluntarily adopted certification of a firm’s environmental performance. Such labelling on the packaging of the product identifies its overall environmental performance characteristics within a given category. Many countries are using eco-labelling schemes to solve the information asymmetry problem between consumers and firms. However, with the rapid growth in Chinese firms applying for certification, consumers find that multiple eco-labels with different standard levels often coexist in the same industry and they cannot differentiate between these different labels. To address the negative effects such as consumer confusion caused by this problem, the government issued “Opinions on Establishing a Unified Green Product Standard, Certification and Labelling System” in 2016 to achieve the goal of “one industry, one standard, one list, one certification, one label” (the policy). In theory, the policy could improve the signalling effect of eco-labels by reducing consumer confusion. However, the coexistence of multiple green certifications in the market could also help firms with different environmental qualities seeking green certifications that match their product qualities best, thus disclosing more information on the environmental quality of products. Whether the standard integration policy could improve the effectiveness of the green certification remains to be addressed. Based on the current situation of the green certification market in China, we investigate the mechanism by which Standard Integration affects industry green output, and the moderating effect of various external factors on the effect of the policy.Within the framework of the classic product differentiation theoretical model and based on the actual background of China’s green certification market, we construct one static model to examine the effect of Standard Integration on the industry green output. First, we systematically clarify the market equilibrium results from the interaction between the product and certification markets before standard integration. By examining the standard levels that may be set when multiple organisations participate in the standard setting, we compare the industry green output before and after the standard integration. The results indicated that the policy could improve the effectiveness of the green certification mechanism only when the integrated standard level in the middle range. Finally, the policy is heterogeneous in different industries: when the number of green certifications initiated by industry associations dominates in the market, the probability of the policy improving the green output of the industry is higher. When consumers’ confusion about different green certifications is reduced or consumers’ willingness to pay for green products is increased, the policy is likely to improve the green output of the industry only when there are enough green certifications initiated by industry associations in the market. The higher the cost of green production, the lower the probability of standard integration to improve the green output of the industry.According to the industry status and heterogeneity in China, we present several suggestions to improve the positive impact of Standard Integration policy from the perspective of policy promotion, standard setting level, and supervision and management. The main contributions of this study are as follows: First, we expand the current research on the setting of green certification standards. Although in-depth research has focused on the single certification standard setting, multi-standard competition research on the impact of certification standard integration on market equilibrium and industry output is lacking. Second, our study increases the explanatory power of the theoretical model’s conclusions by combining the product with the certification markets via firm’s certification behaviour, which could provide a new perspective for the mechanism design of green certification. Third, we discuss the relevant factors that affect the effect of standard integration policy in detail and provide key evidence for government to continue to optimize the design and implementation of standards integration policy.