On carbon finance from the first zero-carbon science and technology fund
In September 2020, China clearly put forward the goal of peak carbon dioxide emissions and carbon neutrality. On June 15th, 2022, the Beijing News established the Zero Carbon Research Institute. How to accurately understand and grasp the trend of dual carbon policy? What opportunities and challenges do different industries and enterprises face under the background of carbon neutrality? In June, 2022, the Institute published Carbon Newspaper to study the latest dual-carbon policies, authoritative voices, low-carbon samples and other key contents, and to analyze and interpret them.
catalogue
> > > Policy Express
1. The Ministry of Industry and Information Technology issued a draft for comments to accelerate the construction of carbon neutrality standards in peak carbon dioxide emissions in the industrial field.
2. The Ministry of Ecology and Environment will host a special research kick-off meeting, and the expansion of the national carbon market will be imminent.
3. China’s largest demonstration base for carbon capture, utilization and storage of the whole industrial chain started construction.
4. Hunan issued the trading rules of electric auxiliary service market, and optimized the way of energy storage participating in peak shaving trading.
5. The first provincial-level carbon measurement center in China landed in Dalian, Liaoning.
6. Huawei launched a new generation of all-scene intelligent optical storage solutions.
7. The world’s first hydrogen-electric hybrid artificial intelligence transport robot was released.
8. The first domestic zero-carbon science and technology investment fund was raised.
9. EU will ban the destruction of unsold textiles.
10. France issued an action plan for emission reduction targets in 2030, and the ban on short-haul flights came into effect.
> > > Special topic carbon discussion
Behind the establishment of the first zero-carbon technology investment fund in China, the difficulties and prospects of China’s carbon finance development
main body
I. Policy Express
A, authoritative voice
1.The Ministry of Industry and Information Technology issued a draft for comments to accelerate the construction of carbon neutrality standards in peak carbon dioxide emissions in the industrial field
On May 22nd, the Ministry of Industry and Information Technology issued "Guidelines for the Construction of Carbon Neutralization Standard System in peak carbon dioxide emissions in Industrial Field (2023 Edition)" (draft for comments), proposing to establish the framework of carbon neutrality standard system in peak carbon dioxide emissions in industrial field by 2025 and formulate more than 200 urgently needed standards in peak carbon dioxide emissions. Focus on formulating standards for basic universality, accounting and verification, low-carbon technology and equipment, and provide technical support for carbon assessment and carbon emission reduction in the industrial field.
Zero carbon interpretation:Industry is the key area of carbon emission, so it is urgent to build a carbon neutral standard system in peak carbon dioxide emissions that adapts to the characteristics of China’s industrial development. A few days ago, the National Standards Committee and other 11 departments jointly issued the "Guidelines for the Construction of Carbon Neutralization Standard System in peak carbon dioxide emissions", proposing to achieve full coverage of carbon accounting verification standards in major industries. This time, the Ministry of Industry and Information Technology took the lead in launching the guidelines for the construction of carbon neutral standard system in peak carbon dioxide emissions, which will further accelerate the process of double carbon in China’s industrial field.
2.The Ministry of Ecology and Environment presided over the special research kick-off meeting, and the expansion of the national carbon market was imminent.
Recently, the kick-off meeting of "Special Study on Expanding the Industry Coverage of the National Carbon Market" hosted by the Climate Change Department of the Ministry of Ecology and Environment and undertaken by the Environmental Planning Institute of the Ministry of Ecology and Environment was held in the Environmental Planning Institute. Li Gao, Director of Climate Change Department, Yun Shize, Deputy Director, and Wang Jinnan, President of the Environmental Planning Institute, and more than 50 representatives from more than 20 units attended the meeting. Everyone agrees that the current conditions for expanding the carbon market are basically mature, and special research will play an important role in further improving the construction of China’s carbon market system and promoting the implementation of the "double carbon" goal.
Zero carbon interpretation:Director Li Gao emphasized that the special research should fully absorb the effective practices and experiences of international carbon market construction, domestic local carbon market pilot and power industry carbon market construction and operation, and put forward the phased objectives, tasks and construction roadmap of various industries in line with China’s national conditions, so as to provide key technical support for the national carbon market to expand industry coverage.
3. China’s largest demonstration base for carbon capture, utilization and storage of the whole industrial chain started construction.
Recently, the 3 million tons/year CCUS demonstration project in Ningxia with a total investment of 10.2 billion yuan started construction in Ningdong base. The project includes 3 million tons of carbon dioxide capture project, 3 million tons of carbon dioxide long-distance pipeline, 2.5 million tons of carbon dioxide flooding enhanced oil production project and 500,000 tons of carbon dioxide capture and storage project. (Xinhua News Agency)
Zero carbon interpretation:According to Ma Cheng, the second-level inspector of the Management Committee of Ningdong Energy and Chemical Industry Base, the project realized the green carbon reduction cooperation between modern coal chemical industry and large oil and gas field exploitation for the first time in the world, and found a "golden key" to solve the problem of "high carbon" for modern coal chemical industry, and also found a "secret weapon" for green production increase for crude oil exploitation. After the project is completed, it will become the largest demonstration base of carbon capture, utilization and storage in the whole industrial chain in China, which will provide replicable and popularized market-oriented practical experience for China to carry out CCUS project construction on a large scale and realize terminal carbon reduction.
B, local practice
fourHunan issued trading rules for electric auxiliary service market,Optimize the way of energy storage participating in peak shaving trading
On May 22nd, the Trading Rules of Hunan Electric Power Auxiliary Service Market (2023 Edition) was issued. The trading rules expanded the scope of buyers and sellers of electric power auxiliary services, and included small and medium-sized power generation entities with an installed capacity of 10 MW or more in the province that met the measurement (measurement) conditions into the buyers of electric power auxiliary services. The access conditions for energy storage to participate in auxiliary services are set, and two modes of sequential call and priority call are optimized.
Zero carbon interpretation:Perfecting the power auxiliary service market is an important means to build a power market mechanism that adapts to the transformation of energy structure and give play to the clean and low-carbon transformation of energy in the power market. This time, the Trading Rules of Hunan Electric Power Auxiliary Service Market (2023 Edition) optimized the trading mode of energy storage participating in deep peak shaving, stimulated the competitive vitality of energy storage participating in auxiliary service market, and provided a mechanism guarantee for the large-scale application of new energy and energy storage.
five.The first provincial carbon measurement center in ChinaLanding in Dalian, Liaoning
Recently, the "Liaoning Carbon Measurement Center (Electric Carbon)" built by State Grid Dalian Power Supply Company was inaugurated in Dalian. Since then, the first provincial-level carbon measurement center in China has officially settled in Dalian. The carbon measurement center (electric carbon) will focus on the key areas of electric carbon, focusing on the realization of "double carbon" goals in key industries such as high-end equipment manufacturing, petrochemical and metallurgy, and provide effective measurement support and technical support.
Zero carbon interpretation:Carbon measurement is the basis of carbon market and carbon trading, and it is also an important technical support to realize "peak carbon dioxide emissions and carbon neutrality". The measurement center will provide differentiated, diversified and specialized carbon measurement services for the government, industries and enterprises, and share carbon measurement technical resources, which will drive enterprises and technical institutions in Liaoning Province to effectively deal with carbon tariff technical barriers. (Yang Guangwang)
C, enterprise action
six.Huawei launches a new generation of full-scene intelligent optical storage solution.
Recently, at the 16th (2023) International Conference on Solar Photovoltaic and Smart Energy (Shanghai), Huawei Smart Photovoltaic made a grand appearance with a new generation of full-scene intelligent optical storage solution with the theme of "integrating wisdom and light, creating a better future together", bringing cutting-edge solutions and successful global application practices for three application scenarios: clean energy base, industry and commerce, and household.
Zero carbon interpretation:This time, Huawei released the FusionSolar intelligent optical storage generator solution, which has the advantage of active network construction and has become a highlight of this solution. Through the integration of power electronics technology and digital technology, optical storage, energy flow and information flow, Huawei has worked with ecological partners to create a new clean energy base solution with stable grid connection, extreme security, intelligent operation and maintenance and higher income. It provides important support for promoting photovoltaic to become the main energy source. (Huawei Digital Energy)
seven.The world’s first hydrogen-electric hybrid artificial intelligence transport robot was released.
On May 20th, at the 7th World Intelligence Conference, Tianjin Port Group released the world’s first hydrogen-electric hybrid artificial intelligence transport robot (ART) independently developed and manufactured by itself. The endurance of the robot is further increased by the hydrogen fuel engine, and the running time can reach 13 hours, which is more than 25% higher than that of the electric artificial intelligence transport robot.
Zero carbon interpretation:According to the relevant person in charge of Tianjin Port Group, the hydrogen-electric hybrid artificial intelligence transport robot will be put into use immediately after it goes offline, and it will "seamlessly connect" with the largest intelligent transport robot formation in China, serving the production and operation of the "Smart Zero Carbon" terminal in Tianjin Port.
8.The first one in ChinaZero-carbon technology investment fundComplete the fundraising
Recently, Hong Kong China Gas and IDG Capital officially announced that the first domestic zero-carbon technology investment fund jointly established by the two parties has completed the fund raising target of RMB 5 billion. The fund will land in Changzhou, Jiangsu Province, and form a good synergy mechanism with Changzhou’s industrial development. This fund will focus on investing in solar energy, power batteries, energy storage, smart grid and zero-carbon technology-related innovation fields such as charging and replacing electricity, hydrogen energy, carbon capture, carbon trading and management.
Zero carbon interpretation:Achieving carbon neutrality in peak carbon dioxide emissions requires huge financial support. According to the latest data from McKinsey, the global annual (carbon neutral financing) is $9.7 trillion. In terms of the proportion of China’s emissions, China needs about 20 trillion yuan of investment a year. This time, the Zero Carbon Science and Technology Investment Fund will further stimulate the financing role of financial institutions, and promote the process of carbon neutrality and the realization of the goal of "double carbon" in local peak carbon dioxide emissions.
D, international aspects
9.EUwillIt is forbidden to destroy unsold textiles.
Reuters, UK, reported on 22nd that EU governments agreed that the EU should ban the destruction of unsold textiles to promote environmental protection. According to the preliminary idea, after the ban is promulgated, it will immediately apply to large textile enterprises, while medium-sized production enterprises with less than 250 employees will have a transition period of four years, and small enterprises with less than 50 employees will not be affected by the ban. The ban requires clothing companies to produce more durable clothes, which will have a great impact on some fashion brands whose profit point is "quickly updating styles".
Zero carbon interpretation:According to the report, the impact of European textile consumption on the environment and climate change is second only to food, housing and transportation. There are about 5.8 million tons of textile overproduction in the EU every year, and the per capita waste is about 11 kilograms. These textiles are mainly unsold clothes, and most of them will be buried or burned, which not only causes great waste, but also does great harm to the environment during the destruction process. (Reuters)
10.lawcountryRelease the action plan for emission reduction targets in 2030,Short-haul flight banFormal entry into force
On May 22nd, local time, France released the action plan for greenhouse gas emission reduction targets in 2030, aiming to promote France to reduce greenhouse gas emissions by 50% compared with 1990 by 2030. The plan is mainly aimed at transportation, construction, industry and agriculture. The next day, a French ban on domestic short-haul flights aimed at reducing carbon emissions came into effect. The bill stipulates that it is forbidden to set up civil aviation passenger routes between cities that can be reached within two and a half hours by train in France.
Zero carbon interpretation:Agence France-Presse reported that France’s current greenhouse gas emissions have decreased by 25% compared with the 1990 level, but it needs "great efforts" to reach the 50% target. Recently, France has issued a series of policies to promote carbon emission reduction in various fields, and aviation is one of the key areas. However, some non-governmental organizations questioned that the bill was not strong enough, and suggested changing the "two and a half hours" in the relevant provisions to "four hours".
two、Thematic carbon discussion:Behind the establishment of the first zero-carbon technology investment fund in China, the difficulties and prospects of China’s carbon finance development
Recently, the first domestic zero-carbon technology investment fund jointly established by Hong Kong China Gas and IDG Capital has achieved the fund raising target of RMB 5 billion. The LPs participating in the fund subscription include local governments, head sovereign funds, large domestic and foreign insurance funds, and government industrial guidance funds and other well-known institutions. At the same time, on May 21st, at the 2023 Wudaokou Global Finance Forum in Tsinghua, Zhu Min, former vice president of the International Monetary Fund and former vice president of the People’s Bank of China, pointed out that with the full implementation of carbon neutrality, the financial industry has entered the era of zero-carbon finance. In this context, carbon finance has become an important topic of concern in the industry.
1. What is it?Carbon finance
At present, there is still no unified concept of carbon finance, which generally refers to all financial activities that serve to limit greenhouse gas emissions, including direct investment and financing, carbon index trading and bank loans. The rise of carbon finance originated from the United Nations Framework Convention on Climate Change and Kyoto Protocol, that is, financial activities such as direct investment and financing, carbon rights trading and bank loans for technologies and projects such as limiting greenhouse gas emissions.
In a broad sense, the concept and connotation of "carbon finance" are constantly evolving with the different characteristics of human beings in various stages of coping with climate change, from the initial environmental protection finance, climate change finance and sustainable finance to the current green finance; With the development and perfection of carbon markets in various countries, carbon finance mainly refers to direct investment and financing for technologies and projects that reduce greenhouse gas emissions and direct and derivative financial activities around carbon emission trading, and the concept and connotation of carbon finance are gradually clear. In 2021, at the 26th Conference of the Parties to the United Nations Framework Convention on Climate Change (COP 26)-Glasgow Conference, everyone reached a consensus that the transformation of carbon neutrality in the era of zero-carbon economy must correspond to zero-carbon finance, and the development of zero-carbon finance has gradually become a new research direction supporting carbon neutrality in the world.
China has made a lot of exploration work in the construction of carbon financial system and related product innovation. In April, 2022, China Securities Regulatory Commission issued the financial industry standard "Carbon Financial Products" (JR/T 0244—2022). Following the principle of standardization and internationalization, and based on the classification of carbon financial products, it gave clear and specific implementation requirements for carbon financial products. Carbon financial products are divided into carbon market financing tools, carbon market trading tools and carbon market support tools. Among them, financing tools include carbon bonds, carbon asset mortgage financing, carbon asset repurchase, carbon asset custody, etc. Its core function is to finance activities through carbon emission rights such as carbon quotas or carbon credits, thus serving commercial activities to reduce greenhouse gas emissions or increase carbon sink capacity. Carbon financial trading tools include carbon forward, carbon futures, carbon options and carbon swaps, which are effective supplements to the carbon spot market and can improve the price discovery efficiency and resource allocation efficiency of the carbon market; Carbon financial support tools include carbon index, carbon insurance, carbon fund, etc., which can effectively guide the allocation of market funds in the dual-carbon field and enhance the awareness of low-carbon development in all walks of life.
2. China’s carbon finance is characterized by large scale and outstanding product innovation.
The goal of carbon neutrality in peak carbon dioxide emissions cannot be achieved without financial support. The development of carbon finance can give full play to the functions of finance in price discovery, risk avoidance and hedging, improve the liquidity and marketization of the carbon market, and guide more capital to invest in carbon neutrality in peak carbon dioxide emissions through the marketization mechanism. China’s carbon finance has been developing with the pilot of carbon market. In 2011, the pilot of carbon market in China started, and Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong and Shenzhen became the first pilot areas of carbon emission trading. At the end of 2016, the carbon markets in Sichuan and Fujian began to be piloted, and the number of pilot areas in China increased to nine.
In July 2021, the national carbon market was officially launched for online trading. In the first performance cycle, 2,162 key emission units in the power generation industry were included, with an annual carbon dioxide emission of about 4.5 billion tons, making it the largest carbon market in the world. By April 11th, 2023, the cumulative turnover of carbon emission quota (CEA) in the national carbon market exceeded 200 million tons, and the cumulative turnover exceeded 10 billion yuan. Recently, the kick-off meeting of "Special Study on Expanding the Industry Coverage of the National Carbon Market" hosted by the Climate Change Department of the Ministry of Ecology and Environment was held, and everyone agreed that the conditions for expanding the carbon market were basically mature. The coverage of carbon market will be further expanded, which will further expand the trading scale of China’s carbon market.
At the same time, in order to meet the needs of diversified market transactions, the pilot areas have carried out innovative practices such as carbon bonds, carbon funds, green structure deposits, carbon quota over-the-counter swaps, carbon trading, and carbon quota forward. Take the green bond market as an example. Since its launch in 2016, its annual issuance scale has remained above 200 billion yuan. The data shows that by the end of 2020, the balance of green loans in China was nearly 12 trillion yuan, ranking first in the world, and the non-performing rate of green loans was far lower than that of commercial banks nationwide. The stock of green bonds is 813.2 billion yuan, ranking second in the world.
Jiang Lu, chief analyst of China Securities Futures Metals, said that with the formation of China’s carbon market, in order to promote corporate carbon asset management and active carbon market transactions, carbon financial market innovations have emerged one after another, covering all kinds of major carbon financial instruments except carbon futures. In January 2021, Guangzhou Futures Exchange was established to launch carbon rights futures varieties; In July 2021, Baowu Carbon Neutral Equity Investment Fund with a total scale of 50 billion yuan was established, which is the largest carbon neutral theme fund in China. In November 2021, the People’s Bank of China created and launched a carbon emission reduction support tool to provide funds to financial institutions at an interest rate of 1.75%, which was highly concerned by the market. By the beginning of this year, carbon emission reduction support tools had issued more than 300 billion yuan in refinancing, and commercial banks had been supported to issue more than 510 billion yuan in carbon emission reduction loans, providing low-cost long-term financial support for the development of low-carbon industries. In 2022, carbon emission reduction support tools will drive carbon emission reduction to exceed 100 million tons of carbon dioxide equivalent, which will become an important financial means to promote carbon neutrality in peak carbon dioxide emissions.
3. Accelerate the construction of a rich, three-dimensional and perfect carbon financial system.
Achieving peak carbon dioxide emissions’s goal of carbon neutrality needs huge investment as support. According to the research of the Price Monitoring Center of the National Development and Reform Commission, China needs 3.1 trillion -3.6 trillion yuan of funds every year to realize the peak carbon dioxide emissions in 2030; To achieve carbon neutrality by 2060, it is necessary to invest 139 trillion yuan in new energy generation, advanced energy storage and green zero-carbon buildings. Yi Gang, governor of the People’s Bank of China, pointed out at the China High-level Development Forum in 2021 that "there are many estimates on the capital demand for realizing carbon neutrality in peak carbon dioxide emissions, and the scale level is tens of billions of RMB". However, government funds can only cover a small part, and the gap must be made up by market funds. Therefore, it is necessary to establish a perfect carbon financial system, guide and encourage the financial system to support green investment and financing activities in a market-oriented way.
At present, the development of carbon finance in China is still in its infancy and exploration stage. The national carbon emission trading market has just been established, and the number of market participants and trading activity are still at a low level. It is urgent to speed up the construction of a rich, three-dimensional and perfect carbon finance system. First of all, it is necessary to enrich the participants in the carbon financial market and promote the carbon market to change from a controlled enterprise to a diversified participant. The development of carbon financial market is inseparable from diversified investment institutions and investors. Due to the lack of participation of mainstream financing financial institutions, the current carbon trading market is mainly attended by emission control enterprises, and the number of trading subjects is far from enough, resulting in transactions in each pilot market concentrated in their respective performance months, which leads to great deficiencies in market liquidity, activity and price discovery function, and it is difficult to play the role of carbon trading market in optimizing resource allocation in promoting carbon neutrality in peak carbon dioxide emissions. Fan Wei, general manager of the fixed income financing headquarters of Shenwan Hongyuan Securities, believes that to develop the carbon financial market, investors must be diversified, including not only enterprises and financial institutions in related industries, but even some individual speculators and arbitrageurs.
Secondly, encourage the pilot innovation of carbon financial products and form more abundant carbon financial tools. At present, China’s double-carbon financing is too concentrated in the field of green credit, especially bank loans. Compared with traditional projects, green projects have low returns, long term and high risks. These properties determine that we cannot mainly rely on green credit for financing. We should innovate various forms of carbon financial financing tools and support tools, speed up the application and promotion of carbon bonds, carbon funds, carbon emission rights mortgage financing and other products, and encourage and guide long-term funds such as insurance, pension and social security funds to participate in green projects. At the same time, on the basis of risk control, we will expand the scale of carbon futures products such as carbon forward, carbon futures, carbon options and carbon swaps as soon as possible, expand the hierarchical system of carbon market, and form a carbon financial product system that pays equal attention to spot, futures and derivatives.
Finally, strengthen the construction of standards and norms for carbon financial products and reduce the risks of carbon financial products. At present, China’s carbon market mainly deals with carbon assets such as carbon quotas and CCER. It is necessary to further improve the carbon quota allocation system and optimize the development process of CCER, ensure that carbon quotas are fair and reasonable and CCER data are reliable, and reduce the risks of carbon assets trading such as carbon quotas and CCER. In addition, the scale of China’s green bonds is huge, but there are irregularities in the areas where bond funds are invested and the term of bonds. It is necessary to standardize green bonds and carbon bonds and strengthen evaluation and certification to improve the credibility of the green bond market.
Ren Daming, researcher of Beijing News Zero Carbon Research Institute
Editor Tao Ye proofreads Liu Baoqing.
interlinkage
The Beijing News Zero Carbon Research Institute was established on June 15th, 2022, aiming at zero carbon. It will create new products integrating content, data, services, research reports and activities, aiming at providing intellectual support and media support for the dual carbon work. The Zero Carbon Research Institute will record the development of "double carbon", innovate popular science products, build high-end think tanks, research and development industries and local green databases, build a "double carbon" consulting system, build a communication platform, organize public welfare activities, publish research reports and select outstanding cases.
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