In the three years since its establishment, what changes have been brought about by the construction of the national carbon market?
At present, the national carbon emissions trading market has been launched for three years. The Third Plenary Session of the 20th Central Committee of the Communist Party of China proposed to speed up the improvement of the system and mechanism for the concept that lucid waters and lush mountains are invaluable assets. Carbon trading is a major institutional innovation that uses market mechanisms to control and reduce greenhouse gas emissions and promote green and low-carbon development. It is an important policy tool to achieve the goal of carbon peak and carbon neutrality. Since its establishment three years ago, the National Carbon Market has played an increasingly important role in promoting enterprises to reduce carbon emissions, promoting green technology innovation, and improving resource allocation efficiency.
Not long ago, the Ministry of Ecology and Environment released the "2024 National Carbon Market Development Report". The report shows that my country has built the world's largest market covering greenhouse gas emissions.
In layman's terms, the trading mechanism of the carbon emissions trading market is that the government sets a large plate of total carbon dioxide emissions and allocates carbon emission indicators based on the carbon dioxide emissions of enterprises. Enterprises with lower rankings have surplus indicators and can be sold on the market for money. Enterprises with excessive emissions will have to spend money to buy carbon emission indicators to fill the gap.
It is in this way that the carbon emissions trading market trading mechanism effectively promotes enterprises to reduce carbon emissions. As of July 15, the cumulative transaction of carbon emission quotas in the national carbon market exceeded 460 million tons, with a cumulative transaction value of nearly 27 billion yuan.
Huadian Group Hubei Xiangyang Power Plant is a large-scale thermal power generation enterprise with a total installed capacity of 2.6 million kilowatts and emissions of millions of tons of carbon dioxide every year. In 2014, Hubei's carbon emissions trading pilot was launched. Since then, Xiangyang Power Plant has continued to explore the integration of production and operation and the carbon market.
Yang Tao, deputy director of the Biomass Operation and Maintenance Department of Hubei Huadian Xiangyang Power Generation Co., Ltd., said: "Because we have four units of 330,000 kilowatt, the relative energy consumption of the units is small and the energy consumption is slightly larger, and the pressure to reduce carbon is increasing. At that time, the entire company also thought about later carbon emissions and whether biomass renewable energy would be conducive to emission reduction, so in 2015, it began to do a feasibility study on this project."
With the development of the carbon market and the gradual tightening of carbon quotas, companies must reduce carbon emissions through technological innovation and energy conservation and carbon reduction. At that time, Xiangyang Power Plant chose biomass renewable energy to replace some coal.
Biomass such as straw, bark, and peanut shells is itself formed by absorbing carbon dioxide through photosynthesis of plants. If burned again, it will not increase the carbon dioxide content in the atmosphere. Therefore, it can be used to replace part of coal combustion, thereby achieving the goal of reducing carbon.
Yang Tao, deputy director of the Biomass Operation and Maintenance Department of Hubei Huadian Xiangyang Power Generation Co., Ltd., said: "Biomass fuel is sent to the gasifier through the belt feed port to produce combustible gases such as carbon monoxide, hydrogen, and methane, and then the combustible gases are sent through pipelines. Send to coal-fired boilers and mixed combustion with coal, realizing coupled power generation between biomass and coal-fired units."
my country's first biomass gasification coupled unit in the energy field can process 8 tons of agricultural and forestry waste per hour, generate 59 million kilowatt-hours of electricity per year, replace 18,000 tons of standard coal, and reduce carbon dioxide emissions by about 50,000 tons.
This biomass-coupled power generation project can not only help companies cope with increasingly stringent carbon emission requirements, but also help companies achieve additional benefits. This benefit comes from two aspects: if the carbon dioxide emissions reduced through this project are traded in the carbon market, the carbon amount can be exchanged for relevant benefits; on the other hand, if it is used to replace the carbon emissions of other coal-fired units, it can at least reduce the company's capital expenditure by millions of yuan every year.
Hubei's carbon market is one of the first seven carbon emissions trading pilots in the country. Power generation companies like Xiangyang Power Plant have accumulated valuable experience in entering the national carbon emissions trading market after several years of exploration in these pilot markets. In 2021, the national carbon emissions trading market will launch online trading, and the power generation industry will become the first industry to be included in the national carbon emissions trading market.
The performance of the power generation industry in the national carbon market has laid the foundation for the realization of overall emission reduction targets. As a market-oriented policy tool, the carbon market continues to drive enterprises, especially the power industry, to accelerate the transformation and development of clean, low-carbon and efficient. After joining the national market, Hubei Huadian Xiangyang Power Plant is still facing the pressure of energy conservation and carbon reduction.
Liu Xiaojun, chief engineer of Hubei Huadian Xiangyang Power Generation Co., Ltd., said: "Entering the national carbon market in 2021, our company's carbon quotas are still relatively loose. However, as the country's carbon quotas have tightened in the past two years, our carbon quotas have gone from loosening to a slight surplus, and there will definitely be a gap in the future. Therefore, we must take the path of energy conservation and carbon reduction."
In the national carbon emissions trading market, if a company emits large carbon dioxide emissions, once there is a gap in carbon quotas, it needs to spend real money to buy them from the market.
In order to cope with increasingly stringent carbon emission requirements, Xiangyang Power Plant also needs to continue to explore technological innovation and equipment transformation. In 2023, the company invested another 225 million yuan to carry out heating renovation, energy conservation and carbon reduction renovation, and in-depth regulation and flexibility renovation on the units.
Carbon quotas are getting tighter and tighter. The supply-demand relationship of market quotas and fluctuating carbon prices are driving companies including Xiangyang Power Plant to adopt more emission reduction technologies and emission reduction measures to reduce emission reduction costs.
It has been three years since the national carbon emissions trading market started online trading. In order to achieve the goal of reducing carbon emissions, enterprises are constantly developing technical paths for reducing emissions, and the trading and activity of the carbon market are becoming more and more high.
The vitality of the carbon market has steadily increased, and the industry's emission reduction effect has gradually emerged. Through the construction of the carbon market, the main responsibility of enterprises for carbon emission reduction has been consolidated, and the low-carbon awareness that "carbon emission has costs and carbon reduction has benefits" has been deeply rooted in the hearts of the people. The market-oriented role of controlling greenhouse gas emissions and promoting energy structure adjustment has also become more obvious.
The construction of the carbon market is a complex and systematic project. At present, the national carbon emissions trading market is still in its infancy, and the institutional system needs to be further improved.
Xia Yingxian, director of the Climate Change Response Department of the Ministry of Ecology and Environment, said: "Regarding the relevant construction of the national carbon market, especially the related work related to industry expansion, we are currently accelerating the inclusion of key emission industries such as steel, cement, and aluminum smelting into the national carbon emissions. In the emissions trading market, we will continue to strengthen data quality management, gradually promote coordinated paid distribution, and continuously enrich trading entities, trading varieties and trading methods to study and explore feasible paths for carbon finance activities."
At present, industry expansion is advancing in an orderly manner. Steel, cement, aluminum smelting and other industries will gradually be included in the national carbon emissions trading market. More and more key emission units will join it. Many companies are also busy before entering the market. Be prepared to reduce carbon emissions.
In the open-pit mine of a cement production company in Wuhu, Anhui Province, several wide-body vehicles used for limestone transportation are shuttling back and forth in an orderly manner. It is understood that this is the world's first driverless transportation project in the field of open-pit mines. This wide-body vehicle is driven by pure electric energy and driverless technology, which not only meets the requirements of clean transportation, but also realizes the digitalization of mining.
He Shenzhong, general manager of Haibo Intelligent Technology Co., Ltd., said: "We have created a model of unmanned driving and new energy mining cards to increase resource utilization while effectively reducing energy consumption. In the past, our entire transportation link consumed 40,000 tons of fuel annually. Now we adopt driverless new energy mining trucks. For this alone, we reduce carbon dioxide emissions by more than 120,000 tons annually."
For companies like Conch Cement, after entering the national carbon market in the next step, reducing carbon emissions means that there are more carbon quotas that can be sold in the carbon emissions trading market to gain economic incentives.
In addition to saving energy and reducing carbon emissions in response to the upcoming national carbon market, Conch Cement is also trying to innovate low-carbon technologies and participate in the national voluntary greenhouse gas emission reduction trading market. Unlike the mandatory national carbon market, the national voluntary greenhouse gas emission reduction trading market launched in January this year is another independent market. The two markets operate independently and together constitute the national carbon market system.
In the voluntary emission reduction trading market, participating entities follow the principle of voluntariness and participate in greenhouse gas emission reduction through the development of renewable energy, afforestation and other projects. The carbon dioxide emission reductions obtained are certified by the state and then in the voluntary emission reduction trading market. In the market, the certified voluntary emission reductions can also be used as part of the carbon quota to offset the carbon emissions of enterprises in the national carbon emissions trading market.
Zhang Xin, chief economist of the National Center for Strategic Research and International Cooperation on Climate Change, said: "Voluntary emission reductions are theoretically relatively cheaper than mandatory emission reductions. On the one hand, it reduces the cost for enterprises to complete quota payment. On the other hand, through this mechanism, the national carbon emissions trading market and the national voluntary greenhouse gas emission reduction market are connected through the carbon quota payment and offset mechanism. In fact, carbon reduction and green expansion are effectively combined."
As the carbon market system gradually matures, the national carbon emissions trading market and the voluntary emission reduction market are connected to each other. In the future, the development effectiveness of the carbon market will gradually be demonstrated, and the industry's emission reduction effect will gradually emerge.
Zhang Xin, chief economist of the National Center for Strategic Research and International Cooperation on Climate Change, pointed out that there is a long way to go to build a carbon market with more international influence. With the construction of our country's carbon market, we have gradually expanded the coverage of the industry, continuously enriched trading entities and trading products, and continuously improved the institutional system construction of the national carbon market, and built the national carbon market into an international carbon trading center, an international carbon pricing center and an international Carbon finance center to build a carbon market with more international influence.
As my country's carbon market matures, more key emission industries will gradually be included in the national carbon market, which will increase the diversity and depth of the market. The diversification of quota allocation methods in the future and the innovation of carbon financial products will further enhance the influence of China's carbon market in the international community and play a greater role in the global carbon market. The future outlook of China's carbon market is positive, but it also needs to address multiple challenges. By continuously improving policies, strengthening supervision, promoting innovation and expanding opening up, China's carbon market is expected to play a more critical role in promoting green and low-carbon development and achieving carbon neutrality goals.
