Industry Review on Carbon Market Performance Path
Sinochem New Network News
On July 5, the "Two Lakes Dialogue" International Cooperation Matchmaking Conference on Carbon Market and Carbon Finance was held in Wuhan, Hubei. Experts attending the meeting put forward their own views and thoughts on the role of the national carbon market, measures to respond to later expansion, and increasing the compliance paths for enterprises in the carbon market.
Zhu Guohui, vice chairman and general manager of Carbon Emissions Registration and Settlement (Wuhan) Co., Ltd., said that the development of the carbon market in recent years has enhanced enterprises 'awareness of low-carbon development that "carbon emission has costs and carbon reduction has benefits." After the national carbon market was officially launched in July 2021, the emission allocation amount was about 4.5 billion tons, accounting for 40% of the country's total carbon emissions. Currently, transactions are becoming increasingly active and prices are also showing an upward trend; currently, the allocation quota for two performance cycles exceeds 19 billion tons, and the asset price exceeds 1.5 trillion yuan based on current market prices.
Talking about future changes in the carbon market, Zhu Guohui believes that the expansion of the national carbon market is a high probability event. This year, the cement, electrolytic aluminum and steel industries will be added, and the annual carbon allocation will reach about 8 billion tons; the number of participants will increase, such as Qualified institutional investors; the variety will gradually increase; the allocation methods will be more diversified. Currently, quotas are allocated for free, and starting from next year, there may be paid distribution; It will more reflect the marginal cost of carbon emissions, and the price of carbon emissions is expected to rise further; carbon-mediated green finance will grow rapidly.
Huang Dai, deputy general manager of Carbon Emissions Registration and Settlement (Wuhan) Co., Ltd., introduced that with active carbon market trading and steady increase in carbon prices, some key enterprises included in the national carbon market have been promoting their own green and low-carbon development. Initial results have been achieved. Some emission control companies have accelerated the establishment of professional carbon market management companies to participate in carbon asset operations, data quality management, green and low-carbon investment, etc. For example, Sinochem Energy Carbon Asset Operation Co., Ltd., a subsidiary of Sinopec, has achieved profitability in carbon trading investment and used investment profits to support renewable energy and low-carbon investment.
As the carbon market expansion signals continue to be released and carbon prices show an upward trend, some companies are also thinking about how to better participate in the carbon market and put forward corresponding suggestions. Suo Haixiang, project manager of China Coal Group's Carbon Asset Management Center, believes that rising carbon prices is an inevitable trend. Which industries will be included in the future expansion of the carbon market, and what impact will it have on the existing carbon market after inclusion, including changes in quota allocation plans and quota performance changes, are all issues that energy companies need to consider when participating in the carbon market. He hopes to speed up the construction of the carbon market policy system, enhance enterprises 'carbon market expectations, increase enterprises' paths in carbon market performance, and reduce enterprises 'performance costs and risks.
Fang Long, general manager of the carbon asset operation and management department of Sinochem Energy Carbon Asset Operation Co., Ltd., said that in the future, the volume of carbon assets managed by the petrochemical and chemical industries will increase exponentially, and the primary task of the management team is to help companies reduce performance costs. He also hopes that the expansion process of investment institutions will be accelerated, so that more rich carbon asset management models will enter the market, helping companies carry out risk management and asset operations.
Liu Gengshi, environmental protection director of Jingneng Shiyan Thermal Power Co., Ltd., proposed that carbon market trading products need more innovation to reflect financial attributes. If developed products and derivative products based on carbon quotas, such as carbon futures, carbon options, carbon claims, etc., are included in the trading system, the carbon market function will be more fully exerted, and the market potential will be more fully released, which will greatly stimulate market vitality.
