Event:
On March 5, Premier Li Keqiang delivered a government work report, pointing out that the target of energy consumption intensity should be comprehensively assessed within the 14th Five Year Plan period, with appropriate flexibility; Orderly promote carbon peak and carbon neutralization, and resolutely curb the blind development of high energy consumption, high emission and low-level projects; We will strengthen pollution control, ecological protection and restoration, and properly handle the relationship between development and emission reduction.
Comments:
The energy consumption intensity target shall be comprehensively assessed within the 14th Five Year Plan period, with appropriate flexibility. In the process of “dual control of energy consumption” in the third quarter of 2021, some industries and regions have adopted the practice of “Sports” carbon reduction. The difference between this year’s government work report and last year is that there is no specific target value for reducing energy consumption per unit of China’s GDP, indicating that the state attaches importance to scientific assessment in the process of achieving the target of energy consumption intensity control and avoids simple “one size fits all”. In addition, as early as the central economic work conference at the end of 2021, it was proposed that the new renewable energy and raw material energy consumption should not be included in the total energy consumption control, and conditions should be created to realize the transformation from “double control” of energy consumption to “double control” of total carbon emission and intensity as soon as possible. On the whole, scientifically assess the target of energy consumption intensity and realize the transformation from “double control” of energy consumption to “double control” of total carbon emission and intensity, which is conducive to leading enterprises with high proportion of raw material energy consumption, environmental protection technology advantages, cost efficiency advantages and capacity expansion potential.
Orderly promote carbon peak and carbon neutralization, and resolutely curb the blind development of high energy consumption, high emission and low-level projects. This year’s government work report proposes to promote the R & D, promotion and application of green and low-carbon technologies, build a green manufacturing and service system, and promote energy conservation and carbon reduction in iron and steel, nonferrous metals, petrochemical, chemical, building materials and other industries; Resolutely curb the blind development of high energy consumption, high emission and low-level projects; We will improve the incentive and restraint policies for reducing pollution and carbon, and accelerate the formation of a green production and lifestyle. This year’s government work report clearly proposes to promote energy conservation and carbon reduction in high-energy consumption industries and curb the blind development of “two high” projects, which is conducive to promoting the high-quality development of the chemical industry, accelerating the withdrawal of backward, inefficient and highly polluting production capacity, and improving the market share of high-level enterprises in the industry.
We will strengthen pollution control, ecological protection and restoration, and promote harmonious coexistence between man and nature. This year’s government work report pointed out the need to strengthen pollution control and ecological protection and restoration. Specific to the chemical industry, we believe that it will be conducive to the development of degradable plastics industry. As early as February 23, the spokesman of the Ministry of ecology and environment said that we should implement the legal requirements of plastic pollution control, promote the implementation of the opinions on further strengthening plastic pollution control and the action plan for plastic pollution control in the 14th five year plan, and manage plastic pollution accurately, scientifically and according to law. On March 2, the United Nations adopted a resolution entitled “ending plastic pollution: developing an internationally legally binding instrument”, which set the goal of completing a draft legally binding global agreement by the end of 2024.
Investment suggestion: this year’s government work report proposes to realize the transformation from “double control” of energy consumption to “double control” of total carbon emission and intensity, resolutely curb the blind development of “two high” projects, benefit the leading enterprises Wanhua Chemical Group Co.Ltd(600309) ( Wanhua Chemical Group Co.Ltd(600309) ), Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) ( Shandong Hualu-Hengsheng Chemical Co.Ltd(600426) ), etc. with high proportion of raw material energy, environmental protection technology and cost efficiency. In addition, the government work report proposes to strengthen pollution control and ecological protection and restoration to benefit the development of degradable plastics industry. We can pay attention to Red Avenue New Materials Group Co.Ltd(603650) ( Red Avenue New Materials Group Co.Ltd(603650) ) and Henan Jindan Lactic Acid Technology Co.Ltd(300829) ( Henan Jindan Lactic Acid Technology Co.Ltd(300829) ).
Risk warning. The fluctuation risk of energy prices caused by the uncertainty of the conflict between Russia and Ukraine; Risk of narrowing the price difference of chemical products due to sharp fluctuations in oil prices; If macroeconomic pressure leads to the risk that the downstream demand of chemical products is lower than expected; The risk of deterioration of supply and demand pattern due to the rapid release of new production capacity of some products; The risk of intensified industry competition; Natural and man-made disasters and other force majeure events.
