Talk every Monday:
On the night of April 10, the Central Committee of the CPC and the State Council issued the opinions on accelerating the construction of a unified national market, which proposed that the development of a unified capital market would be accelerated, and the action programme for the construction of a unified national market in the next period was provided from the overall and strategic perspective.
The opinion proposes to cultivate and develop a unified ecological environment market throughout the country. Relying on the public resource trading platform, build a unified national carbon emission rights and water rights trading market, and implement unified and standardized industry standards and trading supervision mechanism. Promote the market-oriented trading of emission rights and energy use rights, and explore the establishment of systems such as initial distribution, paid use, market trading, dispute resolution and supporting services.
The proposal of unified big market will accelerate the construction of four rights of carbon, water, pollution and energy. At present, China’s national carbon emission market has been running for nearly a year. The mechanism of water rights trading is being explored in key basins such as the Yangtze River and the Yellow River, while the emission rights and energy use rights are still in the pilot exploration stage.
In 2022, the expansion of the national carbon emission market can be expected, and the restart process of CCER has attracted much attention.
Ten years of pilot accumulation. Since 2011, China has carried out a pilot of regional carbon emission trading in Beijing, Shanghai, Guangzhou, Shenzhen, Tianjin, Chongqing and Hubei for nearly 10 years, covering more than 3000 key emission units in more than 20 industries, with a cumulative trading volume of 430 million tons of carbon dioxide equivalent and a cumulative turnover of nearly 10 billion yuan.
The national market was opened. On July 16, 2021, the national carbon emission teacher market was officially launched. The power industry has become the first industry to be included in the national carbon market, covering more than 2000 power enterprises, covering about 4.5 billion tons of carbon dioxide equivalent, accounting for more than 40% of the national carbon emissions. By the end of 2021, the cumulative trading volume was 179 million tons and the turnover was 7.66 billion yuan.
Take the step of capacity expansion. According to the plan of the Ministry of ecology and environment, eight key emission industries will be included in the carbon market before 2025. According to the information disclosed by the chairman of Shanghai Environment Group Co.Ltd(601200) energy exchange (seee) and the executive deputy general manager of Hubei carbon emission trading center in 2021, nonferrous metals and building materials industries are planned to be included in the national market in 2022, while oil refining and petrochemical industries are expected to be included in the national market in 22-23 years.
CCER as a complement to carbon quotas. National certified voluntary emission reductions (CCER) refers to the greenhouse gas emission reductions registered in the national greenhouse gas voluntary emission reduction transaction registration system after quantifying the greenhouse gas emission reduction effects of renewable energy, forestry carbon sequestration, methane utilization and other projects in China, which can be used to offset the payment of carbon emission quotas, and the offset proportion shall not exceed 5% of the payable quotas, calculated based on the current emission coverage of 4.5 billion, The carbon emission market demand of CCER exceeds 200million tons.
CCER restart process has attracted much attention. In March 2017, the national development and Reform Commission issued an announcement to suspend the acceptance of CCER related applications. Recently, the Ministry of ecological environment said that it would support Beijing to undertake the construction of a national voluntary emission reduction trading center in the form of joint construction of ministries and cities, and CCER is expected to restart in 2022.
The water rights trading mechanism is still under exploration and reform. Since the first water rights transfer in 2000, China has gradually established the basic system and framework of water rights and trading. In 2014, the pilot work of water rights was carried out in seven provinces of Ningxia, Jiangxi, Inner Mongolia, Henan, Gansu, Guangdong and Hubei, and the China water rights exchange was established in 2016.
Emission rights started early and are still under pilot exploration. China has been exploring emissions trading since 1988. In 2007, the pilot trading was carried out in 11 provinces and cities, and the secondary market was relatively inactive.
Investment strategy: carbon emission trading is expected to usher in marginal changes in the near future. The implementation of CCER will help enterprises such as waste incineration power generation and landfill gas utilization under the coverage of methodology to obtain additional income by applying for CCER. It is suggested to pay attention to waste incineration leaders Zhejiang Weiming Environment Protection Co.Ltd(603568) , Grandblue Environment Co.Ltd(600323) , and landfill gas utilization leaders Henan Bccy Environmental Energy Co.Ltd(300614) .
Risk tip: the policy promotion is not as expected, etc.
Market review:
Last week, Shenwan environmental protection sector rose or fell – 5.2%, ranking 26 / 31 in Shenwan level industry.
In terms of sub sectors, the five sectors of atmospheric governance, water and water governance, comprehensive environmental governance, solid waste governance and environmental protection equipment rose or fell by – 2.86%, – 4.58%, – 4.95%, – 5.46%, – 8.02%.
In terms of individual stocks, Tongxing Environmental Protection Technology Co.Ltd(003027) (24.64%), Haitian Water Group Co.Ltd(603759) (2.21%), Guangxi Nanning Waterworks Co.Ltd(601368) (2.12%) rose ahead Wuhan Xianglong Power Industry Co.Ltd(600769) (- 13.62%), Jiangsu Jiuwu Hi-Tech Co.Ltd(300631) (- 14.15%) and Jingjin equipment (- 15.78%) decreased significantly.
