With the power of the carbon market, we will play the game of carbon reduction

　　"Petrochemical enterprises participating in the carbon market should not only achieve carbon reduction in the process of participating in the transaction, but also seek new development opportunities in the process of carbon reduction, and use the huge power of the carbon market to play a chess game of green, low-carbon and high-quality development of the industry. At the 2022 Petrochemical Industry Low-Carbon Symposium held recently, the participating experts said this.

　　It is a system and a tool for reducing emissions, and the scale of the carbon market is getting bigger and bigger

　　Chen Xuanchen, assistant director of the commodity division of the Guangzhou Futures Exchange, said that the carbon market system is multi-level, which can generally be divided into carbon emission rights market, voluntary emission reduction trading market, local GSP market and carbon finance market relying on various financial forms. In fact, under the carbon market mechanism, although carbon emission rights are bought and sold, the total amount of carbon emissions is still within a controllable range.

　　"The report of the 20th National Congress of the Communist Party of China clearly stated that it is necessary to improve the statistical accounting system of carbon emissions and improve the carbon emission market trading system. These are two very important foundations for promoting carbon peak and carbon neutrality. Li Yongliang, deputy director of the Industrial Development Department of the China Petroleum and Chemical Industry Federation, said.

　　"Judging from the operation of China's carbon trading pilot, the carbon market is a very effective market-based policy emission reduction tool, which can not only control carbon emissions, but also reduce the cost of emission reduction for the whole society. At the same time, different allowance methods and market supply will also have different impacts on carbon prices. Zhang Binliang, general manager of Beijing Zhongchuang Carbon Investment Education Consulting Co., Ltd. and IFC carbon finance expert of the World Bank's International Finance Corporation, pointed out that the "double carbon" goal has brought unprecedented historical opportunities to the construction of the carbon market, and the carbon market also plays an important role in the "double carbon" process. China's carbon market has gone through more than 10 years of construction, in 2011 after the competent authorities issued a notice to establish a carbon trading pilot, Beijing, Shanghai, Guangdong, Shenzhen, Chongqing, Hubei and other places have declared and established carbon trading pilots. At present, petrochemical companies such as Sinopec and CNOOC have participated in local carbon trading, and about 30 captive power plants of petrochemical companies have participated in the national carbon market.

　　Regarding the future development trend of the carbon market, Zhang Binliang said that there will be fewer and fewer carbon allowances in the future. Compared with the first compliance cycle of the national carbon market, the biggest change in the second compliance cycle is that the total amount of carbon allowances has been reduced by about 10%, and the allocation plan has become more stringent. He predicts that in the future, China will cancel the free quota system and gradually introduce a paid distribution and auction mechanism, and the scale of the national carbon market will reach 7 billion ~ 8 billion tons or even larger.

　　Chen Chiping, a senior expert at McKinsey & Company, believes that in the future, the national carbon market will be integrated with various market mechanisms such as the green power market and the green certificate market, and the relevant standards will be gradually refined, and the market mechanism will become more and more standardized.

　　The petrochemical industry will be included in the carbon market

　　"The construction of the carbon market is an important part of improving the market-oriented mechanism, and the petrochemical industry will also be included in the national carbon market in the future, which is likely to be at the end of the 14th Five-Year Plan. Li Yongliang said.

　　Pang Guanglian, member of the Standing Committee of the Party Committee and Deputy Secretary-General of the Petrochemical Federation, believes that the petrochemical industry is a pillar industry of the national economy and one of the main industries of carbon emissions, and participating in the carbon market in the future is an inevitable and unavoidable challenge.

　　"For the petrochemical industry, participating in the carbon market is both a challenge and an opportunity. Zhang Binliang pointed out that the petrochemical industry carbon emissions account for about 14% of the country's carbon emissions, if only rely on energy substitution, carbon dioxide capture and storage, optimize the production process route and other ways to reduce carbon emissions, the cost is very high, according to the current development of accounting, the cost of emission reduction will reach 300 yuan / ton and above. The petrochemical industry emits more than one billion tons of carbon emissions every year, and the cost of emission reduction in the entire industry is huge. Under such circumstances, it is difficult to achieve carbon reduction targets if only state subsidies or self-financing by enterprises are used. Therefore, for the petrochemical industry, the carbon market is a very good channel for innovation and investment and financing, and enterprises can make full use of the carbon market to strive for more favorable and low-cost investment and financing for enterprises to achieve green and low-carbon transformation in many aspects.

　　Huang Yanxiang, CEO and co-founder of Carbon Balance Technology, believes that there are three main development opportunities brought by the carbon market to petrochemical companies. First of all, as the most effective market-based policy emission reduction tool, the carbon market has greatly encouraged the willingness of relevant enterprises to reduce carbon emissions, and by integrating the concept of green development into the operation of enterprises, they can improve their green transformation capabilities and enhance their core competitiveness. Secondly, the essence of the carbon market is the financial market, such as green credit, green bonds, green insurance and other related industries will have a very large space for development, petrochemical enterprises should seize the opportunity for investment and financing in a timely manner. Third, an effective carbon market mechanism can promote the rapid development of scientific and technological innovation. In fact, every technology follows the principle of market pricing from R&D to market entry. For example, the current cost of carbon capture, utilization and storage technology is 300~700 yuan/ton, and it is expected that by 2060, the cost will drop to 100~400 yuan/ton, and the cost of technology and carbon price will reach the break-even point.

　　It is necessary to self-examine and plan as a whole, and to respond to the carbon market positively

　　"To actively respond to the carbon market, we must first find out our own 'carbon background'. It is necessary to make full use of the carbon trading mechanism to expand new channels for investment and financing, develop green emission reduction technologies and negative carbon technologies under different production scenarios, further improve energy efficiency, reduce carbon emission intensity, and promote the high-quality development of petrochemical enterprises. Zhang Binliang said.

　　Hong Sheng, a senior managing partner at McKinsey & Company, said that in order to deal with the carbon market, petrochemical companies must first figure out and understand six issues. First, it is necessary to have a deep understanding of China's carbon market mechanism and strategy, clarify what policies or laws are closely related to the development of enterprises, and what are the risks and opportunities faced by enterprises. Second, it is necessary to determine the carbon asset needs of enterprises, including their own emission reduction capabilities, what their emission reduction goals are, and how many carbon emission rights they need. Third, it is necessary to determine the supply capacity of carbon emission assets of enterprises, and whether they need to obtain carbon emission rights by seeking business cooperation. Fourth, it is necessary to consider whether enterprises are likely to actively participate in the carbon market, thereby creating new opportunities for the development of enterprises, and also striving for effective compensation for achieving carbon reduction goals. Fifth, it is necessary to determine whether the enterprise wants to establish a new business route. Sixth, it is necessary to consider whether the enterprise needs to deploy funds to obtain the ability to generate carbon emission rights or acquire relevant companies in the field.

　　Pan Ting, purchasing manager of energy and basic chemicals at Covestro Asia Pacific, said that he hopes that before petrochemical companies enter the carbon market, relevant policies will be introduced to guide them to prepare. He also pointed out that petrochemical companies should make full use of the extension of the industrial chain to make some green hydrogen, green ammonia and other green electricity derivatives, which will also help achieve carbon reduction goals.