36 Carbon Focus|Behind a cross-border carbon transaction, Ganghua Energy's carbon neutrality chess game
Text | Snow stubborn
Edit | Su Jianxun
When the tide of carbon neutrality swept the world, the carbon trading market has become a key force for countries to cope with climate change and promote green and low-carbon development. According to a report released in March by the International Partnership for Action on Carbon (ICAP), the carbon market now covers 17% of global greenhouse gas emissions. In terms of carbon allowance revenue, the global carbon market revenue reached a record high of US$63 billion in 2022.
Using market mechanisms to reduce carbon emissions and carry out carbon trading is an innovative practice that integrates environmental protection and economy. When "carbon" becomes an asset, a business, and a business, the degree of financialization of the carbon market and the role of all parties to the transaction have become important topics for the industry to pay attention to and discuss.
In November 2022, the Hong Kong Stock Exchange's Core Climate platform successfully completed the first batch of VCUs (Verified Carbon Units, tradable carbon credits certified by VERRA), an international carbon emission reduction registry, which attracted industry attention. thereintoOne transaction brought together many core issues related to the international carbon market, such as cross-border dual currency settlement, trading resource matching, and carbon credit product certification, and was of benchmarking significance. The main party behind this transaction is a carbon management professional called "Ganghua Carbon Asset".
In the newly emerging carbon asset management track in China and even the global carbon circle, Ganghua carbon assets are a special existence.
The emerging carbon business condenses a century of service precipitation. Behind Hong Kong's carbon assets is the Hong Kong and China Gas Group, founded in 1862 – not only is Hong Kong's oldest utility but also one of the largest energy suppliers in Hong Kong.As the only professional organization responsible for carbon asset business under Hong Kong and China Gas, Ganghua Carbon Asset is unique in its own genes and positioning, not only serving the group, but also serving market-oriented customers with carbon reduction needs.
This benchmark VCU transaction is just a microcosm of Ganghua's carbon business. As one of the seven core business sectors supporting Ganghua Energy's zero-carbon smart energy services,The business scope of Ganghua Carbon Asset covers the whole process of carbon asset management capabilities such as carbon trading, carbon services, and carbon development.In particular, for the international carbon market with huge demand potential but complex trading,Ganghua Carbon Asset not only has the ability and experience to serve overseas customers, but also reserves "hardcore" carbon emission reduction assets.
How is the "all-powerful" Hong Kong carbon asset refined?
01
What is it like to trade carbon across borders?
Recalling the whole process of the first VCUs transaction, Dr. Zhang Jinbai, Executive Vice President of Ganghua Smart Energy, remembers it vividly.
Dr. Zhang Jinbai, Executive Vice President of Ganghua Smart Energy Source: Enterprise Authorization
"The key to trading is to find the product and the demand side. ”Dr. Zhang Jinbai told 36 Carbon that the biggest highlight of this transaction is that Ganghua Carbon Asset has accurately matched the trading customers and project products, which also reflects the overseas trading resources and capabilities of Ganghua Carbon Asset.
The buyer of the deal is a carbon service provider from Dubai. According to reports, the Dubai company has strict requirements on the type, time and place of issuance of carbon credits. Through a Singapore-based voluntary emission reduction project developer, Ganghua Carbon Asset Management has obtained eligible VCUs – wind energy and biomass emission reduction projects from China and India in newer years, meeting buyers' demand for high standards for products.
Dr. Zhang Jinbai introduced,In order to ensure the reliability and uniqueness of carbon credits, the Ganghua Carbon Asset team has conducted additional third-party due diligence on trading products on the basis of the existing VERRA certification.From the compliance documents of the project to the time of issuance, from the actual emission reduction effect to the existence of "one thing, two sales", the team inspected the project products in detail to ensure the quality of transactions and avoid transaction risks.
Not only that, the Dubai-based customer also requested cross-border dual currency settlement, as well as completing two cross-border transactions of purchase and sale.
In fact, one of the keys to the cross-border transaction process is to open up the timeliness of dual-currency fund settlement. The reason why Ganghua Carbon Asset can meet the needs of customers for dual-currency settlement is due to the Core Climate platform of Hong Kong International Carbon Trading Center, which it participated in the construction.
The Core Climate platform is currently HKEX's only international carbon trading platform that offers both HKD and RMB settlement, and was officially launched in late October 2022.
36 Carbon learned that the founding members of the Core Climate platform are mainly financial institutions and traders, and Ganghua Carbon Asset and Hong Kong and China Gas jointly participated.In the stage of platform construction, Ganghua Carbon Asset participated in it as a trading demander, based on years of carbon trading experience, tested and fed back the Core Climate platform from the aspects of operation interface, basic functions (account, deposit and withdrawal, etc.), transaction logic, network technology, etc., provided constructive suggestions outside the financial perspective, and strengthened the platform's capabilities。
It is the cross-border trading capabilities of the Core Climate platform that promoted the first VCUs transaction of Ganghua Carbon Asset under the platform. Through this practice,Ganghua Carbon Asset has accumulated more experience in the financial process and staffing of cross-border carbon credit transactions, and promoted the establishment of real-time, fast and transparent overseas carbon credit trading channels.According to reports, the current counterparties of Ganghua Carbon Asset have covered Singapore, the United Kingdom, Dubai, Australia, Switzerland and other countries.
Dr. Zhang believes that VCUs trading is only the first step in the Core Climate platform. Compared with other carbon exchanges, the Core Climate platform is based on the role of Hong Kong's international financial center, and in the future, it can start from the aspects of enriching trading varieties, enhancing trading liquidity, improving trading standards, and ensuring the uniqueness of carbon credit products to enhance the platform's competitiveness in international carbon trading.
02
The whole process carbon business plan reduces and manages the "carbon"
How to manage "carbon" is a real problem that many companies are troubled by.
Ganghua gave its own answer. In addition to carbon trading, carbon services and carbon development are also the core businesses of Ganghua Carbon Assets, covering the whole process of corporate carbon asset management.
Source: IC photo
As a carbon trader,Ganghua has always been committed to efficiently and accurately matching carbon credits for customers, while ensuring the quality and compliance of subject matter——This is also a major industry pain point facing international carbon trading. For a long time, international carbon trading has mainly adopted the over-the-counter trading method, and trading efficiency and security are shortcomings. At the same time, the world has not yet formed a unified carbon market, and there is a lack of public aggregation and distribution channels for trading information, and poor information has become a barrier in front of traders.
The essence of the carbon market is a trading market, and the authenticity and reliability of products is the basis of trading. Ganghua Carbon Asset Management attaches great importance to controlling the potential risks of trading products.“从优先级来看，第一目标是满足客户需求，第二目标就是满足港华碳资产内部的风控标准要求。”Dr. Zhang Jinbai introduced,港华有严格的第三方尽调环节，即使是已获得认证的碳信用额，港华也会在此基础上进行额外的审查，目的是确保产品的唯一性与合规性。
Based on rich trading experience, capabilities and resources, Ganghua Carbon Asset can help clients develop the benefits generated by emission reduction into carbon credits, and help enterprises without development capabilities realize carbon assets. ButThe positioning of Ganghua Carbon Asset is not as simple as an independent carbon trading service company, but also the key and source link for Ganghua Energy to provide energy and carbon services to many industrial and commercial customers.
As a core member of Hong Kong and China Gas Group and a renewable business brand of Ganghua Smart Energy,Ganghua Energy is positioned as a leading energy Internet aggregation service provider, with comprehensive energy, decarbonization and digital intelligence as the strategic core, providing green, safe and efficient zero-carbon smart energy management services and technical solutions for industrial and commercial enterprise customers and industrial parks.Ganghua Energy has a complete set of carbon business logic and planning solutions: first help enterprises understand the basic plan of their own carbon emissions, and then provide enterprises with economic and compliant carbon reduction pathways. Other wordsFirst help enterprises clarify the current situation, calculate the ROI (input-output ratio) of carbon reduction, and then find the optimal solution, and plan the layout of carbon reduction solutions as a whole. Ganghua Carbon Assets plays an important role here.
Especially at a time when green trade barriers are escalating, export-oriented enterprises must first settle the economic account of carbon and deal with potential risks and challenges in advance. At the same time, with the gradual establishment and improvement of domestic carbon market mechanisms and accounting standards, enterprises may face new additional costs and need to plan ahead.
Compared with the energy carbon service enterprises in the market,Ganghua Energy's carbon reduction service solutions are highly practical and practical – Dr. Zhang Jinbai calls it "both physical and virtual methods".
Specifically,The physical approach refers to directly helping companies reduce energy consumption through energy-saving services and green power alternative investments.For example, through the energy-saving transformation of industrial construction, water pumps, air pressure, waste heat utilization, distributed photovoltaic investment, and integrated construction of solar storage and charging, carbon emissions and energy costs are directly reduced from energy conservation and clean energy supply.
Virtual methods include microgrids, virtual power plants, green power, green certificate procurement and carbon trading.Especially in the face of the requirements of the EU CBAM, enterprises can reduce the additional costs caused by the "carbon tariff" by purchasing carbon indicators or green certificates that meet the requirements of the EU.
03
Starting from customer needs, create personalized "carbon reduction menu"
The carbon asset business is just one part of Ganghua Energy's vast business landscape.In May this year, Ganghua Energy officially released the "Seven Star Service Plan" including seven business segments: Ganghua Carbon Assets, Ganghua Green Power, Ganghua Times, Ganghua Jianneng Energy, Ganghua Energy Conservation, Ganghua Digital Energy and Ganghua Energy Research Institute.
Ganghua Energy Seven-Star Service Plan Source: Enterprise Authorization
In Ganghua Energy, the "Seven Star Service Plan" is vividly called the "Seven Fairies", and the seven business fulcrums have their own characteristics, but are closely related and synergistic with each other."Think of these seven business segments as modular services, like a full-menu menu where customers with different tastes can choose their favorite combination. Dr. Zhang Jinbai explained, "Everything starts from the customer's carbon reduction needs, which is the highest goal. ”
In fact, this reflects the "comprehensiveness" of Ganghua's energy solutions - the seven business segments are not a single advance, but an organic whole coordinated with each other.Enterprise customers can flexibly choose from this "carbon reduction menu" according to their individual needs.
At present, industrial parks are becoming a new carbon reduction scenario and a new battlefield for Ganghua Energy to accelerate its landing, and has built a landing sample of zero-carbon smart industrial parks in many cities.
Hailing District, Taizhou City, Jiangsu Province, is one of the top 100 industrial zones in China.In 2022, Ganghua Energy combined with the local plan to build a "Sun City" and fully implement the construction of "zero-carbon smart park" through the comprehensive plan of "solar storage and charging".It is reported that after the project is fully completed, it is expected to reduce hundreds of thousands of tons of carbon emissions per year.
In recent years, Ganghua Energy has accelerated the provision of green, safe and efficient zero-carbon smart energy management services and technical solutions for industrial and commercial customers and industrial parks. 36 Carbon learned,Ganghua Energy has deployed more than 500 smart energy projects in 22 provinces, autonomous regions and municipalities directly under the central government, including 91 zero-carbon industrial parks.
In the Guangzhou headquarters of ultra-high precision metal parts enterprise International Precision,Ganghua Energy provides a set of smart integrated energy solutions, through distributed photovoltaic, central air conditioning energy saving, air compressor system energy saving, new energy charging, waste heat recovery supply domestic hot water and other comprehensive services, to help International Precision build a low-carbon factory.It is reported that the project can generate more than 5.4 million kWh of green electricity per year, save more than 6 million kWh of electricity, and reduce carbon emissions by more than 6,000 tons per year.
As one of the five major gas service enterprises in China,Ganghua Smart Energy has more than 400,000 industrial and commercial customers, more than 30 million resident users, and serves 100 million people nationwide.With the continuous improvement of business layout, the customer scope of Ganghua Smart Energy is constantly expanding.In order to better serve the differentiated carbon reduction needs of different types of customers, Ganghua Energy provides a full range of one-stop services such as "customized planning, low-carbon energy supply, green energy saving, digital intelligence empowerment, and carbon power management".
From carbon business to one-stop integrated energy services, Ganghua Energy is breaking new ground in the zero-carbon battlefield. This zero-carbon ambition and layout will also become a powerful engine for Ganghua to help client enterprises achieve the goal of carbon neutrality and create new green growth points.
