Written by Zhao Zikun/Li Yuan Since this year, Tong Fu, CEO of Sanzang Technology, has clearly felt that there are more types of companies coming to do carbon emission assessment and the demand is more urgent. Not only petrochemicals, building materials, and electricity are the o

Written by/ Zhao Zikun

Edited by/ Li Yuan

Since this year, Tong Fu, CEO of Sanzang Technology, has clearly felt that there are more types of companies coming to do carbon emission assessment and the demand is more urgent.

Not only are the big carbon emitters such as petrochemicals, building materials, and electricity, but some technology industry companies also want to make estimates of their own carbon emission levels. Even non-regulated enterprises (including key emission units in management) are under increasing pressure to transform to "dual carbon" and have potential demand for carbon asset management.

"We also want to echo the dual carbon, but first of all, we have to know how much carbon we are emitting." Li Ming (pseudonym) said.

In early autumn of September, Li Ming attended the "2022 GCMC Global Carbon Management Conference" and he came to "get the scriptures". The market value of his A-share listed technology company is nearly 300 billion yuan. He is in a state of great difficulty recently and does not know how to accurately calculate his "carbon value". For this purpose, the company specially established a "dual carbon" virtual organization department, and Li Ming was also absorbed and was responsible for the company's urgent carbon management services. At the

conference, Sequoia China founder and CEO O Shen Nanpeng mentioned that carbon emission calculation and management are digital infrastructures for "carbon neutrality" - this is also the first difficulty that Li Ming's company currently faces in response to "dual carbon".

After all, before the "dual carbon" target was proposed in September 2020, carbon asset management was still an industry that was "sinking in the water". With the birth of the "dual carbon" fever, more and more companies are involved in the wave, and this service industry attached to the carbon reduction and and carbon reduction business has also surfaced.

If the company sets emission reduction goals to repair and repair them on a built building, then the carbon asset management company is the one who "delives tools" for them.

According to the "Forecast of China's Carbon Management Market Size", the scale of China's carbon management market will reach 109.9 billion yuan in 2025, 450.4 billion yuan in 2030, and 432.86 billion yuan in 2060. Among them, the carbon management software market and the carbon consulting service market basically account for half of each.

The demand for carbon asset management has exploded

The current hot demand for carbon asset management companies is actually closely related to the accelerated implementation of my country's carbon trading market and the gradual establishment of unified industry standards.

In July 2021, my country's carbon trading market was officially launched, and the first batch of more than 2,000 power generation companies were first included. Market estimates that if all the eight major emission industries have all managed enterprises entering the carbon trading market, the total number will be about 8,000. Then, the market size with carbon assets as the trading target is expected to reach 100 billion.

uses market-oriented means to solve environmental problems, and the carbon trading market is not the first case. Previously, my country also had pilot projects such as sulfur dioxide transactions and pollution rights trading. But in comparison, the implementation of the carbon market is obviously more resolute.

Of course, at present, the carbon trading market that has just been launched for more than a year is still in its early stage of exploration. In this process of laying the foundation, many companies are willing to enter but lack guidance, and need third-party institutions to help clarify emission reduction plans and organize plans.

"What we do now is data management, including low-carbon planning, carbon data management and digital construction related to carbon. Some asset management involving financial orientation also depends on the development of the later trading market." Tong Fu said.

On April 12 this year, The "Carbon Financial Products" released by the China Securities Regulatory Commission defines carbon assets as new assets generated by the carbon emission rights trading mechanism. All kinds of carbon emission quotas issued by the government, carbon emission reduction projects that may obtain carbon credit, etc., have been included in the scope of carbon assets .

In fact, there are three main ways for general enterprises to manage carbon assets: the control and control enterprises themselves, establish special branches or departments at the group level, and hand them over to third-party institutions for management. At present, the five major power companies, such as " three barrels of oil ", as well as local state-owned enterprises such as Zhejiang Energy , Shenneng , etc., have built their own management platforms. But more companies still outsource their business to third-party institutions, which has also made carbon asset management companies everywhere.

Tong Fu introduced: Most of the demands of enterprises in charge are to analyze and analyze the potential costs of carbon emission reduction , hoping to calculate the "economic account", compare the relationship between energy-saving and emission reduction costs and quota carbon market emission prices, and then determine how to fulfill the contract. Most non-regulated enterprises respond to their industries and want to strengthen their carbon emission management capabilities and reduce the intensity of carbon emissions per unit product.

For enterprises with strong demand, carbon asset management companies generally provide customized solutions, including: carbon data monitoring and collection, carbon emission quantitative analysis, introduction of energy-saving and carbon reduction processes, digital transformation , etc. For enterprises with low demand for non-key emissions and participating in the carbon trading market, a collaborative management platform for carbon emissions is provided so that enterprises can have a preliminary understanding of their own energy consumption and carbon emission levels.

Take Sanzang Technology as an example. They can currently provide green platform construction services for governments, parks, enterprise users, etc., for example, jointly with Huawei to build the "5G+ big data VOCs monitoring, early warning and traceability platform" of Guangpec Park, providing decision-making support for VOCs control and precise governance in the park. But one of the company's routine tasks is to provide companies with carbon asset research reports.

. According to AI Finance and Economics, the general charging market in the carbon asset ESG report industry ranges from tens of thousands to hundreds of thousands of yuan depending on the company's scale and complexity. "The general primary purpose of everyone now is to understand their own carbon assets," said Tong Fu.

Sanzang Technology will mainly evaluate the greenness of the enterprise from five dimensions: environmental risk management, pollutant emissions, carbon resource use, transformation potential, external supervision and public opinion. In each dimension, set ten or dozens of quantitative indicators. Then, through the hierarchical analysis model of through the operation research and research of , it is finally integrated into the company's carbon asset report. In addition to the company, there are many financial institutions that evaluate the potential and risks of the company's ESG.

However, Tong Fu admitted: Accurate calculation of carbon assets is a common difficulty in the industry. However, with the establishment of a unified national carbon market, the clarity of carbon emission accounting standards is approaching. Recently, the National Development and Reform Commission , the National Bureau of Statistics , and the Ministry of Ecology and Environment announced the "Implementation Plan for Accelerating the Establishment of a Unified and Standardized Carbon Emission Statistical Accounting System".

Director of the Energy Statistics Department of the National Bureau of Statistics Hu Hanzhou pointed out that the issuance of the "Implementation Plan" is of great significance to consolidate the foundation of carbon emission statistical data, improve the quality of carbon emission data, and implement the requirements of the CPC Central Committee on "achieve the transformation of energy consumption's 'dual control' to total carbon emissions and intensity 'dual control' as soon as possible."

Some scholars have also pointed out that to a certain extent, carbon emission rights are the right to future development, which means real money and will even affect the transformation and regional layout of enterprises.

Business Opportunities in Carbon Trading

China's carbon trading has gone from scratch, and it has been ten years.

In October 2011, Beijing, Tianjin, Shanghai, Chongqing, Hubei, Guangdong and Shenzhen launched a pilot program of carbon emission rights trading. At that time, the quotas could not be circulated between the pilot projects, the carbon prices were also varied, and the overall liquidity was poor. At the end of 2020, the "Implementation Plan for the Setting and Allocation of the National Carbon Emission Trading Quota" was issued. In the early stage, only 2,162 key emission units in the power generation industry were included, covering about 4.5 billion tons of carbon dioxide emissions , becoming the world's largest carbon market.

Around the world, the carbon emission trading system basically follows the Cap and Trade rules, that is, at the beginning of the performance period, the government sets the total emissions in a region, and then allocates them according to the actual emissions of the emission-controlled enterprises. The ultimate allocation to the enterprise is the "currency" in carbon trading - quota. For real enterprises, carbon quotas have become a special asset, namely "carbon assets".

trading of carbon emission rights is a gradual process. Previously, most of the quotas in the carbon emission market were free quotas, and a small amount of quotas were bidding. "We are still in the stage of laying the foundation, and the accounting system rules and evaluation methods of Chinese-style are still in the process of improving."Zou Juan, partner of Bain Company, chairman of China's sustainable development business, and chairman of the energy transformation business in Greater China, introduced. According to the " Greenhouse Gas Accounting System ", the emissions of greenhouse gas are divided into three scopes: scope 1, direct greenhouse gas emissions, including emissions generated by emission sources directly controlled or owned by accounting companies; scope 2, refers to indirect greenhouse gas emissions generated by purchasing power, etc.

scope 3, other indirect emissions, including emissions caused by upstream raw materials production, emissions from products and services sold, etc.

Compared with this system, carbon assets in different industries are also different. According to Zou Juan introduced: Most industries such as steel, cement, coal chemical industry, etc. focus on one scope of the first, namely process improvement in their own production process. The technology industry mainly considers high-energy-consuming data centers. For light industries such as consumer goods, it is more necessary to empower the upstream and downstream of the production chain, make certain requirements for suppliers, and at the same time educate and influence downstream consumers.

Different types of enterprises have different levels of demand in carbon reduction. The establishment of the national carbon trading market, using market financial means to regulate the carbon reduction needs of various enterprises at different stages, has also created new business opportunities.

"First, ESG services, from consulting services, technical services, to third-party management, will tend to prosper. Second, it is beneficial to green technology, energy-saving and environmentally friendly technologies. Third, it is beneficial to new energy and industrial chain sectors related to new energy, including complete vehicles, photovoltaic wind power generation , inverter , energy storage, upstream key components and other industries. Fourth, the assets and power services of Green Electric , including electricity monitoring, management and services of power assets and green assets, are all real business opportunities. "Zou Juan introduced.

settled on both parties to the transaction, and quota sellers can also increase profits by selling quotas. And quota buyers buy quotas and internalize them to increase costs, and this process can also generate benefits. For example, two years ago, Tesla made the first profit for the sale of carbon emission points, and achieved revenue of US$1.58 billion in one year, exceeding twice its annual profit.

from "surface" to "internal"

For a long time, carbon emissions were often classified as " corporate social responsibility" Let consider it, but it has not been truly included in the production and business strategy , and scientifically calculate and plan the "carbon cycle". Therefore, many market voices have questioned that ESG has become a "face project" in practice, serving corporate image management.

However, with the gradual improvement of carbon asset standards and the establishment of the carbon trading market, this problem is being improved.

"For enterprises, emission reduction investment should be part of operating costs, and economic accounts have not been considered in the past. Now we have a high awareness of emission reduction, and emission reduction should be regarded as cost and is not optional. "Tong Fu said. The starting point of the design of

carbon market is to realize that administrative orders are not enough to promote the goal of carbon reduction, and they also need the assistance of economic and financial means. Under the current mechanism design, if a company's carbon emissions are below the average level, or the data after technology investment and emission reduction decline, then the "carbon quota" produced by rich people can also be compensated after selling it. In fact, looking at the world, although the trading rules and prices of carbon markets in various countries vary greatly, the establishment of unified carbon emission standards and carbon quota trading are propositions that are widely concerned. Affected by factors such as trade, EU carbon border regulation mechanism (CBAM), the accounting standards for carbon quota are also on the road to accelerating unification and mutual recognition in all countries.

Take the EU as an example and clearly requires the first batch of mutual recognition pilot projects for carbon quota accounting starting from January next year, mainly targeting steel, aluminum, cement, fertilizer and other products, and a timetable for actual implementation in 2026 is given. At the same time, the EU requires that the carbon footprint of import and export companies and the carbon price they have paid in their own country must be disclosed, and carbon certificates that match the amount of carbon footprint should be purchased.

On the other hand, for companies doing global business, it is very important to understand the ESG rules and dual carbon gameplay of the target country, understand the carbon transactions and the carbon tax and carbon tariff that it triggers. "Some consumers in the target market care more about the environmental protection of product service design. In these aspects, they really need to know themselves and enemies." Zou Juan said.

For example, in the just-passed financial report season, foreign environmental protection organizations found that while lululemon is crazily attracting money, greenhouse gas emissions are also rising, with emission density 9% higher than in 2020, which has triggered a wave of global protests.

On September 17, more than 1,500 protesters from more than 30 countries signed a statement: requiring the lululemon factory to convert from traditional energy to clean energy by 2030. Although lululemon had previously had a "plan to reduce fossil fuel emissions", consumers believe that this is just a marketing rhetoric. For a brand that once used the "advanced" values ​​of health, trends, and care about the community to attract customers, the "stain" of values ​​is unforgivable.

Previously, in Bain's survey, more than half of the surveyed technology Internet companies said: Compared with the current plan, the proportion of renewable energy used will increase by 0% to 25% in 2030, and 10% of technology Internet companies plan to increase by more than 50% of renewable energy.
"We have observed that many leading and leading enterprises in China's industries have begun to do more or less with the "inside" things because of their demonstration effect and close contact with consumers." Zou Juan said.