The Zhitong Finance App learned that in order to promote the shift from dual control of energy consumption to dual control of carbon emissions, the inclusion of carbon quotas in the eight energy-intensive industries is expected to accelerate, and CCER will also be an important supplement. China's carbon market construction will be increasingly improved. It is recommended to focus on the carbon market industry chain: Xuedilon (002658.SZ) (carbon monitoring), Ruichen Environmental Protection (301273.SZ) (energy-saving equipment), Baichuan Changyin (300614.SZ) (blue gas and flame power), Holdings (000968.SZ) (coalbed methane extraction), Mountain High Ring Energy ( 000803.SZ) (waste oil utilization), high energy environment (603588.SH) (metal recycling).
Haitong Securities's main views are as follows:
CCER has restarted to improve China's carbon market, and the “Interim Measures on the Administration of Voluntary Greenhouse Gas Emissions Reduction Transactions (Trial)” (Draft for Solicitation of Comments) has made significant changes.
Recently, the second session of the Central Committee on Comprehensive and Deepening Reform emphasized the gradual shift from dual control of energy consumption to dual control of carbon emissions, strengthening basic capacity building for dual control of carbon emissions, and improving various supporting systems for dual control of carbon emissions. According to the Bank's comparison with the original “Interim Measures on the Administration of Voluntary Greenhouse Gas Emission Reduction Transactions”, there are the following key changes: 1) In addition to the original carbon dioxide, methane, nitrous oxide, HFC, perfluorocarbons, perfluorocarbons, and sulfur hexafluoride, nitrogen trifluoride has been added to the original “Interim Measures on the Administration of Voluntary Greenhouse Gas Emissions Reduction Transactions”. 2) The competent authority was changed to the Ministry of Ecology and Environment, which organized the establishment of a national registration and trading agency. 3) Applications for new methodologies can no longer be filed by other developers; the Ministry of Ecology and Environment organizes the formulation of new methodologies. 4) The emission reduction time requirement for projects applying for registration is after (September 22, 2020) and within 5 years before the project application registration date.
The CCER stock has mixed methodologies, and it will take time for the new methodological system to develop.
According to the Ministry of Ecology and Environment, the CCER methodology is an important basis for guiding the development, implementation, accounting and verification of voluntary greenhouse gas emission reduction projects. According to the bank's statistics, a total of 12 methodologies have now been filed, covering 200 methodologies, covering 29 different areas of emission reduction. Among them, the top five methodological fields are electricity (15%), methane (10%), transportation (9%), biomass energy (8%), and chemicals (6%). According to an exclusive interview with Li Gao, director of the Climate Change Response Department of the Ministry of Ecology and Environment, the first batch of project methodologies collected more than 300 methodological suggestions, according to the official account of the Special Committee on Carbon Neutrality, citing the 21st Century Economic Report. Methodologies with obvious emission reduction effects, high social expectations, low technical disputes, reliable data quality, and both social and ecological benefits will be published on merit. The bank believes that the original CCER inventory methodologies for filing are numerous and complex, that some of them are not very operable, and that with the advent of new emission reduction technology, it will take time for the competent authorities to reorganize and confirm the new methodologies.
The supply side of CCER is expected to be around 180 million tons.
According to the International Institute of Green Finance of the Central University of Finance and Economics, citing information published on the China Certified Emission Reduction Transaction Information Platform, as of March 2017, China had approved a total of 2,871 CCER projects, with a total emission reduction of 507.17,500 tons. The bank estimates that the 2012-2017 Q1 stock CCER can register emission reduction supplies (excluding registered emission reductions) can reach 42.21 million tons; the second batch of incremental CCER projects can reach 200 million tons (including the supply of forestry carbon sink reforestation projects only). Excluding the issuance of a green certificate to reduce emissions, the bank expects the CCER supply side to reach 180 million tons.
The potential demand range for CCER from 2023 to 2027 is about 200 million tons to 500 million tons.
According to data from the Energy and Environmental Policy Research Center of Beijing Institute of Technology's “China Carbon Market Review and Prospects (2022)”, the first batch of the national carbon market covered greenhouse gas emissions during the compliance season was about 4.5 billion tons of carbon dioxide. According to the bank's estimates, greenhouse gas emissions are expected to cover 45-9.6 billion tons from 2023 to 2027, corresponding to the potential demand for CCER of about 200 million tons to 500 million tons.
The revenue elasticity of hydropower and forest carbon sink reforestation projects in CCER projects is high.
From the perspective of revenue elasticity, according to the bank's estimates, if CCER carbon prices are pessimism/50 yuan/70 yuan respectively, wind power project revenue elasticity is 3%/6%/8%; PV project revenue elasticity is 5%/8%/11%; hydropower project revenue elasticity is 6%/10%/14%; waste incineration power generation project revenue elasticity is 6%/9%/13%; revenue elasticity of coalbed methane power generation projects is 4%/6%/9%; revenue elasticity of forest carbon sink reforestation projects is 5%/10%/13%.
Risk warning:Policy progress fell short of expectations, CCER prices fluctuated greatly, and there were errors in data estimates.