Seizing the opportunity in carbon trading

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This post was last edited by yuchenchf on 2016-12-16 at 11:02. Excessive emissions of carbon dioxide will cause large areas of land to be flooded and lead to a severe deterioration of the Earth’s ecological environment. Carbon dioxide is the main greenhouse gas; it has a warming effect. An increasing level of carbon dioxide in the atmosphere causes the surface temperature of the Earth to rise gradually, leading to the greenhouse effect, global warming, melting glaciers, and rising sea levels. Rising sea levels will flood large areas of land, having a significant impact on the human living environment. At the same time, the large amount of fresh water poured into the ocean also damages its ecological environment, representing a catastrophic disaster for marine life. When the volume percentage of carbon dioxide in the air is 1%, people will feel short of breath, dizzy, and have palpitations ； At 4%-5%, people experience dizziness ； When it exceeds 6%, a person will lose consciousness, breathing will gradually stop, leading to death. Our country needs to control energy consumption in order to reduce environmental pollution and help bring carbon dioxide emissions to their peak at an earlier stage. The Kyoto Protocol came into effect in February 2005, and it is hoped that international cooperation will help to curb the greenhouse effect caused by excessive carbon dioxide emissions. In our country, the situation regarding energy transition and environmental protection is even more severe at present, and achieving the **set goals for energy conservation and emission reduction, as well as the related tasks, represents a major issue in current economic development. **Use carbon emission trading as an important management tool to control the total energy consumption and promote the development of an ecological civilization. The implementation of a national carbon trading market is approaching. To achieve the goals of reaching a peak in carbon dioxide emissions by 2030 and reducing the carbon emission intensity by 60%–65% compared to 2005, China is **actively working to establish a unified national carbon market, with such a market set to be in place in China by 2017**. In simple terms, “carbon trading” means that if a company’s carbon emissions exceed the allowed limit, it must purchase credits from other companies that have lower carbon emissions. Companies that carry out energy-saving upgrades, reduce carbon emissions, and exceed their carbon reduction targets can sell the remaining carbon credits to those who have failed to meet their targets. Public information shows that the carbon price for transactions in various pilot programs across the country is currently around 15–30 yuan per ton. From its launch in 2017 until the end of 2019, the national carbon market was in its initial phase of operation; as a result, the carbon price remained at a low level of 30–100 yuan per ton. However, according to preliminary estimates by the National Development and Reform Commission, in the long term, a carbon price of 300 yuan per ton is the level that can truly serve to promote low-carbon and green development. The opening of the carbon trading market represents a new opportunity for companies to generate revenue, and it will also serve as a turning point in their development. Statistical data shows that 43.7% of the total heat energy generated by steam boilers in the United States is wasted. In comparison, the heat energy waste in China’s steam systems is certainly higher than 43.7% in the United States, meaning there is greater potential for energy savings. Taking an enterprise with an annual standard coal consumption of 30,000 tons (and a steam consumption of about 25 tons per hour) as an example, based on an energy-saving potential of 43.7%, 1) the enterprise can save 13,110 tons of standard coal per year. Since industrial boilers produce 2,620 kilograms of carbon dioxide per ton of standard coal burned, it can be calculated that enterprises can reduce carbon dioxide emissions by 34,348 tons per year (2.62 × 13,110) tons. Based on the information above, if the carbon price is 200 yuan per ton, enterprises can earn an additional 6.87 million yuan per year through carbon trading ； 2) A 43.7% energy-saving effect results in a savings of 11 tons of steam per hour. At a steam price of 300 yuan per ton (the price of steam has risen significantly after switching from coal to gas for boiler operation; 300 yuan per ton is used as an estimate for now), energy-saving upgrades to the steam system can save more than 27 million yuan in steam costs each year. Therefore, since 2017, with the implementation of carbon emission trading, an enterprise that currently consumes about 25 tons of steam per hour can achieve economic savings of over 33 million yuan per year through the optimization and renovation of its steam system. It is evident that the regulation of carbon emission rights and the opening up of carbon trading markets offer new opportunities for energy-intensive enterprises. Of course, opportunities come with risks; the control of emission standards and the significant increase in costs associated with excessive emissions pose challenges to a company’s management capabilities, initiative, and execution skills, thereby increasing the risks to the company’s survival. This helps to eliminate those with low energy efficiency and encourages the development of those who use energy efficiently, in line with the principle of survival of the fittest as well as China’s 13th Five-Year Plan and its **long-term development strategies. Opportunities for growth come with the risk of being eliminated; a company’s choices and actions determine its own fate. Seize the opportunity in carbon trading – there’s no time for hesitation or waiting!