Unified National Carbon Market to be Started Soon, Industrial Bank Gaining Momentum

(Reporter: Ouyang Jie) The construction of a unified national carbon market has entered the countdown stage. The National Carbon Market Capacity-Building Center (Shenzhen) was inaugurated in Shenzhen Emissions Exchange on March 19. The National Development and Reform Commission recently also said it would introduce Carbon Emissions Trading Regulations and supporting implementation details as soon as possible, to ensure that by 2017 a nationwide carbon emissions trading market can be launched and operated.

Industrial Bank (IB), which has actively involved in the carbon market and boosted domestic carbon trading market construction since 2007, has occupied first-mover advantages over carbon finance services. With the recent agreement signed with Beijing Environment Exchange and the strategic cooperation regarding carbon emissions trading pilot in Beijing, Industrial Bank now achieved full coverage in all national carbon emissions trading pilot areas.

The so-called carbon emissions, refer to the total amount of greenhouse gases emitted during energy consumption, including carbon emissions for sale and carbon emissions required. According to their carbon emission quota, energy users can trade excess quota; if the original carbon emission quota of other users are not enough due to expanded production, they can purchase carbon emissions via transactions, thus forming a carbon emissions trading market.

In 2011, our nation decided to carry out carbon emissions trading pilot in Beijing, Shanghai, Tianjin, Chongqing, Guangdong, Hubei and Shenzhen, marking an official start for domestic carbon trading market. After development of several years, the exploration of carbon trading mechanism has made significant progress. As of the end of August 2015, the accumulated local quota transacted in seven national carbon emissions trading pilot areas reached about 40.24 million tons with a turnover about 1.2 billion yuan, an accumulated auctioned quota about 16.64 million tons and the turnover of about 800 million yuan In 2015, the performance rate of pilot areas reached 98%.

'We currently have signed cooperation agreements with all the seven regional carbon emissions trading pilot areas and achieved thorough cooperation with national carbon emissions trading pilot. We are well prepared for a national carbon emissions trading market.' said Fang Zhiyong, GM of Environment Finance Dept. of IB.

According to him, the Industrial Bank has in-depth cooperation with domestic carbon emissions trading markets, providing them with a package of energy saving products and services including carbon trading system design and consulting, trading and clearing system development, carbon asset pledge and credit extension, and financing for energy saving and emission reduction projects. Based on the progress of carbon trading pilot, IB will provide various exchanges in the market of carbon emissions trading with integrated solutions covering domestic carbon trading market platform and mechanism design, the development of carbon trading system as well as clearing, settlement, national account opening agency, money management and financing supporting services for carbon trading.

In fact, the bank was involved in carbon market as early as 2007 by developing a carbon assets evaluation tool independently and leading the way to provide international comprehensive carbon finance products and services for front, middle and back office in carbon trading. For example, it innovated in, developed and implemented China's first international carbon assets pledge and credit extension business; established long-term cooperative relationship with a dozen of most active buyers of international carbon in China, and facilitated the execution of more than ten Emission Reduction Purchase Agreements (ERPA); provided transaction settlement and depository services for China's first voluntary carbon emission reduction transaction; launched the first special management program for carbon finance client's assets……

In November 2014, the Industrial Bank further expanded carbon finance services to individual clients and formally launched China's first bank-based carbon trading agent account system, by which domestic institutions and individuals in the carbon trading market can open accounts directly at Shenzhen Emissions Exchange via the bank's Personal Internet Banking.

In addition to advancement in the field of carbon finance, the Industrial Bank is also leading the way in respect of financial innovation in emission permits. By now, IB has signed all-round cooperation agreements with 9 out of the 11 pilot provinces and municipalities for emission trading in China to provide professional financial services such as consultation and design of emission trading regulations, development of emission trading and settlement system, emission permit pledge and credit extension, and financing for projects that reduce the emission of pollutants, thus actively facilitating the construction of domestic emission trading market.

Industrial Bank Co. Ltd. issued this content on 23 March 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 21 April 2016 10:39:16 UTC

Original Document: http://www.cib.com.cn/en/About_IB/whatxs_new/20160421_1.html