Low-carbon transition of China’s fossil fuel energy state-owned enterprises (SOEs) is the key to achieving the Paris Agreement and China’s commitments. As one of the main sources of global and Chinese carbon emissions, achieving the ” dual carbon ” goal must, first, reduce carbon emissions related to fossil fuel energy SOEs. In this context, IIGF and NRDC have been commissioned by KR foundation to analyze China’s SOE reform process, characteristics and challanges for low carbon transition of the Chinese fossil fuel SOEs. The report takes three typical large-scale fossil fuel energy SOEs in China-National Energy Group, Sinopec Group and China Coal Group as typical cases. The project will provide an essential reference for governments, regulators, financial institutions, and state-owned enterprises to apply green finance and transition finance policies and tools, manage the financial risk and support the low-carbon transition of fossil energy SOEs under the carbon neutrality goal.
The executive summary in English can be downloaded here:
The project was finalized on September 30th, 2021, during the closing seminar. The seminar was attended by experts from financial and academic institutions, NRDC, and China’s fossil energy state-owned enterprises (SOEs) and the research outcomes received high recognition and positive reviews from the experts. Additionally, participants provided valuable insights regarding the content of the research, and put forward their suggestions. The meeting was chaired by Julia Mao, the Director of International Cooperation of the IIGF. The NRDC Climate Finance Analyst, Jia Yang, introduced the project background and emphasized the urgency of conducting similar research. Prof. XU Hongfeng, the Deputy Director of the IIGF, Director of the Energy Finance Research Center, and the project leader, reported on the report’s content and main research outputs.
The report consists of five parts：
1. Importance of the lowcarbon transition of China’s fossil energy SOEs.
2. Current status and challenges
3. Possibe means to promote low-carbon transition
4. International cases of green financial instruments driving the low-carbon transition of fossil energy enterprises
5. Policy recommendations
In the discussion section, LIU Junguang, Vice General Manager of China Coal Finance, emphasized the need to focus on the consumption side of fossil fuels and allign the carbon-neutral policy with national industrial policy and fiscal policy. WANG Haiyan, Department Manager of PetroChina International and LIN Yikai, Director of Research Department of CNOOC Group Office, both discussed the relationships between emissions reduction, energy transition, and energy supply, energy security, energy cost, and price. They noted that need to use greenfinance and transitionfinance is more urgent for electric power enterprises that currently under considerable financial pressure. XIN Zhuoyu, Director of Industrial Economy Research Office, Inner Mongolia Academy of Social Sciences, ZHANG Mingzhe, Deputy Director of Green Finance Department, Postal Savings Bank of China, and CHEN Yaqin, Assistant to General Manager of Green Finance Department, Head Office of Industrial Bank respectively expressed their views on the role of green finance and transition finance and timeline for low-carbon growth of fossil energy SOEs. WU Qi, Director of the China Environmental Law Program at the NRDC, also attended the seminar.