Diversified carbon trading accelerates China's "dual carbon" goal

TIANJIN, June 7 (Xinhua) -- After investigating the carbon footprint of raw materials, production processes, energy consumption, and other links, and optimizing them in a targeted manner, TUPO Ludricant Co., Ltd. successfully reduced the carbon emissions of products before it neutralized the carbon emissions through the purchase of carbon credits.

Through such procedures, the company has made innovative strides in the development of "zero carbon" lubricating oil products.

"We have chosen two popular engine oil products designed for passenger cars and commercial vehicles. Taking into account the carbon footprint of these products and their estimated annual output, we have purchased corresponding voluntary emission reduction products through the Tianjin Climate Exchange to achieve the carbon neutrality of the products," said Li Chunqing, executive general manager of TUPO Ludricant Co., Ltd. in Greater China.

Li said the attempt at "zero carbon" engine oil is of great significance as it not only leads the industry's development but also serves as a guiding force for downstream companies in adopting low-carbon processes.

The TUPO Ludricant Co., Ltd. is among numerous companies in China pursuing the green path, as the country has been steadfast in its commitment to ecological priority, emphasizing low-carbon development. China has set ambitious goals of achieving a carbon peak by 2030 and carbon neutrality by 2060, taking a prominent role in the global fight against climate change.

In line with these goals, China has made unwavering efforts to develop its carbon trading market. It piloted carbon emission trading in seven provinces and cities in 2011 to explore market-based mechanisms to control greenhouse gas emissions. A national carbon emission trading market was launched in 2017.

Now, the country's carbon trading market has evolved into a more mature mechanism that promotes environmental protection through market-based approaches.

Data reveals that as of May 2022, the cumulative volume of carbon emission allowances in the national carbon market is about 235 million tonnes, with the turnover amounting to nearly 10.79 billion yuan (about 1.52 billion U.S. dollars).

Carbon trading enables the demand side to achieve emission reduction targets, while the supply side reaps economic benefits from participating in carbon trading.

In 2022, Huaneng Power International, Inc., as one of the power generation enterprises participating in the national carbon emission trading market, generated approximately 478 million yuan in revenue from selling carbon emission quota.

As the company also incurred an expenditure of around 104 million yuan for purchasing carbon emission quotas, it achieved a net income of 374 million yuan, making it the listed power company that gained the most benefits from the national carbon trading market that year.

Alongside quota carbon trading, the voluntary carbon trading market has emerged as an essential avenue within the carbon trading landscape due to its wide range of participants and diverse array of products. Among them, the forestry carbon sink sector stands out as having tremendous potential.

As of the first quarter of this year, east China's Fujian Province has successfully completed forestry carbon sink trading and re-trading amounting to over 4.05 million tonnes and involving more than 62.67 million yuan. Also, provinces such as Guangdong and Shandong have prioritized the innovation of forestry carbon sink practices to support the promotion of green transformation.

According to Niu Guimin, a researcher at the Tianjin Academy of Social Sciences, promoting diversified carbon trading varieties and trading methods is considered a prevailing trend.

Data from the National Forestry and Grassland Administration shows that over the past 30 years, the country has experienced a consistent "double growth" in both forest area and forest volume, with the forest coverage rate reaching 23.04 percent.

"Environmental protection and afforestation are China's contributions to the world. Through initiatives such as the forestry carbon sink trade, a promising future emerges where the integration of ecological value and economic value becomes apparent," Niu said.