On February 22, 2021, China’s State Council issued its “Guiding Opinions” on accelerating the establishment of a green, low-carbon circular economy.
The Opinions emphasize that China will begin building a low-carbon economic development system and a green and low-carbon value chain to support it. Chairman Xi Jinping pointed out in the 75th UN General Assembly that China will enhance its independent contribution towards tackling the problem of climate change and adopt more effective policies and measures.
As the world's largest paper producing country, China faces a major undertaking when attempting to figure out how to take effective measures to actively pursue a green, low-carbon circular economy. However, the real challenge will be in continuously improving carbon emission-related policies while not negatively impacting economic developments for both upstream and downstream papermaking enterprises.
According to the Carbon Module available via FisherSolve Next, Asia's carbon emission equivalent per ton of paper is the highest in the world. Compared with Europe, Asia's carbon emission equivalent per ton of paper is more than twice that of Europe. Fisher believes that the policy that flows from the Guiding Opinions will impact China’s pulp and paper industry, as manufacturers need to be prepared to:
- Reduce energy consumption and improve energy efficiency. China's paper-making carbon emissions in 2020 will reach 250 million tons of CO2 equivalent, of which 185 million tons will be generated by fossil energy and power consumption.
- Use clean energy. Although the state promulgated the transition from coal to natural gas, most paper enterprises are still in a “wait-and-see” mode of operation due to the increase in energy cost caused by the transition.
- Promote further integration and increased efficiencies across the paper industry. Currently, EU countries have proposed an increase in carbon tariffs on imported products. The collection of carbon tariffs will reduce international competitiveness of China's export paper products.
About the Author
Amy Chu has over 10 years of experience in the pulp and paper industry, with core competencies centering around data mining and analysis, and cost modeling. As a member of Fisher’s consulting team in China, Amy helps clients transition to a managed investment model, now that operational excellence drives decision making among China’s leading paper industry stakeholders.
Using a leveraged consulting approach, Amy supports clients who must quickly understand their competitive position and develop asset optimization strategies in advance of major investment decisions.
Source : Forest2Market