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China's low carbon future
- report from CILE 2012, Beijing

  Photo: A corner of the fair.
  A corner of the fair.
China has mapped out policies in its 12th Five-Year Programme for the development of low carbon industries, with emphasis on energy saving, new energy and new materials.

It's a move to propel low carbon industrial development and a low carbon economy. So, there are business opportunities in a large variety of sectors.

Currently, developed countries, including the US, have increased their input in research and development of low carbon technologies, so aiming at the heights of appropriate technologies. It's a major strategic focus on re-industrialisation and re-vitalisation of the economy.

Under China's policies on energy savings and emission reduction, efforts are aimed at promoting clean energies that include solar, biofuels, wind power and hydropower. These will act as the driving force for growth and transformation of the low carbon economy.

China's low carbon industries are at a nascent stage, but policies are clear. The 2012 China International Low Carbon Industry Exhibition (CILE) held in Beijing attracted a large number of domestic and foreign players.

People in the trade pointed out that the fair demonstrates China's market prospects under low carbon policies.

According to the fair organiser, CILE built bridges in business for enterprises and investors by "combining an exhibition with a forum, publicity, promotion, and projects with products".

Efforts were also made to publicise China's latest policies on "the low carbon economy", energy saving measures and emissions reduction.

Photo: Building materials for a new economy.   Photo: Low carbon products.
Building materials for a new economy.
Low carbon products.

There was emphasis on displaying the experiences and achievements of low carbon development, covering such areas as carbon dioxide utilisation technology, carbon dioxide capture and storage (CCS), as well as services such as climate consulting management, including industrial energy savings and emission reduction plans.

The fair also focused on the savings brought by eco lamps, green lighting products and technologies, biomass energies as well as low carbon technologies and new technologies for energy savings and emissions reduction.

Guests considered "low carbon cities", "low carbon industries" and "low carbon buildings". The government is determined to promote new products and technologies with higher "tech content" in the areas of energy saving, environmental protection, utilisation of resources, cleaner production, new energies and new materials.

Low carbon approach generates opportunities

The concept of a "low carbon industry" is, in fact, very general. Experts at CILE suggested that investors exploring opportunities should not simply focus on a few sectors such as "new energy".

The low carbon concept penetrates almost all industries, which in turn generate greater investment opportunities.

Photo: New building partitions with high energy efficiency.   Photo: New building materials.
New building partitions with high energy efficiency.   New building materials.

For instance, as the policy for popularising the use of energy-saving lamps in Chinese mainland households unfolds, eco light bulbs are expected to drive changes in the design and structure of traditional lighting products.

A new energy-saving lighting product at one booth was a case in point. In terms of structure, both the production and design were not complicated. But as the light bulb was of the new energy-saving type and smaller but many times stronger in output than the traditional bulb, the designer had much more room to consider new materials, design and shape; also, the price was lower than for regular lighting.

Photo: Filtering for a dry toilet.  
Filtering for a dry toilet.  
One expert pointed out that the development of low carbon products is bound to bring about technological innovation, policy change and new business models. This will in turn lead to changes in low carbon industrial structures, energy and related infrastructure.

On the Mainland, where the service industry accounts for less than 40% of GDP, the only way to developing low carbon industries and expand the scale of the low carbon economy is to raise service industries as part of the economic aggregate.

There has indeed been growth in sectors such as innovative financial services, e-commerce and e-payments that are low carbon in nature. These sectors will focus the attention of investors over the next 10 or even 20 years, commentators said.

The current development of China's low carbon industries is of three forms. The first is narrowly based, focusing on clean energy and environmental protection, such as solar energy, wind energy, hydropower and the recovery and treatment of refuse.

The second is the application of energy saving technologies in various sectors. Energy saving is not confined to the manufacturing industries and agriculture, but is also applied in many sectors of the services industries, such as power and water supply.

The third factor covers investment opportunities generated by the state's macro industrial policy adjustments made with a low carbon economy in mind.

Photo: Fire-resistant materials.   Photo: Electric bike.
Fire-resistant materials.   Electric bike.

One exhibitor involved in research, development and production of polycrystalline silicon (the raw material for generating solar energy) said that a few years ago, when the price of this material peaked on the Mainland, it was selling for US$400 per kg and profit margins were high.

As a result, many solar energy enterprises specialising in production and sales of this material mushroomed. But today, as the market has matured, investors have turned to technology and innovation, so the price of polycrystalline silicon has dropped to between US$50 and US$60 per kg, so cutting profit margins.

Low carbon cities gather momentum

As China moves to build "low carbon cities", such projects will be bright spots for investment. However, experts at the fair said the building of these low carbon cities was excessively dependent on the construction of new technologies, while administrative measures for promotion of energy savings are few and far between.

Photo: New energy-saving lights.   Photo: Model of an energy-saving building.
New energy-saving lights.   Model of an energy-saving building.

One expert at CILE reckoned that in the course of China's low carbon development greater importance should be attached to raising the utilisation rate of energy in the urban areas, optimising energy structures and rationalising consumer behaviour.

Also, a sound energy and carbon emission monitoring system would ensure that policies and measures for the construction of low carbon cities would have an increasingly scientific base.

from special correspondent Xu Lin, Beijing

Content provided by Hong Kong Trade Development Council
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