Zhitong Finance and Economics learned that Huachuang ** released a research report saying that the cement industry, as a high-carbon emission industry with carbon emissions accounting for 13% of total emissions, is expected to become the first sub-industry in the building materials industry to be included in the national carbon market. According to the analysis of "China's Carbon Market Review and Optimal Sector Inclusion Sequence Outlook (2023)" released by Beijing Institute of Technology, due to the large emissions and low marginal cost of emission reduction, the cement industry is the best choice for the next of the eight high-carbon emission industries to be included in the carbon market, except for the power industry. The carbon trading market is expected to reshape the cost curve of the cement industryIt is recommended to pay attention to the relevant targets with leading emission reduction technology and abundant funds: Huaxin Cement (600801sh) and so on;At present, there is still a lot of room for technological transformation in the cement industry, and the development of carbon reduction technology has broad prospects. It is recommended to pay attention to the leading cement project: Sinoma International (600970).sh)。
The main views of Huachuang ** are as follows:
The expansion of the domestic carbon trading market is imminent, and the cement industry is expected to be included in the national carbon market
In 2021, the national carbon market was launched, and the first batch was only included in the power sector. According to the "14th Five-Year Plan" comprehensive work plan for energy conservation and emission reduction, the remaining seven major industries, including petrochemicals, chemicals, building materials, iron and steel, nonferrous metals, paper and aviation, are expected to be gradually included in the carbon market. In June 2023, the special research work conference on the inclusion of steel, petrochemical, building materials, chemicals, nonferrous metals and other industries in the national carbon market was held one after another, and the expansion of China's carbon trading market is imminent.
As a high-carbon industry with carbon emissions accounting for 13% of total emissions, the cement industry is expected to become the first sub-industry in the building materials industry to be included in the national carbon market. According to the analysis of "China's Carbon Market Review and Optimal Sector Inclusion Sequence Outlook (2023)" released by Beijing Institute of Technology, due to the large emissions and low marginal cost of emission reduction, the cement industry is the best choice for the next of the eight high-carbon emission industries to be included in the carbon market, except for the power industry. At present, the revised "Carbon Emission Accounting and Reporting Requirements Part 8: Cement Production Enterprises" under the auspices of the China Building Materials Federation has entered the revision and approval stage, and the cement industry is expected to make progress in being included in the national carbon market.
Referring to the current pilot situation, it is expected that the carbon quota of the cement industry will be allocated by the baseline method in the initial stage, and the quota will be mainly issued free of chargeHowever, at present, the setting of benchmark values varies greatly from place to place, which may lead to certain uncertainties in the national market for the establishment of unified benchmarks.
The cement industry has broad prospects for carbon reduction, and the difference in carbon emissions of domestic enterprises has been initially highlighted
The proportion of non-energy emissions in the cement production process is relatively high, and it is difficult to reduce emissions. At present, the main emission reduction pathways in the cement industry include: cement reduction, technological transformation to improve energy efficiency, fuel substitution, low-carbon cement technology based on raw material substitution, and carbon dioxide storage and absorption technology (CCUS). At present, the carbon reduction means of China's cement industry are mainly technological transformation, but the potential for technological transformation and carbon reduction is limited. In the short term, raw material and fuel substitution are still the key breakthrough goalsIn the long run, CCUS may still be the back-up technology for the carbon neutrality goal of cement.
At present, the carbon emission difference of China's cement enterprises has been initially highlighted, and the head enterprises represented by Huaxin Cement are significantly better than the industry averageHowever, compared with the major overseas cement leaders, although the energy consumption level of domestic leading enterprises is obviously superior, the level of carbon emissions per unit is not much differentThis difference may be related to domestic and foreign policy guidance and regional resource endowment. With the shift of domestic policy guidance from focusing on dual control of energy consumption to focusing on dual control of carbon emissions and the expansion of the national carbon market, the willingness of domestic enterprises to reduce carbon emissions is expected to increase, driving the carbon emission intensity of the industry to further decline.
Cost perspective: What will be the impact of inclusion in the national carbon market on cement companies?
At present, the carbon quota of cement enterprises in the pilot area is relatively relaxed, and the cost of carbon purchase is lowTaking Tower Group as an example, the company's net purchase of carbon allowances accounts for 0% of the total cost of cement clinker business11%, corresponding to the cost of a single ton of cement is only 03 yuan;However, judging from the experience of the European market, the cost impact of the carbon trading market on cement companies will gradually become prominent.
If the cement industry is included in the carbon market in 2024, it is estimated that under the strict baseline assumption of loose and neutral carbon quotas, the carbon quota gap in the cement industry will be as follows: no impact 034~0.9.2 billion 150~2.0.7 billion tons, the carbon cost increment per ton of clinker is: no impact 304~8.11/13.28~18.36 yuan, considering that the profit of the cement industry has declined significantly throughout the year, the overall profit of the industry may be reduced by more than 15% under the neutral scenario.
From the perspective of enterprises, the cost shock of the carbon trading market is asymmetrical for enterprises, so the industry cost curve may be reshaped
1) The difference in carbon emission reduction will be converted into the cost difference between enterprises in the form of carbon price. For example, in 2022, Huaxin Cement's carbon emission advantage over Shanshui Cement will only correspond to 3The cost advantage of 2 yuan tons of clinker, while the cost difference will expand to 24 under the European carbon price$0. 2) Leading enterprises have financial advantages and the ability to dilute carbon reduction costs.
Taking Huaxin Cement Wuxue Plant as an example, its average annual investment per ton of clinker from 2021 to 2025 and 2026 to 2030 is 545/15.15 yuan, the current industry loss area expanded, small enterprises may be difficult to bear the same cost of technological transformation, and leading enterprises have a strong ability to reduce carbon costs, the cost gap will be further expanded. It is judged that the inclusion in the carbon market is expected to promote the continuous increase in the concentration of the cement industry, and the supply pattern will continue to be optimized under the gradual clearance of small enterprises and the gradual reduction of industry M&A costs.
Risk Warning:
The carbon trading market is not as good as expected, the carbon quota carbon trading fluctuates, and there are errors in data measurement.