Opportunities for investment in energy efficiency increasing

Energy efficiency is emerging as a burgeoning market with increasing investment opportunities as China pledged to accelerate the formation of a resource pricing mechanism. “Raising prices of rare resources will spur numerous business opportunities in fields like the circular economy, while more expensive carbon emissions will propel more investors to turn to the new energy sector and green transition of the traditional energy sector while attracting more businesses to relevant markets,” said Lin Boqiang, Dean of the China Institute for Studies in Energy Policy at Xiamen University. China has vowed to accelerate the establishment of a resource pricing mechanism that reflects the degree of resource scarcity – as well as the costs of both ecological damage and environmental pollution – at the 27th meeting of the Central Commission for Comprehensively Deepening Reform last week.

“Geopolitical tensions have further accelerated the energy crisis, and remind us of the importance of energy conservation and environmental protection,” said Luo Zuoxian, Director of Intelligence and Research at the Sinopec Economics and Development Research Institute. One of the most effective ways to reduce energy consumption is through price regulations that reflect the degree of scarcity and achieve the purpose of practicing efficient use of resources, Luo said. China plans to reduce energy consumption per unit of GDP by 13.5% and carbon dioxide emissions per unit of GDP by 18% during the 14th Five Year Plan period (2021-25). “China aims to price natural resources properly and systematically as there is growing volatility of commodity prices amid geopolitical tensions, and China has come to value the long-term sustainability of its resources. Otherwise, it is easy for the country to use them up too soon before their long-term value is utilized,” said Wei Hanyang, Power Market Analyst at research firm BloombergNEF.

According to a report by the Qianzhan Industrial Research Institute, China’s market for energy saving and environmental protection will continue to rise, buoyed by the country’s goals to peak carbon emissions by 2030 and reach carbon neutrality by 2060, as well as a series of supportive policies. It expects the industry’s output to surpass CNY19 trillion by 2027, the China Daily reports.