SRCB (601825.SH, 601825) has recently released China’s Certified Emission Reduction (CCER) pledge loan with future earnings to Jinko Power Co., Ltd., a wholly owned subsidiary of Jinko Power. Based on the trading prices of CCER listed in the China Carbon Emission Trade Exchange (CCETE), SRCB provided a working capital loan to Jinko Power for the daily operation and turnover of the enterprise by accepting the pledge of the future usufruct of the CCER project. This is a new path for enterprises in addition to traditional financing.
CCER, short for Chinese Certified Emission Reduction, is subject to the management by the National Development and Reform Commission (NDRC) in accordance with the Interim Measures for the Administration of Voluntary Emission Reduction Trading for Greenhouse Gases (the Measures). Projects involved in the emission reduction transactions will be converted to CCER projects by going through stages of examination and approval, project registration and issuance by institutions with national CCER examination and certification qualification, and will be filed and registered with the competent national authorities.
According to the Measures, the CCER projects filed with the NDRC can be traded in the trading institutions filed with the competent national authorities, which are carbon assets featuring national credibility and one of the important ways for the realization of carbon assets of the project enterprises.
As a brand-new guarantee resource, CCER future usufruct breaks through traditional loan ideas and revitalizes the enterprises' carbon assets, further promoting the achievement of the goals of carbon peaking and carbon neutrality.
Jinko Power is mainly engaged in the development, construction and operation of various PV plants. At present, its grid-connected installation capacity reaches nearly 3 GW in China and its cumulative power generation exceeds 18 billion KWH, with its PV plants built in more than 20 provinces including Zhejiang, Jiangsu, Hebei, Anhui, Ningxia and Qinghai, etc.
On October 26, the Ministry of Ecology and Environment issued the Notice on the Settlement of Carbon Emission Quotas for the First Performance Cycle on the CCETE, requiring local ecology and environment departments (bureaus) to urge key emission enterprises of the power generation industry to complete the settlement of quotas for the first performance cycle on the CCETE as soon as possible, and to ensure that 95% of key emission enterprises located in the administrative regions complete the performance before 17:00 on December 15, 2021 and that all key emission enterprises complete the performance before 17:00 on December 31, 2021. According to the relevant CCETE rules, emission control enterprises can use CCER to offset, within 5% of, the carbon emission quotas to be settled.
Therefore, CCER has been traded every day since late October this year in the Chinese market, with the single-day trading volume becoming slightly larger. As the performance period of the CCETE is upcoming, the CCER prices have also increased a lot recently, to the current RMB 35 yuan / ton for most circumstances. According to the price estimate of CCER released by the Research Center for Sustainable Development of Fudan University, the bid of CCER is expected to be RMB 39.78 yuan / ton and the ask of CCER is expected to be RMB 41.57 yuan / ton throughout China in December.
