轻工造纸行业研究：碳汇行业专题系列一：CCER即将重启，碳汇产业链将如何受益？_21页_2mb

Carbon Trading and CCER Market Analysis Summary

Overview of Carbon Neutrality and CCER

China has set ambitious carbon neutrality targets, supported by a carbon trading market that uses carbon emission allowances to incentivize corporate emission reductions. CCER (Chinese Certified Emission Reduction), a voluntary offset mechanism for carbon trading, was suspended in 2017 due to regulatory and operational issues but is now expected to restart this year. This is driven by inadequate CCER supply relative to growing demand and ongoing policy refinements, which could enhance market liquidity and stability. Forestry carbon offset projects, despite their low current share in previous CCER approvals (around 34%), face strong growth potential due to additional factors like sustained extraord inance and expanding forested areas. Carbon monitoring, as a pre-trading essential, is experiencing demand growth and technological advancements.

CCER Market Outlook

The resumption of CCER is anticipated to revitalize the market, particularly with China's carbon trading expanding to include more high-emission sectors beyond electricity. Current CCER demand, based on a 5% offset allowance for the national market (initially covering 45 billion tonnes of emissions), is around 225 billion tonnes, but this could rise to 35 or 52.5 billion tonnes under neutral or optimistic scenarios for further industry inclusion. With a projected minimum average price of 60 yuan/tonne for CCER (compared to carbon emission allowances at around 541 yuan/tonne), market size could reach 135 billion to 525 billion yuan. In the short term, prices might face pressure but could stabilize or increase due to long project approval cycles. Long-term trends suggest CCER prices may align with tightening carbon cap policies in China, mirroring European successes.

Forestry Carbon Offset Projects

Forestry carbon projects are poised for significant market growth, as they are cost-effective and continue to meet extraord inance requirements better than many other offset types. Current market share is only about 34%, with expansion supported by increasing forest coverage (e.g., China's forest cover hit 24% in 2022) and governmental push for sustainable development. Companies with substantial forest resources, such as Yueyang Paper and Yong'an Forestry, are well-positioned to benefit. As CCER demand rises, forestry carbon projects could see increased validation and economic returns, making them a key subsector.

Carbon Monitoring Industry

Carbon monitoring involves businesses quantifying emissions via methods like nuclear calculation or Continuous Emission Monitoring Systems (CEMS) to support trading activities. The industry is expected to expand significantly as more entities enter carbon trading, with a theoretical market size of approximately 32.7 billion yuan. CEMS adoption is ramping up, driven by regulatory support, and domestic equipment offers competitive advantages in cost and performance, potentially displacing imported devices. This growth highlights opportunities in precise monitoring technologies.

Investment Recommendations

For investors, focus on companies profiting from carbon market expansion:

• Forestry carbon sector: Prioritize Yueyang Paper (YTC) and Yong'an Forestry, with large-scale forest assets and carbon project experience.
• Carbon monitoring: Target Xiodylong, a leader in CEMS systems and environmental monitoring, aided by its technical expertise and government involvement.

Key Risks

Potential disruptions include: delays in CCER approval, oversupply leading to price declines if projects flood the market too quickly, and broader policy uncertainties affecting the carbon trading framework.

For further details, refer to the appended disclaimer and full report analysis.