Global carbon neutrality has established a climate and new energy policy framework. The development of new energy vehicles is a powerful means of achieving carbon neutrality. New energy vehicle companies, represented by BYD, have core technology in the industrial chain and vehicle fields, which will change the future structure of the automobile market

“Investor Network” Zhou Miao

In order to respond positively to the country's “carbon peak by 2030 and carbon neutrality by 2060” goals and promote the full and effective implementation of the Paris Agreement to combat climate change, recently, BYD (002594.SZ) announced the launch of corporate carbon neutrality planning research to explore carbon footprint standards for the NEV industry.

As a staunch practitioner and leader of the green dream, BYD develops green technology products such as photovoltaics, energy storage, electric vehicles, electric forklifts, cloud rails, cloud buses and LEDs to open up all aspects of energy from acquisition and storage to application, providing a package of green overall solutions for cities.

Facing the future, BYD said it will continue to increase technological innovation and resource investment, strengthen energy saving and emission reduction in the upstream, middle and downstream industrial chains, establish a green procurement system for “green suppliers and green raw materials”, study and explore the carbon footprint of core components such as new energy vehicles and power batteries, promote green travel, and strive to become a benchmark enterprise for carbon emission reduction in the NEV sector.

The world starts a race for carbon neutrality

Carbon neutrality means that emissions and absorption of anthropogenic carbon dioxide, the main greenhouse gas, are balanced, so that no new anthropogenic carbon dioxide emissions are added to the atmosphere.

In fact, as early as 2015, countries promised in the Paris Agreement to keep the rise in global average temperature to no more than 2°C before industrialization, to try to keep it within 1.5°C, and achieve the global “carbon neutrality” goal by 2050-2100, that is, the balance between emissions and absorption of greenhouse gases.

Judging from the pace of global energy, major countries around the world have set carbon neutrality targets one after another, and the European Union, Japan, and South Korea will achieve carbon neutrality by 2050. The new European Commission has proposed that Europe will become the world's first “carbon neutral” region by 2050, and has drawn up a detailed road map and policy framework for this.

On December 10 last year, European Commission President von der Leyen said that the leaders of the 27 EU member states had reached a consensus on the EU's long-term budget plan. A total long-term budget of 1.8 trillion euros will be used to build a more resilient, greener and digital Europe.

The Chinese government is also making efforts to this end. In September of last year, China announced the goal of reaching a carbon peak by 2030 and striving to achieve carbon neutrality by 2060.

The country's latest “14th Five-Year Plan” states that in the future, it is necessary to accelerate green and low-carbon development, strengthen laws and policy guarantees for green development, develop green finance, support green technology innovation, promote clean production, develop environmental protection industries, and promote green transformation in key industries and important fields.

At the same time, promote clean, low-carbon, safe and efficient use of energy; develop green buildings; carry out activities to create a green lifestyle; reduce the intensity of carbon emissions, support places that are in a position to do so to reach peak carbon emissions by 2030, and formulate action plans to peak carbon emissions by 2030.

According to Guotai Junan's research report, renewable energy enters a major investment era in the context of carbon neutrality, and industries such as photovoltaics, new energy batteries, wind power, energy storage, and fuel cells directly related to carbon neutrality will usher in huge development opportunities.

The NEV industry plays an important role

Domestically, carbon emissions mainly come from automobile exhaust emissions. According to actual calculations, among all modes of transportation in the country, road transport has the highest carbon emissions, accounting for about 75% of the entire transportation industry. With the increase in domestic car ownership, the carbon emissions from road traffic in China have also been growing at a high rate.

According to industry insiders, as the country proposes carbon peaking and carbon neutrality targets, vehicle emissions will inevitably be subject to stricter supervision. However, the domestic automobile industry is facing the challenge of green transformation, and the NEV industry is playing a critical role in achieving the “carbon peak” and “carbon neutrality” goals.

To this end, the country has also introduced relevant policies for the NEV industry. The “New Energy Vehicle Industry Development Plan (2021-2035)” issued by the General Office of the State Council in November suggests that by 2025, sales of new energy vehicles will reach about 20% of total new vehicle sales; by 2035, pure electric vehicles will become the mainstream of newly sold vehicles.

Furthermore, countries such as Britain and Japan have introduced more clear and stringent policy plans, such as a “fire ban.” The UK proposes to stop selling new gasoline and diesel cars and vans by 2030 (ten years earlier than originally planned); by 2035, sales of hybrid vehicles will be stopped.

Japan, on the other hand, revised the passenger car procurement standards in the “Green Procurement Law”, made it clear that passenger cars must be “electric vehicles” and “next-generation cars,” and removed the words “gasoline vehicles.” Also, starting in February 2021, various ministries and agencies of the central government of Japan will switch from purchasing traditional gasoline-powered passenger cars to electric vehicles.

“Low-carbon development has become a major trend. The energy transition is both a Chinese thing and a global thing.” Minister of Industry and Information Technology Xiao Yaqing said that developing new energy vehicles is the main direction of transformation and upgrading of the automobile industry, and is a strategic choice to promote green development and ensure energy security.

However, in the opinion of industry insiders, it is not only possible to achieve carbon neutrality by simply producing electric models, but it is necessary to control the carbon emissions of automobiles throughout their life cycle. To achieve the goal of carbon peaking and carbon neutrality, the automobile industry needs to establish an innovation system for low-carbon development.

Currently, while domestic and foreign car companies are investing heavily in the new energy industry, they are also scrambling to propose their own carbon neutrality targets. These include multinational car companies such as Volkswagen, BMW, Daimler, Bosch, mainland China, and Tesla, as well as Chinese car brands such as BYD, Geely, and Great Wall.

BYD takes the lead in proposing a carbon neutrality planning plan

As a leading domestic NEV company, BYD has taken the lead in carrying out carbon neutrality planning research, using greenhouse gas management as part of the company's operating activities, establishing a “Greenhouse Gas Quantification and Report Management Procedure”, counting and disclosing its own carbon emissions data to relevant parties every year, and actively taking effective energy saving and emission reduction actions.

In addition, BYD has also implemented the concept of green development into enterprise production and operation, reducing energy consumption and improving energy efficiency through measures such as energy audits, internal audits, energy-saving technology transformation, and employee training. BYD is also continuously reducing energy consumption and carbon dioxide emissions by establishing a green energy management system, promoting renewable energy to replace traditional energy, developing technology and managing energy saving.

Provide a package of green overall solutions for cities

As for the goal of zero carbon emissions, BYD has already implemented a comprehensive zero-emission solution. In 2010, BYD took the lead in proposing the world's first public transportation electrification plan, which is now a global consensus; in 2015, BYD launched a “7+4" full-market strategy to promote automobile electrification in “seven major” conventional fields such as urban commodity logistics and urban construction logistics, as well as “four major” special fields such as warehousing and mining.

In response to carbon emissions reduction in the transportation sector, BYD has introduced three major measures to reduce automobile exhaust: one is to promote the full electrification of buses, leasing, and online car-hailing; the second is to promote the full electrification of urban trucks and special purpose vehicles; and the third is to accelerate the replacement of fuel vehicles by new energy vehicles in the private car sector. These measures will help achieve decarbonization in the fields of public transportation, engineering, and logistics, and ultimately enable automobiles to enter the era of full electrification.

Last year, BYD launched a high-safety “blade battery”, a high-performance silicon carbide chip, and a high-efficiency DM-i super hybrid system, which accelerated the process of electrification of private cars. At present, BYD has sold more than 1 million new energy vehicles (including passenger cars and commercial vehicles) and reduced CO2 emissions by more than 5.48 million tons, which is equivalent to planting 460 million trees.

“Investors Network” learned that during its commitment to green and low-carbon development, BYD was also highly recognized by various circles. As early as September 2015, BYD won the “UN Energy Special Award”, the first award for the new energy industry in the 70 years since the UN was founded; in January 2016, BYD won the “Zayed Future Energy Award” again, the first time a Chinese company has received this award.

Today, BYD's “original intention” has been realized under the global carbon neutrality target, which not only continues the green dream it has always adhered to, but also shows the responsibility of Chinese enterprises. On the path of sustainable development to reduce carbon emissions, BYD continues to increase investment in green technology research and development, accelerate the transformation of clean energy production lifestyles in enterprises and industries, and strive to achieve the zero carbon target. (Produced by Thinking Finance) ■