Core Viewpoint - The EU's Carbon Border Adjustment Mechanism (CBAM) will officially enter its "charging period" on January 1, 2026, initially covering six product categories: steel, cement, aluminum, fertilizers, electricity, and hydrogen. By 2028, the scope is expected to expand to approximately 180 downstream products, including washing machines and automotive parts, creating a comprehensive "green bill" that impacts both raw materials and finished products [1][2][4]. Group 1: CBAM Implementation and Scope - The CBAM's product coverage and execution timeline have become clearer, with a transitional phase from 2023 to 2025 focusing on carbon data research, leading to formal implementation in 2026 [2][3]. - The CBAM will charge for direct and indirect emissions from cement and fertilizers, while steel, aluminum, and hydrogen will not incur charges for indirect emissions [3][4]. - The EU plans to expand the CBAM to include downstream products related to steel and aluminum, with a total of 180 new products expected to be added by 2028 [3][4]. Group 2: Impact on Chinese Enterprises - Chinese enterprises exporting to the EU will need to establish differentiated carbon emission data management systems to comply with CBAM, particularly focusing on direct and indirect emissions [7][10]. - The introduction of a 50-ton annual import exemption threshold will significantly reduce the compliance burden for small and medium-sized enterprises, with approximately 90% of importers expected to be exempt from CBAM obligations [4][5]. - Major Chinese suppliers of steel and aluminum, such as China Aluminum and Nanshan Aluminum, may not be significantly impacted by CBAM due to their limited export volumes and ability to track production data [6][10]. Group 3: Carbon Footprint Regulations - The EU has introduced new battery regulations that require carbon footprint labeling, which will become another compliance requirement for exporting companies [8][9]. - The carbon footprint label will consist of four components, including a declaration of the battery's lifecycle carbon footprint, although the specific accounting methodology is still not defined [9][10]. Group 4: Strategic Responses and Advantages - Chinese companies are encouraged to adapt to EU standards and establish low-carbon supply chains to mitigate compliance risks while actively participating in international carbon rule-making [10][11]. - China's proactive approach to low-carbon transformation, including significant progress in energy structure and early adoption of low-carbon practices in industries like steel, positions it favorably against stricter EU regulations [10][11].

Report Summary 1. Report Industry Investment Rating - Not provided in the given content 2. Core Viewpoints - On December 31, 2025, the domestic commodity futures market ended its trading year. Basic metals led the gains, while precious metals led the losses. Throughout the year, some commodities like Shanghai silver and gold had significant increases, while others like alumina had large drops. The oil prices decreased over 10% in 2025. Different commodities are expected to have different trends in the future based on their supply - demand situations and geopolitical factors [5][6] - The geopolitical situation, especially the events in Venezuela and the Russia - Ukraine conflict, has a great impact on the commodity markets, especially on crude oil and related products [11][14] 3. Summary by Related Catalogs 3.1 Commodity Performance - On December 31, 2025, basic metals had the highest gains, with Shanghai nickel rising 2.44%. Non - metallic building materials all increased, with glass up 1.30%. Most new energy materials rose, with polysilicon up 1.03%. Most oils and fats and oilseeds increased, with soybeans up 0.88%. All shipping futures rose, with the container shipping index (Europe line) up 0.52%. Precious metals had the largest declines, with platinum down 12.04%. Most energy products fell, with low - sulfur fuel oil down 2.17%. Most black series products declined, with coke down 1.25%. Most chemical products dropped, with ethylene glycol down 0.81%. Most agricultural and sideline products decreased, with corn down 0.67% [5] - Throughout 2025, Shanghai silver soared about 125%, Shanghai gold rose over 55%, and lithium carbonate rose over 54%. Alumina dropped nearly 46%, leading the decline [6] - On December 31, in the domestic futures market, Shanghai nickel and Shanghai aluminum rose over 2%, while platinum, palladium, and low - sulfur fuel oil had large drops. In the A - share market, the Shanghai Composite Index rose 0.09%, while other major indices mostly declined. Treasury bond futures all closed down [8] 3.2 Market Analysis 3.2.1 Crude Oil - OPEC + 8 additional voluntarily - reducing oil - producing countries reaffirmed to suspend production increase in the first quarter of next year. The peak season of crude oil demand ended, with US crude oil and refined oil inventories increasing. US crude oil production decreased slightly but remained near the historical high. The Russia - Ukraine peace talks made progress, but the EU extended sanctions against Russia. The US - Venezuela military confrontation intensified, causing concerns about Venezuelan exports. The global crude oil market is in a supply - surplus situation, and crude oil is expected to fluctuate weakly [11] 3.2.2 Asphalt - The asphalt开工率 increased 3.7 percentage points to 31.3% last week, higher than the same period last year but at a low level in recent years. The expected production in January 2026 is 200 million tons, a decrease of 7.3% month - on - month and 12.1% year - on - year. The downstream开工率 mostly declined. The national shipment volume increased 11.17% to 27.18 million tons. The refinery inventory - to - stock ratio increased slightly but remained near the lowest level in recent years. Due to the US sanctions on Venezuela, the supply of asphalt may decrease. The northern demand will slow down, while the winter storage demand in the north is being released. The asphalt futures price is expected to fluctuate, and the situation in Venezuela should be monitored [12][14] 3.2.3 PP - As of the week of December 26, the PP downstream开工率 decreased 0.56 percentage points to 53.24%, at a low level in recent years. On December 31, the PP企业开工率 was around 82%, and the production ratio of standard - grade drawing was around 27.5%. The petrochemical inventory is at a high level. The cost - end crude oil price has limited rebound. The supply has new capacity, and the downstream is at the end of the peak season with orders decreasing. The PP is expected to have limited upward space, and the L - PP spread is expected to narrow [15] 3.2.4 Plastic - On December 31, the plastic开工率 rose to around 87%. As of the week of December 26, the PE downstream开工率 decreased 0.62 percentage points to 41.83%. The petrochemical inventory is at a high level. The cost - end crude oil price has limited rebound. There are new production capacities. The downstream demand is weakening, and the plastic is expected to have limited upward space. The L - PP spread is expected to narrow [17] 3.2.5 PVC - The calcium carbide price in the upstream northwest region is stable. The PVC开工率 decreased 1.13 percentage points to 77.23%. The downstream开工率 decreased 0.87 percentage points, and export orders decreased slightly. The social inventory increased slightly and remains high. The real estate market is still in adjustment. There is new production capacity. The PVC is expected to fluctuate [18]

Core Insights - The effectiveness of SBTi targets relies on deep integration with internal KPIs, requiring a comprehensive process of "goal breakdown - indicator design - collaborative execution - dynamic calibration" to embed emission reduction requirements into daily operations [1] - A three-dimensional system of "scope - department - time" is essential for breaking down SBTi targets, ensuring precise alignment between scientific carbon goals and business scenarios [1][3] - The design of KPIs must closely align with SBTi's core requirements, balancing scientific rigor with operational feasibility [3] Group 1: Target Breakdown - Emission targets should be divided into three scopes: Scope 1 focuses on direct emissions from production, Scope 2 on indirect emissions from energy consumption, and Scope 3 on value chain emissions [1] - A cross-departmental responsibility matrix is necessary, with production departments handling Scope 1, administrative departments managing Scope 2, and procurement and sales departments addressing Scope 3 [1] - The breakdown process should consider industry characteristics, allowing high-energy-consuming companies to further dissect production targets by workshop or equipment [1] Group 2: KPI Design - KPIs should be designed to directly connect with SBTi targets, such as "reduction rate of carbon emissions per unit product" for production departments and "proportion of renewable energy" for energy management [3] - Management KPIs should also be included to ensure the execution process is standardized, such as "timeliness of emission data verification" [3] - Short-term KPIs must meet annual reduction progress, while long-term indicators should align with industry decarbonization pathways [3] Group 3: Data Management - A unified carbon emission data management system is crucial for aligning SBTi targets with KPIs, with clear data reporting responsibilities assigned to each department [5] - Standardized data accounting methods should be adopted to prevent discrepancies between targets and KPIs [5] - A real-time data monitoring system is necessary for dynamic tracking of key indicators, ensuring accurate data support for KPI assessments [5] Group 4: Execution Assurance - A comprehensive "responsibility - incentive - adjustment" mechanism should be established to ensure effective execution of targets [7] - Incentive mechanisms should be diversified, rewarding departments that meet KPIs and encouraging employee suggestions for emission reduction [7] - Regular evaluations of KPI performance and SBTi target progress should be conducted to identify execution deviations and implement corrective measures [7]