Core Insights - The renewable energy green certificate market in China has experienced significant growth in both volume and price, achieving international breakthroughs in 2023 [1][7] - As of September 2023, the cumulative issuance of green certificates reached 7 billion, with a trading scale of 529 million certificates, reflecting a year-on-year increase of 110% [1][3] - The average trading price of green certificates in Q3 2023 was 5.06 yuan per certificate, a 210% increase from Q1 [1][3] Market Dynamics - The growth of the green certificate market is driven by multiple factors, including policy optimization and increased demand due to international recognition [3][4] - The implementation of a comprehensive green certificate policy and the launch of a national trading system in 2024 have contributed to a stable supply of green certificates [3][4] - Price differentiation exists among green certificates from different production years, with the average trading price for 2024 production year certificates at 2.56 yuan and for 2025 at 5.22 yuan [3] Demand Drivers - The demand for green certificates is significantly influenced by corporate commitments to green electricity goals, regulatory requirements for high-energy-consuming industries, and pressure from downstream customers [5][6] - Five key categories of enterprises drive the consumption of green certificates: multinational companies with carbon reduction commitments, domestic companies with green electricity goals, high-energy-consuming industries, upstream suppliers responding to customer demands, and export-oriented manufacturers [5][6] Challenges and Opportunities - Despite the growth in demand, the consumption potential of green certificates remains underutilized, with structural challenges in attracting more buyers [1][5] - The mandatory green electricity consumption policy impacts high-energy industries by increasing operational costs, while also promoting market competition and efficiency [6][7] - The international recognition of Chinese green certificates by RE100 marks a significant step towards global integration, although further improvements in traceability and certification processes are needed [7][8] Future Considerations - Companies are encouraged to align their green certificate deployment with their overall low-carbon development strategies and carbon asset management systems [10] - The transition of green certificates from a cost item to a value item requires careful consideration of economic viability and necessity, emphasizing the importance of green electricity procurement and investment [10]

Investment Rating - The report maintains an "Outperform" rating for the industry [6] Core Insights - The RE100 organization has unconditionally recognized China's green certificate, marking a significant step in the internationalization of green certificates, which will enhance the competitiveness of exports and support the development of green supply chain enterprises [3][18] - The release of the 136 document by Guangdong and Shandong provinces is expected to accelerate the marketization process of the renewable energy industry, shifting companies from reliance on policy subsidies to market competitiveness [4][24] - The recent urban renewal initiative aims to accelerate the renovation of urban infrastructure, including gas, water, and waste management systems, which is projected to enhance operational capabilities of existing waste-to-energy and waste treatment projects [35][39] Summary by Sections Market Review - From May 12 to May 16, the environmental, gas, and electricity sectors saw increases of 0.58%, 0.54%, and 0.09% respectively, while the water sector decreased by 0.43%, against a backdrop of a 1.12% rise in the CSI 300 index [12][18] Industry Dynamics - The green certificate market has seen significant growth, with a total of 5.617 billion certificates issued by the end of March 2025, and a transaction volume of 753 million certificates, reflecting a year-on-year increase of 4.5 times [19][20] - The urban renewal plan includes over 60,000 projects with an estimated investment of approximately 2.9 trillion yuan, focusing on the renovation of aging urban infrastructure [36][39] Investment Recommendations - The report recommends specific companies within various sectors, including Jiangsu Guoxin in the thermal power sector, and suggests cautious investment in companies like Sheneng Co. and Zhejiang Energy [5][24]

Investment Rating - The industry investment rating is "Outperform the Market" and is maintained [1] Core Insights - The report highlights the recognition of China's green electricity certificates by the RE100 initiative, which is expected to enhance the value of green certificates and promote transparency in green electricity consumption [4][5] - The transition from "priority purchase electricity" to "manufacturing consumption" is anticipated to benefit the manufacturing sector's green initiatives and environmental value [5] - The report suggests that the value of green electricity is likely to be reassessed, recommending attention to JinkoSolar [6] Industry Overview - The closing index level is 3153.4, with a 52-week high of 3359.79 and a low of 2868.51 [1] - The relative performance of the industry index shows a gradual improvement from -14% in May 2024 to +16% by May 2025 [3]

Investment Rating - The industry investment rating is "Outperform the Market" and is maintained [1] Core Insights - The report highlights the recognition of China's green electricity certificates by the RE100 initiative, which is expected to enhance the value of green certificates and promote transparency in green electricity consumption [4][5] - The transition from "priority purchase electricity" to "manufacturing consumption" is anticipated to benefit both the manufacturing sector's green initiatives and the representation of environmental value [5] - The report suggests that the value of green electricity is likely to be reassessed, with a recommendation to pay attention to JinkoSolar [6] Industry Overview - The closing index level is 3153.4, with a 52-week high of 3359.79 and a low of 2868.51 [1] - The relative performance of the industry index shows a gradual improvement from -14% in May 2024 to +16% by May 2025, indicating a positive trend [3]