In Sept 2020, China announced its target to reach peak carbon emissions by 2030 and achieve carbon neutrality (net zero) by 2060. China is the biggest CO2 emission country, accounting for 28% of the world’s total emission (although in terms of per capita emission, China ranked 47th). To reduce all this emission while maintaining a high growth rate is a task of tremendous magnitude. In addition, China leaves only 30 years to drop the emission from peak to zero while most developed economies would be 40-60 years, which means much more dramatic changes in policy and technology adoption.

All this will lead to exciting investment opportunities! ATC Sustainable Investment, a new program by ATC Initiative, will capture the various sustainable investment themes in China through our researches, interviews and our Green-Connecting project.

Green Bond

China is the biggest issuer of Green bond worldwide and has an active Green Bond Market with about EUR 125 billion labelled green bonds outstanding. The 2021 new version of The Green Bond Support Project Catalogue issued by PBoC (China Central Bank) adjusted the qualified green industry sectors in line with international standard and made the Chinese green bond more desirable to global climate-aware investors. Various Green Bond Indices issued by China Central Depository & Clearing (CCDC) and other index providers since 2016 and a few Green Bond Funds offerings also provide investors more investment opportunities.

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Listed Equities

As the biggest manufacturing country, China boasts of very complete industry chain for various green business sectors. In Chinese stock market investors would be able to find a good supply of listed companies along each of these industry chains to include in their portfolio. For illustration, we collated the listed equities in the three industry chains: New Energy Vehicles, Solar Photovoltaic, Wind Power.

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Technology Investment

With the increasing demand for energy-saving, low-carbon and emission reduction, Start-ups have emerged as one of the key drivers of cleantech development in China, and we have also seen the presence of venture capital companies behind. China now takes the lead in the clean technology emerging after 2010, more trends can be discovered in the future.

The current cleantech investment themes in China

The Current Cleantech Investment Themes In China

Hydrogen, EV, sustainable agriculture and food, energy efficiency and renewable energy are some current cleantech investment themes in China.

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Green Industrial Park

Green Industrial Park

In order to better support the development of new energy companies, more than 30 hydrogen energy industrial parks and more than one hundred new…

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Renewable Energy Infrastructure

As renewable energy electricity prices gradually enter the era of grid parity in most parts of the country from 2020 in China, renewable energy infrastructure investment has become increasingly attractive due to its stable cash flow prospect and clear policy support. China has already had the world’s largest installed capacity in solar, wind, hydro and bio-mass power generation, at 930 Gigawatts (GW). The installed capacity of solar and wind power is expected to more than double in the next 10 years to reach 1200 GW in 2030, given China’s 2030/2060 commitment.

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Carbon Pricing

The carbon pricing mechanism is an effective tool that can help countries and enterprises achieve a low-carbon economy and reduce carbon emissions. In 2021, China will clearly speed up the construction of the National Emissions Trading System (ETS), meanwhile, the Chinese ETS pilots should gradually be incorporated into the national ETS in the future. We can expect a comprehensive national emissions trading system will be accomplished by the end of this year.

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