Aerial photo taken on Dec. 15, 2020 shows a solar thermal electricity project in Gonghe County, Tibetan Autonomous Prefecture of Hainan in northwest China's Qinghai Province. Qinghai authorities have been promoting clean energy in recent years. Photo:Xinhua

US companies are rushing to take a slice of China's carbon neutrality markets, which could amount to trillions of yuan by 2030 and cover multiple industries as China strives to meet its carbon emissions peak goal in a relatively short time. 

At two roundtable meetings in East China's Shanghai and Suzhou where China's National Development and Reform Commission (NDRC) briefed business representatives from 75 US companies and institutions that have businesses in China on details of the 14th Five-Year Plan (2021-25), carbon neutrality became one of the most discussed topics as companies are eager to know how they can get business opportunities from China's carbon-reduction efforts. 

Some US companies raised questions on Wednesday about what China's exact carbon neutrality and low-carbon development plans are, how they could influence manufacturing industries, and if China and the US will carry out more cooperation in carbon neutrality and climate change handling.  

Their interest surged after China announced a plan to hit peak emissions before 2030 and for carbon neutrality by the year of 2060, a relatively tight schedule. Detailed plans are now being made by government departments to reach that goal. 

Gao Jian, Deputy Director General of the NDRC's Department of International Cooperation, said during the roundtable meetings that the NDRC is currently formulating a "1+N" policy system on carbon neutrality, where NDRC and other government departments will roll out their own peak carbon dioxide emission plans.

He also noted China has established some cooperative mechanisms with the US in the past on carbon issues, and is willing to resume those mechanisms with the US. "We hope that more US companies can participate in China's green and low-carbon development more actively," he said. 

Several US companies told the Global Times that they are already or planning to gear their businesses to cater to new market needs as China moves to carbon emission reduction campaigns. 

Maggie Qian, public relations manager at US water solutions giant Xylem, told the Global Times that they have been upgrading products and solutions to meet customers' increasing needs to reduce carbon emissions and save energy, such as helping polluted water factories manage their equipment in a more energy efficient way. 

"I believe China's gradual rolling of carbon emission policies would generate a large number of new orders, particularly as companies would have to search for intelligent solutions which they might not have cared to use in the past in order to achieve low energy consumption and high working efficiency," she told the Global Times.  

"We are very confident in the Chinese market's potential, which is why we expanded investment in China amid the pandemic by opening new offices in Henan and Shenzhen," she said, adding that the company not only imports technologies into China from the US, but also exports technologies developed by Chinese research teams. 

Zhao Qiang, director of US manufacturing giant Minnesota Mining and Manufacturing, told the Global Times that the company is looking forward to learning more details about China's carbon neutrality proposals, which he said the company will use as reference to research relevant products as well as solutions to meet the country's market demands. 

Likewise, US air-conditioning giant Carrier also disclosed an ambitious plan to help its customers reduce carbon emissions by a trillion tons, Yang Weina, government affairs director of Carrier, told the Global Times.

"Competition in China's air-conditioning market has been neck-and-neck in the past years, but if the government raises requirements for energy efficiency, it will give a prominent advantage to companies that have higher technologies, instead of being just buried in price competition," Yang said. 

Experts said that China's carbon plan is of great interest to overseas companies as it could help unlock a massive market, and overseas companies could make huge profits on that even with the fierce competition they will have to face from Chinese firms. 

Guo Haifei, deputy director of the green innovation center under the Investment Association of China, told the Global Times that carbon neutrality and related markets could amount to trillions of yuan as of 2030 given conservative calculations, if 50 percent of Chinese companies will complete their green transformation by that time. Industries like energy, transportation and infrastructure will mostly benefit.

Photo: Courtesy of NDRC

Fierce competition

However, China's gesture to welcome US companies in carbon industries is in contrast with the US government attitude. Although it has shown some willingness to cooperate with China on climate issues, it also shows distrust and a crackdown trend. 

US special presidential climate envoy John Kerry recently signaled that a carbon tariff is "out there," not ruling out the possibility that it might enforce tougher climate trade terms on China, according to media reports.

"The actual possibility of a carbon trade war is small as the US, with environmental protection as one of its core strategies, must cooperate with China. But it's using carbon issues as a political crackdown tool, which shows its arrogant and bossy attitude," Gao Lingyun, a trade expert at the Chinese Academy of Social Sciences in Beijing, told the Global Times.

Gao also said it reflects the fierce competition between the two countries' green economies, as the US has fears about the similar technology level between China and the US, instead of a huge technology gap 10 years ago.

Gao also stressed that most players in China's carbon market will still be domestic companies, as China's green technology is already among the best in the world, and overseas companies may not adapt to domestic policies as fast as domestic ones. 

"It's unlikely that overseas companies will get more than 30 percent of the total market share, but certain overseas companies with tech reserves might stand out and get ample profits from the business," he said.