Zhang Weidong: Green finance empowers the green, low-carbon and high-quality development of the steel industry

“The iron and steel industry is an important basic industry of the national economy, and it is also an important field for my country to promote green and low-carbon development. Under the background of ‘dual carbon’, the iron and steel industry is also facing new development opportunities and challenges. Green finance can empower the steel industry to green Low-carbon and high-quality development.” On December 9, Zhang Weidong, deputy secretary-general of the Green and Low-Carbon Financial Industry Committee of the China Energy Conservation Association, made an online report at the on-site launch meeting of the three-year action plan for energy efficiency benchmarking in the steel industry, and pointed out that the current promotion of steel companies The situation facing green and low-carbon development, briefly introduced the development of my country’s green finance, the green finance practice of my country’s banking institutions and iron and steel enterprises, and started from green financial solutions, and put forward suggestions for some green projects in the iron and steel industry.

According to Zhang Weidong, my country is a country with a relatively complete global green financial policy system. After green finance was elevated to a national strategy in 2015, my country issued guidance on building a green financial system in 2016, clearly putting forward the focus of developing green finance. tasks and specific measures to provide policy guarantees for the standardized development of green finance. The Fifth Plenary Session of the 19th Central Committee of the Party and the “14th Five-Year Plan” all proposed that green finance should be vigorously developed. Green finance, as an important starting point for realizing the “double carbon” goal, has ushered in a stage of rapid development. At present, my country’s green finance has formed “three major functions” (resource allocation function, risk management function, market pricing function) and “five pillars” (improving the green financial standard system, strengthening the supervision and information disclosure requirements of financial institutions, improving the incentive and constraint Mechanisms, enriching green financial products and market systems, and expanding the space for international cooperation in green finance), this has become the focus of the financial sector’s strong support for carbon peaking and carbon neutrality.

“Vigorously developing green finance is an inherent requirement for the high-quality development of the financial service economy. As an important participant in my country’s green financial market, banks have continued to explore in the field of green finance, and through green credit, green bonds, etc., to promote low-carbon and sustainable economic development. Development, helping to achieve the goal of ‘dual carbon’. According to the latest data from the central bank, as of the third quarter of 2022, the balance of green loans in domestic and foreign currencies was 20.9 trillion yuan, a year-on-year increase of 41.4%. Among them, the total balance of green loans of the six major state-owned banks was 11.51 trillion yuan, accounting for about 55% of my country’s green loans. The national joint-stock commercial banks’ green credit growth rate is relatively fast, and the growth rates of China CITIC Bank, Minsheng Bank, and Ping An Bank are all over 50% compared with the end of the previous year. At the same time, the Chinese people’s Banks have created carbon emission reduction support tools and special refinancing to support the clean and efficient use of coal to support the economic transition to green and low carbon,” he said.

“In recent years, China’s iron and steel enterprises have also carried out a lot of green financial practices.” Zhang Weidong continued, “First of all, local governments actively guide financial institutions to support the development of iron and steel enterprises through green credit. Taking Hebei Province as an example, banks in Hebei Province actively To support the transformation and development of the steel industry, a total of 29.464 billion yuan of green credit was issued in 2015. Secondly, the steel industry has a long industrial chain and a large volume, so some innovative financial services have also been developed. For example, the total investment is about 100 billion yuan, The Zhongtian Green High-quality Steel Project with a planned steel production capacity of 20 million tons is a demonstration project for Jiangsu Province to implement the Yangtze River protection strategy and promote the transfer and upgrading of the steel industry to the coast. Bank of China Jiangsu Branch, Export-Import Bank Jiangsu Branch and other 8 banks A syndicate of banks was formed to provide financing for the project, with a total amount of 17 billion yuan, setting a record for the total amount of syndicated loans in Jiangsu Province in 2021. Finally, Chinese iron and steel enterprises have also made full use of green financial policies in recent years to serve their own green development, such as Hegang , Baotou Steel and other steel enterprises issue green bonds.”

Zhang Weidong said that after entering the “14th Five-Year Plan”, the green development of the steel industry is facing capital needs. “It is necessary to promote the transformation of energy-saving projects, but also to lay out the development of ‘dual carbon’. The capital demand of steel enterprises is very large.” He said. To this end, Zhang Weidong puts forward the following three suggestions:

One is for individual energy-saving and environmental protection projects in the iron and steel industry. On the one hand, steel enterprises can use special green loans from banking financial institutions for financing, and on the other hand, they can also issue green bonds for direct financing by relying on their own resource endowments.Zhang Weidong said that at present, the main financial products supported by banking and insurance institutions for energy conservation and environmental protection include green credit, green leasing, green trust, green investment, etc. Enterprises can choose suitable products according to different projects.

The second is the overall packaging of energy-saving and environmental protection projects. Zhang Weidong suggested that steel enterprises can package energy-saving projects, environmental protection projects, comprehensive resource utilization projects and other projects as a whole, and carry out overall planning, design, investment, construction and operation.At the same time, the above-mentioned green projects can also be packaged according to the production area of ​​the process flow, and can also be packaged as a whole according to the public auxiliary system, organically integrating the projects that can generate cash flow and the projects that do not generate cash flow, and the overall packaged projects can be The business model of contract energy management is adopted, and the green and low-carbon financial industry committee organizes energy-saving and environmental protection benchmarking enterprises to implement it according to market-oriented rules. Benchmarking companies can use their industry experience and brand advantages to integrate green credit, green leasing, financial subsidies, green guarantees and other methods to help steel companies implement green and low-carbon projects with green financial capital and overall services.

Third, for existing green projects in the iron and steel industry, the Green and Low-Carbon Financial Industry Committee will give full play to the advantages of resource pooling, and invest in the green projects that have been implemented by steel enterprises through “asset replacement + technical transformation investment + management optimization” through third-party professional institutions Replacement and operations management.Zhang Weidong said that through this model, win-win development can be achieved: on the one hand, it can improve the financial statements of steel companies, reduce asset-liability ratios, improve credit ratings, and reduce financing costs. At the same time, it can help companies revitalize assets, recover funds, and solve ongoing projects. Capital issues; on the other hand, steel enterprises can reduce operation and maintenance costs and reap environmental benefits by using new technologies, new processes, new equipment, and new systems for technological transformation and professional services.