On November 2, 2011, Industrial Bank Shanghai Branch and the Shanghai Environment and Energy Exchange officially entered into a regional strategic cooperation agreement in the field of carbon trading. Upholding the concept of sustainability, both parties will fully employ the market-levering and financing roles of Shanghai as a pilot city for carbon trading and commit themselves to financial innovation and trading services to promote the development of a low-carbon economy. This is an important landmark for Shanghai to stride toward s building the carbon finance center of China.
Under the agreement, both parties are the preferred business partner of each other. Relying on the influence and advantages of the Shanghai Environment and Energy Exchange in the fields of climate and environment domestically, IB Shanghai Branch will make full use its own flexible mechanism, customer resources, operation al network and technological strength and work together with the Shanghai Environment and Energy Exchange to strengthen innovation in financial and trading services, advance the appropriate financial operation of the carbon market, achieve effective low-cost emission reduction at low cost, and explore the construction of a carbon trading market in China. The specific cooperation content is as follows: deposit, settlement, and supervision of trading funds; joint research into financial topics regarding the pilot sites for the trading of carbon credits; and joint efforts to promote the construction of carbon market mechanisms, etc.
The construction of a Chinese carbon market has been put on the agenda. The national “12th Five-year Plan” Outline and Comprehensive Work Plan for Energy Conservation and Emission Reductions during the “12th Five-year Plan” Period both have clear statement on pushing forward the construction of the market for the trading of carbon credits. This April, the National Development and Reform Commission (NDRC) specified that carbon trading pilot sites would be established in Beijing, Shanghai, Guangdong, Tianjin, Hubei, and Chongqing, etc., trying to start carbon trading in 2013 and promote it across China in 2015. However, the construction of carbon trading market is a complicated system project. A common problem facing the government, banks and enterprises is how to full y employ the financing function of the carbon market, ensur ing the eff ectively and fluidity of the market, and enable more available funds to facilitate energy conservation and environmental protection.
As one of the first group of carbon trading pilot cities, Shanghai plans to launch regional carbon trading pilot sites before 2013 at the earliest time. Giving ful ly employing its advantages in resources and intelligence as the financial center of China, the city will launch a range of works regarding the calculation of greenhouse gases emissions, establishment of index -allocating rules, construction of a trading market platform, improvement of supporting systems and capacity building of enterprises, etc., thus building in advance a sound foundation for exploring the construction of a nationwide carbon trading market in 2015. By establishing strategic cooperation, IB Shanghai Branch and the Shanghai Environment and Energy Exchange are jointly committed to driving the appropriate financial operation of carbon trading market in Shanghai and ensuring the stability and trading dynamics of the carbon market, meaning, making valuable attempts at constructing a carbon trading market across China.
As the financial institution giving attention to and lending support to energy conservation and emission reduction with actions, and advocating sustainable finance at the earliest time, IB has always actively exploring financial innovation to support the development of a low-carbon economy and building a professional financial services provider for energy conservation and emission s reduction covering a wide range and the full process. In 2006, the Bank took the lead and release d the energy efficiency project financing program. It became the first bank to provide comprehensive carbon finance services in 2007 and the first Equator bank in China in 2008, and established the only institution specialized in sustainable finance in China in 2009. In 2010, IB released innovative financial products such as carbon capital pledge-based credit extensions, emission right s pledge-based credit extensions, and low-carbon credit card in succession. By September 2011, the Bank had provided over RMB 90 billion in green financ e in total. Recently, as the only commercial bank representative in China, IB was invited by the Clean Development Mechanism Fund (CDMF) of the Ministry of Finance to attend the UN Climate Change Conference (COP17) that will held in Durban in South Africa at the end of November, and the bank will make a them ed speech at the side events held by the Chinese delegation.
The Shanghai Environment and Energy Exchange is the first institution for trading environment and energy rights and benefits in China. Up to now, the Bank has witnessed a realized project total of RMB 32.5 billion, with the traded amount breaking through RMB 7 billion. The holders of personal accounts for voluntary emission reduction projects have gone beyond 210,000. It has become the largest trading market for environment and energy rights and benefits in China, covering the following varieties: projects co vering energy conservation , emission reduction and environmental protection technology assets; contract energy management, clean development mechanism (CDM), and voluntary emission reduction (VER), etc. During the “12th Five-year Plan” period, the exchange will put stress on boosting the construction of a carbon trading market, participate in the design of carbon trading mechanism in Shanghai and across China, and preparation for carbon trading pilot sites in an active way, and build a world class carbon trading platform and institution for trading environment and energy rights and benefits by way of integrating resources, improving services, and making unceasing innovation.