the china greentech report tm 2009 overview of key findings september 2009
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The China Greentech ReportTM 2009
Overview of Key Findings
September 2009
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The China Greentech Report 2009
The China Greentech ReportTM 2009 is the culmination of an open source, commercial collaboration of leading organizations
The China Greentech Initiative:
Includes over 80 of the world’s leading technology companies, entrepreneurs, investors, NGOs and policy advisors
Represents cross section of global community (1/3rd China, 1/3rd North America, 1/3rd rest of world)
Participants provided time, expertise, introductions, resources and funding
Open and Collaborative Research Process:
Hundreds of people in China and around the world over a nine month period
Input from Initiative’s partners and advisors combined with dedicated strategic research team
Collected and consolidated data from wide range of Chinese and English sources
Conducted interviews with partners, strategic advisors and other industry experts
Facilitated 21 in-person working sessions (3 per sector) to frame and prioritize issues, test preliminary insights and validate findings
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Background
Introduction
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The China Greentech Report 2009
The report addresses important questions facing participants in China’s complex and rapidly-changing greentech markets
How should one frame and define the greentech opportunities that exist in China?
What are the most important environmental issues impacting China and what are the forces driving them?
How are China’s government and the international regulatory community responding to these issues?
Which existing and emerging greentech solutions are most attractive for China in the short, medium and long terms?
What are the biggest challenges facing China’s greentech markets?
How might stakeholders overcome these challenges in order to accelerate China’s greentech market development?
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Key Questions
Introduction
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The China Greentech Report 2009
The findings are largely optimistic, tempered by the complexity of China’s markets and the challenges remaining to be overcome
1. Tremendous Greentech Market Potential Exists
With hundreds of solutions across multiple sectors, the total potential addressable China greentech market could be as large as US$1 trillion annually
2. First Signs of Green Transformation Appearing
China is already laying the foundation for greentech market growth, with first signs of a green transformation already appearing
3. Government Policies Enabling Market
China’s government is implementing policies that positively impact the environment and enable greentech markets
4. Challenges Remain to Be Overcome
While markets are generally attractive, market, technology, financing and regulatory challenges remain to be overcome
5. Clear Opportunities Exist to Accelerate Markets
Clear opportunities exist for stakeholders to accelerate greentech markets and create an environmentally sustainable China
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Key Findings – The China Greentech Report 2009
Key findings
Source: The China Greentech Report 2009
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The China Greentech Report 2009
With hundreds of solutions across multiple sectors, the potential addressable China greentech market could be US$1 trillion annually
Greentech Definition
Technologies, products and services that deliver benefits to users of equal or greater value than those of conventional alternatives, while limiting the impact on the natural environment and maximizing the efficient and sustainable use of energy, water and other resources
Hundreds of Solutions across Multiple Sectors
China’s greentech markets include a broad range of sectors, segments and solutions:– Report focused on seven distinct sectors: Cleaner Conventional Energy,
Renewable Energy, Electric Power Infrastructure, Green Building, Cleaner Transportation, Cleaner Industry and Clean Water
– Identified 300+ greentech solutions available now or soon in China– Evaluated 125 solutions with highest environmental impact and commercial
value
Growth and Environment Driven
Greentech markets driven by China’s continued economic growth and the accompanying environmental pressures
Tremendous Market Potential
Total potential addressable market for greentech solutions in China could be US$500 billion to US$1 trillion annually, comparable to approximately 15% of China’s forecasted GDP in 2013
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China Greentech Market Potential
#1
Key findings – 1. market potential
Source: The China Greentech Report 2009
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The China Greentech Report 2009
China’s greentech markets are driven by continued economic development and the resulting environmental pressures
Economic Growth – Three decades of formidable economic growth have transformed China into a colossal and resilient economy:
– 10% annual growth has created 3rd largest economy and 2nd largest consumer of energy in world– Improved living standards, massive urbanization and emerging consumer market– Resilient economy with world’s largest foreign reserves, 2nd largest stimulus plan and continued growth– Colossal scale in terms of population, infrastructure and energy requirements
Environmental Costs – Yet China’s economic growth has come at significant environmental costs:
– Polluted air (largest emitter of greenhouse gases and significant particulate matter)– Strained water resources (limited fresh water resources, high demand, inefficient use and pollution)– Land degradation (desertification and land contamination)
Vision for Sustainable China – China’s economic development will become environmentally sustainable out of necessity
Greentech Environmental Benefits – Greentech solutions hold the potential to greatly mitigate the impact of economic activities on the environment
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Driven by Economic and Environmental Pressures
Key findings – 1. market potential – economic and environmental pressures
Source: The China Greentech Report 2009
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The China Greentech Report 2009
The first signs of a green transformation are appearing in China, with a number of greentech segments experiencing rapid growth
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First Signs of China’s Green Transformation
Key findings – 2. green transformation – emerging leader
Source: The China Greentech Report 2009
#2
Renewable Energy
Wind capacity grown at nearly 100% annual rate for the past four years Domestic Solar Photovoltaic market growth has accelerated, reaching 50% in 2008 China is worldwide leader in adoption of Solar Water Heaters, with 1 in 10
households using one
Road Transportation
Electric Two Wheelers represent the greatest adoption of battery technology in transportation worldwide
New Energy Vehicles (such as Electric Vehicles and Hybrids) have been announced by a number of auto manufacturing companies as a key focus for future development
Internal Combustion Engines are becoming more fuel efficient and less polluting
EnergyEfficiency
Energy intensity of GDP has been continuously declining for decades Green buildings and sustainable communities are being introduced Energy efficiency of home and office appliances is increasing
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The China Greentech Report 2009
China is rapidly ramping up its power generating capacity from renewable sources, and has established ambitious targets
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Source: 1. Pullen, Angelika et al., Global Wind 2008 Report (Brussels, Belgium: Global Wind Energy Council, 2009), 252. Li, Junfeng et al., China Wind Power Report (Beijing, China: China Environmental Science Press, 2007), 15 3. Renewable Energy World, “China’s New Focus on Solar,” May 22, 2009, http://www.renewableenergyworld.com/ 4. National Development and Reform Commission, Medium and Long Term Development Plan for Renewable Energy in China (Beijing, China: NDRC, September 2007); CGTI analysis
China Wind Capacity1, Gigawatts
12.2
5.92.61.30.80.60.5
2008200720062005200420032002
China Solar Photovoltaic Capacity2,3, Megawatts
150
100807065
4519
2008200720062005200420022000
Source4 2005 Actual
2010 Target
2020 Target
Energy from renewable sources
7% 10% 20%
Hydro power 117 GW 190 GW 300 GW
Wind power 1.3 GW 10 GW 100 GW
Solar PV 0.07 GW 0.3 GW 20 GW
Solar water heating capacity
80 million m2
150 million m2
300 million m2
Biomass power(agriculture/forestry)
2 GW 5.5 GW 30 GW
Bioethanol1
million tons3
million tons10
million tons
Biodiesel0.05
million tons0.2
million tons2
million tons
Key findings – 2. green transformation – emerging leader
#2
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The China Greentech Report 2009
China’s government has established policies which positively impact the environment and enable greentech markets
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Government Policies Enabling Greentech Markets
Key findings – 3. government policies
#3
Source: The China Greentech Report 2009
China’s Supportive Government
Guided by policy principles, China’s government is establishing plans and programs, laws and standards, fiscal incentives and subsidies, industrial promotion and price management policies supporting greentech markets
International Policy Environment Influence
International policy organizations, principles, agreements and relationships are promoting the development of China’s greentech markets
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The China Greentech Report 2009
The Initiative identified 12 overall market, technology, financing and regulatory challenges which remain to be overcome
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Challenges Remain to Be Overcome
Key findings – 4. challenges remain
Source: The China Greentech Report 2009
#4
Category Market Development Challenges
Market Inadequate awareness about greentech solutions Underdeveloped value chains Highly-concentrated markets
Technology More expensive than conventional alternatives Lacks adaptation to China’s specific market requirements Intellectual property and technology transfer issues
Financing Fewer financing options Financing practices lack synergy with greentech requirements
Regulatory
Complex regulatory environment Developing policy incentives Uneven compliance with existing policies Limited policy visibility
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The China Greentech Report 2009
The Initiative identified five overall opportunities to accelerate China’s greentech market development…
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Overall Opportunities to Accelerate China’s Greentech Markets
Key findings – 5. clear opportunities – overall
Source: The China Greentech Report 2009
#5
Overall Opportunities Description
Raise Decision-Maker Awareness
Help decision makers understand the benefits, costs and risks of green technologies
Drive the Maturity of Standards-Based Technologies
Support evolution of standards-based technologies to enable widespread adoption
Support Fair Market Playing Fields
Include costs into regulatory and market frameworks which properly value impacts of pollution and resource use
Enhance Capabilities Build greentech skills necessary to design, develop, market, finance,
implement, monitor and regulate greentech solutions
Promote Collaboration Strengthen collaboration between public and private sectors and
throughout value chains, at all stages of greentech solution life cycles
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The China Greentech Report 2009
… and clear complementary opportunities exist for each stakeholder to accelerate greentech markets in China
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Clear Opportunities Exist to Accelerate Greentech Markets
Key findings – 5. clear opportunities – stakeholders
Source: The China Greentech Report 2009
#5
Stakeholders Key Opportunities
SolutionAdopters
Promote sustainability Buy green Improve compliance
SolutionProviders
Match solutions to local market requirements Educate adopters to greentech benefits Minimize life cycle costs of end-products Leverage partners
Financial Investors
Enhance capabilities Utilize new financing mechanisms Participate in environmental asset markets
GovernmentRegulators
Refine policies Optimize standards Enforce compliance Liberalize markets
OtherStakeholders
Drive greentech training Engage other stakeholders Sponsor research Monitor compliance
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The China Greentech Report 2009
China’s greentech opportunities are tremendous – while challenges remain, clear steps exist to accelerate greentech markets
Tremendous greentech market potential exists for hundreds of solutions across multiple sectors, driven by China’s continued economic growth and environmental challenges
The first signs of a green transformation are appearing, as China is already laying the foundation for greentech market growth
China’s government is implementing policies that positively impact the environment and enable greentech markets
While China’s greentech markets are generally attractive, market, technology, financing and regulatory challenges remain to be overcome
Clear opportunities exist for stakeholders to accelerate greentech markets and create an environmentally sustainable China
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Summary – The China Greentech Report 2009
Conclusion
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The China Greentech Report 2009
This report is a starting point for defining and framing China’s greentech market issues and opportunities
Full version of the report to be released by October
Join the CollaborativeDiscussion on theChina Greentech website
Provide Feedback
Executive Overview of report released today Detailed analyses of seven greentech sectors will be released over
next few weeks
Readers of The China Greentech Report 2009 are invited to join the interactive conversation by visiting www.china-greentech.com:
– Download electronic copies of the Executive Overview, full report and individual sector chapters
– Order printed versions of the report– Access additional content developed by the Initiative– Participate in interactive discussion forums to create, uncover and promote
greentech solutions for an environmentally sustainable China and world
Suggestions for evolving the content in the report are welcome at [email protected]
…
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Path Forward – The China Greentech Initiative
Path forward