(Yicai) May 27 -- The Chinese government is facing multiple setbacks with the solid implementation of its plan to build around 100 national-level zero-carbon industrial parks by 2030, despite their development becoming a standard initiative for industrial transformation and upgrading across the country, according to several industry insiders.

Local governments can leverage the advantages of zero-carbon parks, including low costs, energy consumption, and carbon emissions, to gather upstream and downstream supply chains, Sun Jie, chief sustainability officer of Chinese green energy firm Envision Group, told Yicai. They can build new green industrial clusters and export hubs, Sun noted.

Almost all of the Chinese mainland's provincial-level regions have incorporated zero-carbon park development into key government work plans since the central government released its plan late last year, according to incomplete data compiled by Yicai. For example, Tianjin aims to build at least two national-level parks by 2030, while Zhejiang province plans to start building 20 parks within this year and foster more than 10 zero-carbon factories.

However, companies are generally adopting a wait-and-see approach toward settling in, with only one firm moving into a zero-carbon park in Chifeng, despite the northern city conducting investment promotion for nearly a year, a person in charge of the park said to Yicai.

Zero-carbon industrial parks require settled companies to conduct coordinated management of energy use and carbon emissions, the person said, noting that the complicated operations and uncontrollable costs have made many of them hesitant about relocation.

Imperfect project planning is another major setback, a power industry expert said. A coastal zero-carbon park was proposed to rely on offshore wind power for clean energy supply during the application phase, but during subsequent advancement, developers found that the project would violate local ecological protection redlines, the expert pointed out.

Poorly conceived planning is quite common, the expert added, noting that other prevalent challenges include insufficient available land around parks, mismatches between park energy demand and new energy supply capacity, and a lack of funding for park renovation.

Deficiencies in data operation capabilities also hold back zero-carbon park construction. Data is critical for park acceptance and carbon asset monetization, yet water, electricity, gas, and heating data in many parks are scattered across different departments, and metering devices for such data at settled firms are also inadequate.

"Many settled companies are reluctant to submit core production and operational data to park operators over concerns of trade secret leaks," said Xie Qiuye, former president of the Power Planning & Engineering Institute. Unified data reporting standards should be formulated at the national or park level, accompanied by incentive policies to encourage data submissions, he stressed.

In addition, running a zero-carbon park requires professionals capable of energy storage dispatching, green power trading, energy and carbon data collection, carbon emission accounting, green finance connection, and green certificate management, the Chifeng park head noted. In contrast, existing staff at most industrial parks mainly focus on investment attraction, land allocation, rent collection, and basic property services, resulting in a severe talent gap for green business operation and management, the person added.

Once new energy power accounts for more than 25 percent of the total power in the grid, relevant regulation costs will surge exponentially, Yuan Bo, deputy director of the State Grid Energy Research Institute's Energy Internet Institute, said to Yicai. This will not only drive up electricity costs for park users but also significantly increase the financial risks and pressure on capital recovery for zero-carbon park projects, which feature long development cycles and heavy upfront investment, Yuan added.

This problem will be particularly prominent in regions with inadequate new energy resources and inflexible power demand, Yuan stressed.

Targeted Countermeasures

Developers of zero-carbon parks need to make efforts in planning, technology, finance, and operation to foster a sustainable development model for parks and settled firms, the experts suggested.

Park planning must be tailored to local resource endowments and industrial features under the principle of "one policy for one park, the power industry expert said. "Zero-carbon parks should first define targeted industries before selecting suitable new energy sources."

In addition, different parks require differentiated green energy management strategies. For example, those hosting export-oriented manufacturing firms shall prioritize green power application and carbon footprint management, while others focused on equipment manufacturing can focus on optimizing time-of-use electricity tariffs and energy use efficiency.

Last week, China issued a new policy to encourage investment in multi-user direct green power connection projects and traceable green production, which addresses a core pain point of zero-carbon parks: enabling multiple companies within parks to access green power efficiently and economically without excessive cost increases.

Financial support for zero-carbon parks should also follow the "one policy for one park" principle, with differentiated financial services for park developers and settled companies, noted Cui Ying, vice president of the International Institute of Green Finance at Central University of Finance and Economics.

Financial institutions can provide full-cycle services for leading settled firms via equity and bond combination financing, Cui said. For small and medium-sized enterprises, customized financing products linked to carbon performance appraisal can be launched to help them tackle difficulties, including insufficient collateral and difficulties in monetizing carbon data, she added.

Last December, Chinese authorities released the list of the first batch of 52 national-level zero-carbon park projects, covering the 31 provincial-level regions and the Xinjiang Production and Construction Corps.

Editors: Tang Shihua, Martin Kadiev