The Clean Energy Company at the Forefront of China’s Drive to Decarbonize

Hot on the heels of COP26 the need to combat climate change has never been clearer. With its impacts only predicted to worsen, solving the climate crisis has become the most urgent task of our generation. Success requires participation at every level of society.

A growing number of countries have pledged to reach carbon neutrality by the middle of this century, or soon after, with China setting its own target as 2060. It’s an ambitious goal, but can it be done? Mr. Yuying Zhang, President of ENN Energy – one of the leading clean energy suppliers in China – believes it can:

“The climate crisis is one of the greatest challenges of our era. To realize the goal, it’s imperative to transform the energy system, change the way of energy consumption and innovate new energy technology. These initiatives will take time to implement, so we need to set short- and medium-term carbon reduction milestones to get on track to achieve long-term goals.”

ENN, a new constituent stock of the Hang Seng Index in Hong Kong, distributes natural gas (producing 50-60% less carbon emissions than coal, it’s an important step in the transition towards carbon neutrality, especially in developing countries) in 239 concession areas in China, and helps its industrial customers integrate renewable energy and other decarbonization technologies, into their operations.

ENN has developed 139 integrated energy projects thus far, providing tailor-made low-carbon energy solutions to customers including industrial parks, airport terminals, hospitals, manufacturing plants, etc., throughout China. In the latest Top 250 Global Energy Company Rankings released by S&P Global Platts, ENN Energy ranked 67th. With sustainable development a core goal for the company, it’s no surprise that ENN is at the forefront of the nation’s drive to decarbonize.

Mr. Zhang explains: “As one of the leading clean energy suppliers in China, ENN Energy should show a broad and long-term view and take the lead in establishing a clear path of emission reduction for ourselves and our customers, setting the goal of achieving carbon neutrality earlier than the whole country.”

With China’s new push towards decarbonization, ENN has set 2050 as its own target for Net Zero.

Journey to Net Zero

ENN is the first Chinese utilities company to unroll a roadmap to Net Zero. As well as plans to reduce the company’s own emissions, the roadmap promotes decarbonization in the industry and society as a whole. Businesses and society at large are all interconnected in ENN’s decarbonization vision.

“As a clean energy distributor, we must fulfil our social responsibilities and reduce the environmental impact during business development, in order to ensure the sustainability of the company as well as society,” Mr. Zhang points out. “Business growth is grounded on a stable and safe society. If no one practices emission reduction and sets green targets, more frequent extreme weather caused by climate change will bring serious life and economic losses, and ultimately affect the company's business development.”

The roadmap highlights ENN’s decarbonization plans for this decade – for example, by reducing greenhouse gas (GHG) emissions intensity of its integrated energy projects by 48% against its 2019 baseline, and by increasing the use of renewable energy, enhancing efficiency and deploying carbon capture, usage and storage (CCUS) technology. The company also stated that it would review and adjust the targets every three years, to factor in latest technology development, government policies and industry trends.

The company also intends to reduce the GHG emissions intensity of its city gas business by 20% against its 2019 baseline, principally through more stringent methane emissions management and decarbonization of its energy-transportation fleet and office buildings. Half of its self-owned vehicles are slated to be replaced with new energy vehicles by 2025, and office buildings will be equipped with solar photovoltaics, with increased renewable energy throughout. The company intends its own operations to show-case what is possible.

“Our own emission reduction measures and achievements can also be used as a demonstration case for customers,” explains Mr. Zhang. “It can promote and provide low-carbon energy services to customers more convincingly, to establish low-carbon development strategies with reference value for industry partners and society, and to assist the country to realize carbon neutrality.”

To assist the greening of industry, ENN aims to help build 50 green factories and 50 low-carbon industrial parks by 2025 - increasing to 200 respectively by 2030.

ENN is also actively involved in the development and rollout of new green technologies which can be applied to the decarbonization solutions for industrial customers. Its rapid pyrolysis equipment, used to produce biofuels, obtained a total of 12 authorized patents and was successfully selected in the Green Technology Promotion Catalogue (2020) issued by the National Development and Reform Commission. Geothermal technology and enhanced hot dry rock (HDR) technology are also part of the company’s comprehensive vision.

Residential customers will benefit from the three-pronged approach of “Smart, Safe and Low-Carbon,” with the company utilizing IoT technology and Big Data to accurately predict energy needs, and provide smart, safe and low-carbon products and services in a targeted manner, helping to create low-carbon living environments.

An ESG Leader

In the latest Environment, Social and Governance (ESG) rating review by MSCI on 22 October 2021, ENN Energy’s ESG rating was upgraded from BBB to A, recognizing its outstanding performance in ESG best practices. According to MSCI’s ESG ratings, less biodiversity-related risks, more efforts made on carbon emission control, and strong business ethics policies and practices has led to the upgrade. ENN Energy is the first Chinese utilities company obtaining an A ESG rating from MSCI.

“In the past few years, the company has been upgrading and transforming towards an integrated energy service provider, and our business strategy is constantly innovating according to customer needs and market changes,” says Mr. Zhang. “ENN Energy is the first among the industry to set foot in the integrated energy business. This pioneering advantage, years of customer-service experience accumulated in the city gas business, and an in-depth understanding of our customers, will enable us to grasp the benefits and new opportunities of carbon neutrality.

“We will continue to work with industry chain partners to promote low-carbon energy solutions, while at the same time, actively joining hands with peers in the energy sector to forge ahead emissions reduction, in particular on methane emission control (ENN Energy is a member of Methane Guiding Principles “MGP” and a co-founder of China Oil and Gas Methane Alliance).”

ENN’s roadmap, and its proven commitment to reducing carbon emissions for all, shows the company taking a much-needed lead in China, as the country strives towards carbon neutrality.

Never one for waiting around, Mr. Zhang believes that, when it comes to a sustainable future, we should act now: “2021, the first year for carbon neutrality over the next 30-40 years,” he says, “is the most crucial.”

Few would argue with that.