Energy & Resources Talking Points | 02/05/2018

In Today’s Talking Points: China and Emerging Markets Dominate Clean Energy Investment in Q1 2018; China Targets Cleaner Skies With New Carbon Tax Plan; Sinopec to continue cuts to Saudi Crude Oil Imports in June and July; HSBC Launches Overseas Payment Service for Chinese Students at International Universities

 

China and Emerging Markets Dominate Clean Energy Investment in Q1 2018

Emerging markets dominated the clean energy investment space in Q1 2018, lead by China. More than 40% of funding projects went to China, with notable investments in Mexico, Morocco, Indonesia and Vietnam. Bloomberg reported that total investment in Q1 2018 was $61.1 Billion, a fall of 10% compared to the same period last year, while the Clean Energy Pipeline reported the figure at $62.1 billion. The fall in investment was caused by a 19% drop in solar funding, as a result of a 7% fall in the price of solar equipment. There was a 10% increase in investment in wind power (up to $18.9 billion), while investment in geothermal energy rose by 39% to break the $1 billion for the first time. Despite China’s continued dominance of the clean energy sector, the total investment from January to March was 27% less than in the first three months of 2017, due to rising costs and diminishing returns throughout the rest of the world.

Read more on Forbes

China Targets Bluer Skies With New Carbon Tax Plan

China is aiming to combat the high levels of pollution throughout the country by introducing both an emissions trading scheme and a carbon tax. Pollution and the negative health risks brought about by it have been a high-profile issue in China, however the government has committed to reducing the problem, saying that low carbon is the future. The emissions trading scheme will be expanded nationally to cover 1700 power companies across China, covering three billion tonnes of carbon, making it the largest such scheme in the world. There is scope for the ETS to spread across other industries, however in the meantime a carbon tax will be implemented as a stopgap, along with government subsidies for renewable energy resources. Senior Chinese energy researchers are optimistic about the effectiveness of the programs going forward.

Read more on SBS

Sinopec to continue cuts to Saudi Crude Oil Imports in June and July

Officials from Asia’s largest oil refiner Sinopec have stated that there will be further cuts to Saudi crude imports after slashing shipments by 40% in May. Officials stated that the reason for the cuts is due to Saudi AramCo’s decision to raise it’s official selling prices for light crude oil, making the prices uncompetitive. The price increase also prompted smaller Asian refineries to cut imports and seek alternatives to Aramco’s light crude oil. Although justified, the large 40% cut alarmed Saudi Arabia as it sells only through long-term contracts where the permitted change is plus/minus 10%. However, this large cut coincides with the closing of two major refineries in China for scheduled maintenance – likely the reason for the cut.

Read more on Reuters

 

HSBC Launches Overseas Payment Service for Chinese Students at International Universities

On Wednesday 18th April, HSBC launched their innovative new payment system, aimed at Chinese students studying abroad. The new services allows students (or families) to pay tuition fees to foreign universities in the US, UK, Canada, Australia and Hong Kong.  China provides the highest number of international students to foreign universities, so such a payment system will make fee paying easier and more convenient, allowing more to travel overseas to study without worrying about the fiscal side of moving. Overseas Chinese students spend more than RMB 380 billion each year, with 80% of this comprised of tuition fees and day-to-day expenses. The number of Chinese students studying abroad rose 12% last year, signalling increasing demand for foreign education. Overseas students can use the HSBC China mobile app, or WeChat banking in order to exchange the yuan into US dollar, British pound, Canadian dollar or Australian Dollar in order to pay their tuition fees, saving them visits to bank branches and a multitude of paperwork.

Read more on South China Morning Post