Zhongjin: Policy assistance promotes green methanol, downstream orders are the short-term focus for locking in.

CICC has released a research report stating that global shipping companies are still expected to enhance their carbon reduction trends driven by policies or voluntary actions. At the same time, China's development of green fuels, such as green methanol, will help promote the non-electric utilization of new energy and ensure energy security. The trend of China developing green methanol as a carbon reduction fuel for shipping is promising, and green methanol projects that can attract high-quality overseas clients are expected to benefit first. The company is optimistic about new energy equipment companies and green energy operation companies that can lead in building green methanol production capacity, securing orders, and capturing market share. CICC's key points are as follows: Overseas shipping carbon reduction policies are continuously being formulated, but short-term green fuel still relies on premium acquisitions. Starting from 2024, the EU will include shipping in its carbon emissions system and implement the EU Maritime Fuel Regulation from 2025, penalizing vessels that do not meet the requirements. In addition, the International Maritime Organization's Net Zero Act is the first global carbon pricing mechanism for shipping. If approved by vote, it is expected to play an important role in promoting the use of carbon reduction fuels in global shipping. Among low-carbon/zero-carbon fuels, the bank believes that green methanol is an important direction in the short to medium term. However, based on calculations, the penalties for traditional fuel carbon emissions under the above shipping carbon reduction policies are low before 2030. In the short term, low-carbon/zero-carbon fuels represented by green methanol still rely on shipowners' premium acquisitions. China's development of green methanol is supported by policies, with downstream order securing being the short-term focus. The company believes that China's development of green fuels aligns with the direction of non-electric utilization of new energy in the 14th Five-Year Plan, and also contributes to ensuring energy security. It is expected to continue receiving policy support domestically. By the end of 2025, China plans to have a green methanol production capacity exceeding 60 million tons, with only about 1% actually in operation. Most of the projects are still far from reaching their nominal production capacity. The company believes that in the next 1-2 years, global demand for green methanol will continue to outstrip supply, making the short-term priority securing overseas orders, while cost reduction and improvement in production processes will determine the industry's long-term development space. Risk Warning: Results of overseas shipping carbon reduction policies may be unsatisfactory; high green methanol production costs; changes in green methanol certification standards.