Innovation China Conference: Renewable Carbon - CM Venture Capital 遨问创投

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11th Innovation China Conference 2024: Renewable Carbon

November 20, 2024

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The 2024 ‘Renewable Carbon’ Innovation China Conference was held at Crowne Plaza Shanghai Fudan on 8 Nov 2024

The Fall Edition of the biannual Innovation China Conference took place in Shanghai. As the world faces climate change, industries have more reasons to pursue sustainability, and one of the avenues is the area of decarbonization or carbon capture and use. As our shared sustainable future calls for making use of resources in abundance, the area of CCU explores new thinking and breakthroughs to support carbon mitigation, by making use of an element that earth isn’t short on: carbon.

Organized by the SEIF (Strategic Emerging Industries Foundation) and managed by CM Venture, Mitsubishi Corporation (Shanghai) is a lead sponsor.

This time, the event was also supported by key sponsors BAT, Herbert Smith Freehills, Sengong, and featured a 2-hour special on a shark-tank style startup challenge, pitching in the area of battery material decarbonization. The winning startup walked away with a grand prize of 5,000 USD and opportunities to collaborate with a JDA with the OEM.

For the first time, the event also featured 10 startup booths to showcase material technologies in the renewable carbon space. Local startups such as Changhua, ReMall, Carbon Miner, HS Tech, Enwise and more. Also, CM Venture and its LPs & CVC partners had a breakfast meeting prior to the official start of the event (photos below).

Attended by Fortune 500 companies, LPs, CVCs, startups, policymakers and partners, this year’s MNC speakers included BAT, Herbert Smith Freehills, Bloomberg NEF, Shanghai Environment, Energy & Exchange, CICC, Phoenix Contact, Novalis Advisors, Arkema and Veolia. CVCs attending included Heraeus, SCG Investment, MTR Lab, Merck, LG Energy Solution, Sembcorp, Temasek Foundation, PTTEP, Petronas, Samsung Electronics, Zeiss Group, and more.

The event wrapped up with a wine & cheese session by kindly sponsored by Penfolds Australia.

We’ve picked out a few insights gleaned from the conference.

Introduction/Overview of Renewable Carbon by Dr Zhou Min, CM Venture Capital

A wrap up: comparison of Carbon Emissions Market Mechanisms – China vs. EU

Currently the Chinese carbon emissions market is heavily policy-driven, aiming primarily to support emissions reduction in the real economy. It is in the early stages of development, with limited financial features and relatively simple market functions.
In contrast, the EU carbon market has evolved over 20 years into a mature system with a clear, progressively decreasing cap on total emissions. It features a well-functioning market adjustment mechanism and a diverse range of market options, including spot and futures trading, both on-exchange and over-the-counter.

CM Venture’s POV
Although China’s carbon market has a long journey ahead, as Chinese enterprises improve in carbon reduction, this will enhance their global competitiveness, and China’s carbon market will grow alongside. For systems with mature templates, China is able to catch up quickly if there’s real demand.

Carbon Neutrality in the Chemical Sector

Reducing carbon emissions is especially challenging in the chemical sector, given the need for both external support on costs and favorable policies. This context offers a broad application space for new carbon reduction technologies.

Products like ammonia, methanol, and olefins are the primary sources of emissions within the industry. As demand grows, so does the pressure to reduce emissions. Currently, the level of green premiums in the petrochemical industry is highly varied and generally elevated.
The costs of achieving carbon neutrality are substantial. If these are fully internalized, they could drastically increase total industry costs and significantly impact profitability.
Thus, to achieve net-zero or even negative emissions, the petrochemical sector must employ various technological strategies. These include purchasing zero-carbon electricity, reducing demand for calcium carbide products, implementing carbon capture and storage (CCS) technologies, substituting biomass raw materials, converting CO₂ and hydrogen, and enhancing energy efficiency. Policy guidance and system development are key, as they can encourage companies to adopt new technologies, facilitating a natural optimization on the supply side.

CM Venture’s POV
The real step towards carbon reduction lies in utilizing CO₂ effectively. High-value utilization of CO₂ is a critical topic. Companies that can balance both commercial and ESG value will be a major focus for market-based funds, including CM. CM’s two investments in this area — Econic Technologies (CO2 to materials) and NovoNutrients (CO2 to protein/feed) — are prime examples.