On March 8, several fully automatic intelligent production lines operated at a constant speed at the final assembly workshop of the Chengdu plant of Dongfeng Peugeot Citroen Automobile Company Ltd. (DPCA) in Chengdu Economic & Technological Development Zone (CETDZ). New energy vehicles (NEVs) of Citroën, Peugeot, Dongfeng Fukang and other brands rolled off the production line one after another, many of which would be directly exported to Europe. CALB (Chengdu) Co., Ltd., 25 km away from the DPCA Chengdu plant, continuously supplies lithium batteries to automobile manufacturers in CETDZ.

Both enterprises are located in CETDZ. They are connecting all parts of CETDZ through industry chains to jointly form a super-large "automobile manufacturing city" with upstream and downstream enterprises, so as to expand the production capacity through large-scale, intensive and cluster-based development and to develop import and export business. CETDZ has thus become one of the first provincial green foreign trade circular economy industrial parks.

As the pace towards the carbon peaking and carbon neutrality goals quickens, Sichuan is actively building a national demonstration zone for green foreign trade. It is also advancing towards a new "blue ocean" of green trade by promoting the sale of a large number of low-carbon made-in-Sichuan products in the international market, such as energy equipment, crystalline silicon photovoltaic (CSPV) products, power batteries, NEVs, and vanadium and titanium.

A huge space

The energy system reform accelerates, green trade increases significantly

From October 1, 2023, the agreement on the Carbon Border Adjustment Mechanism (CBAM) will officially come into force. It means that countries or regions strictly implementing carbon emission reduction policies will pay corresponding taxes or give back some quotas for carbon emissions when importing (exporting) products with heavy carbon emissions. The first list of such products covers iron &steel, cement, aluminum, fertilizer, electricity and other fields. In addition, the European Union (EU) has taken a decision to ban the production of new gasoline-fueled automobiles from 2035.

"Substantive measures under the carbon peaking and carbon neutrality goals are becoming stronger, and accelerated development of green trade to address barriers to international trade is increasingly urgent," said Lu Rongdong, a member of the Decision-making and Advisory Committee of Sichuan Province and a senior economist of Sichuan Provincial Development and Reform Institute. Lu thinks that Sichuan, as a major province of manufacturing and foreign trade, should actively develop green and low-carbon advantageous industries and improve the space, quality and efficiency of green trade.

Recently, CETDZ made new moves: DPCA has accelerated the transformation of NEV production lines, aiming to launch eight NEV models in its plants, including the Chengdu plant, in the future.

"NEV exports are in a growth phase with the demand constantly increasing in both domestic and foreign markets. Expediting the transformation of NEVs reflects both the market demand and the development situation," said Xu Changyu, Director of Production at the DPCA Chengdu plant. According to Xu, the total number of NEVs exported from the Chengdu plant to Europe reached 18,000 last year, and the plant has received export orders for 12,000 vehicles so far this year, showing an obvious increase.

CALB (Chengdu) Co., Ltd., an upstream enterprise of NEV manufacturing, mainly engages in the production of power batteries and energy storage batteries. It has entered a new stage of capacity expansion and plant construction since products rolled off the production line at the first plant with a capacity of 10 GWh of the first-phase project in October last year. As products will roll off the production line at the second plant with a capacity of 10 GWh of the first-phase project at the end of March 2023, the capacity of the production line for advanced batteries will reach 20 GWh, and the output value is expected to exceed five billion yuan this year.

"While supporting each other, upstream and downstream enterprises in CETDZ also collaborate with Sichuan's enterprises outside CETDZ to jointly expand and strengthen the whole NEV industry chain, which has effectively driven the exports," said the relevant person in charge of CETDZ. As a functional area of the green and intelligent automobile industry established by Chengdu, CETDZ has initially formed an industry chain system led by vehicles and supported by motor, electronic control and battery systems. In 2022, the base achieved an output of 40,000 NEVs, with a year-on-year increase of 36%. In the same year, the total import and export value reached 25.6 billion yuan, and the NEV (hybrid vehicle) exports exceeded 20,000, ranking first in the province.

Shehong Economic &Technological Development Zone, which is also competing in the green and low-carbon industry, aims to develop into the core area of Suining, the "City of Lithium Battery". Gathering 10 listed companies including Tianqi Lithium, the zone boasts 35 enterprises and 50 projects of lithium battery-related industries, forming a situation characterized by concentrated development of the lithium battery industry. In 2022, Shehong's lithium battery industry achieved an output value of 32.062 billion yuan, up 309.7% year on year; the cumulative foreign trade value of lithium battery enterprises in Shehong Economic &Technological Development Zone totaled 664 million yuan, a surge of 457.98%.

According to incomplete statistics, the foreign trade value of the industries of energy equipment, CSPV products, power batteries, NEVs, and vanadium and titanium in the province climbed by 148.5% to 74.6 billion yuan in 2022, of which the import and export value of lithium battery materials jumped by 577%.

"Industries are the source of vitality for foreign trade," said the relevant head of Sichuan Provincial Department of Commerce. With the acceleration of the energy system reform, Sichuan's green trade will have huge space for growth.

A "green closed loop"

Sichuan promotes low-carbon development in an all-round way from production, products to industries

At the end of 2022, Sichuan issued the measures on the accreditation of green foreign trade circular economy industrial parks, and selected two provincial parks of this kind for the first time, namely CETDZ and Yibin Lingang Economic and Technological Development Zone. The head of foreign economic services of Longquanyi District Bureau of Commerce believes that this undoubtedly represents the upcycling of the automobile industry ecosystem in CETDZ.

The green footprints of the automobile industry chain in CETDZ have appeared in many lists, including the list of national green product certification, the list of low-carbon product certification, the list of national and provincial research and development institutions of low-carbon advantageous industries, and the list of enterprises above the provincial level that have passed the green factory certification. These lists not only cover the enterprises in CETDZ, but also detail the use of green products in each enterprise. A "green closed loop" has formed from production and products to industries.

"Green trade not only calls for low-carbon and green raw materials of products and their application fields, but also clean production techniques and process," said Xu Changyu. According to Xu, the DPCA Chengdu plant has also been certified as a green plant; in the four major workshops of stamping, welding, coating and final assembly, such technologies as dust prevention, noise reduction, electricity saving and zero emission of exhaust gas are applied throughout the production process.

In the stamping workshop, for example, the noise of the high-speed automatic stamping line can be controlled below 83 decibels. In the coating workshop, the high-pollution traditional paint has long been replaced with green one, and natural gas can be saved by reducing baking through technological innovation.

"With the new technology, two fewer drying ovens can be used in the coating process of a vehicle, which can help save 1 kW of electricity per hour," Xu Changyu introduced. Additionally, in order to improve production efficiency and reduce resource loss caused by transportation, supporting suppliers' workshops of such products as front and rear bumpers and rear doors of vehicles were built beside the DPCA Chengdu plant when the plant was established. Spare parts can be sent automatically to the workshop of the plant through overhead catenary cables, greatly saving the fuel and electricity used during the transportation through vehicles.

The lithium battery industry has made similar efforts. The Shehong production base of Tianqi Lithium has fully started the carbon emissions verification and products' carbon footprint verification, sped up the use of clean energy, completely eliminated raw coal and fine cleaned coal, and used green power such as hydropower for production. Fan Yonglan, Acting General Manager of the base, introduced that through the lithium slag solid waste comprehensive utilization project carried out by the base, downstream enterprises gradually began to use products of recycled solid waste to replace primary minerals. That effectively promoted carbon management carried out by upstream and downstream enterprises of the industry chain and increased the comprehensive recycling of lithium ore and lithium slag resources.

Sichuan Fulin New Energy Technology Co., Ltd., a lithium battery cathode material manufacturer downstream of Tianqi Lithium in Shehong Economic &Technological Development Zone, has reduced the electricity consumption per ton of lithium iron phosphate from 6,000–8,000 kWh to 3,000–5,000 kWh through its self-developed double-layer, six-row kiln technology. This technology has also been widely used in other lithium battery production enterprises in Shehong Economic &Technological Development Zone.

"The zone is striving to develop a green and low-carbon industry. While promoting the green and low-carbon production techniques of enterprises, it will build a green supply chain information management platform to encourage upstream and downstream enterprises to implement green partnership-based supplier management and further accelerate the development of green industry foreign trade clusters," said He Kai, Deputy Secretary of the Party Working Committee of Shehong Economic &Technological Development Zone.

A development path

Integrated construction helps create new drivers for foreign trade

To vigorously promote green trade, Sichuan has shifted its focus from what the province has to how it should do.

"Sichuan contributes 28% to the national hydropower and its annual output of natural gas (shale gas) ranks first in China. In Liangshan Yi Autonomous Prefecture, the windmills can generate 11.7 billion kilowatt-hours of green electricity a year. By virtue of these, Sichuan has become one of the provinces with the lowest carbon emissions per capita in China," said the relevant head of Sichuan Provincial Department of Commerce.

According to the professional conversion, if products produced in Sichuan are sold to Europe, about 292 yuan of the social cost of carbon can be saved per 10,000 yuan of the output value compared with the same products produced in other parts of China. The International Energy Agency (IEA) predicts that the carbon price of developed countries will top 1,500 yuan by 2050, which means that for products produced in Sichuan, more than 600 yuan can be saved per 10,000 yuan of GDP compared with other places of China.

Advantages will bring greater opportunities. "In the past, Sichuan vigorously cultivated the electronic information industry, helping the province's foreign trade to exceed one trillion yuan. Going ahead, Sichuan has made it clear that the province will rely on green and low-carbon advantageous industries to form new advantages for development. Green and low-carbon development is undoubtedly the key to creating new drivers for Sichuan's foreign trade, and the most promising way to jointly bring the province's foreign trade to a higher level together with the electronic information industry." The head revealed that this is the reason why Sichuan put forward a goal to build a national green trade demonstration zone.

In 2022, Sichuan launched a series of measures. On the one hand, the 2022 Green and Low-carbon Trade Work Plan was issued, which proposed 10 specific measures for the cultivation of green foreign trade enterprises, the establishment of a green standard system, and the deepening of international cooperation, and made systematic planning and layout. On the other hand, the Measures of Sichuan Province on the Accreditation of Green Foreign Trade Circular Economy Industrial Parks was formulated and issued to encourage all parts of the province to take the lead in carrying out pilot programs through such platforms as pilot free trade zones, national economic &technological development zones and foreign trade transformation bases. All localities were supported to comprehensively utilize energy conservation, emission reduction, carbon fixation, carbon sink and other means to realize a green closed loop among projects, enterprises and industries within the platform, thus building a number of low-carbon star platforms and subjects for foreign trade.

In addition, in terms of building a green trade support policy system, Sichuan promoted the inclusion of Sichuan's lithium battery material industry into the national foreign trade quality and efficiency improvement demonstration projects and obtained special support. Provincial green and low-carbon trade funds were allocated to provide special support to foreign trade enterprises engaged in green and low-carbon advantageous industries in "carbon footprint" international certification, market expansion, international logistics, comprehensive foreign trade services, etc.

"At present, relying on the Import and Export Alliance for Green and Low-carbon Enterprises, Sichuan is expediting the promotion of projects such as the whole life-cycle tracking system of carbon footprint, and further improving the added value and core competitiveness of Sichuan's foreign trade products by quantifying and calculating foreign trade products' carbon footprint, tracing, auditing and certifying the supply chain, and carrying out carbon management of the whole supply chain of enterprises," said the relevant heat of Chengdu Customs District Technological Center, which is undertaking the above-mentioned projects.