Editor's note:
(The Second Session of the 14th Henan Provincial People's Congress and the Second Session of the 13th Henan Provincial CPPCC opened in Zhengzhou on January 28 and January 27 respectively. In order to fully demonstrate the style of deputies and members in performing their duties, during the Two Sessions of Henan Province, Dahe Fortune Cube continued to launch a series of reports on "Financial Interviews in Two Sessions". It invited deputies and members to talk about their performance in the new era and new journey, gathered good voices from the financial affairs of the Two Sessions, and looked forward to new momentum for economic development, new advantages for industrial development, and a new situation of high-quality development in 2024.)
The green transformation and development of energy in rural areas is an important part of building a modern energy system. It is of great significance to promote rural revitalization, achieve the goals of carbon peaking and carbon neutrality, and modernize agriculture and rural areas.
During the Two Sessions of Henan Province in 2024, Zhang Daoyuan, member of the CPPCC Henan Provincial Committee and Vice Chairman of Henan Tian Lun Investment Holding Group Co., Ltd., said in an interview with a reporter from Dahe Fortune Cube that high-value utilization of straw mainly in the form of biogas had comprehensive benefits such as waste resource utilization, organic fertilizer returning to fields, improvement of rural energy environment, emission reduction and carbon reduction. There was a huge industrial space on the road of green and low-carbon transformation and development in Henan Province. In this regard, Zhang Daoyuan suggested improving the subsidy mechanism for biogas projects and accelerating the green and low-carbon transformation of rural energy.
It Is Recommended to Improve Subsidy Mechanism for Biogas Projects
Encouraging green and low-carbon transformation and development of energy has always been the focus of Zhang Daoyuan's proposals. During the Two Sessions of Henan Province, Zhang Daoyuan put forward the "Proposal on Steadily Promoting Coal-to-Gas Transformation in Townships" and "Suggestions on Accelerating Gas Penetration in Rural Areas in Henan", providing reference and enlightenment for promoting the green and low-carbon energy transformation in Henan Province.
At the Two Sessions of Henan Province this year, Zhang Daoyuan still focused on the green and low-carbon transformation of energy and put forward relevant proposals.
"Henan is a major grain-producing province with abundant straw resources. The high-quality development of the grain industry requires scientific and efficient treatment and utilization of crop straw, but there are problems such as high cost of straw collection and storage and low level of industrialization of resource utilization are common. Direct return of straw to the field has led to an increase in soil diseases and insect pests and accelerated loss of 'green water' in soil. These problems are becoming increasingly prominent." Zhang Daoyuan said that at present, biogas was being well promoted in countries such as Germany, Sweden and Denmark. Henan had also carried out practices in biogas and achieved overall economic, social and ecologic benefits.
To support the development of biomethane projects, he recommended improving the subsidy mechanism for such projects in Henan Province and accelerating the green and low-carbon transition of rural energy.
First, in terms of ecological and environmental management such as straw removal, collection and storage, and utilization, the application process for project subsidies should be simplified. At the same time, the entry threshold should be raised to prevent misallocation or misuse of special funds and ensure that limited resources are used where they are most needed.
Second, financial subsidies should be provided for both the volume and pricing of biomethane. A third-party agency, appointed under the central government’s special funds program, should oversee the process. A designated subsidy account should be established for each project, and disbursement should be based on actual production capacity, with funds released in stages to improve payment efficiency.
Third, local governments should establish operational subsidy mechanisms and enhance preferential policies related to land use, electricity tariffs, and taxation. These measures aim to foster a favorable business environment for the sustainable development of the biogas industry.
Ensure Adequate Allocation of Gas Quotas for Rural Households
In recent years, China’s natural gas market has repeatedly faced challenges in maintaining supply during the winter season. In the winter of 2022, many "coal-to-gas" rural residents in Hebei experienced restrictions or cut-offs in their natural gas supply, drawing widespread attention. During the current heating season, some rural areas in northern China have again faced tight gas supplies and rising costs.
Zhang Daoyuan believes that the reason why these winter supply issues lies in upstream suppliers adopting a sales policy of "reduced volume, increased price", while a large portion of the gas used in rural areas is not included in the official residential gas quotas. "The upstream gas prices remain high, while the price for rural users is significantly lower than the market purchase price. Meanwhile, downstream suppliers are still expected to ensure household supply for people's livelihood. This triple squeeze has worsened the supply-demand imbalance, causing an average price inversion of 0.5 to 0.8 yuan per cubic meter for gas providers serving rural households in our province. As a result, these enterprises face serious financial difficulties, which in turn have severely impacted the livelihoods and productivity of rural users."
How to Address the Worsening Imbalance Between Upstream and Downstream Supply and Demand? Zhang Daoyuan suggested that the government establish a provincial-level task force dedicated to ensuring the rural natural gas supply. This team should conduct scientific assessments of rural gas demand, establish a feedback mechanism with the National Energy Administration, maintain smooth communication channels, and guide upstream suppliers in setting reasonable allocation ratios for residential gas supply. "Based on the current gas demand of rural residents in our province, an annual allocation of 300 to 500 million cubic meters of dedicated residential gas quotas should be established to fundamentally resolve the supply-demand problem."
He also recommended that relevant authorities, based on the province's annual natural gas demand forecast, oversee the signing of upstream and downstream supply contracts and verify residential gas volumes. This should be done in strict accordance with the National Development and Reform Commission's policies to ensure full coverage and sufficient contracted gas supply.
"At present, many rural gas supply enterprises in our province still do not have accounts with PetroChina or Sinopec. It is recommended that relevant departments coordinate with upstream suppliers, fully consider the realities of rural users, and expedite the account setup process for rural gas supply enterprises. This would reduce unnecessary intermediaries, effectively lower procurement costs, and ease supply pressure." Zhang Daoyuan said.
Strengthen Technological Innovation to Achieve Green and Low-carbon Development
The past 2023 marked a period in which Tian Lun Gas strengthened its commitment to technological innovation, delved deeper into user needs, expanded diversified business lines, and achieved its green and low-carbon development goals.
In 2023, Tian Lun Gas continued to optimize and upgrade its digital intelligent operation system and was recognized by Alipay as a digital intelligence "pacesetter"; working with local governments in Henan, Gansu, Jilin, and Shaanxi, the company participated in renovation planning and infrastructure upgrades, enabling 200,000 households in aging residential communities to enjoy safe, comfortable, and convenient green energy; the company also advanced its "Gas Penetration in Rural Areas" initiative by establishing nearly 200 rural energy service stations, cumulatively delivering gas services to around 2 million rural households in Henan; in addition, Tian Lun partnered with central and state-owned enterprises to explore new energy ventures in fields such as photovoltaics and biomass, contributing to Henan's green and low-carbon transition.
Notably, in recognition of its steady and sustainable development, Tian Lun Gas was named a "Central China ESG Leader Enterprise" at the 18th Yellow River Fortune Forum in December 2023.
As global attention to sustainable development continues to grow, ESG has become a focal point for stakeholders across sectors. Zhang Daoyuan shared with the reporter Tian Lun Gas' experience in ESG governance: the company has established a three-tier ESG management structure comprising governance, management, and execution levels to build a clearly defined and accountable system that enhances corporate governance; by developing digital and intelligent systems, the company has reinforced the foundation of safe operations, tightened control over supply sources, established a long-term safety management mechanism, advanced the construction of an integrated safety management system, and carried out risk identification and hazard inspections across all business lines; it has also refined various gas source management policies to ensure stable and reliable energy supply.
What Are Tian Lun Gas's Plans and Initiatives for 2024? According to Zhang Daoyuan, Tian Lun Gas will continue to follow the national strategies of rural revitalization and the goal of carbon peaking and carbon neutrality, actively advancing the upgrade and optimization of the energy structure and supporting the rural energy transition; while promoting high-quality development of urban and rural gas services, the company will also innovate in low-carbon energy supply and steadily expand into new energy sectors such as gas-electricity coordination and biomass energy; its goal is to become a leading green and low-carbon energy provider in China, contributing to national food and energy security through the Tian Lun approach.