Digitalization Leading China's Enterprises in Green and Low-Carbon

Title: C Team Youth Talk | Jerry Huang: Digitalization Leading China's Enterprises in Green and Low-Carbon Transformation

Author: Jerry Huang

Publisher:  CTeam Climate Action

Date: May 11, 2023

Link: https://mp.weixin.qq.com/s/6R7KupjsJVZIclONmm2I6A

I am Jerry Huang, the CEO and founder of Shizu Technologies. Today, I am honored to share with you how digitalization is helping Chinese enterprises achieve their climate ambitions and promote greener, more sustainable development.

First, as we all know, China has set the historic mission of achieving peak carbon emissions by 2030 and carbon neutrality by 2060. Meanwhile, the European Union and other countries have implemented carbon tariffs on imported goods, particularly in industries such as new energy and automotive components. We observe that both domestically and globally, there are increasing demands for high-energy-consuming enterprises and other businesses to adopt environmentally friendly, green, and low-carbon practices.

However, most Chinese enterprises have limited understanding and awareness of carbon.

In the past three to four decades of China's robust economic growth, energy and carbon emissions have been unfamiliar topics. Therefore, today I will discuss how digitalization can assist traditional Chinese enterprises in achieving green and low-carbon development.

First, we need to understand that within an enterprise's full lifecycle, carbon emissions are not limited to the production process. From office operations to procurement, production, and eventually the use of our products, whether at the organizational level or product level, it is a full lifecycle involving different stages and stakeholders.

We see potential digital applications at various stages. During the early product design and development phases, through early-stage digital modeling and integration with procurement systems, we can collect real-time data on energy and carbon usage from first-tier, second-tier, and third-tier suppliers.

In the production phase within enterprises, including various workshops and auxiliary equipment, there is the capability for further energy consumption data collection. Finally, during the transportation and use of products, digitalization can help quantify carbon emissions in real-time.

Many enterprises may already have energy management systems, but their granularity is often limited to the factory level and lacks detailed management down to each workshop or production line regarding energy and carbon.

While there might be some foundation in energy management, carbon remains a largely unknown area for most Chinese enterprises.

By quantifying data in various areas, we can help enterprises understand their baseline—how much greenhouse gas each product generates and the energy and carbon emissions of each piece of equipment. The first step is data quantification, giving enterprises a clear picture. But digitalization should not be pursued for its own sake. By collecting energy consumption data, we can further analyze and optimize enterprises' operations.

Like diagnosing a patient, merely looking at the surface provides only limited information. Monitoring various parameters like blood lipids, blood oxygen, and blood pressure allows us to identify issues, whether in the heart, lungs, or kidneys. The same applies to enterprises.

Through real-time energy and carbon emissions monitoring systems, we can help enterprises identify optimization opportunities within their full lifecycle.

For example, in an office workshop, everyone knows lights should be off when people leave, but is this being effectively managed? Most enterprises still find this area unclear. Beyond lights, real-time energy-consuming equipment like air conditioners, water dispensers, and televisions are often not managed effectively. We can help monitor and control these systems in real-time.

Similar principles apply to other areas. Energy is often not allocated efficiently in production workshops. For example, HVAC, steam, and compressed air systems might not be used correctly in terms of timing and quantity, leading to energy waste.

Overall, enterprises face various energy and carbon optimization opportunities.

We must consider ROI (Return on Investment). Digitalization helps enterprises quantify energy consumption, identify optimization points, and implement control measures, saving water, electricity, gas, and steam. Amidst unprecedented global changes, Chinese enterprises face increasingly complex and challenging tasks. Traditionally rough development now requires more refined internal management due to dual carbon goals, ESG, and corporate social responsibility.

The motivation for enterprises to achieve dual carbon transformation stems from external pressures, such as mandates from the Chinese government, foreign government regulations, and demands from buyers and stakeholders. Enterprises need to meet zero or low-carbon product requirements, adhere to stock exchange disclosures, and more.

These external and internal dynamics collectively drive enterprises towards significant dual carbon transformations, whether for cost efficiency, branding, or industry leadership.

In this transformation, digitalization not only provides visibility but also extracts value from data. Quantifiable, comparable, and in-depth data help various departments—operations, procurement, production, finance—gain confidence and improve management. Digitalization enhances the fourth flow of enterprises, the energy-carbon flow, alongside traditional financial, operational, and informational flows, helping more products and departments achieve zero carbon.

The core of today's topic is how digitalization empowers green and low-carbon development.

Regarding the role of youth in this wave, we see that young people can integrate interdisciplinary knowledge to help themselves, their teams, and organizations. Youth studying accounting, computer science, artificial intelligence, ecology, and environmental protection contribute to the dual carbon transition. Achieving this transition requires collaboration across different departments and disciplines.

When young people possess interdisciplinary capabilities, they can see further and find better ways to achieve goals, with digital technology playing a crucial role. Digitalization helps accurately identify issues and track, iterate, and provide feedback, aiding enterprises in their energy-carbon transformation.

Chinese youth and enterprises have a leading edge in the global dual carbon transition, with the world's most developed new energy industry, a complete industrial system, and outstanding young talents. By integrating knowledge from various fields, they contribute to society with patriotic passion.

In conclusion, I am honored to share my insights today and look forward to more youth and peers working together to create a green future for China. Thank you. For more information on digital transformation theories and practices, follow Shizu Technologies' official account to explore the potential of zero carbon with digitalization. Thank you.