The influence behind Chinas "dual control system of energy consumption" policy

25 Oct, 2021
The influence behind Chinas "dual control system of energy consumption" policy

Recently, news of China's "dual control system of energy consumption" policies has rushed into hot searches.Lighting companies around us are also affected by the power limit requirements.

The manufacturing industry is highly dependent on the continuous supply of electricity. For manufacturing companies, the stop and start of many production lines may cost high costs. Power curtailment will lead to a decrease in the operating rate.

If long-term power curtailment is used for production, The impact is not only the delayed delivery, but also the market raw material supply and changes in the market, resulting in huge losses. And the operating rate brings new uncertainties.

Why did China government temporarily issue a "power curtailment order" during the peak production season?

There are two reasons for this situation:

1. In response to the national call for dual control system of energy consumption" policies, enterprises in various regions need to control production to ensure the implementation of energy conservation and emission reduction targets.

China will strive to achieve "emission peak" by 2030 and "carbon neutrality" by 2060. It can be seen that achieving the goals and promoting a green and low-carbon life have become my country's key policies.

 

LED lighting products have the attributes of energy saving and environmental protection, and have great potential in energy saving and carbon reduction. They are used in more residential, road, construction, agriculture and other fields. Solar lighting is an indispensable trend in the future, which can not only achieve more efficient lighting , Saving electricity expenses and promoting green consumption are important ways for the general public, enterprises, and government agencies to actively contribute to carbon emission reduction and carbon neutrality.

Many places, as well as technology and lighting companies, are integrating into the blueprint of "carbon neutrality" through innovation.

2.It is because coal prices have continued to rise this year, which has increased the cost of power generation from power plants.

Since 70% of my country's power generation still relies on coal for power generation, under the background of high coal prices and insufficient coal supply, it is imperative to reduce power generation. Some local governments acted too hastily in the implementation, and used the means of turning off the power to carry out emergency regulation, which caused this round of multiple power rationing. It should be said that behind this round of power cuts, the hidden worry in my country's energy supply is highlighted, that is, the increase in key energy production capacity such as coal cannot keep up with the increase in economic development needs, so there is a problem of insufficient energy supply to some extent. . Coupled with the uneven distribution of energy supply regions in my country, there are many energy-consuming industries in the Northeast but there is not enough power supply, so this problem has appeared in some areas of the Northeast. What we should focus on is not the current power cuts, but the long-term concerns about China's energy supply.

This situation has directly brought about two consequences: global shipping prices and raw material prices have soared.

In terms of overseas transportation, foreign trade companies have to lower their profits to subsidize transportation costs, otherwise the prices of products shipped abroad are too high, which will affect sales.

In terms of raw material imports, major factories are vying to purchase to raise prices, which has led to lower and lower product profits. In order to maintain their market share, foreign trade companies have to continue this vicious competition.

The meager product profits are incompatible with high-energy-consuming production methods, and domestic processing companies are equivalent to doing coolies for free. This unreasonable export method is not very helpful to the internal circulation of the domestic economy. Under the current unstable global environment, it is most important to supply products to the domestic market to stimulate domestic demand.

As far as processing plants are concerned, as long as they have a meager profit, they are willing to work hard, even if there is no profit, they will start to maintain the operation of the factory.

Impact and suggestions on our customers:

The first is the severe result that caused the cost of raw materials, packaging, labor, and shipping to rise.

Second, the price will rise and the delivery period will be extended.

We recommend that you make a purchase plan in advance and place an order as soon as possible, so that we can arrange the production line in advance to ensure that your order can be delivered on time.

 

The impact of this policy on cross-border sellers.

First: The most direct cause of the factory delivery delay, the seller link has an increased risk of out of stock

Due to the power curtailment policy, the factory's production capacity has dropped sharply, which will adversely affect the order delivery time. Previously, for example, the 30-day delivery time will be increased to 45 days, 60 days or even longer. This is an uncertain factor. Therefore, The first thing sellers do is to place orders in advance and increase the production cycle time when calculating the supply chain to avoid out-of-stocks.

Second: The financial pressure on cross-border sellers will further increase

Due to unstable shipping schedules and congestion at the terminal, the logistics timeliness is getting worse and worse. This year's first-haul logistics time has increased a lot compared with previous years. In the past, the western United States could arrive in more than 20 days, and now it is more than 30 days, 40 days, and more than 50 Days are normal. Now, with the further extension of the production and delivery period, the financial pressure on the seller will be even worse. The payment cycle will be further extended. The seller friends need to find a way to solve the problem of capital shortage.

Third: Ocean freight will continue to fall, which is good for cross-border sellers

Due to the electricity curtailment policy, the cargo has been reduced, and shipping companies have lowered their shipping prices. There have been signs recently. The prices in West America have dropped a lot. It is predicted that they will gradually decrease in the future. This is good news for sellers. This year's shipping costs are already weak. Tucao again, so in the control of the supply chain, it is necessary to ensure that the products continue to be shipped, and at the same time choose the appropriate shipping price for shipment. This time node needs to be controlled.

Fourth: There will be a crisis of out of stock in foreign markets

I predict that from the end of the fourth quarter of this year until the second quarter of next year, there will be another round of out-of-stock crisis in the European and American markets. Therefore, if the backlog of goods is not very serious, you can wait for a while and see until the end of the fourth quarter. Depending on the changes in market conditions, you can choose to increase the selling price to reduce the losses caused by rising costs.

Fifth: The price war will get better

According to the previous forecast, with the out-of-stock crisis in the latter part of the fourth quarter, sellers suffering from price wars this year can take a breather, appropriately increase selling prices and increase product profits, while also taking into account product inventory.

So what do the above two terms about carbon mean?

Two examples can be used to explain:

In the first example, a new pizza shop was opened downstairs. We went to eat every day, and it was called a fragrant.

After eating for a week, one day I suddenly felt tired of eating, and my desire for pizza reached its peak, which is called "pizza peak" for short. After that, I was no longer as active as it was before, and I would only eat it occasionally.

The "emission peak" is the same logic.

When a country wants to achieve a green and low-carbon goal, the first milestone is that carbon emissions (greenhouse gases) reach a peak (highest point) at a certain stage, and then begin to gradually decline.

It's like we eat pizza. Only when we get tired of it will we enter the stage of weight loss.

According to the data provided by the three cobbler report libraries:

The time for the United States to reach its peak of carbon is 2007, and the time to achieve carbon neutrality is 2050;

The EU’s carbon peak time is 1990, and the time to achieve carbon neutrality is 2050;

It can be seen that "emission peak" is our stepping stone to achieve "carbon neutrality".

In the second example, during the process of losing weight, we still failed to resist the temptation one night, so we went to the pizza shop and ate another one.

Although it was refreshing when I ate it, I regretted it after I ate it.

What should I do if I regret it? Idea sub-remedy.

Then, we have to go to the gym to exercise, get up for a run the next morning, and just eat two bites when we arrive at the office in the morning, and stop eating at noon and night.

This general operation is to use exercise and diet to offset the calories we consume when eating Pizza, avoid weight gain, and achieve a balance between skewers and weight loss, referred to as "pizza neutralization".

The same logic applies to "carbon neutrality".

The country achieves this goal, just like we want to lose weight after eating skewers. Green measures must be used to offset the greenhouse gases emitted by the development of the economy.

You come to me to neutralize carbon emissions and ultimately protect the environment. This is "carbon neutrality".

None
Next Post
Leave a comment