Case Study Of Rongsheng Petrochemical’s Issuance Of Green Bonds

With the development and progress of the global economy,environmental pollution problems caused by the development of industrial science and technology have also followed,such as the gradual depletion of a variety of non-renewable resources such as minerals,forests and fossil energy,and frequent natural disasters such as earthquakes,typhoons and floods.However,the above problems are not only urgent for China to solve,but also for the whole world to pay attention to.In September 2020,President Xi Jinping first proposed the dual carbon goal at the 75 th session of the United Nations General Assembly,in order to achieve this goal,in addition to increasing carbon sinks through afforestation,it is also necessary to strengthen industrial restructuring,that is,the green transformation of enterprises,which starts from the financial industry to build a green financial system,so as to establish a close connection between finance and green environmental protection industry.With the in-depth understanding of green finance by governments and social investors,many countries have begun to pay attention to energy conservation and environmental protection,clean energy,green transportation,green building and other project investment.In this process,relevant policies have also brought benign impact on China’s overall social environment,among which green bonds as a new financing tool also play a significant role.Green bonds have developed rapidly in China,from the initial little-known to the end of 2022,with a green bond stock of about 3 trillion yuan at home and abroad,ranking among the top in the world.The essence of green bonds is to use the funds obtained for compliant green projects or bond financing tools that use these projects to refinance,compared with ordinary bonds,the issuance of green bonds not only has multiple roles such as supporting environmental improvement and developing new energy,but also has low issuance costs,municipal sector support,enjoy a variety of preferential policies and other characteristics in the issuance process,for investors,this is an advantage that other financing methods can not achieve,and therefore attracts a large number of investors to issue green bonds.Therefore,it provides experience for enterprises in the same industry to use green bond financing,which is of great significance for opening up China’s green bond market and promoting social economy.This thesis takes Rongsheng Petrochemical Co.,Ltd.as an example and focuses on the three green bonds issued by the company,including "19 Rongsheng G1","20 Rongsheng G1" and "20 Rongsheng G2".Firstly,the background of Rongsheng Petrochemical’s issuance of green bonds,such as the company’s basic situation,the company’s operation and financial situation,the issuance and process of bonds,and then introduces the motivation of the company to issue green bonds from various aspects.On the one hand,under the guidance of President Xi Jinping’s national strategic decision on the "dual carbon" goal,Rongsheng Petrochemical needs to issue green bonds to further develop the company,respond to the call of the country’s green,low-carbon and high-quality development,assume social responsibility,and enhance the company’s overall image;On the other hand,in order to expand the scale and promote the green transformation of the industry,the company has a large demand for project funds,and due to the low financing cost of green bonds,the fast review speed and the large proportion of supplementary liquidity funds,the issuance of green bonds has become an ideal choice for the company’s project financing.Subsequently,Rongsheng Petrochemical was taken as an example to carry out the analysis,and the conclusions are as follows:(1)In terms of financing costs.Compared with ordinary bonds of the same grade in the same period,the issuance interest rate is also lower,which shows that the issuance of green bonds can reduce the financial pressure of issuers to a certain extent;(2)Financial effects.The issuance of green bonds is conducive to alleviating the financial pressure of the company’s projects,ensuring the normal operation and development of the company,and thereby improving the company’s solvency,profitability and growth ability.(3)Environmental effects.The green bond fundraising project has achieved a number of environmental protection achievements such as nitrogen oxide emission reduction,solid waste treatment,wastewater recycling,and VOCs recycling by purchasing advanced equipment,innovating green technologies,and using harmless fuels,which have played a positive role in both energy conservation and pollutant emission reduction.(4)Social effects.Rongsheng Petrochemical Co.,Ltd.achieved financing by issuing green bonds,and most of the funds raised were invested in the construction of Zhejiang Petrochemical’s 40 million tons/year refining and chemical integration project,which to a certain extent promoted the trade of refined oil products and enhanced the international competitiveness of China’s petrochemical industry.Finally,combined with the research conclusions of this thesis,some enlightenment is obtained,which provides reference for enterprises interested in issuing green bonds in the future,and also provides a reference for green bond investors,the Chinese government and relevant departments to promote the development of green bonds in China.