Economic Watch: Siemens Energy deepens ties with Chinese partners amid green policy push

BEIJING, Aug. 18 (Xinhua) -- European energy technology leader Siemens Energy is advancing cooperation with Chinese supply chain partners in energy and carbon management, as China accelerates green transformation and global regulators tighten carbon disclosure requirements.

Facing mounting pressure to adopt low-carbon practices under domestic regulations and international mechanisms, including the European Union's Carbon Border Adjustment Mechanism (CBAM), manufacturers are increasingly shifting from managing only their own emissions to overseeing carbon footprints across their entire supply chains.

Industry insiders say that competitive advantage will increasingly depend on "supply chain-wide collaboration," supported by advanced energy management tools that enable accurate tracking and reduction of emissions throughout manufacturing processes.

BEACON PARTNERSHIP

A latest example of this trend is the German energy technology leader deploying its DigiPlant iEMS, a smart energy management system, at Chinese foundry leader Kocel's production site in Ziyang, southwest China's Sichuan Province, following agreements reached during last year's China International Import Expo in Shanghai.

"As the energy sector evolves rapidly, this initiative broadens our traditional supply chain collaboration further along the value chain," Huang Jie, head of procurement and logistics of Siemens Energy Hub China, told Xinhua in an interview.

This tailored energy management solution integrates energy usage collection, monitoring and analysis into a unified platform -- aiming to boost transparency in energy use and improve operational efficiency, thereby laying a solid foundation for the capability to enable product-level carbon footprint tracking in the future, Huang added.

"The tie-up aims to combine Kocel's foundry expertise with Siemens Energy's energy management technologies, creating a model partnership for low-carbon transformation in China's foundry sector," said Peng Fan, chairman of Kocel Group Ltd., a long-term supplier to Siemens Energy.

Founded in 1966, the Kocel Group is a global leader in high-end equipment manufacturing -- with more than 80 percent of its clients consisting of Fortune Global 500 firms or industry leaders.

"The energy management system relies on extensive supporting technologies," Peng said, noting that to achieve efficient control and optimization of green energy usage, it requires intelligent equipment and sensors to collect accurate production data, and a software platform capable of processing the information.

Only through "comprehensive and deep integration" of these elements can a truly exemplary project be realized and replicated across China's foundry industry, driving wider low-carbon transformation, he said.

As one of the most carbon-intensive manufacturing segments, China's foundry industry, home to over 20,000 companies, accounts for a significant share of the country's industrial emissions. This makes the sector pivotal in cutting emissions and promoting the green transformation of manufacturing, Peng explained.

In a quest to drive low-carbon growth, Kocel has been committed to pushing digitalization and green upgrades. Notably, the company was the first foundry company in China to join the Science Based Targets initiative, a global framework for companies to set emissions reduction targets -- with a commitment to reaching net-zero carbon emissions by 2050.

TEAM EFFORT

The energy management system upgrade in Kocel's Ziyang base builds on Siemens Energy's experience in the sector. In 2023, Siemens Energy supported boutique hotel group Songtsam to build its first green and low-carbon hotel. Over the course of a year, the low-carbon energy system helped the hotel achieve nearly 90 percent solar utilization and cut carbon dioxide emissions by more than 1,000 tonnes.

Earlier this year, Siemens Energy's surge arrester plant in Wuxi, east China's Jiangsu Province, received a product carbon footprint certificate from global testing agency Bureau Veritas for a specific batch of surge arresters.

It made the Wuxi plant China's first manufacturer in the power transmission and distribution sector to enable order-specific carbon footprint calculation, while Siemens Energy became the first in this sector to have a verified capability for real-time full-lifecycle carbon accounting, according to Qin Zheng, who leads industry transformation, electrification automation and digitalization at Siemens Energy Hub China.

Standardized digital platforms like the DigiPlant are key to allowing users to exchange emissions data in a secure way, thus "removing a major barrier to supply chain decarbonization," Qin said.

These carbon-reduction initiatives reflect a broader trend of foreign enterprises engaging deeper in China's green supply chains, as shown by academic research which revealed that from 2012 to 2017 -- multinational enterprises increasingly relocated inland and expanded their presence in clean technology-intensive industries.

This shift aligns with China's industrial policy priorities, namely technology innovation and green transformation. Earlier this year, China rolled out a green, low-carbon action plan for manufacturing, urging faster adoption of advanced technologies and deeper transformation of traditional industries.

Looking ahead, industry observers say energy management and carbon footprint accounting will emerge as "pressing priorities" for Chinese manufacturers, as global regulators enforce carbon disclosure measures.

While many firms still lack clarity on how to advance carbon reduction, with the implementation of international mechanisms such as the CBAM, "supply chain pressures will quickly cascade down to Chinese manufacturing firms," said Li Yongxin, vice president of Kocel Machinery -- underscoring the urgency for relevant action.

"Building and integrating green supply chains is one of the viable paths to carbon neutrality," said Huang. "Our goal is to make green supply chain transformation solutions and partnership models replicable and scalable -- which cannot be achieved by a single company alone." ■