J.P. 摩根-全球投资策略-ESG投资2021：更快、更深、更广-2021.5-41正式版

GlobalResearch

May2021

J.P.MorganPerspectives

ESGinvesting2021:Goingfaster,deeper,broader

ESGandSustainabilityResearch

ESGandSustainabilityResearch

GlobalQuantitativeStrategy

ChairofGlobalResearch

Jean-XavierHeckerAC

HugoDubourgAC

KhuramChaudhryAC

JoyceChangAC

jean-xavier.hecker@

hugo.dubourg@

khuram.chaudhry@

joyce.chang@

J.P.MorganSecuritiesplc

J.P.MorganSecuritiesplc

J.P.MorganSecuritiesplc

J.P.MorganSecuritiesLLC

ESGandUtilitiesEquityResearch

ITHardware,AlternativeEnergyEquity

GlobalIndexResearch

StrategicResearch

ElaineWuAC

Research

GloriaKimAC

KimberlyHaranoAC

elaine.wu@

PaulCoster,CFAAC

gloria.m.kim@

kimberly.l.harano@

J.P.MorganSecurities(AsiaPacific)Limited/

paul.coster@

J.P.MorganSecuritiesLLC

J.P.MorganSecuritiesLLC

J.P.MorganBroking(HongKong)Limited

J.P.MorganSecuritiesLLC

USFixedIncomeStrategy

GlobalCreditResearch

SecuritizedProductsResearch

Currencies,CommoditiesandEMResearch

JoshuaYoungerAC

StephenDulakeAC

AmySze,CFAAC

LuisOganesAC

joshua.d.younger@

stephen.dulake@

amy.sze@

luis.oganes@

J.P.MorganSecuritiesLLC

J.P.MorganSecuritiesLLC

J.P.MorganSecuritiesLLC

J.P.MorganSecuritiesplc

Seeendpagesforanalystcertificationandimportantdisclosures,includinginvestmentbankingrelationshipsAdditionalcontactdetailsalsoincludedinthebackofthepresentation

Executivesummary

Biden'sClimateSummitbringsalignmentofglobalgoals

TheBidenClimateSummitsendsaclearmessagethattheUShasraiseditsambitionstojoinandleadaglobalalliancetoaccelerateclimateaction.

First100daysofBidenadministrationacceleratesclimateactionsatboththedomesticandgloballevelsbutlacksaroadmaporclearfinancingplansdespitethehighcostestimatesforUSinaction.

EUremainstheleaderininstitutionalizingESGwithSustainableFinanceDisclosureRegulation(SFDR)fosteringtransparencyinESGintegrationpractices.

EMisincreasingclimatechangeengagementbutfaceshugehurdlestoadaptationandmitigation,giventherelianceontheutilizationandexportoffossilfuels.

‘E’becomingmorefinanciallymaterialwithgrowinginterestinAltEnergy

COVID-19continuestoacceleratechangeas2030isthenew2050asDMcountriesaremovinguptimelinestodecarbonize,withgrowinginterestinAlternativeEnergy,especiallyHydrogen(H2)…

…butwecautionthatrealismisnecessaryonthedemandsidegiventhechallengestoH2adoption,particularlyrelatedtocost,transportationandstoragechallenges.

RegulationismovingfasterinallgeographieswithEuropeclearlyinthelead,asESGfundstherearelikelytobecomethemajorityoffunds,whileAsiaandtheUSarecatchingupthroughlocalizedinitiatives.

ESGreportinglagsmarketdemand,anddataqualityandthelackofaglobalreportingstandardforcorporatedisclosuresraisetheriskofgreenwashingandremainmajorconstraintstoinvestment.

ACOVID-19legacyistheriseofthe'S'andthe'G'

ESGadoptionisoccurringatthecompanylevelacrossallsectors,notjustthemacrolevel,asCOVID-19hasbroughtincreasedfocusonthe‘S’andthe‘G’andincreasedshareholderactivism.

Integrationofsustainabilityissuesintodisclosurescouldtransformbusinessmodels,andweextendanalysistothe‘humancapitalfactor’andcybersecurityrisks.

ESGinvesting:OpportunitiesandChallenges

LongexcessreturnsfromESGQcontinuetooutperform,andassetsbenchmarkedtotheJESGIndexSuiteincreasedby25%in1Q21alone,andnowexceed$30bn,despiteweakreturns.

DemandforESGfixedincomeproductexceedssupplywithbest-in-classESGissuersinDMcreditgeneratingalpha,butmixedperformancebyEMESGissuersandgreenbondsYTD.

WealsointroduceaJ.P.MorganGreen&SocialthematicscreenerandanAsiaex-JapanSecuritySoftwareScreentohelpinvestorsidentifycompaniesthatwillbenefitfromBiden’sgreenrecoveryproposalsandcompaniesthatgeneraterevenuefromcybersecurityproductsorservices.

1

Agenda

Page

1

Biden'sClimateSummitbringsalignmentofglobalgoals

2

2

2030isthenew2050:IsHydrogenthesolutionfortheenergytransition?

11

3

‘E’becomingmorefinanciallymaterialandbroadeningbeyondclimatechange

16

4

ACOVID-19legacy:Theriseofthe'S'andthe'G'

19

5

ESGinvesting:OpportunitiesandChallenges

26

Biden’sClimateSummitbringsaglobalandsynchronizedapproachtoclimateaction

StatusofNDCsandlatestemissiontargetsfor2030

Country

NDCStatus

Updated/ProposedNDCTarget

UK

SubmittedastrongerNDCtarget

Emissionreductionvs.1990

68%

EU-27

SubmittedastrongerNDCtarget

Emissionreductionvs.1990

55%

US

Emissionreductionvs.2005

50-52%

SubmittedastrongerNDCtarget

Argentina

SubmittedastrongerNDCtarget

Emissioncap

359Mt

Canada

ProposedastrongerNDCtarget

Emissionreductionvs.2005

40-45%

Japan

ProposedastrongerNDCtarget

Emissionreductionvs.2013

46-50%

China

Emissionintensity

65%

ProposedastrongerNDCtarget

SouthAfrica

ProposedastrongerNDCtarget

Emissioncap

398-440Mt

Indonesia

Willnotincreaseambition

Emissionreductionvs.BAU

29%

SouthKorea

Didnotincreaseambition

Emissionreductionvs.2017

24.40%

Australia

Emissionreductionvs.2005

26-28%

Didnotincreaseambition

Brazil

Didnotincreaseambition

Emissionreductionvs.2005

43%

Russia

Emissionreductionvs.1990

25-30%

Didnotincreaseambition

Mexico

Didnotincreaseambition

Emissionreductionvs.BAU

22%

India

DidnotupdatetheNDC

N/A

SaudiArabia

DidnotupdatetheNDC

N/A

Turkey

DidnotupdatetheNDC

N/A

Source:J.P.MorganbasedonClimateActionTrackerandBloombergFinanceL.P.;asofApril30th2021.

TheUShadmadeitclearthatitisaleaderonclimateissuesbyrejoiningtheParisAgreement,conveningaglobalClimateSummit,andaligningUSclimateambitiongoalswiththeEUandUK,followingfouryearsofdisengagementbytheTrumpAdministration.

AttheClimateSummit,JapanandCanadaacceleratedlong-termtargetstodecarbonize.InEmergingMarkets,whilesomekeymarketssuchasChinaandBrazildidnotformallyincreasetheirambitions,positivemessagespavingthewayforincreasedcollaborationataninternationallevelwereobserved.

2

FinancingroadmapforBidenclimateactioninitiativesstillundefinedwhilethefullamountofthe$2.3trnAmericanJobsPlanisunlikelytobeapproved

Fromitsfirstdayinoffice,theBidenadministrationhasreversedmanyofTrump’srollbacksofObama-eraclimateandenvironmentalpolicies.

WiththeAmericanJobsPlanandtheMadeinAmericaTaxPlan,theBidenadministrationoutlinesa“fairtransition”approach,proposing$2.3trnininfrastructurespending.

TheAmericanJobsPlanincludesproposalstomakeelectricvehiclesandchargingstationsmoreaffordableandaccessible,retrofitbuildings,replaceleadpipesandmodernizethenation’selectricalgridaswellastaxcreditstoincentivizegreeninvestments.

TheMadeinAmericaTaxPlanproposeseliminatingsubsidiesforfossilfuelcompanies,andtargetsgenerating~$35bninthenextdecade.

J.P.Morganexpectsaninfrastructurebilltotaling~$1trntopassthroughbudgetreconciliationinSeptemberfor2022implementation.

TheWhiteHousehasoutlinedaUSInternationalClimateFinancePlanwiththegoaltodoubleitsannualclimatefinancingtoEMcountriesby2024,

tobetterequipEMcountriestotackleclimate

3

changeissues,subjecttoCongressionalapproval.

BreakdownofproposedspendingundertheAmericanJobsPlan($bn)

100

28

Transportationinfrastructure

100

100

Careeconomy

111

621

Manufacturing

Affordablehousing

137

Researchanddevelopment

Educationandchildcare

180

Waterinfrastructure

400

Digitalinfrastructure

213

Energyinfrastructure

300

Workforcedevelopment

Federalbuildings

Source:J.P.MorganbasedonFACTSHEET:TheAmericanJobsPlan

Thepresentvalueofeconomicdamagefromglobalwarmingdependsonthetemperaturechangescenarioandchoiceofdiscountrate

Dependingonthepathofemissions,theoutlookforglobalwarmingstartstodivergedramaticallyoverthenextfewyears…

Projectionsforchangeinglobalmeanaveragetemperatures(LHS;C)versuscumulativeCO2emissions(RHS;Gt)

5

Cumulativeemissions(RHS;GtCO2)

4000

4

Changeinglobalmeantempearture(LHS;C)

3000

3

RCP8.5

2000

2

1

1000

RCP4.5

0

0

00

10

20

30

40

50

60

70

80

90

00

Note:ProjectionforchangeinglobalmeanaveragetemperaturefromRasmussenetal.(2016;availablehere),andcumulativeemissionsfromtheRCPScenarioGroupatPotsdam(availablehere).Source:J.P.Morgan,GlobalPolicyLab,RCPScenarioGroup(Potsdam)

theeconomicimpactofwhichisexacerbatedbyanon-linearincreaseinmonetarydamagesforeachincrementaldegreeofglobalmeanaveragetemperatureincrease

MonetaryeconomicdamagetotheUS;%ofGDP

16

14

12

10

8

6

4

2

0

0 1 2 3 4 5 6 7 8

Changeinglobalmeantermperature(Celsius)

Note:FromHsiangetal.(2017),whichcanbeaccessedhere.

Source:J.P.Morgan,GlobalPolicyLab

TheBidenAdministrationisclearlyputtingafocusonclimatepolicy,relyinginlargepartonestimatesofthesocialcostofcarbon(SCC)intheirdecision-making.TheSCCaimstocapturetheaggregateeconomicharmcausedbyanadditionalincrementofcarbon-dioxideemissions.

MeasuringSCCiscomplexandsubjecttoseveralsourcesofuncertainty,notleastamongthemthechoiceofdiscountrate.TheBidenadministrationhassetanestimatefortheinterimSCCat$51perton.

Inaworldbesetbysecularstagnation,weaklonger-termpotentialgrowthanddecliningreturnsonfinancialassetsandeconomicactivitysignificantlyincreasethecostsofinaction.OurUSinterestratederivativesteamfindsthatusingmarketstoestimatediscountratesforsimplifiedSCCestimatesinflatesthepresentvalueofmonetary

damagesfromclimatechangemorethanseven-fold. 4

COVID-19acceleratessecularstagnationandraisesthesocialcostofcarbon

Decliningandnownegativediscountingrateshavedramaticallyincreasedthepresentvalueofeconomicdamageduetoclimatechange…

Estimated*cumulativemonetarydamagefromclimatechangeoverthenext100years,usingdiscountingcurvesasofearly-2010,2015,2020,and2/12/21aswellasaconstantrateof2%forcomparison;trillionsof2020USD

1000

RCP4.5

800

RCP6.0

600

RCP8.5

400

High

200

Median

0

DF2%

DF2010

DF2015

DF2020

DF2021

First,weassumeabaselineGDPwithrealgrowthof2%peryear(consistentwithPhiladelphiaFederalReservemediansurveyestimatesfor10-yearaverages),anchoredtoQ42020BEAdata.Wethencalculateinflation-adjustedmonetarydamagesasa%ofGDPbyapplyingthedamagefunctionsofHsiangetal.(2017)forlow,high,andoverallfits,andglobalmeantemperatureprojectionsfromRasmussenetal.(2016).Discountingratesaretakenfromforward-starting1-yearrealratesfromEFFR-linkedOISminusinflationswapyields,assumingaflatcurvebeyond60-yearmaturities.

Source:J.P.Morgan,GlobalPolicyLab,BEA

andsimilarlyresultinamuchhigheraveragesocialcostofcarbon

Ratioofthedifferenceincumulativeinflation-adjustedmonetarydamagesbetweenRCP4.5and8.5tothedifferenceincumulativeemissions,bothoverthenext100years;$permetrictonofCO2

150

125

Median

High

100

75

50

25

0

DF2%

DF2010

DF2015

DF2020

DF2021

Source:J.P.Morgan,GlobalPolicyLab,BEA,RCPScenarioGroup(Potsdam)

5

Green&SocialthematicscreenerlaunchedtoidentifycompaniesthatwillbenefitfromBidengreenrecovery

Relativeperformanceofthefourstrategiesvs.S&P500sincethelaunchoftheBiden-HarrisPlatform

Baskets'price-rebasedat100fromJuly8th

160

150

140

130

120

110

100

.AJPALLUIndex(USD)(R3)

.AJPOWUIndex(USD)(L2)

.AJPBDUIndex(USD)

(L1)

.AJPBDMUIndex(USD)(R1)

SPXIndex(USD)(R2)

Source:J.P.Morgan,basedonBloombergFinanceL.P.

TheBidenClimateSummitwasacatalystofNorthAmericanmarkets

Baskets'price-rebasedat100fromApril12th

104

103

102

101

100

99

98

4/12/2021

4/13/2021

4/14/2021

4/15/2021

4/16/2021

4/17/2021

4/18/2021

4/19/2021

4/20/2021

4/21/2021

4/22/2021

4/23/2021

4/24/2021

4/25/2021

4/26/2021

4/27/2021

4/28/2021

4/29/2021

.AJPALLUIndex(USD)(R3)

.AJPOWUIndex(USD)(L1)

.AJPBDUIndex(USD)(L2)

.AJPBDMUIndex(USD)(R1)

SPXIndex(USD)(R2)

Source:J.P.Morgan,basedonBloombergFinanceL.P.

J.P.MorganEquityResearchhascreatedaGreen&Socialthematicscreenertoidentifycompanieswithrevenuessignificantlyexposed(>33%)toeconomicactivitiesthatarelikelytobenefitfromtheBidenadministrationpublicinvestmentboostthroughAJP.Wederived4differentstrategiesfromourscreener:

“AJPAllStocks”(AJPALLU):the122stocksflaggedbyourscreenerashaving>33%ofrevenuesexposedtotheAmericanJobsPlan,weightedbymarketcap;

“AJPOverweights”(AJPOWU):the28stocksrated“OW”byJPManalystsoutofthe122above.

“AJPBestESGDisclosure”(AJPBDU):the25stockswithanESGdisclosurescorebetween8and10,amongthe122stocks.

“AJPBestESGDisclosureMomentum”(AJPBDMU):the29stockswithanESGdisclosuremomentum

scorebetween8and10,amongthe122stocks. 6

MainstreamingSustainableFinanceDisclosureRegulationintheEU–ArevolutionforESGinvesting

Entityleveldisclosure

Financialmarketparticipants

Financialadvisers

Sustainabilityriskpolicy

Informationaboutpoliciesontheintegrationof

Informationaboutpoliciesonthe

sustainabilityrisksintotheinvestmentdecision-

integrationofsustainabilityrisksintothe

makingprocess

investmentadviceorinsuranceadvice

ConsiderationofPAIofinvestmentdecisionson

Considerationofprincipaladverse

sustainabilityfactors

impactsonsustainabilityfactorsinthe

Adversesustainabilityimpact

Statementonduediligencepolicies

investmentadviceorinsuranceadvice

Mandatoryforlargeentitiesandlargeholdings

Complyorexplain

Complyorexplainforotherentities

Remunerationpolicies

Informationonhowremunerationpoliciesare

consistentwiththeintegrationofsustainabilityrisks

Source:J.P.MorganbasedonPwC&EU.

SFDRcameintoapplicationonMarch10,2021,withtheaimoffosteringtransparencyinESGintegrationpractices.

ThisambitiousregulationrepresentsasignificantsteptowardsmainstreamingESGinvestingintheEU,aswellasincreasingthetransparencyoffunds.

7

MajorinvestmentsforJapan’senvironmentalpoliciesandESGinvestingsetinmotion

Imageoftransitiontocarbonneutralunder“GreenGrowthStrategythroughAchievingCarbonNeutrality”

NonElectric

Electric

Carbonremoval

2018（1.06bntons）

Public:110mntons

Industry:300mntons

Transportation:200mntons

450mntons

2030（960mntons）

Public:90mntons

Industry:330mntons

Transportation:150mntons

360mntons

2050

Emission+Absorption=0）

Electrification

Hydrogen,Metanation,

Syntheticfuel,BioMass

FossilFuels

DecarbonizedPower

Re-Energy 50~60%

NuclearEnergy

Thermal+CCUS/

30~40%

CarbonRecycle

Hydrogen/Ammonia

10%

Afforestation,DACCS,etc.

Note:Valuesareenergy-basedCO2.Source:METI,J.P.Morgan

Japan’sgovernmentannouncedinOctober2020apledgetobecarbonneutralby2050andtheninDecemberaGreenGrowthStrategyforachievingthecarbonneutralitygoal.

Japan’sstepped-upenvironmentalpolicydevelopments,alongwithworldwidetrends,arelikelytoaffectESG

investingsubstantially.

8

EMinvestorsseebetterESGfundamentalsasloweringsovereigncreditriskbutexpressconcernsthatimplementingESGwillsacrificereturns

Towhatextentdoyouagreewiththestatement“sovereignESGapproachesshouldsupportthoseissuerswhohavethegreatestsustainabledevelopmentjourneytoaccomplishratherthanthosethatarebestESGperformers?”

Unsure

Stronglydisagree

Somewhatdisagree

Neitheragreenordisagree

Somewhatagree

Stronglyagree

0% 20% 40% 60% 80% 100%

Source:J.P.Morgan

Whichpillar(ifany)ofESGisunderrepresentedduetodatachallengesattheEMsovereignlevel?

Environment

Governance

Social

Source:J.P.Morgan

Towhatextentdoyouagreethatthe“useofproceeds”of

Howmanythird-partyESGvendorsdoyoulicense?

sustainableinstrumentsachievestheintendedimpactisvery

16

important?

100%

14

80%

12

US

10

Europe

60%

Asia

8

40%

6

20%

4

0%

2

Strongly

Somewhat

Neither

Somewhat

StronglyUnsure

agree

agree

agreenor

disagree

disagree

0

Source:J.P.Morgan

disagree

9

1

2

3

4+

None

(blank)

Source:J.P.Morgan

NavigatingGreenhouseGasEmissionsData:Buildingtrustinthedatasources

J.P.MorganIndexResearchhavepartneredwithVigeoEiris(V.E)andtheInternationalEnergyAgency(IEA)forGHGemissionsandfossilfueldata.V.EwillbeutilizedforcorporatelevelstatisticswhileIEAprovidesthebestfiguresforsovereigns.

TheIndexResearchteamconductedanRFPto10third-partydatavendorsfocusingonGHGemissionsandfossilfueldata.TheextensiveRFPcomprisedof66questionsencompassingdatacoverage,datahistory,estimationmethodology,qualityassuranceprocess,datasources,updatefrequenciesandmore.

GHGemissionsdatafromV.EandtheIEAwillunderpinJ.P.Morgan’sdevelopmentofadditionalcarbonanalyticsandtemperaturealignedindexmethodologies,inresponsetogrowingclientdemandandcurrent/approachingsustainablefinanceregulation.

10

Third-partyvendorsummary

Vendor

1

2

3

4

5

6

7

JPMTiers

1

2

3

GHGdata

Corporate

Sovereign

Private

FossilFueldata

Corporate

Sovereign

Private

Coverage

Coverageof

2,848fixed

100%

90%

90%

95%

91%

83%

97%

income

issuers

%of

coverage

40%

33%

22%

56%

23%

16%

62%

thatis

estimated

History

Latestyear

GHGdata

2020

2019/20

2019

2019/20

2019/20

2019/20

2020

available

Historyof

2013

2005

2013

2013

2002

2015

2005

GHGdata

Historyof

FossilFuel

2016

2005

2016

2015

n/a

2015

1998

data

QualityAssurance

Isdisclosed

datarun

thoughthe

estimation

model?

Source:J.P.Morgan

Agenda

Page

1

Biden'sClimateSummitbringsalignmentofglobalgoals

2

2

2030isthenew2050:IsHydrogenthesolutionfortheenergytransition?

11

3

‘E’becomingmorefinanciallymaterialandbroadeningbeyondclimatechange

16

4

ACOVID-19legacy:Theriseofthe'S'andthe'G'

19

5

ESGinvesting:OpportunitiesandChallenges

26

Oil&Gas:ExtendingJPMEnergyTransitionScorecardtotheUSmajors–Rankingsscoreinthelowerhalfofthepeergroup

JPMEnergyTransitionCorporateScorecard–quantifyingEUandUSmajorscomparatives;Equinor,REP,TOTALbestplaced

AggregateJPMEnergy

Capallocation;2021/22

NewEnergyfinancial

UpstreamGHG

RefiningGHG

TransitionRank

NewEnergiescapex%

materiality

intensity

intensity

Top

Equinor

Repsol

TOTAL

Galp

Exxon

TOTAL

BP

Equinor

Equinor

Repsol

Bucket

Repsol

Equinor

Repsol

Eni

TOTAL

Middle

Galp

Galp

Galp

Shell

Eni

Eni

Eni

Shell

TOTAL

Chevron

Bucket

BP

Total

Eni

BP

Equinor*

Shell

Shell

BP

Chevron

BP

Bottom

Exxon

OMV

OMV

Exxon

OMV

Chevron

Chevron

Exxon

OMV

Shell

Bucket

OMV

Exxon

Chevron

Repsol

Galp

Source:J.P.Morganestimates.Note:*Equinorexcludedfromrefiningmetricduetonegligibleexposure;weallocateaneutralmid-quartilevalueintherankingsaggregation

WeextendourJPMETCorporateScorecardtoincorporatetheUSmajorsandcomparetheircarbonfootprintstartingpointwiththatoftheEUOils.ThekeytakeawayismodestcapitalrotationtowardnewenergiestodatecombinedwithindifferentprevailingGHGintensities(XOMrefiningtheexception)seestheUSmajorsrankinthelowerhalfofthepeergroup.

Ourscorecardassessesthecompaniesonfourspecificmetrics;(1)Capitalallocation;2021/22NewEnergiescapex%;(2)Lowcarbonfinancialmaterialityby2025(%NI);(3)UpstreamdirectGHGandflaringintensity;and

(4)RefiningGHGintensity(alsodirect).

WemodelNewEnergiescapexashavingrisento15%ofEUOilstotalcapex.ThiscomparestotheUSmajorsatbelow5%,initiallyfocusedonCCSinitiatives.

11

AHydrogen(H2)revolutionisquicklygatheringmomentumtodriveenergytransitionacrosshard-to-abatesectors,butwecautionagainstover-optimismgiventhecost,transportationandstoragechallengesofH2adoption

15countrieshavealreadypublishedaHydrogenstrategyand

13moreareinpreparation

Source:J.P.Morgan;LatestupdatedonApril6th2021

US,Europe,Chinacanallachieverelativelylowall-ingreenH2costs

$/kgAll-ingreenLOCH,2030E

4.5

4.0

3.5

3.0

2.11

2.5

0.16

0.06

0.21

2.0

1.5

2.00

2.26

2.29

1.0

1.73

0.5

0.0

UnitedStates

Europe

China

Japan(importedas

NH3)

Production

Transportation&Conversion

Source:J.P.Morganestimates,companydata

Hydrogenversatilitymakesitanidealenergyvector

Source:J.P.MorganbasedonH2Europe

Electrificationvs.“Hydrogenization”:whichapproachforwhichsector?

Electrificationpossible?

Yes

No

Possible?

Bothcouldcompete:home

H2sweetspot:Steel,Heavy

Yes

heating,energystorage,light

dutyvehicles,aerospace,

vehicles

shipping

H2Solution

loadpowergeneration

likelyneeded:Cement

NoopportunityforH2likely:

Neitheroffersalargescale

No

aluminumsmelting,mostbase

solution,soCCSdevelopment

Source:J.P.Morgan,companydata

12

WeestimatetheH2addressablemarketinChinacanreachRmb12trnby2050Eandgreenhydrogencostcanbecommerciallycompetitiveby2030E

AnnualhydrogendemandinChina(mntonnes)

Hydrogenasa%ofenergymixinChina

70

CAGR

60

60

4%

50

CAGR

40

10%

35

12%

10%

8%

10%

6% 5%

22

10

0

4%

2%

0%

2%

2025

2030

2050

AnnualdemandofhydrogeninChina(mntonne)

Source:ChinaHydrogenAlliance

HydrogenproductionmixinChina

100%

0%

2%

3%

5%

10%

90%

30%

15%

80%

23%

45%

70%

60%

70%

50%

5%

40%

67%

30%

60%

45%

20%

0%

10%

20%

0%

2020

2030

2040

2050

Fossilfuel

Industrialby-product

Greenhydrogen

Biofuel

13

Source:ChinaHydrogenAlliance

2020 20302060Hydrogenas%ofenergymixinChina

Source:ChinaHydrogenAlliance

JPMforecastofChinaFCEVsales

0.6

0.4

unitsMn 0.2

0.0

2035E2034E2033E2032E2031E2030E2029E2028E2027E2026E2025E2024E2023E2022E2021E202020192018201720162015

Annualsales

Source:CAAM,J.P.Morganestimates

Korea:Hydrogentodrive2050carbonneutrality,withthegovernmentsettinglong-termHydrogenandFCEVsupplytargets

FCEVfleetandsalestarget

'000units

200

100

0

2020

2025

2030

FCEVsales

FCEVfleet(RHS)

Source:MOTIE.

HMC:FCEVproductiontarget

'000units,Wtrn(RHS)

600

7