The potential for environmental protection governance is large, and the policy for restricting emissions is strong.
The market demand for excavators can be divided into new demand and renewal demand, among which renewal demand is mainly due to the end of service life or the restrictions of environmental protection policies. In this report, we focused on the need for excavator replacement driven by environmental protection policies. According to the "China Mobile Source Environmental Management Annual Report" released by the Ministry of Ecology and Environment, mobile sources can be divided into two categories: motor vehicles and non-road mobile machinery. Non-road mobile machinery mainly includes construction machinery and agricultural machinery. Due to the problems of serious emissions exceeding standards, long service time, and poor maintenance status of non-road mobile machinery in China, the problem of sewage discharge has become increasingly prominent. According to our calculations, the annual emissions of HC, NOx, and PM of a single excavator are about 5, 19, and 17 times that of a single motor vehicle. The potential governance space is large, and there is sufficient power at the emission restriction policy level.
The forthcoming launch of Country IV has continued to tighten, and the excavator market has been driven in multiple dimensions.
The emission standards for non-road mobile machinery currently implemented in China are the third stage (National III). According to the GB 20891-2014 amendment sheet (draft for comments) issued by the Ministry of Ecology and Environment on February 20, 2019, the implementation date of the National IV standard was officially finalized on December 1, 2020, and non-road mobile machinery at the national stage 3 and before It will not be produced, imported and sold in China. Compared with China 3, China 4 has further tightened its emission restriction. It is expected that the launch of China 4 will have the following impact on the domestic excavator market: 1) Accelerate the replacement of old equipment; 2) Accelerate the clearance of dealers; ) Raise the technical threshold of the industry and accelerate the trend of head concentration; 4) Market size after the increase in the added value of spare parts and maintenance service technology.
The deadline is approaching, and the provinces and cities will accelerate the delineation of the banned areas.
In order to further prevent and control the discharge of pollutants from non-road mobile machinery, the Ministry of Ecology and Environment released the "Limits and Measurement Methods of Exhaust Smoke of Non-road Mobile Diesel Machinery" (GB 36886-2018) in November 2018. The important supplement is a detailed standard specifically for the emission of particulate matter. It has become an important reference standard for defining high-emission non-road mobile machinery in some provinces and cities; in December 2018, 11 departments including the Ministry of Ecology and Environment jointly issued the "Diesel Truck The Action Plan for Pollution Control Attacks emphasizes the promotion of in-depth treatment of high-emission vehicles and the strengthening of delineation and control of emission control areas; clearly proposes that all areas be legally delineated and announced areas that prohibit the use of high-emission non-road mobile machinery. Completion will be completed by the end of June 2020 in cities in other regions. At present, as the deadline approaches, all provinces and cities accelerate the delineation of landing prohibited areas.
Quantitatively calculate the demand for replacement of excavators, a total of more than 400,000 units nationwide.
We use provinces (including municipalities directly under the central government) as the unit to calculate the local high-emission excavator update demand. According to our review, different provinces have adopted different standards for the definition of high emissions: 1) National phase standards, 2) Class III limits in exhaust smoke standards, and 3) Comprehensive consideration of the above two standards. Among them, for Class III limits in the exhaust smoke standard, we assume that all National 1 models cannot meet the standard and need to be replaced; 50% of National 2 models can be modified to meet the standard; all National 3 models can meet the standard, no need Replacement; we assume that the life of the excavator is ten years, then based on the estimated stock size and structure of the excavator sales in the past ten years, combined with the specific emission standards of each province to calculate and sum up, the updated demand for high emission excavators in the country is about 410,000 units It is an optimistic estimate that since high-emission vehicles can still be used in areas outside the forbidden areas of the provinces, the actual update demand may be slightly less than the result of this calculation).
Risk warning: The policy is not as strong as expected, and the macroeconomic downturn.
