What’s new: China’s central bank is launching a carbon-reduction support tool to help businesses cut carbon emissions and motivate more social capital to support the country’s long-term carbon neutrality goals.
The tool will help financial institutions provide low-cost loans to enterprises based on independent decision-making and risk-taking, the People’s Bank of China (PBOC) said Monday in a statement.
Interest rates on such loans by financial institutions will be in line with the benchmark lending rate, or the loan prime rate (LPR), the PBOC said. The one-year LPR currently stands at 3.85%, and the five-year LPR at 4.65%.
Financial institutions can apply for low-cost funding from the PBOC, which will support 60% of loan principal with a one-year lending rate at 1.75%, it said. The loans can be rolled over twice.
The background: China, the world’s largest emitter of greenhouse gases, aims to peak its carbon dioxide emissions by 2030 and achieve carbon neutrality by 2060. Carbon dioxide emissions are the main contributor to climate change.
In an updated plan for reducing emissions submitted to the United Nations in the run-up to the current climate summit, China said it would lower carbon dioxide emissions per unit of GDP by more than 65% by 2030 as compared with 2005, while its forest stock will increase by 6 billion cubic meters by 2030 compared with 2005.
China will release a series of plans and measures to reduce carbon emissions in major areas and industries as part of efforts to reach its goals, Chinese President Xi Jinping told the Group of 20 leaders’ summit in Rome earlier this month.
Contact reporter Denise Jia (huijuanjia@caixin.com) and editor Bob Simison (hello@caixin.com)
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