What’s new: China is ready to launch new policy tools to provide low-cost funding to financial institutions in support of reducing carbon emissions, the central bank said Friday.
The new credit tools will mainly back projects in clean energy development, energy saving and environmental protection, as well as carbon emission reduction technologies, said Sun Guofeng, head of the monetary policy department of the People’s Bank of China. Reducing emissions of carbon dioxide, a principal greenhouse gas, is a key to fighting climate change.
Financial institutions can take the initiative to lend to qualified companies and then apply to the central bank for funding support, according to Sun. The new lending should not affect access to bank credit for companies in coal-fired power generation and coal mining, Sun said.
Why it matters: China’s State Council, the cabinet, in July proposed to set up monetary policy instruments to support reduction of carbon emissions.
The planned relending tool will be the first of its kind created by the central bank to support green projects, although smaller pilot tests have been launched at local levels.
China has stepped up policy arrangements to help reach its goals to bring carbon emissions to a peak by 2030 and achieve net-zero emissions by 2060.
Contact reporter Han Wei (weihan@caixin.com) and editor Bob Simison (hello@caixin.com)
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