China to Deploy New Lending Tools to Support Emissions Reduction
What’s new: China is ready to launch new policy tools to provide low-cost financing to financial institutions to support the reduction of carbon emissions, the central bank said on Friday.
The new credit tools will mainly support clean energy development, energy saving and environmental protection projects, as well as carbon emission reduction technologies, said Sun Guofeng, head of the department of monetary policy of the People’s Bank of China. Reducing emissions of carbon dioxide, one of the main greenhouse gases, is essential in the fight against climate change.
Financial institutions can take the initiative to lend to qualified companies and then apply for financial support from the central bank, according to Sun. The new loan is not expected to affect access to bank credit for coal-fired power generation and coal mining companies, Sun said.
Why is this important: Chinese State Council, cabinet, in July offers put in place monetary policy instruments to support the reduction of carbon emissions.
The planned on-lending 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 the local level.
China has strengthened its policy arrangements to help it meet its goals of peaking carbon emissions by 2030 and achieving net zero emissions by 2060.
Quick Takes are condensed versions of stories related to China for quick news that you can use.
To download our app for getting late-breaking alerts and reading news on the go.
To have our free weekly newsletter must read.