New financial tool unveiled to help China’s low-carbon development

© Provided by Xinhua

BEIJING, Nov. 20 (Xinhua) – China has deployed a new financial tool to support the clean and efficient use of coal as part of efforts to advance green and low-carbon development.

The country will introduce a targeted loan program with a quota of 200 billion yuan (about $ 31.3 billion) to support the clean and efficient use of coal, an executive meeting of the State Council chaired on Wednesday decided. by Premier Li Keqiang.

“Right now, coal is the source of energy that we can really rely on for our supply. It will remain so for a long time to come, and it affects China’s development,” Li said. said, we must pursue a transformation on the path of development. We cannot stay on the path of energy-intensive development. “

China is stepping up the pace of optimizing its energy structure, with incentives to support the green transition to tackle pollution and climate change caused by burning fossil fuels. Currently, coal continues to represent the majority of the country’s energy consumption.

Considering China’s coal dominated energy resources, it is important to work hard to make coal use cleaner and more efficient.

The meeting stressed that the re-lending program should target green and efficient process operations, including coal mining, processing, power generation and heating.

According to the meeting, after the big banks independently grant preferential loans to qualified coal projects, the People’s Bank of China (PBOC), the country’s central bank, can provide lending support to these banks, with the same loan amount as the principal of their loan.

Interest rates on loans provided by big banks are expected to be basically in line with benchmark lending rates, the meeting said, adding that policy supports such as tax incentives, special government bonds and takeover projects will also be deployed to make more use of coal. clean and efficient.

The loaner program is a follow-up measure after China unveiled a carbon reduction support tool earlier this month.

On November 8, the PBOC said it would provide low-cost loans to financial institutions through the support tool, and guide these institutions to provide loans to businesses in key carbon reduction areas on the basis of independent decision making and risk. socket.

In fact, green finance has been an important step for the country to facilitate carbon reduction.

At the end of the third quarter of 2021, China’s green loan balance reached 14.78 trillion yuan, up 27.9 percent year on year. Of the green loans, 66.9% went to projects with direct and indirect carbon reduction benefits.

Financial support is essential, said Dong Ximiao, a part-time researcher at Fudan University, adding that the loan program will help boost green development and increase the willingness and capacity of financial institutions to support the use. clean and efficient coal.

China aims to increase the share of non-fossil fuels in its primary energy consumption to around 25% by 2030, peak carbon dioxide emissions by 2030, and achieve carbon neutrality by 2060.

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