Chinese regulators are close to releasing new “green bond” standards that would exclude polluting fossil fuel projects from corporate financing channels designed to lift environmental standards.
Beijing has in recent years promoted new green financing methods to help industry pay for its transition to cleaner modes of growth. But China’s inclusion of ‘clean coal’ in a 2015 central bank list of technologies eligible for green bonds has put the country at odds with global standards, a point of contention for some international investors and many environmental groups.
According to Reuters, two sources with direct knowledge of the situation say China’s central bank, which regulates financial institution debt issuance and whose 2015 guidelines were adopted by other market regulators, has already revised the eligibility list. One of the people said the list is due to be published later this month. The People’s Bank of China did not immediately respond to Reuters’ request for comment.
“If confirmed, ending the policy of financing coal with green bonds would be a much-needed step in the right direction,” said Liu Jinyan, senior campaigner with environmental group Greenpeace in Beijing. “With no new coal projects taking money from the green bonds market, those funds can actually accelerate China’s energy transition and green development,” she said.
Of the US$42.8 billion worth of green bonds issued in China last year, only US$31.2 billion would have met global criteria, according to a report published at the end of February by the Climate Bonds Initiative (CBI), a non-profit group backing green bond standards. The share of what CBI calls “internationally aligned” green bonds has been steadily increasing as China’s institutions move to align themselves more with global markets.