Includes measures to develop the green finance sector, provide low-cost funds for green projects, and expand the carbon trading market.
China’s State Council and the Central Committee of the CCP have issued new working guidance as part of the country’s plans to achieve its peak carbon emissions and net-zero climate goals.
Under the plan, China will by 2060 have fully established a “green, low-carbon and circular economic system” with equal emphasis on domestic and external investment and trade, and a clean, low-carbon, safe and efficient energy system – where the share of non-fossil energy consumption will exceed 80% of its total mix, compared to just 16% in 2020.
“It is the first time that China has announced the target of 80% non-fossil share in the energy mix by 2060, and has once again affirmed China’s climate pledges–peak CO2 emissions before 2030 and achieve carbon neutrality before 2060,” says Refinitiv’s Lead China Analyst, Yuan Lin.
“This exhibits China’s determination to [meet] its climate pledge after the announcement last September and will inject positive momentum into global climate negotiations in COP26. This document also implies that China will peak its coal consumption before 2026, further showing the willpower to curb fossil fuel consumption.”
The guidance also lays a foundation for detailed roadmaps in China’s green transition across sectors including power, industry and transport. It also emphasises the role of market-based mechanisms in saving energy and reducing emissions, as well as promotes carbon sinks, carbon capture and storage, and other carbon removal mechanisms, Lin says.
The guidance includes a commitment to “build an investment and financing system” that is compatible with the peak carbon and net-zero goals, and to “strictly control” investment in high-carbon projects.
Also included are measures to further develop the green finance sector, including by promoting the development of green and low-carbon financial products and services, establishing monetary policy tools to incentivise carbon emissions reduction, and incorporate green credit into the macro-prudential assessment framework.
Banks and other financial institutions will also be guided to provide long-term low-cost funds for green and low-carbon projects. Policy banks will also be directed to provide long-term stable financing to support China’s green transition.
In addition, support will be provided to qualified companies to help them finance – through the capital markets – the construction and operation of green and low-carbon projects.
A national low-carbon transition fund will also be set up, and social capital will be directed towards the establishment of green and low-carbon industry investment funds.
The national carbon emissions trading market will gradually be expanded in terms of market coverage, trading varieties, trading methods, and the allocation and management of allowances, the guidance says.
Further detailed roadmaps and tools to facilitate China’s climate transition are expected to be published before or during COP26.