Central bank aims to provide financial support for renewable energy sources.
The People’s Bank of China (PBOC) has committed to further intensify its support for carbon transformation initiatives.
In November last year, the central bank established a CNY 200 billion (US$31.4 billion) special loan facility to provide low-cost funding to financial institutions that lend to businesses in key areas of carbon emission reduction.
The facility is expected to provide coal power companies enough financing to upgrade their systems and contribute towards China’s carbon targets, helping the country to save more than 40 million tonnes of coal every year and reduce carbon dioxide emissions by 110 million tonnes.
According to local reports, the PBOC has pledged to increase its financial support for carbon reduction and to set up a new funding system that will further incentivise energy transformation in the country.
According to the deputy director of the PBOC’s Shanghai Head Office, Jin Penghui, the new funding system will be aimed at providing financial support for the development of new energy sources such as wind power, photovoltaics and other forms of energy transformation.
Jin said the PBOC is working on building a new transitional financial system so that more substantial support can be put in place for the low-carbon transformation from fossil fuels, especially coal.
The proportion of coal in China’s total energy mix has so far dropped from 72.4% in 2005 to 56.8% in 2020, according to a white paper released in October last year.