Chinese authorities announced on Wednesday that they would establish a unique lending facility worth 200 billion yuan ($31.36 billion) to support the clean and efficient use of coal. The announcement came following an executive meeting presided over by Premier Li Keqiang and represents yet another significant financial support for the country’s carbon emissions reduction efforts.
According to analysts, the measure will further accelerate the flow of almost 2 trillion yuan in financing assistance from commercial banks toward clean energy projects as China ramps up efforts to reach its carbon reduction targets, as previously announced. Known as the Clean Coal Lending Facility, it will be launched in addition to previous financial lending tools to support carbon emission reductions. The conference will concentrate on retaining clean coal, which encompasses pure and high-performance processing, green and intelligent exploitation, clean and efficient consumption, and coalbed methane exploitation. According to the article, the facility would focus on significant projects and operate on the marketization concept as its foundation. National banks in China will provide preferential loans to such projects based on their appraisal. The People’s Bank of China (PBC), China’s central bank, would offer lending facilities depending on the amount of money lent out due to the loan.
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During the conference, it was also said that China would investigate steps to improve support for projects involving the clean use of coal, such as the issuance of government special-purpose bonds or the imposition of tariff benefits.
The particular relending facility is the most recent example of a series of policies implemented by the Chinese government to drive the country closer to its carbon emissions peak and carbon neutrality objectives, both of which are ambitious. The PBC said on November 8 that it would grant low-cost loans to financial institutions for the purpose of issuing loans to businesses in crucial sectors of carbon emission reduction. Directed fees, according to experts, may be used to promote generator retrofits and cut carbon emissions while also functioning as a lever to produce around 2 trillion yuan in financial support from commercial banks, according to the experts. Because the development and utilization of clean energy necessitate a significant amount of capital for research and development and technological innovation, and financial support, particularly in the form of relending, becomes increasingly important for companies operating in the renewable energy sector, which includes wind power, hydropower, solar power, nuclear energy, and new-energy vehicles.
According to the Global Times, according to Zhang Xiaorong, head of the Beijing-based Cutting-Edge Technology Research Institute, the loans are more likely to be granted to significant firms, notably substantial coal-fired power plants.
China’s decision to boost clean coal use comes after the country’s government announced a raft of steps to alleviate the country’s electricity shortfall, which the country’s high coal prices have exacerbated. The Xinhua News Agency reported that Li said at the World Economic Forum’s Special Virtual Dialogue with Global Business Leaders that China has alleviated its energy constraints, particularly in electricity and coal. The future supply of such energies is assured.
In Li’s opinion, China will strive for a low-carbon transition in a balanced and orderly way, with the prerequisite of a reliable and secure supply of energy.