People's Bank of China intends to move its green financing framework closer to global standards by excluding so-called 'clean coal', according to reports
China is set to scratch coal infrastructure from the government's list of projects eligible for green bond financing, according to reports.
'Clean utilisation of fossil fuel' projects were notably absent from a draft list of projects considered eligible for green bond financing published by the People's Bank of China on Friday, according to reports from Reuters andBloomberg.
The new list is set to replace a 2015 version that notoriously deemed so-called 'clean coal' projects eligible for sustainable financing.
Investors have long called on China to scratch coal from the list and align its green financing rules with global standards, which exclude fossil fuels.
Some 28 per cent of the $21.8bn worth of 'green' bonds issued in China in the first half of 2019 were not in line with international green definitions, according to a report published the UK-based watchdog Climate Bonds Initiative.
The new standards could help entice international bond investors to China's booming renewables market for the first time.
"It's a hugely significant step that will be welcomed by international investors. Removal of fossil fuels brings closer alignment with international practices," Sean Kidney, chief executive officer of the Climate Bonds Initiative told Reuters.
Large 'ultra-supercritical' and 'supercritical' coal-fired power plants have been purged from the list published by the central bank last week, as have projects that process coal to remove impurities and ventures that produce fuels and fuel additives, including gasoline and diesel with 'high' environmental standards.
Meanwhile, hydrogen, geothermal, tidal power, biomass, energy storage, and carbon capture and sequestration, as well as 'new energy vehicle' infrastructure and 'green services' are now included in the list of eligible projects.
The new standards also propose to unify sustainable investment standards across the Central Bank, the National Development and Reform Commission, and the China Securities Regulatory Commission.
The public has until mid-June to weigh in on the new proposals, according to the bank.
The move comes less than a week after the International Energy Association (IEA) warned that coal investment was set to plummet 15 per cent this year due to the coronavirus, as part of a larger slump in investment across the energy industry felt most acutely by fossil fuel sectors.
The report noted that China and other Asian nations' appetite for new coal plants would help buttress the coal industry despite the broader downturn. The rate of approvals for new coal plants has doubled in the first quarter of 2020 compared to the rate seen throughout last year, it warned, due in large part to projects in China.
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