Out-Law News | 18 Dec 2020 | 1:04 am | 1 min. read
The People's bank of China (PBOC) is to set higher green finance standards, introduce mandatory requirements for financial institutions to disclose environment-related information, strengthen capacity to analyse and manage environmental and climate risk, and streamline access for international investors to enter China's green finance market.
PBOC governor Yi Gang confirmed the four priority areas for green finance in China at the Singapore fintech festival (SFF) last week.
The respective value of China's green lending and green bonds reached 11.55 trillion yuan and 1.2tn yuan by the end of the third quarter, according to a Reuters report.
In addition to the plans outlined by the PBOC, China and Singapore announced joint financial initiatives on green finance last week, including billions of renminbi of financing from China for banks in Singapore.
China in September announced its goal to have carbon emission peak by 2030 and achieve carbon neutrality by 2060.
China further committed to contribute more towards the global fight against climate change by 2030 last Saturday. It said it will lower carbon dioxide emissions per unit of gross domestic product (GDP) by over 65% from the 2005 level, increase the share of non-fossil fuels in primary energy consumption to around 25%, increase the forest stock volume by six billion cubic metres from the 2005 level, and bring its total installed capacity of wind and solar power to over 1.2bn kilowatts.
Finance expert Kanyi Lui of Pinsent Masons, the law firm behind Out-Law, said: "I believe 2020 will be considered as a key year for sustainable development in China. It is the year where China announced carbon neutrality goals, support for green financing and formally prioritised clean energy. Coal will remain an important part of China's energy mix, but will in time be increasingly replaced by renewables."
On 18 June this year, six Chinese ministries, including the National Development and Reform Commission and the National Energy Administration, stated that coal plants should only to build on demand, prioritising clean energy, imports and flexibility.