Central Bank Rolls out New Supporting Tool for Carbon Reduction
The People’s Bank of China (PBOC), the country’s central bank, announced that it has rolled out a supporting tool for carbon reduction as part of efforts to facilitate the country’s goal of carbon neutrality.
The launch of such a structural monetary policy tool will support the development of key fields such as clean energy, energy conservation, and environmental protection in a steady, orderly, targeted, and direct manner.
The bank will provide low-cost loans for financial institutions through the carbon-reduction supporting tool, and guide those institutions to provide loans to firms in key carbon-reduction fields on the premise of independent decision-making and risk-taking according to a statement released by the PBOC.
The loan interest rates provided by the financial institutions should be basically in line with the loan prime rates (LPR), it said.
Tentatively, the target of the tool is national financial institutions. The PBOC will provide 60 percent of the loan principal made by financial institutions for carbon-emission cuts, with a one-year lending rate of 1.75 percent.
The central bank also requires those financial institutions to publicly disclose information on the carbon-reduction loans and the emission cuts financed by such loans, according to the PBOC. Third-party professional institutions will verify such information.