Climate friendly projects: China's central bank extends lending framework for green investment
To support further investments in climate-friendly projects, China's central bank has extended its credit line for financial institutions. The central bank will continue its program to support companies in CO2 avoidance projects until 2027, the State Council announced on Sunday.
The program was established in 2021. Banks can receive up to 60 percent of the capital amount for suitable loans at an annual interest rate of 1.75 percent. At that time, China also promised to develop a tax and investment policy to support the "green transformation" in a statement on political goals, although it lacked concrete implementation plans.
The plan included promoting electric vehicles, energy- and water-saving household appliances, or the use of more environmentally friendly building materials. The goal was to increase the share of non-fossil energy consumption to around 25 percent by 2030.
According to the plan announced on Sunday, China aims to fully transition its economy to a green and low-carbon path by 2035 and reduce CO2 emissions by then.
The Commission, in line with China's environmental commitments, shall adopt a decision to extend the eligibility of loans under the credit line for financial institutions in supporting climate-friendly projects. This decision will further reinforce China's support for companies involved in CO2 avoidance projects until 2027, as announced by the State Council.
