SHANGHAI (Reuters) – China has excluded “clean coal” from a list of projects eligible for green bonds, according to long-awaited new draft guidelines published by the central bank on Friday.
The new catalogue of eligible projects replaces the previous one published in 2015, and will be open to public consultation until June 12, the People’s Bank of China said in a notice.
China has sought to use green financing to pay for its transition to cleaner modes of growth, but the previous catalogue allowed it to be raised for the “clean use of coal”, including coal washing plants that remove impurities, and technologies that cut pollution during combustion.
The inclusion of “clean coal” in the 2015 list had put China at odds with global standards, a point of contention for some international investors and many environmental groups.
Chinese financial institutions provided billions of yuan in green financing to coal related projects last year, and have also supported other fossil fuel projects, including the expansion of an oil refiner.
Sean Kidney, chief executive of the London-based Climate Bonds Initiative, said the new list was “a hugely significant step that will be welcomed by international investors”.
“Removal of fossil fuels brings closer alignment with international practices,” he said.
The new guidelines include projects that help replace coal with cleaner forms of energy for winter heating. Green finance will also be available for renewable energy or carbon capture projects, and for steel mills to pay for mandatory upgrades to their emissions control technology.
The central bank has also added shared bicycle services to the list of eligible projects, as well as infrastructure supporting new energy vehicles.
Reflecting China’s shift in priorities from controlling air pollution to reducing greenhouse gas emissions, it will also allow green financing to be used to support the carbon and green power certificate trading sectors.
Reporting by David Stanway, Muyu Xu and Andrew Galbraith; Editing by Simon Cameron-Moore