General

On November 8, the People's Bank of China announced that it has officially launched a carbon reduction support tool. Through this tool, low-cost funds are provided to financial institutions, and financial institutions are guided to provide carbon emission reduction loans to all types of enterprises in key areas of carbon emission reduction under the premise of independent decision-making and self-risking. The loan interest rate should be the same as that of the term. The market quoted interest rate (LPR) for grade loans was roughly the same.

u3000u3000 The reporter learned that with the implementation of this tool, qualified financial institutions will obtain low-cost funds, release preferential interest rate financing to key areas with significant carbon emission reduction effects, and leverage more social funds to participate in the carbon emission reduction market.

u3000u3000 provide funds to take

u3000u3000 Direct mechanism of "loan first, then borrow"

u3000u3000 The relevant person in charge of the People’s Bank of China said that carbon emission reduction support tools provide financial institutions with a direct mechanism of “loan first and then borrow”.

The target of carbon emission reduction support tools is tentatively determined to be national financial institutions. The People’s Bank of China, through the direct mechanism of “loan first and then borrow”, grants qualified carbon emission reduction loans from financial institutions to relevant enterprises in key areas of carbon emission reduction. Provide financial support based on 60% of the loan principal, with an interest rate of 1.75%. The term is 1 year and can be extended twice. Financial institutions need to provide qualified collateral to the People's Bank of China.

"Financial institutions shall provide carbon emission reduction loans to all types of enterprises in key areas of carbon emission reduction on the premise of making independent decisions and assuming their own risks. The loan interest rate should be roughly the same as the market quoted interest rate (LPR) for loans of the same maturity grade." The person in charge said.

u3000u3000Carbon reduction support tool is "addition"

u3000u3000What are the projects supported by the carbon reduction support tool?

u3000u3000 The relevant person in charge of the People's Bank of China stated that it focuses on supporting the three carbon emission reduction areas of clean energy, energy conservation and environmental protection, and carbon emission reduction technologies. In the early stage, the key areas of carbon emission reduction highlighted "small and refined", and focused support on industries that are in the initial stage of development, but there is more room to promote carbon emission reduction, and a certain amount of financial support can bring significant carbon emission reduction effects.

Specifically, the clean energy field mainly includes wind power generation, solar energy utilization, biomass energy utilization, pumped storage, hydrogen energy utilization, geothermal energy utilization, ocean energy utilization, heat pumps, high-efficiency energy storage (including electrochemical energy storage), smart Power grid, large-scale wind power photovoltaic source grid integrated load storage project, household distributed photovoltaic whole county promotion, cross-regional clean power transmission system, emergency backup and peak shaving power supply, etc.

u3000u3000 The energy-saving and environmental protection fields mainly include energy efficiency improvement in the industrial field, and the transformation of new power systems.

u3000u3000The technical fields of carbon emission reduction mainly include carbon capture, storage and utilization.

u3000u3000 "The scope of follow-up support can be adjusted according to industry development or policy needs." The person in charge said.

“Large enterprises in the low-carbon and clean energy sectors are also within the scope of this carbon emission reduction support tool.” Dong Shanning, general manager of the Green Finance and PPP Division of the Bank of Jiangsu, said that it is different from the previous refinancing tools. The difference is that the carbon emission reduction support tool introduced this time has broadened the scope of support, which is a major breakthrough.

The relevant person in charge of the People’s Bank of China stated that the carbon emission reduction support tool is “additional”. Incremental funds are used to support investment and construction in key areas such as clean energy, thereby increasing the overall energy supply capacity. Financial institutions should follow the principles of marketization and rule of law. Provide financing support to help the country's energy security supply and green and low-carbon transition.

u3000u3000Ensure that funds accurately support carbon emission reduction

u3000u3000How to achieve the emission reduction effect of carbon emission reduction support tools? The relevant person in charge of the People's Bank of China stated that when financial institutions apply for carbon emission reduction support tools from the People's Bank of China, they need to provide carbon emission reduction data on loans related to carbon emission reduction projects and promise to disclose relevant information to the public.

u3000u3000 "Financial institutions refer to carbon emission reduction project feasibility study reports, environmental impact assessment reports or evaluation reports issued by professional institutions recognized by the market, and the proportion of loans to the total project investment to calculate the annual carbon emission reductions of loans." The person in charge said.

The person in charge stated that after financial institutions receive the support of carbon emission reduction support tools, they need to disclose quarterly carbon emission reduction areas supported by carbon emission reduction support tools, the number of projects, loan amounts, weighted average interest rates, and carbon emission reduction data. , Accept the supervision of the public.

u3000u3000 The People’s Bank of China will work with relevant departments to verify the authenticity of the information disclosed by financial institutions through various methods such as entrusting third-party professional inspections.

u3000u3000 The industry generally believes that in the actual implementation of the tool, it is necessary to pay attention to issues such as the unification of green classification standards and the disclosure of carbon emission reduction information.

u3000u3000 In Dong Shanning's view, "computability" is the most critical part of the implementation of the tool: it is necessary to accurately assess and calculate the carbon emission reduction effect. "It is necessary to establish a clear and quantifiable accounting process to evaluate the carbon emission reduction effects of supporting enterprises and projects." Dong Shanning said.

"If you want to get the support of preferential low interest rate tools, the carbon emission reduction benefits of related projects must be verifiable, identifiable, and quantifiable. It is necessary to ensure that the environmental benefits represented by carbon dioxide emission reductions can be demonstrated and stand the test. Li Jing, EY Greater China Financial Services Climate Change and Sustainability Partner and EY Asia Pacific Financial Services Sustainability Director, said that after financial institutions adopt monetary policy tools to support carbon emission reduction, they should evaluate credit projects before granting credit. Post-loan management should also be different from ordinary post-loan management.

Li Jing believes that in post-loan management, it is not only the normal operation of the project, but also whether the project meets the relevant emission reduction requirements, whether the project owner's carbon emission compliance capability is within a reasonable range, and the project's carbon emission reduction performance ability, Whether the relevant environmental and social risk management capabilities are controllable, so as to avoid some potential risks.

"It is very important to ensure that funds are invested where they need to go and where they should go." Li Huashan, President of Hang Seng China Global Trade and Finance, told reporters that Hang Seng China has a clothing fabric manufacturing company that has been cooperating for many years, and it has invested in large-scale carbon emission tracking technology. Technology, all fabric production, according to different fabric varieties, fabric colors have different carbon emission reduction indexes, which can be tracked and quantified. The upcoming carbon emission reduction re-lending interest rate will be placed on this type of company with data available, which will be the priority and choice of Hang Seng China.

The relevant person in charge of the People’s Bank of China stated that by clarifying the key areas of carbon emission reduction and strengthening financial institutions’ information disclosure of carbon emission reduction and other institutional arrangements, carbon emission reduction support tools will exert policy demonstration effects and guide financial institutions and enterprises to fully understand green The important significance of the transformation is to encourage more social funds to invest in green and low-carbon fields, and to promote the concepts of green production and lifestyle and circular economy to enterprises and the public to help achieve the goal of carbon peak and carbon neutrality.