Climate finance: China says 193 green bonds worth US$35 billion meet EU standards, enhancing lure for overseas investors

The previously issued bonds comply with the common-ground taxonomy (CGT) for climate-mitigation projects, says China’s Green Finance Committee

CGT stamp of approval expands pool of investible green bonds and removes risk of greenwashing accusations, experts say

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Workers inspect solar panels at the fishing-solar complementary photovoltaic power generation base in Taizhou, in China’s eastern Jiangsu province, on July 12, 2023. Photo: AFP

Published: 3:00pm, 17 Jul 2023

China’s main guidelines issuer for green finance has announced that 193 previously issued green bonds meet the standards of both China and the European Union, a stamp of approval that allows more international investors to back Chinese climate-mitigation projects.

The Green Finance Committee, led by China’s central bank the People’s Bank of China and operating under the China Society for Finance and Banking, said it set up an expert group that spent several months reviewing green bonds issued in China to come up with the list.

The first batch of 193 bonds, which raised 251.3 billion yuan (US$35 billion) between 2016 and this year for their issuers – primarily state-backed public transport and clean-energy companies – fully comply with the common-ground taxonomy (CGT) announced jointly by China and the EU in June last year, according to the committee.

“The Green Finance Committee expert group’s effort is an important innovation to expand the use cases of the CGT,” said the committee’s chairman Ma Jun in a statement on Friday. “This initiative will also help enhance the openness of China’s green bond market to global investors.”

Officers stand guard in front of the headquarters of the People’s Bank of China in Beijing on September 30, 2022. Photo: Reuters

All 193 bonds are traded in China’s interbank bond market and have maturity dates later than March 31 this year.

The CGT is a classification of projects that qualify for issuance of green bonds, which finance projects with environmental benefits, in both China and the EU. After two years of comparison work to identify commonalities and differences between Chinese and EU issuance standards, it so far includes 72 types of projects acceptable by both jurisdictions.