Earth Summit 2021: China excludes fossil fuel projects from green bonds, taking a step towards global standards on the path to 2060

Name: Two sessions: How China's environmental policies are giving a boost to green industries
Uploaded: 2021-04-22T09:00:19.000Z
Duration: 3 min 26 s
Description: Two sessions: How China's environmental policies are giving a boost to green industries

The announcement is a big step forward, but until further reform Chinese green bonds will remain off bounds to many international investors, analysts said

So-called clean coal and secondary oil and gas extraction projects will no longer qualify for fundraising via green bonds, under updated rules

Reading Time:3 minutes

Why you can trust SCMP

Green bonds and other forms of sustainable investment are becoming increasingly important. Photo: Shutterstock Images

Eric Ng

Published: 5:00pm, 22 Apr 2021Updated: 1:11pm, 21 May 2021

China’s announcement that fossil fuel projects will be excluded from those eligible for green bonds financing is a major step forward for the world’s biggest emitter of carbon dioxide.

Still, until further reform, Chinese green bond products will remain off limits to many international investors, analysts said.

“China’s plan to remove fossil fuel projects from green bonds’ use of proceeds will bring its burgeoning green bond market closer to aligning with more stringent global issuance standards,” said Chen Weiheng, a global market strategist at JP Morgan Private Bank Asia.

“[But] until China implements further steps to align closely with [those] standards, international investors are limited in their ability to invest in China’s green bonds.”

03:26

Two sessions: How China's environmental policies are giving a boost to green industries

An updated list of eligible projects, which will come into effect on July 1, together with Beijing’s target of rolling out the China-EU green finance classification system later this year, should help China converge with global green standards, he added.