China Plans To Back-Clean Coal With 200 billion Yuan Relending Facility

November 17, 2021

China will establish a special relending facility worth 200 billion yuan ($31.35 billion) to support the clean use of coal, state media quoted the cabinet as saying on Wednesday.

It did not say what activities would be classified as a clean use of coal, but the cabinet said the loans would in addition to a lending tool rolled out by the central bank this month to support efforts to cut carbon emissions.

China's central bank said on Nov. 8 it would provide financial institutions with low-cost loans to help firms cut carbon emissions, supporting the country's long-term carbon neutrality goals.

Analyst View
China is one of the largest consumers of coal for power production. China has been experiencing power cuts at factories across China since September as local governments struggled to balance the rising demand for electricity with efforts to reduce carbon emissions. Initial trade data showed China’s imports of coal surged by 76% from a year ago in September to 32.9 million tons.