China’s outstanding green loans surpass 22 trillion yuan ($3.2 trillion) at present, accounting for roughly 10% of the country’s total loan balance, People’s Bank of China Governor Yi Gang said on Wednesday.
Separately, China’s green bonds have hit more than 2.5 trillion yuan, Yi said at the Boao Forum in southern China’s Hainan province.
“Achieving carbon neutrality requires ‘carrots and sticks’,” Yi said. A central bank incentive mechanism, which provides commercial banks with loans with interest rates as low as 1.75%, could be equated to a “carrot”, he said.
To support carbon emission reduction, the central bank has lent more than 300 billion yuan via a relending tool which has helped banks to make 600 billion yuan in loans to green projects.
The central bank said in January it would keep the relending tool in place until the end of 2024.
Zhao Chenxin, deputy director of the National Development and Reform Commission, told the same forum that China is creating policies to promote green and low-carbon development.
China aims to reach its peak in carbon dioxide emissions by 2030 and achieve carbon neutrality before 2060.
- Reuters, with additional editing by Vishakha Saxena