China plans to make fossil fuel projects ineligible for financing via green bonds, as Beijing tightens up standards for such investment to follow international practices and push its domestic clean energy strategy forward, reported Caixin.
Fossil fuel projects were missing from the latest draft list of projects eligible for green bond financing, which was jointly released Friday by the central bank, the country’s top securities watchdog and the National Development and Reform Commission (NDRC). Such projects, including those related to coal-fired power plants, are currently eligible under a guideline published by authorities in 2019.
The draft is also set to unify the currently fragmented supervision of China’s multibillion-dollar green bond industry. The two main regulators for green bonds, the central bank and the NDRC, have different standards for this kind of debt.
In recent years, China has ramped up its efforts to issue green bonds and set up relevant regulations, and has now become one of largest issuers of green bonds. However, some of China’s green bonds didn’t meet global standards because of differences in the definition of “green.” For instance, fossil fuel projects are not normally included in many other countries’ definitions.