China is dumping so-called “clean coal” from the guidelines for its green bond programs, a decision that will match up the country’s green finance definitions more closely with the standard set by the global Climate Bonds Initiative.
“The issuance of green bonds for clean coal has been highly controversial and the technology is widely considered, at least by Western investors, to be too emissions- intensive to be green,” reports Environmental Finance magazine, in a post republished by the Institute for Energy Economics and Financial Analysis. “China’s support for clean coal has in the past been the biggest difference between its definition of green and the opinions of most Western investors.”
But now, “I can share with the conference that, going forward, in the new [green bond] catalogue, the clean utilization of coal will not be considered green,” Geoffrey Choi, financial services assurance leader for the Asia Pacific region at Ernst & Young, told a recent event in Tokyo.
Choi said the decision was a “big step” for the country, adding that “for a lot of the areas that we have debated in the past, China has the determination to converge with the EU standard.”
But elsewhere, China continued to be a complicated source of mixed messages on climate and energy, with Agence France-Presse pointing to the outdated coal technology Beijing is still exporting to countries in Asia, Africa, and the Middle East. “The carbon dioxide emissions from these Chinese-backed plants could cripple global efforts to rein in global warming caused by the burning of fossil fuels—especially coal,” the news agency warns.
“China is a world leader in terms of embracing the policy and investment needs to progressively decarbonize its economy,” said IEEFA Director of Energy Finance Studies Tim Buckley. “But internationally, China continues to invest in a range of coal projects in direct contradiction to its domestic energy strategy.”
“The risk is locking these countries into something that won’t be good for them in the long run, and that is incompatible with the Paris climate agreement’s temperature goals,” said CoalSwarm energy analyst Christine Shearer. With little or no coal-fired power, and no coal to fuel future power plants, recipient countries like Egypt, Nigeria, Kenya, Senegal, Zimbabwe, and half a dozen others “will have to build import infrastructure, or even coal mines,” she added.
