PBOC expands carbon reduction facility for green transition
The People's Bank of China (PBOC) has expanded the scope of its Carbon Emission Reduction Facility (CERF). This decision aims to promote a comprehensive green transition of economic and social development and further develop green finance.
New projects for a greener economy
The PBOC's decision specifically includes projects that demonstrate direct carbon emission reduction effects, broadening the eligibility criteria for the CERF.
Among the newly incorporated categories are energy-saving retrofitting, which focuses on enhancing efficiency and reducing energy consumption across various sectors.
Green upgrading initiatives are also now within scope, supporting the modernization of industrial processes and infrastructure to meet higher environmental standards.
Furthermore, the facility will now back projects centered on the transition to green and low-carbon energy sources, a critical step towards decarbonizing the economy.
This strategic adjustment underscores the central bank's commitment to leveraging financial instruments to accelerate the nation's environmental objectives and stimulate investment in sustainable practices.
Quarterly funding for green initiatives
The Carbon Emission Reduction Facility (CERF) operates on a structured quarterly basis, ensuring consistent support for eligible green projects.
Each operation provides one-year central bank lending funds to participating financial institutions.
The total annual volume of these central bank lending funds is capped, not exceeding RMB800 billion, reflecting a substantial commitment to green development.
The PBOC determines the quarterly operation volume, aligning this decision with its broader monetary policy adjustments.
Funds are provided based on the loans issued by financial institutions to designated target areas and their specific demand for central bank lending, creating a responsive and targeted financing mechanism.