Chinese green finance goes to coal

Reported by Reuters, 7.4bn yuan, or the equivalent of USD $1.1bn in green corporate and financial bonds were instead issued to 13 coal projects over the first half of 2019. China Energy News also reported that over 80 per cent of a central government renewable energy fund was used to fund fossil fuel projects like fracking last year. These investments are expected to fund the construction of new coal-powered energy plants and the refurbishing of existing mines and plants. These projects will increase China’s coal capacity. The country recently approved 141m tonnes of new annual coal mining capacity in the first half of 2019.

Roughly 60 per cent of China’s current fuel mix is comprised of coal. This figure is down from 69.5 per cent in 2012, but the country remains one of the world’s largest greenhouse gas emitters. China recently removed renewable energy subsidies, leading to a decrease in investment in clean energy. However, a current Chinese solar auction could improve private sector renewable financing, and has the potential to supply large quantities of energy to Chinese cities, reported on here. If the country’s green bonds continue to be diverted to coal and fossil fuels, the private sector will be China’s only opportunity to capitalise on emerging renewable industries.

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