Clean coal loans put China’s green dilemma in place

A chimney of a coal-fired power plant stands behind a lion statue in Shanghai, China on October 21, 2021. REUTERS / Aly Song / File Photo – RC2QJQ97Y6ZQ

HONG KONG, Nov. 18 (Reuters Breakingviews) – China risks taking one step forward and two back. The State Cabinet, which oversees the central bank, has mandated a special repayment facility of $ 31 billion Read more to support “clean use of coal.” The People’s Bank of China will fully cover the loans; the cheap loans he just announced to help cut carbon emissions are only getting 60% support. Both facilities allow businesses to borrow at the benchmark lending rate.

The funds are intended to improve the efficiency of the extraction and processing of fossil fuels. The country depends on it for nearly 60% of its energy consumption, and a national electricity crisis led to a 4% increase in China’s coal production last month. Thus, any effort to reduce its pollution must be welcomed.

But they will only make the coal a little less dirty. Calling it “clean” raises the specter of greenwashing. The PBOC already tried to exorcise this from the financial sector earlier this year by making “clean coal tech” ineligible for issuance of green bonds. Now that principal may have gone up in smoke. (By Yawen Chen)

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Editing by Antony Currie and Thomas Shum

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