China to step up financial support for clean, efficient use of coal

Chinese authorities vowed to integrate more policy tools and step up financial support for clean and efficient use of coal, the dominant energy resource in China, in order to ensure energy security and reduce air pollution.

China will increase financial support for enterprises that implement major transformation in order to cultivate leading firms in the clean and efficient utilization of coal, according to a guideline jointly released by the National Development and Reform Commission (NDRC) and other departments on Tuesday.

High-quality financial services will be provided to key projects with significant effects on clean and efficient utilization of coal and preferential tax policies will be implemented to accelerate the pace of transformation and upgrading of clean and efficient utilization of coal in the country, said the guideline.

Enterprises should strengthen research and development, application of technology and equipment for clean and the efficient use of coal, promoting the formation of a strong domestic market, it added.

The clean and efficient use of coal is a vital path to achieving the country’s carbon peak goal in 2030 and carbon neutrality goal in 2060, Chinese Vice Premier Han Zheng said in a meeting in March, calling for moves to advance a green transition of energy in a scientific and targeted manner.

At present, the energy intensity of coal is still relatively high in China, the world’s biggest coal miner and consumer. Last year, the country’s coal output registered a record 4.07 billion tons, up 4.7 percent on a yearly basis, data from the National Bureau of Statistics showed.

On May 4, the People’s Bank of China, the country’s central bank, announced that it has increased the targeted re-lending quota for the coal industry by 100 billion yuan ($15.11 billion) to support the clean and efficient use of coal, in order to stabilize industrial and supply chains and keep the country’s major economic indicators within an appropriate range as a complex global environment and volatile energy prices pose increasing uncertainty to China’s energy security and the economy.

At a State Council executive meeting last November, the country decided to roll out a targeted re-lending program with a quota of 200 billion yuan to make coal use cleaner and more efficient, to shape policy steps of a sizable scale and facilitate green and low-carbon development.

“Financial, fiscal and tax support can make a big difference. We need to fully consider the combined use of multiple financial, fiscal and tax policies to help lower costs and promote efficiency,” Chinese Premier Li Keqiang said at the meeting.