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China disqualifies ‘clean coal’ technology from green bond funding

December 14, 2018

Environmental Finance:

China will axe ‘clean coal’ from its green bond guidelines, in a move that will see its definition of green align more closely with the Climate Bond Standards and the consensus of opinions in the West.

Geoffrey Choi, financial services assurance leader for the Asia Pacific region at EY, said at the Asian sustainable green bond market conference in Tokyo, organised by the International Capital Market Association (ICMA) and Japan Securities Dealers Association: “I can share with the conference that, going forward, in the new [green bond] catalogue, the clean utilisation of coal will not be considered green.”

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.

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.

Choi explained that it is a “big step” for China to move towards a likely EU green bond standard, adding that the standards will continue to evolve.

“For a lot of the areas that we have debated in the past, China has the determination to converge with the EU standard,” he said.

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