China will put in place targeted re-lending to support the clean and efficient use of coal amid efforts in green and low-carbon development, a State Council executive meeting chaired by Premier Li Keqiang decided on Wednesday.
Given China's coal-dominated energy resource endowment, it is important to act in light of the national reality and work hard to make coal use cleaner and more efficient.
"At present, coal is the energy source that we can truly rely on ourselves for supply. It will remain so for quite a long time to come, and this bears on China's development," Li said, "That said, we need to pursue a transformation in the path of development, that is we cannot stay on the path of energy-intensive development."
On top of the financial instruments introduced earlier to support the reduction of carbon emissions, a targeted re-lending program with a quota of 200 billion yuan (about $31.3 billion) will be rolled out in support of clean and efficient use of coal, to shape policy steps of a sizable scale and facilitate green and low-carbon development.
In line with market principles, the 200-billion yuan targeted re-lending program, which focuses on priority areas and is more operable, will provide targeted support for safe, efficient, green and smart coal mining, clean and efficient coal processing, clean and efficient use of coal-fired power, clean industrial combustion and heating, clean residential heating and comprehensive utilization of coal resources, and vigorously promote the development and utilization of coalbed methane.
Specifically, national banks will issue loans at their discretion to eligible projects within the supported areas, at a rate basically on par with the prime rate of loans of the same maturity. The People's Bank of China may provide re-lending support to these banks in the equivalent amount of the loan principal.
"There is huge potential for the clean use of coal. At present, the energy intensity of coal is still relatively high. We must accelerate the commercialization of the mature technologies we have, seek steady upgrades based on practices in our country, and continue to deepen international cooperation," Li said.
Such measures as lowering project capital contribution as appropriate, proper tax incentives, intensified funding support from government special bonds and accelerated depreciation will be explored in a holistic way, to step up support for projects featuring clean and efficient use of coal.
"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," Li said.