China's central Bank will extend the low-carbon loan tool until 2027

China's central banks will extend the programme that provides financial institutions with low cost loans to assist companies in reducing carbon emissions. The government announced this on Sunday.

China's State Council announced that the People's Bank of China will extend its policy of supporting carbon-reduction initiatives by companies until the end of 2027.

In 2021, the PBOC launched its financing scheme. The financing window allows banks to receive up to 60% of their principal on qualified loans, at a rate of 1.75 percent for a year.

China, in a broad statement of goals with no specific plans for implementation, also pledged to create tax and investment policies which would support the "green transformation" Beijing refers to as the second largest economy of world.

The plan included the promotion of battery-powered cars, energy-saving appliances for home and use of environmentally friendly materials.

China repeated an earlier target to increase non-fossil fuel consumption to around 25% by 2030.

According to the plan, China's overall goal is to have its economy "fully green and low carbon" by 2035, with declining emissions at that time. Reporting by Ethan Wang, Kevin Krolicki and Toby Chopra. Editing by David Goodman and Toby Chopra.

(source: Reuters)