In 2015, the People's Bank of China ("PBOC") issued Guidelines defining criteria and category for green bond projects, which cover green financial bonds within the inter-bank market. It sets out the official requirements for what projects qualify as green, management of proceeds and reporting, and a taxonomy in the form of a Green Bond Endorsed Project Catalogue. The Catalogue, aimed at financial entities, defines eligible green projects and provides guidelines for project classification and eligibility criteria within the following six environmental sectors:
- Energy saving;
- Pollution prevention and control;
- Resource conservation and recycling;
- Clean transportation;
- Clean energy; and
- Ecological protection and climate change adaption.
Depending upon the nature of the Chinese domestic issuer, they are subject to different green bond guidelines, which will define what constitutes eligible projects to be financed by a Chinese domestic green bond. The following guidelines exist:
- Green bonds issued by financial entities are subject to the People’s Bank of China (PBOC) Green Bond Endorsed Project Catalogue
- Green domestic corporate bonds, (and in general non-listed companies), are subject to the National Development and Reform Commission (NDRC) Green Bond Guidelines
- Green bonds issued by listed companies and corporate asset-backed securities are subject to the China Securities Regulatory Commission (CSRC) Guidelines for Supporting Green Bond Development.
In June 2020, the People’s Bank of China (PBoC), China’s central bank, the China Securities & Regulatory Commission (CSRC) and the National Development & Reform Commission (NDRC) released a draft Green Bond Endorsed Project Catalogue (2020 Edition) which will unified green bond guidelines in China.
The draft Catalogue 2020 includes the following principles:
- Aligning with NDRC “Green Industry Guiding Catalogue (2019 version)”;
- Screening green projects with significant and positive environmental impacts in addressing climate change, circular economy, and environment improvement;
- Taking mainstream international green finance taxonomy into consideration and continuously improving internationalization level of the Catalogue.
In April 2021, the PBOC issued a new catalogue of projects that are eligible for green bond issuance, which will come into effect on 1 July 2021. The Catalogue excludes coal and other fossil fuels from the list of eligible projects that can be financed through green bond issuance.