<p>Loopholes in China's green financing rules could allow big state-owned firms to use proceeds from "carbon-neutral bonds" to fund day-to-day operations including coal-fired power plants, according to research published on Tuesday.</p>.<p>The Institute for Energy Economics and Financial Analysis (IEEFA) examined the first batch of yuan-denominated carbon-neutral bonds issued this year by giant state-owned energy corporations such as China Energy Investment Corporation (CEIC) and the China Huaneng Group.</p>.<p>It said 30% of proceeds from the bonds were to be allocated to the working capital of the issuers.</p>.<p>"The promise of green bonds is that they can help channel capital to energy transition investments," IEEFA researcher Christina Ng said.</p>.<p>"But potentially the proceeds raised by the SOEs from these bond deals could be spent on maintaining a steady or growing coal business, particularly as they have new coal assets in the pipeline."</p>.<p>Neither CEIC nor Huaneng responded immediately to a request for comment.</p>.<p>Green financing has become one of China's top priorities as it tries to pay for the clean energy infrastructure required to bring emissions to a peak by 2030 and to net-zero by 2060.</p>.<p>China central bank advisor Ma Jun said in January that China would require at least 100 trillion yuan ($15.7 trillion) to meet its 2060 carbon neutrality pledge.</p>.<p>China overtook the United States when it came to issuing green bonds in the first quarter of this year, raising $15.7 billion, but analysts said more policy support was needed.</p>.<p>Companies were previously allowed to apply for green finance to fund "clean coal" projects, even though they still produced large amounts of carbon dioxide.</p>.<p>The central bank has since excluded "clean coal" from the list of projects eligible for green bonds, but up to 50% of green bond proceeds can still be allocated to working capital and used to finance coal, Ng said.</p>.<p>"One hundred per cent of green bond proceeds should be going to green projects," she said. <br /><br /></p>
<p>Loopholes in China's green financing rules could allow big state-owned firms to use proceeds from "carbon-neutral bonds" to fund day-to-day operations including coal-fired power plants, according to research published on Tuesday.</p>.<p>The Institute for Energy Economics and Financial Analysis (IEEFA) examined the first batch of yuan-denominated carbon-neutral bonds issued this year by giant state-owned energy corporations such as China Energy Investment Corporation (CEIC) and the China Huaneng Group.</p>.<p>It said 30% of proceeds from the bonds were to be allocated to the working capital of the issuers.</p>.<p>"The promise of green bonds is that they can help channel capital to energy transition investments," IEEFA researcher Christina Ng said.</p>.<p>"But potentially the proceeds raised by the SOEs from these bond deals could be spent on maintaining a steady or growing coal business, particularly as they have new coal assets in the pipeline."</p>.<p>Neither CEIC nor Huaneng responded immediately to a request for comment.</p>.<p>Green financing has become one of China's top priorities as it tries to pay for the clean energy infrastructure required to bring emissions to a peak by 2030 and to net-zero by 2060.</p>.<p>China central bank advisor Ma Jun said in January that China would require at least 100 trillion yuan ($15.7 trillion) to meet its 2060 carbon neutrality pledge.</p>.<p>China overtook the United States when it came to issuing green bonds in the first quarter of this year, raising $15.7 billion, but analysts said more policy support was needed.</p>.<p>Companies were previously allowed to apply for green finance to fund "clean coal" projects, even though they still produced large amounts of carbon dioxide.</p>.<p>The central bank has since excluded "clean coal" from the list of projects eligible for green bonds, but up to 50% of green bond proceeds can still be allocated to working capital and used to finance coal, Ng said.</p>.<p>"One hundred per cent of green bond proceeds should be going to green projects," she said. <br /><br /></p>