Coal-fired power plant in China issues green bonds
A power station in the Chinese city of Tianjin has issued ‘green bonds’ worth one billion yuan ($150 million) to subsidize a 2,000-megawatt coal-fired power plant. Environmental activists have attacked the move.
Tianjin SDIC Jinneng Electric Power said it registered its short-term “green bonds” on the interbank market. The company is planning to sell the obligations in the third quarter of this year.
“The company's registration and issuance of the green bonds have driven forward the green, circular and low-carbon development of the Beijing-Tianjin-Hebei region,” the company said in a statement, seen by Reuters.
This is the first “green bond” of its kind launched by China's thermal power sector, the company says. The returns will reportedly be used to pay back loans steered into the construction of two of the latest ultra-supercritical (USC) coal-fired electricity generating plants.
To promote new methods of financing to back China's transition to cleaner growth, Beijing opened five “green finance” pilot zones. Under the program, the government is going to spend at least three trillion yuan ($450 billion) annually by 2020 to reduce pollution and greenhouse gas emissions.
China is planning to scale down the share of coal in its total energy mix from 64 percent in 2015 to 58 percent by the end of the decade. At the same time, total consumption of coal is still expected to grow over the period.
As a way of compensating Beijing is promoting the use of lower emission coal-fired power generation technology with subsidies and preferential financing policies.
In late 2015, so-called clean coal was included in the catalog of sectors suitable for green financing. The list contained USC power plants with a capacity of 300 MW or more.
The decision has been criticized by environmentalists who say funds are being diverted from cleaner enterprises.
“The ‘clean’ in clean coal is a relative term. Technology such as ultra-low emissions, albeit producing less air pollutants, is not a solution to lowering the carbon emissions that endanger our climate,” said Huang Wei, a climate and energy campaigner with Greenpeace East Asia in Beijing, as quoted by Reuters.
“It is unwise to use green bonds to support any coal projects, especially coal power and coal chemical projects,” she added.