China Releases USD15.7bn Green Bonds in 1Q21, Surpassing the US

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China Releases USD15.7bn Green Bonds in 1Q21, Surpassing the US

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The latest statistics of international data provider Refinitiv showed that China issued green bonds with a scale of approximately USD15.7bn for clean and renewable energy related projects in the first quarter of this year, as reported by Xinhuanet on April 2. The reading was about four times that of the same period in 2020, and also exceeded the USD15bn of the US in 1Q21. Citing the analysis of DBS Bank [DBS:SP], the boom of green bonds in China in the first quarter was largely due to the effective control of the pandemic and the economic recovery in the country. At the same time, China’s carbon peak and carbon neutrality targets and relevant supporting policies have also played a promoting role.

Entering the second quarter, Chinese enterprises are continuing green bond issuance. For example, Inner Mongolia Bao Gang United Steel issued a green bond on April 1, the country’s first carbon neutrality themed green bond both for the iron and steel industry and Inner Mongolia Autonomous Region. The underlying project is mainly to convert recycled blast furnace gas into electrical energy to reduce environmental pollution caused by direct gas discharge with a self-generation rate of 58.72%. Sinopec [0386:HK] also issued the first carbon neutrality themed bond in the domestic oil and gas industry on April 2, which had an issuance scale of RMB1.1bn and a maturity of three years. Sinopec will use the raised funds for its green projects, such as photovoltaic, wind power, and geothermal. Through those green projects, it can achieve an emission reduction of 362,800 tons of carbon dioxide and 93.35 tons of sulfur dioxide per year. According to the data from PBoC, at the end of 2020, the stock of China’s green bonds was RMB813.2bn, ranking second in the world. The overall quality of China’s green financial assets is good, and there are no default cases up to now.