Recently, the People's Bank of China and eight other departments jointly issued the "Guiding Opinions on Further Improving Financial Support for Green, Low-Carbon and High-Quality Development of the Yangtze River Economic Belt", proposing to make full use of structural monetary policy tools to support green and low-carbon development. Prior to this, the CPC Central Committee and the State Council issued the "Opinions on Accelerating the Comprehensive Green Transformation of Economic and Social Development" (hereinafter referred to as the "Opinions"), proposing to enrich green transformation financial tools and extend the implementation period of carbon emission reduction support tools to the end of 2027.
Which companies will be given new opportunities by extending the implementation period of the carbon emission reduction support tool? In the process of promoting the internationalization of carbon footprint, what overseas experience can be used as a reference? Recently, Yang Junhao , CEO of CCXGF International and Vice President of CCXAP , accepted an exclusive interview with 21st Century Business Herald. He believes that clean energy, energy conservation and environmental protection, and carbon reduction technologies will continue to receive financial support. In terms of carbon footprint certification, there are still certain barriers between the mainland and Hong Kong. It is a future trend to establish a unified and efficient carbon footprint certification system across the country and abroad.
Yang Junhao , CFA, FRM, is currently the CEO of CCX Green Finance International and the Vice President of CCX Asia Pacific. Previously, he was a senior investment banker with more than ten years of experience in the financial industry, and worked at Guotai Junan Securities and China Merchants Securities. Dr. Yang holds a Master of Finance from the University of Sydney, a PhD in Finance from the University of Queensland, and is a postdoctoral fellow in Applied Economics at Renmin University of China.
Clean energy, energy conservation, environmental protection and carbon reduction technologies will continue to receive financial support
" 21st Century ": What do you think of the quantitative transformation goals in energy, transportation and other areas proposed in the "Opinions"?
Yang Junhao : The Opinions put forward relatively clear time nodes and task goals for the transformation and development of the real economy, and made it clear that it is necessary to promote the green and low-carbon transformation and upgrading of traditional industries. I believe that in order to promote the green and low-carbon transformation of industries such as steel, nonferrous metals, petroleum, and chemicals, it is necessary to further promote clean production technology and equipment and promote industrial process upgrades. At the same time, the Opinions also emphasizes the optimization of industrial capacity scale and layout, the use of national standards to guide and enhance the upgrading of traditional industries, and the establishment of a sound capacity withdrawal mechanism, which is conducive to curbing the blind launch of high-emission projects.
"21st Century": Which companies will be given new opportunities by extending the support tools for carbon emissions reduction to 2027?
Yang Junhao : The carbon emission reduction support tool adopts a direct mechanism of "lending first and borrowing later". The People's Bank of China provides financial support for 60% of the loan principal for eligible carbon emission reduction loans issued by financial institutions to relevant enterprises in key carbon emission reduction areas. At present, the carbon emission reduction support tool focuses on supporting three carbon emission reduction areas: clean energy, energy conservation and environmental protection, and carbon emission reduction technology. We expect that enterprises related to clean energy, energy conservation and environmental protection, and carbon reduction technology will continue to receive greater support. When the carbon emission reduction support tool is extended to after 2027, we also believe that more financial institutions will obtain the business qualifications of the carbon emission reduction support tool. At the same time, carbon financial products and derivatives can be aligned with international standards, especially with the financial instrument standards of the United States and the European Union.
21st Century: What do you think of the Opinion on the formulation of transitional finance standards? At present, the national transitional finance standards have not yet been introduced. What difficulties are there in standard formulation?
Yang Junhao : The scale of the transition finance market is huge and is crucial to the healthy development of the real economy. At present, in the field of transition finance, the market expects that more comprehensive transition finance standards can be issued at the national level as soon as possible. For industries such as steel, cement, building materials, non-ferrous metals, chemicals, aviation, and papermaking, there is currently no unified transition path and standard in the industry, which is also one of the challenges facing transition technology. The formulation of relevant standards requires the active participation of the above-mentioned real industries, especially leading enterprises and industry associations.
Establishing a cross-border carbon footprint certification system
"21st Century": What are the similarities and differences between Hong Kong's green finance development policies and those of the mainland?
Yang Junhao : The development of Hong Kong's green market follows multiple standards, including the Green Bond Principle of the International Capital Market Association and the Green Loan Principle of the Asia Pacific Loan Market Association. At the same time, the domestic market operates according to the assessment guidelines of the People's Bank of China, which leads to differences in the assessment standards under the regulatory system of the two places. In cross-border business, we will also consider green standards and catalogues in other regions, such as the China-EU Common Classification Catalogue and Hong Kong's Sustainable Classification Catalogue, and are committed to promoting the integration of these standards. We firmly believe that unified green and sustainable standards are crucial to the unification of capital market opinions and the convergence of investment decision-making processes.
Hong Kong explored the concept of green earlier than other regions. Thanks to the integration of Chinese and Western cultures, the concept of green environmental protection has been deeply rooted in the hearts of the people. For example, local developers have long focused on zero-emission design in the construction of buildings and commercial real estate, and have chosen environmental protection measures such as lighting and water use. In addition, Hong Kong financial institutions also attach great importance to sustainable development. Some institutions have even established the position of Chief Sustainability Officer (CSO) and a special green finance review committee to promote the greening of the bank's loan issuance and asset allocation. The requirements set up at the board level not only reflect good corporate governance standards, but also demonstrate Hong Kong's in-depth layout and high attention in the field of green finance.
"21st Century": In terms of product carbon footprint, what experiences and practices can Hong Kong provide for reference for the mainland?
Yang Junhao : In terms of carbon footprint certification, there are still certain barriers between the mainland and Hong Kong. Due to the high degree of internationalization of the Hong Kong market, its recognized certification standards have been integrated into the EU system. After completing carbon accounting, many certification agencies can directly connect with the European Carbon Exchange and even attract investment and subscription from EU ESG funds. However, with the continuous development of green finance, I believe that a unified and efficient carbon footprint certification system that spans domestic and foreign countries will be gradually established in the future. This is the inevitable trend and direction of future development in the field of green finance.
"21st Century": What are the specific difficulties in implementing cross-border authentication?
Yang Junhao : There are differences in green finance standards at home and abroad. The mainland has a unique classification system, while Hong Kong used to follow international certification systems such as the ICMA Green Bond Principles. But in May this year, Hong Kong also released a local classified directory. In terms of certification standards, there are significant differences in industry coverage between the mainland and Hong Kong and the international industry. It will take time to verify whether mainland carbon assets can be recognized by overseas investors.
"21st Century": What suggestions do you have for companies to manage product carbon footprints?
Yang Junhao : Most companies may have done quite well in scope 1 and scope 2. However, in scope 3, it is still difficult to obtain data from upstream and downstream companies. In this process, the voice and control of companies in the supply chain are one of the key factors. We are relatively more objective and fair in doing this as an independent third party. Because we can communicate with upstream and downstream companies from a professional perspective, obtain data without affecting the normal production and operation of the company , and convert these data into disclosable standards. This is also the main pain point and difficulty of most companies, and it is also the core of our value service.
"21st Century": How do you evaluate the development of green finance in Mainland China and Hong Kong?
Yang Junhao : The Hong Kong SAR government is vigorously promoting subsidy programs to build a green financial center, attracting many Chinese issuers to come to finance. US dollar financing costs may fall due to the Federal Reserve's interest rate cuts, and the amount of green financial financing in Hong Kong is expected to grow significantly, indicating the general trend of it becoming a green financial center. At the same time, green finance is also booming in the mainland. The People's Bank of China, the National Association of Financial Market Institutional Investors, and the Shenzhen and Shanghai Stock Exchanges have continuously launched innovative products such as green bonds and special loans, and regulators have actively promoted them. At the same time, mainland financial institutions have also begun to proactively deploy green loans and green investments, setting up specialized departments or institutions for overall coordination and allocation. This process not only promotes the green development of the capital market, but also benefits financiers and borrowers, promoting the transformation and development of the mainland's green industry.
