The pilot construction of climate investment and financing in Taiyuan is gradually improving

A seminar on climate investment and financing was recently held in Taiyuan, Shanxi Province, where many experts and scholars from the field of environmental protection in China and representatives of financial institutions in Taiyuan spoke freely and jointly offered suggestions for the continuous promotion of the construction of the national climate investment and financing pilot project in Taiyuan.

Since August 2022, the Ministry of Ecology and Environment, the National Development and Reform Commission, and the Ministry of Industry and Information Technology jointly released the list of the first batch of climate investment and financing pilot cities in the country, and Taiyuan was successfully approved as the first batch of climate investment and financing pilot cities in the country.

Nowadays, the pilot construction of climate investment and financing in Taiyuan has gradually improved, the city's pilot construction cooperation mechanism has been initially established, the normalized and efficient government-finance-enterprise docking mechanism is accelerating, the financial "living water" is nourishing the "green water and green mountains", and the release of green kinetic energy is accelerating.

We should take measures to address the symptoms and establish and improve the support system for climate investment and financing

The development of climate investment and financing is a key measure to achieve the "dual carbon" goal and an important support for sustainable urban development. "Taiyuan is an important energy and heavy industry base in China, with a heavy industrial structure, coal-biased energy structure, and prominent high-carbon characteristics, and is a typical resource-based city, which is in a critical period of industrial transformation, a critical period of ecological governance, and a period of improving resilience cities, and the demand for climate investment and financing is more urgent. Yuan Jin, a researcher at the School of Environment of Taiyuan University of Technology and chairman of Shanxi Kecheng Energy and Environment Innovation Research Institute, introduced.

As one of the first batch of pilot cities, based on the requirements of green and low-carbon development of energy and heavy industry cities and the realization of the "double carbon" goal, Taiyuan successfully held the first climate investment and financing industry and finance matchmaking meeting on July 25, 2022, and initially established a climate investment and financing project library, and screened out a total of 125 climate investment and financing projects with a total investment of 398 billion yuan.

It is understood that the project library includes six major projects, including promoting the adjustment of industrial structure and carbon reduction, optimizing the energy structure to decarbonize, synergize pollution reduction and carbon reduction, resource recycling development to help reduce carbon, infrastructure resilience, and ecosystem restoration and protection, covering seven major industries, including low-carbon industry, clean and low-carbon energy, low-carbon transportation, low-carbon buildings, waste recycling, and ecosystem carbon sinks, and is committed to creating a "Taiyuan model" for climate investment and financing models.

With the care and support of the Taiyuan Municipal Party Committee and the Taiyuan Municipal Government, in March 2023, the Taiyuan Climate Investment and Financing Financial Service Base was officially unveiled, marking the beginning of a substantive operational stage for climate investment and financing. The platform covers five functional systems and more than 20 application scenarios, realizing the whole process, wide-range, in-depth and high-quality financial services from financing demand matching to loan follow-up management, and providing a wide range of policy, institutional and financial support for the development of low-carbon industries.

On the basis of continuously improving the climate investment and financing project library and the construction of a comprehensive service platform, Taiyuan has steadily advanced and innovated in climate investment and financing.

Climate-friendly financial products and services are constantly being innovated. On April 18, 2023, the second climate investment and financing industry and finance matchmaking meeting was carried out as scheduled, at which Taiyuan City officially launched the first carbon inclusive platform - "Longcheng Carbon Benefit" applet by using the method of "Internet + big data + carbon finance", to build a "recordable, measurable, profitable, and recognized" mechanism for citizens' carbon emission reduction, actively mobilize all social forces to join the national emission reduction action, and help Taiyuan City's climate investment and financing pilot construction.

The consensus on comprehensively deepening the synergy of pollution reduction and carbon reduction has been continuously strengthened. On September 6, 2023, the Climate Investment and Financing Forum of Taiyuan Energy Low-Carbon Development Forum was grandly opened in Taiyuan, at which the Climate Investment and Financing Alliance of the Central Shanxi Urban Agglomeration was established, aiming to seek development with "one game of chess", promote the implementation of projects with "one force", and provide an innovative sample for the development of climate investment and financing. The forum also invited experts in the field of climate change and climate investment and financing, representatives of domestic and foreign financial institutions and research institutions, and representatives of national climate investment and financing pilot cities to participate in the forum, through the establishment of exchange and cooperation platforms, in-depth discussion of financial solutions for climate change mitigation and adaptation, promote the process of cooperation between government, economy and enterprises, and leverage diversified funds to support climate change work.

On September 30, 2023, the Taiyuan Sino-European Carbon Footprint Innovation Center was established to promote scientific research, technology, projects, talents, and other scientific research, technologies, projects, and talents in the field of climate change response between Taiyuan and surrounding cities and European cities. All-round cooperation in finance and other fields.

Looking back, pragmatic measures and favorable policies have further optimized the climate investment and financing policy environment in Taiyuan. Li Jisheng, member of the party group and deputy director of the Taiyuan Ecological Environment Bureau, said that in the next step, Taiyuan will further cultivate a number of climate-friendly market entities through innovative exploration in the fields of policies, systems, organizations, markets, products, services, and safeguard measures, explore a number of climate investment and financing development models, comprehensively promote ecological and environmental governance, and continue to contribute to the construction of a beautiful China and the response to global climate change.

Innovative measures Financial institutions are empowering climate investment and financing projects

Tackling climate change requires a large amount of capital investment and efficient investment and financing means. Where does the money come from, how do you use it well, and how can we improve the "living water" effect of finance?

Based on the advantages of the provincial capital city, Taiyuan has continuously promoted high-quality projects by holding activities such as production and demand matchmaking meetings, industry-finance matchmaking meetings, and project promotion meetings, launching a series of "sustainable development linked +" products, developing insurance products with Shanxi characteristics, continuously promoting the application of green financial instruments, innovating fund products, and establishing a "double carbon" business platform...... The vitality of financial empowerment of climate investment and financing has been accelerated.

As of September 2023, the Shanxi Branch of the Postal Savings Bank of China has issued a total of 4.9 billion yuan of sustainability-linked financing to 7 provincial state-owned enterprises, promoted the opening of 92 carbon accounting accounts, and invested a total of 2.5 billion yuan in green loans targeting provincial coal enterprises.

From January to May 2023, Chinese Life Property & Casualty Shanxi Branch provided risk protection of 154 million yuan for 46 production enterprises through environmental pollution liability insurance, and provided risk protection of 10.581 billion yuan, 41.1 billion yuan and 7 billion yuan for 335 energy enterprises, 53,000 new energy vehicles and 8,178 new energy taxis, respectively.

The Shanxi Branch of the Agricultural Development Bank set up an agricultural development infrastructure fund and invested 270 million yuan in the central heating upgrading and expansion construction project and the PPP project of the transit realignment project.

Focusing on the three major sectors of traditional fossil energy, new energy and coal-fired power infrastructure, IB has provided financial support of 13.244 billion yuan so far, including 9.3 billion yuan for climate change mitigation and 3.037 billion yuan for climate change.

In the next five years, the two financial institutions will provide no less than 10 billion yuan of intentional comprehensive financial service support to Taiyuan in the field of ecological environmental protection and climate change.

In terms of financial support, the Taiyuan Municipal Bureau of Finance has arranged 1 billion yuan of industrial transformation and upgrading funds and 500 million yuan of new kinetic energy development funds to support enterprise transformation, 2 billion yuan of scientific and technological innovation funds to support scientific and technological innovation and development, and 1 billion yuan of funds to support talent development, so as to comprehensively promote green transformation;

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The innovation of financial institutions continues.

"In addition to traditional bank loans, financial institutions should also explore diversified financing channels, such as policy-based financial products, intellectual property financing, investment-loan linkage, financial leasing, etc., so that all kinds of enterprises can obtain more comprehensive financial support under policy guidance and market mechanisms to meet the capital needs of enterprises in the process of development. Sun Lei, director of CECEP Innovation Research Center, mentioned.

Towards Green The agglomeration effect of low-carbon projects of enterprises is becoming increasingly prominent

Under the "dual carbon" goal, green and low-carbon transformation is becoming a "compulsory course". In Taiyuan, government departments have joined hands with key enterprises and financial institutions to coordinate key areas such as industry, energy, and ecological construction, and have successively selected a number of projects such as renewable energy, photovoltaic power generation, low-carbon manufacturing, and environmental infrastructure construction to be included in the climate investment and financing project library, focusing on green infrastructure carbon reduction projects, energy structure decarbonization projects, and energy structure decarbonization projects, etc., to form a low-carbon project agglomeration effect.

The emission index of coke oven flue gas after desulfurization and denitrification treatment of coke oven gas to LNG and liquid ammonia project of a large coking enterprise in Taiyuan City has reached the ultra-low emission limit in the "Opinions on Promoting the Implementation of Ultra-low Emissions of Iron and Steel Enterprises", which meets the relevant standards of advanced desulfurization and denitrification technology and by-product resource technology in the coking industry.

At the same time, through cooperation with Shanxi Environment and Energy Trading Center, it provides 80 million yuan of financing support for a cogeneration project in the south of Taiyuan City, and directly links the enterprise to the loan interest rate, guides the enterprise to achieve the carbon emission reduction target value within the agreed period, and lowers the loan interest rate in a stepwise manner, reduces the financing cost of the enterprise, and promotes the energy conservation, emission reduction and green development of the enterprise.

In the practice of climate investment and financing pilot construction, a number of highlight projects in Taiyuan are refreshing. For example, the third phase of the reconstruction and expansion of Wusu Airport is the first "zero-carbon airport" project in the field of civil aviation in China, and it is also a typical case of green infrastructure carbon reduction projects, with a total investment of 1.837 billion yuan. Among them, 75% of the construction funds came from sovereign loans from the New Development Bank of the BRICS countries. After completion, it can reduce carbon emissions by 118,000 tons per year, and the surplus green electricity of the project can be supplied as social electricity, with an annual carbon reduction of 4,722 tons.

In terms of optimizing the energy structure and decarbonization projects, Meijin Hydrogen Energy is at the forefront of development. After completion, it will produce 20,000 tons of high-purity hydrogen per year, which can be used by 5,600 buses, 8,000 logistics vehicles or 2,200 heavy trucks, and can reduce carbon emissions by about 264,000 tons. By replacing traditional energy vehicles, in addition to significantly reducing carbon emissions, it can also reduce atmospheric nitrogen deposition and particulate matter pollution caused by traditional energy vehicle exhaust, avoid the formation of acid rain and haze, and further protect the atmospheric environment and living environment.

As a representative project of investment attraction and industrial transformation and upgrading in the Comprehensive Reform Zone, the hosen lithium-ion battery separator is also a key project in Shanxi Province. On January 26, 2023, Industrial Bank Taiyuan Branch, as the lead bank, jointly formed a syndicate with the Nanjing Branch of Industrial Bank in the system to approve a 10-year project loan of 1.8 billion yuan for the project, and on May 31 of that year, the first project loan of 332 million yuan was disbursed, and up to now, IB has invested a total of 689 million yuan in the project.

In the practice of climate investment and financing, enterprises have been able to run out of Taiyuan's "acceleration", but at the same time, they are also facing many practical problems. Liu Xueye, an expert from the Green Innovation and Development Research Institute, proposed that enterprises should comprehensively consider the regional "dual carbon" requirements and short- and medium-term industrial development needs, formulate green and low-carbon development strategies, increase R&D and innovation of green and low-carbon technologies, improve the climate risk management system, and build a team of professionals who take into account low-carbon technology and finance, so as to better meet opportunities and respond to challenges.

Yan Wenbin, Secretary of the Party Leadership Group and Director of Taiyuan Ecological Environment Bureau, said that in the next step, Taiyuan will continue to carry out climate investment and financing as a powerful starting point to promote Taiyuan's green and low-carbon transformation, guide financial resources to gather in green and low-carbon fields by building a climate investment and financing cooperation platform, and continuously promote major financial institutions to improve the platform, broaden the channel of industry and finance docking, realize the tracking management of project declaration, docking, financing and landing, and effectively play the leading and forcing role of "carbon reduction", and form a successful experience that can be replicated and promoted.