Green bond issuance in China grows 35 per cent to record US$155 billion in 2022 as nation strives to meet climate goals

Growth shows China’s climate commitment is increasingly integrated into its policies, says non-profit Climate Bonds Initiative

Hong Kong can play key role in mobilising capital flows to support its own and mainland China’s carbon transition, organisation says

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An aerial photo taken on May 16, 2023 shows wind turbines of Honghe Yongning wind power plant in Honghe Hani and Yi Autonomous Prefecture, southwest China’s Yunnan Province. Photo: Xinhua

Published: 7:00pm, 9 Jun 2023

Green bond issuance in China grew 35 per cent last year to reach a high of US$155 billion as the country’s climate commitment became further integrated into its overall policy and economic system, according to a report by UK-based non-profit Climate Bonds Initiative (CBI) on Friday.

The world’s second-largest economy must rapidly scale up its sustainable-debt markets to help achieve its goals of becoming carbon neutral by 2060 and peaking emissions before 2030, according to the report, China Sustainable Debt State of the Market.

Green bonds are fixed-income securities designed to fund environment-friendly projects.

“China’s economic and social development have underpinned the growth of a formidable [sustainable] debt market with unique characteristics,” according to the report, jointly released by CBI, China Central Depository & Clearing Research Centre, CIB Research and Standard Chartered Bank. “This experience can support whole-economy transition by extending access to capital to entities operating in the hard-to-abate sectors.”

A 2019 file photo shows a photothermal power station built in Gobi desert in Hami, in northwest China’s Xinjiang Uygur Autonomous Region. Photo: Xinhua

In 2022, China was the top source of green bonds that were aligned with the CBI’s definition and included in its database, which screens debt instruments from over 80 jurisdictions based on the non-profit’s taxonomy, allowing for comparison across markets.

China recorded US$85.4 billion of green bond offerings that met CBI’s definition last year, from both onshore and offshore issuers, followed by the US with US$64.4 billion and Germany with US$61.2 billion, according to CBI.