绿色金融与发展中心-2024-2025年中国绿色金融现状与趋势（英）-2025.2_25页_3mb

Summary of China Green Finance Status and Trends 2024-2025

Core Content

This report provides an overview of China's green finance developments in 2024, highlighting policy progress, key trends, and challenges in the sector. It is produced by the Griffith Asia Institute (GAI) at Griffith University and the Green Finance & Development Center at Fudan University, with the aim of encouraging discussion and debate on green finance trends.

Main Points and Key Trends

1. Policy Progress in 2024

China's green finance policies have advanced significantly across five key pillars:

• Standard system: Updated green and transition industry taxonomies were finalized, including the Green and Low-Carbon Transition Industry Guidance Catalogue (2024 version), which emphasizes low-carbon transformation. The Hong Kong Taxonomy for Sustainable Finance was also introduced, aligning with international standards.

• Disclosure policy: The Corporate Sustainability Disclosure Guidelines (Trial Version) were published, applicable to all companies. These guidelines align with IFRS S1 and aim for a nationally harmonized system by 2030. Listed companies and green bond issuers are required to disclose ESG information, including Scope 1 and 2 emissions.

• Incentive and restraint mechanisms: Central-level incentives include a 300 billion yuan green fund for clean energy, green transport, and low-carbon technology. Monetary tools such as the carbon reduction support tool continue to be used, with selected banks reporting significant carbon-reduction lending. Local initiatives include transition loans and ESG-linked financing.

• Products and market system: Green and transition bonds, carbon footprint quantification, and green electricity certificates (GECs) are key developments. The Green and Low-Carbon Transition Industry Guidance Catalogue and the revised ETS regulations have improved market mechanisms.

• International cooperation: China has actively participated in setting international green finance standards, including the launch of the Multi-jurisdiction Common Ground Taxonomy (M-CGT) at COP29. It has also strengthened cooperation with the EU on emissions trading schemes.

2. Green Finance Instruments

• Green loans: Maintained strong growth, with a focus on low-carbon transformation and resource efficiency.

• Green bonds: Continued to decline, but transition-related bonds and green insurance products showed growth.

• Green insurance: Expanded in scope and scale, with nine key coverage areas outlined, including low-carbon technology and green manufacturing.

• Green funds: Experienced a strong rebound from 2023, indicating renewed investor interest.

3. Key Challenges and Recommendations

• Challenges:

  • Lack of national transition finance standards for priority sectors.
  • Insufficient long-term roadmap for carbon markets.
  • Green finance instruments still represent a small share of the total market.
  • ETS design remains flawed.
  • Green insurance and biodiversity finance disclosure policies are not yet fully developed.

• Recommendations:

  • Accelerate the development of national transition finance standards.
  • Expand the scope of ETS to include more high-emission industries.
  • Strengthen the disclosure framework for green insurance and biodiversity finance.
  • Establish a more robust and long-term green finance policy support system.

Key Developments

• Green Taxonomy: The 2024 version includes more focus on low-carbon industries and traditional sectors undergoing green transition.

• Green Insurance: The NFRA issued guidelines to promote high-quality development, aiming to establish a comprehensive policy system by 2027 and make green insurance a vital financial tool by 2030.

• Transition Finance: Seven ministries led by PBOC released guiding opinions on transition finance, with pilot programs in certain sectors. Local governments like Huzhou and Inner Mongolia have also introduced innovative financial products.

• Carbon Footprint Standards: A national standard was introduced, and MIIT issued specific guidelines for industrial product carbon footprint accounting.

• ETS and CCER: The ETS was regulated with new interim rules, and the CCER market was re-launched, with new sectors added for consultation.

Conclusion

China's green finance landscape in 2024 reflects a strong policy push and regulatory development, with continued growth in green loans and green funds, and emerging opportunities in transition finance and carbon markets. However, challenges such as limited standards, small market share, and design flaws in ETS persist. The report recommends further actions to enhance the effectiveness and scalability of green finance in China.