(Yicai Global) April 13 -- Bank of Jiangsu has become China’s first bank to roll out a carbon neutral action plan, aiming is to cut carbon emissions by more than 10 million tons through 2025.

During the period, the provincial bank has vowed to lend no less than CNY200 billion (USD30.5 billion) to climate change projects, including those for clean energy, clean transport and zero carbon buildings. 

Bank of Jiangsu intends this year to boost its green credit by at least 20 percent and clean energy loans by no less than 50 percent, Dong Shanning, its general manager  of green finance, told Yicai Global.

The lender will also improve its climate investment and financing product system, while developing green products and replenishing basic carbon financing tools, carbon derivatives, and carbon capital market tools, Dong said.

Though Bank of Jiangsu is the first to roll out a climate change action plan, it was not the first lender to bring out related products. On March 18, China Development Bank issued the country’s first tranche of carbon neutral-themed green finance bonds, with the money raised to be used on projects such as wind and solar power.

China’s green loan balance was just CNY12 trillion at the end of last year, accounting for about 6.9 percent of total loans, which suggests there is more room for development.

The Paris Agreement adopted by a majority of countries in 2015 suggests that global warming should be kept well below 2 degrees Celsius from pre-industrial levels by the end of the century, and efforts should be made to limit any increase to 1.5 C.

According to Tsinghua University’s estimates, if that is to be achieved, the energy sector will need CNY138 trillion (USD21.1 trillion) of investment between 2020 and 2050, equivalent to more than CNY3 trillion of new spending a year. That will increase the call on banks.

Editors: Xu Wei, Peter Thomas