China's Green Bond Issuance Doubles in the First Half of The Year

China's Green Bond Issuance Doubles in the First Half of The Year

BY  
Seneca ESG  
- August 24, 2022

China issued USD57.8bn worth of bonds to fund climate change solutions in the first half of 2022, roughly doubling from the same period last year, as reported by Nikkei Asia on August 19. Data was published by the US-based Intercontinental Exchange (ICE) . Green bond issuers include financial institutions such as the Bank of China (BOC) and other industrial companies, raising funds for infrastructure and other costly projects to facilitate decarbonization progress. According to the ICE, 83% of the green bonds issued in 1H22 in China were certified by a third party, while the rest was self-declared as green. The proportion of green bonds certified by a third party was only 33% in 1H20. 

China is expected to be the largest green bond issuer in 2022 as the green bond supply slumps in North America and Europe due to uncertainties over interest rates and lower liquidity. In 2Q22, green bond issuance in Europe and North America stood at USD46.50bn and USD9.40bn, dropping by 37.3% and 63.7% YoY, respectively. Meanwhile, the supply of green bonds in the Asia-Pacific region soared by 32.9% YoY to USD39.15bn, most of which was driven by the growth in China. However, China had differing rules on what qualifies as green projects and how green bond issuers may use their proceeds, leading to regional discrepancies. To create a unified framework for the fast-growing green bond market, Chinese regulators published the China Green Bond Principles on July 29 of this year, including standards on the use of funds, project assessment and selection, fund management, and information disclosure.

Sources:

https://asia.nikkei.com/Spotlight/Environment/Climate-Change/China-s-green-bond-issuances-doubled-for-January-June-half

https://www.spglobal.com/marketintelligence/en/news-insights/latest-news-headlines/europe-s-dominance-in-green-bond-market-fades-amid-record-growth-in-china-71321575

https://www.reuters.com/markets/europe/china-issue-principles-green-bonds-securities-times-2022-07-28/

https://chinadialogue.net/en/digest/chinese-green-bonds-100-percent-funds-for-green-purposes/pyjwas

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